MARKET VOLATILITY

Guide to current markets

Insights, tools and resources from Capital Group to help you during unsteady markets

Outlook

Perspectives and insights on the current volatility

Results

How our funds are doing right now and in past downturns

See our current results, commentaries and comparisons

INVESTING FOR THE LONG TERM

Experience matters

Throughout our history, we've weathered past storms. In fact, our equity-focused funds have outpaced their benchmark indexes during the biggest downturns of the last nine decades.

Across 17 bear markets, the equity-focused American Funds outpaced their benchmarks 77% of the time

Chart with headline that reads: Across seventeen bear markets, the equity-focused American Funds outpaced their benchmarks 77% of the time. Chart has legend of two squares. Blue square labeled: Fund outpaced benchmark. Raspberry square labeled: Fund lagged benchmark. Chart tracks performance of twenty American Funds through bear markets from their inception through May 31, 2020. Results of each fund are as follows: The Investment Company of America. Outpaced benchmark 1934-1935, 1937-1938, 1938-1939, 1939-1940, 1940-1942, 1956-1957, 1966, 1973-1974, 1980-1982, 1987, 2000-2002, 2007-2009, 2020. Lagged benchmark 1946-1947, 1948-1949, 1961-1962, 1968-1970. American Mutual Fund. Outpaced benchmark 1956-1957, 1961-1962, 1966, 1968-1970, 1973-1974, 1980-1982, 1987, 2000-2002, 2007-2009, 2020. Washington Mutual Investors Fund. Outpaced benchmark 1956-1957, 1961-1962, 1966, 1968-1970, 1973-1974, 1980-1982, 1987, 2000-2002, 2007-2009. Lagged benchmark 2020. AMCAP Fund. Lagged benchmark 1968-1970, 1973-1974. Outpaced benchmark 1980-1982, 1987, 2000-2002, 2007-2009, 2020. The Growth Fund of America. Outpaced benchmark 1980-1982, 1987, 2000-2002, 2007-2009, 2020. The Income Fund of America. Outpaced benchmark 1980-1982, 1987, 2000-2002. Lagged benchmark 2007-2009, 2020. New Perspective Fund. Outpaced benchmark 1980-1982, 2000-2002, 2007-2009, 2020. Lagged benchmark 1987. Fundamental Investors. Outpaced benchmark 1980-1982, 1987, 2000-2002, 2007-2009. Lagged benchmark 2020. American Balanced Fund. Outpaced benchmark 1980-1982, 1987, 2000-2002. Lagged benchmark 2007-2009, 2020. Capital Income Builder. Outpaced the index 1987, 2000-2002. Lagged benchmark 2007-2009, 2020. The New Economy Fund. Outpaced benchmark 1987, 2007-2009, 2020. Lagged benchmark 2000-2002. EuroPacific Growth Fund. Lagged benchmark 1987. Outpaced benchmark 2000-2002, 2007-2009, 2020. Capital World Growth & Income Fund. Outpaced benchmark 2000-2002, 2007-2009, 2020. SMALLCAP World Fund. Lagged benchmark 2000-2002, 2007-2009. Outpaced benchmark 2020. New World Fund. Outpaced benchmark 2000-2002, 2007-2009, 2020. International Growth and Income Fund. Lagged benchmark 2020. American Funds Global Balanced Fund. Lagged benchmark 2020. American Funds Developing World Growth and Income Fund. Lagged benchmark 2020. American Funds Global Insight Fund. Outpaced benchmark 2020. American Funds International Vantage Fund. Outpaced benchmark 2020.

Sources: Capital Group, Morningstar. Class R-6 shares with all distributions reinvested.

View fund expense ratios and returns.

Dates shown for bear markets are based on price declines of 20% or more (without dividends reinvested) in the unmanaged S&P 500 with at least 50% recovery between declines. Funds shown are the equity-focused American Funds in existence at the time of each decline. Fund and benchmark returns are based on total returns. 

Class R-6 shares were first offered on May 1, 2009. Class R-6 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Please see the fund’s prospectus for more information on specific expenses.

