Investment Insights | Capital Group

Investment Insights

INVESTMENT INSIGHTS  |  Tue Sep 11 00:17:00 PDT 2018

Getting equity right in the target date distribution phase

Should a 65-year-old investor have the same equity portfolio as a 25-year-old? Most people would say no. But, surprisingly, this is the case for some target date series (including some passive ones).

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INVESTMENT INSIGHTS  |  Sat Jul 07 02:27:00 PDT 2018  |  FEATURING Gary Veerman & Chris Anast, CFA

Three fundamental pension risk management questions all plan sponsors should ask.

Plan sponsors have many factors to consider when making prudent pension risk management decisions. Equity results, interest rate movements, glide path development, Pension Benefit Guaranty Corporation premiums, contribution policy, company-specific risk tolerance, actuarial assumption changes — the list goes on.

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INVESTMENT INSIGHTS  |  June 2018

Can good stewardship improve outcomes?

In recent years, stewardship has been a growing topic in investment research, as studies have explored how an investment firm’s people, culture and processes can influence outcomes. One area that has drawn attention is manager ownership — the extent to which portfolio managers are personally invested in the funds they manage. The reasoning is that by having a personal stake in their own funds’ results, portfolio managers’ interests are better aligned with those of shareholders, potentially resulting in better outcomes.

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INVESTMENT INSIGHTS  |  February 2018

U.S. Tax Reform: Six Key Takeaways

Sources: Capital Group estimates

This article was originally published on Dec. 20, 2017, and has been updated to reflect the bill's passage into law.

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INVESTMENT INSIGHTS  |  February 2018  |  FEATURING Mike Gitlin

Renewed Volatility Means It’s Time to Refocus on Fixed Income.

Key Takeaways

Mike Gitlin, head of fixed income at Capital Group, has 24 years of investment industry experience. He discusses the current market environment and what it means for bond investors.

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INVESTMENT INSIGHTS  | 
February 2018
 |  FEATURING Timothy D. Armour & Will McKenna

Capital Group's Tim Armour Addresses Market Volatility

Capital Group chairman and chief executive officer Tim Armour discusses the sudden return of volatility to the markets and provides helpful context for advisors and investors.

Watch Video (15:03)

INVESTMENT INSIGHTS  |  February 2018  |  FEATURING Timothy D. Armour

The Return of Market Volatility Is Expected and Healthy

Stocks have declined in recent days amid investor concerns about higher inflation and rising interest rates. In this interview, Capital Group Chairman and CEO Tim Armour discusses the drivers of this sudden downturn and his long-term outlook for the financial markets.

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INVESTMENT INSIGHTS  |  February 2018  |  FEATURING Jared Franz

Stocks Pull Back Amid Signs of Rising Rates and Higher Inflation

The equity market lost more than 8% in a few weeks’ time. This decline to the S&P 500 Composite Index, which began in late January, is the first of its kind since 2016. This volatility comes as investors come to terms with a new economic and investment environment of higher interest rates and rising inflation.

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INVESTMENT INSIGHTS  |  January 2018

2018 Outlook: It’s Time for Balance and Flexibility

Despite the concerns surrounding financial markets, 2017 produced healthy returns. What will 2018 hold in store? In our 2018 Outlook, we give our perspective, including:

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INVESTMENT INSIGHTS  | 
July 2017
 |  FEATURING Greg Garrett

As Rates Rise, Keep Your Eyes on the LDI Prize

When will the Federal Reserve make its next move, and how high could rates go? These questions can seem like the only ones that matter in a hiking cycle. Plan sponsors, however, need to think differently. In an Asset TV “LDI Masterclass,” panelist Greg Garrett makes the case for looking at scenarios — and considering the possible impact on plan funded status.

Watch the full Masterclass video on Asset TV

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INVESTMENT INSIGHTS  | 
March 2017
 |  FEATURING Will McKenna & Michael T. Kerr

A Glimpse Inside The Growth Fund of America’s Portfolio

Mike Kerr, a principal investment officer of The Growth Fund of America®, shares his thinking on industries and companies currently held in the fund, including technology, entertainment and health care.

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Defined benefit (DB) plans consistently report better returns — as much as 0.9% higher per year1 — than defined contribution (DC) plans. The Pension Protection Act gave plan sponsors tools to narrow this gap, such as investment re-enrollment and target date funds (TDFs) as default investments. These have helped improve investing behavior for many participants, but what about the 63% of DC plan participants who still make their own investment decisions?2

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INVESTMENT INSIGHTS  |  November 2016

Reflecting Plan Sponsor Risk Tolerance in Glide Path Design

Synchronize your risk tolerance and LDI glide path
  • What is the optimal way for a defined benefit plan to de-risk? This is one of the most challenging questions faced by plan sponsors.
  • To answer appropriately, a sponsor must first consider their risk tolerance and the objective factors influencing it — including the plan’s relative size, whether it’s open or closed, and business cyclicality.

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Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing. 

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. 

Although the target date funds are managed for investors on a projected retirement date time frame, the funds' allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year in which an investor is assumed to retire and begin taking withdrawals. American Funds investment professionals manage the target date fund's portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for 30 years after it reaches its target date. 

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Standard & Poor's 500 Composite Index is a market capitalization-weighted index based on the average weighted results of approximately 500 widely held common stocks.

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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation. 

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Past results are not predictive of results in future periods.