F-2 Direct-at-Fund

There are multiple options from which a firm can choose to select its lineup of available fee-debiting options:

1.     Multiple flat rates – your firm can select up to five different flat rates anywhere between 5 bps and 200 bps (rates should end in “0” or “5”, i.e., 0, 25, 60, 100, 115)

2.    Tiered advisory fee schedule (nonblended breakpoint)

Once the firm has selected its desired combination of the above options, financial professionals can select which rate or schedule is most appropriate for each of their accounts. Each option is an annual rate, billed quarterly in arrears.

The advisory fee rate that applies to each eligible client’s account is determined by the cumulative asset value on the last day of the quarter. The cumulative asset value is determined based on all account types and share classes that are held by AFS, including A shares and the American Funds U.S. Government Money Market Fund℠. If the account is fully depleted prior to quarter end, the cumulative asset value of the account the day prior to the all-share transaction applies.

The firm has the option to outline a tiered fee schedule within the following guidelines:

• Maximum of five tiers
• Set in increments ending in “0” or “5,” not to exceed 200 bps

Tiered fee schedule example:

Step 1: Identify the cumulative asset value for the client.

An investor has four accounts with the following asset values:

The cumulative asset value for this client will be $375,000 based on our aggregation policies. All commissionable and noncommissionable shares of American Funds U.S. Government Money Market Fund are included in the total cumulative asset value. External assets are excluded.

Step 2: Identify the advisory fee rate, based on the client’s total cumulative asset value.

The firm’s tiered advisory fee schedule is:

Based on the firm’s tiered fee schedule, a client with a cumulative asset value of $375,000 on the last day of the quarter would be subject to the 0.75% advisory fee.

Step 3: Identify the average eligible assets for each fund variable (average daily balance ÷ number of days in the quarter).

Step 4: Calculate the advisory fee amount for the quarter for each fund variable.

Advisory fee payment formula (per fund variable):

Total average eligible assets = $375,000

Number of days in the quarter = 90

Advisory fee rate = 75 bps

Number of days in the year = 365

Advisory fee amount = $693.49

All fees, whether flat or tiered, are calculated quarterly in arrears by applying the selected fee to a client’s eligible accounts' Average Daily Balance (ADB). To exclude accounts from the calculation process, submit your request in writing.

Your firm will receive fee payments via ACH the month after the off-calendar quarter-end. (For example, fees for December–February are deducted and paid in March.) The quarterly payout schedule is March, June, September and December.

If your firm is eligible for the program, a principal or other authorized individual at your firm must sign an F-2 Share Class Agreement with Capital Group. You may begin this process by calling us at (800) 421-5450.

Once your firm has signed an F-2 Share Class Agreement, you will receive a link to account applications and supplements.

You can send forms electronically. You can also send them via fax or mail to an American Funds Service Center. Call us at (800) 421-5450.

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Since 1931, Capital Group, home of American Funds, has helped investors pursue long-term investment success. Our consistent approach — in combination with The Capital System^SM — has resulted in superior outcomes.