Benchmark indexes for the funds: S&P 500 (ICA, AMF, WMIF, AMCAP, GFA, FI); MSCI World (NPF, WGI, GIF); 60% S&P 500 / 40% Bloomberg Barclays U.S. Aggregate (AMBAL); 65% S&P 500 / 35% Bloomberg U.S. Aggregate (IFA); 70% MSCI ACWI / 30% Bloomberg Barclays U.S. Aggregate (CIB); S&P 500 prior to the 2020 bear market, MSCI ACWI thereafter (NEF); MSCI EAFE prior to the 2007-09 bear market, MSCI ACWI ex USA thereafter (EUPAC); MSCI ACWI Small Cap (SMALLCAP); MSCI ACWI (NWF); MSCI ACWI ex USA (IGI), 60% MSCI ACWI / 40% Bloomberg Barclays Global Aggregate (GBAL); MSCI Emerging Markets (DWGI); MSCI EAFE (IVE)

 

Support

Resources to guide client conversations and build your business

Resources to help guide your conversations

Webinars and podcasts

Register for our weekly webinar series and tune in to our podcasts.

WEBINAR SERIES

Volatility 2020: Weathering the storm: Join our investment team on Thursdays as we go deep on the forces roiling markets.




WEBINAR SERIES

Retirement Plan Tuesdays: Join our team as they dive into practice management, plan design, and investment insights.

 

 

PODCAST

What’s next for global equities?
Capital Group portfolio manager Carl Kawaja discusses the outlook for global equity markets in the COVID-19 era.

 

 

Approach

How our core beliefs keep us confident through market downturns

VIEW TRANSCRIPT

Opening disclosure:

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

 

How is Capital Group responding to the COVID-19 pandemic?

  • Tim Armour: Let me start by saying, on behalf of my colleagues at Capital Group, our hearts go out to anyone who has been impacted by this virus. Like most organizations we have instituted a work-from-home policy, which means I am sharing these remarks from my home in Los Angeles.
  • To those who are sick, or have loved ones who are, our thoughts and best wishes go out to you for a full and speedy recovery.
  • Today, we are all consumed by coronavirus news and fear. It is understandable. Yet, while this coronavirus is new to us, bear markets and volatility are not. Since 1900, there have been 21 market declines of 20% or more.
  • In fact, Capital Group was founded in 1931, in the midst of one of the worst down markets of all times. That period – and other market downturns over our nine decades – have informed how we invest. In short, we manage investment portfolios that seek to be less volatile, and to help you in down markets.
  • We take a long-term view on behalf of clients – and we manage our business the same way. As a private company, we’re able to do both. We are built to see through difficult market periods so we can stay focused on you. And you can count on us to stay true to our mission: to improve lives by delivering superior investment results over the long term.
  • As an organization, we have most of our associates in work-from-home mode and we are using social distancing practices in the few locations where associates need to come into the office. Despite these changes in our practices, we are operating well. Our focus remains on delivering for investors and those that work with them.

How is Capital managing money particularly suitable for these types of market periods?

  • Our history has shown that our distinct investment process – how we actually manage money — is built for times like these. The way we manage client assets, known as the Capital System, features managers with diverse perspectives and investment styles assigned to each fund or strategy. This approach seeks to provide investors with a smoother and less volatile experience than the broader markets. Our goal in every fund we manage is to keep you from experiencing the worst of these declines, and to do it better than the broader markets.
  • During market downturns like this, our 350 investment professionals around the world remain fully engaged – analyzing companies and bonds, and making real-time judgments about their potential long-term value. In-depth, fundamental research and a long-term view of markets are at the core of what Capital does – collaborating with one another and leveraging our collective thoughts and experience.

What are the learnings from your own investing career that you can apply today?

  • In my 37 years of experience, I’ve invested through eight bear markets. Whether caused by wars, recessions, the dot-com bubble or The Great Financial Crisis — each one is different in some way. With that said, there is one aspect that always remains the same: they feel terrible as you’re living through them, and they often feel like they will never end. Living through these experiences has taught me that markets – and great companies – do rebound, and life eventually returns to a more normal state.

What guidance would you give to our clients?

  • People are understandably worried – first and foremost, about the health of their families and friends. They are also worried about the impact on their investments and on their important goals, such as having a comfortable retirement, buying a home, or putting their children through college. These worries are natural – none of us know for certain how this pandemic will play out and what the economic fallout will be.
  • It is exactly in times like this that having a long-term horizon and a well thought through investment plan is critical. The best thing investors can do now is keep to their plan – fight through the urge to act. Stay invested. I know that doing nothing can be difficult, but I hope investors take comfort in knowing that we are acting for them. Through the Capital System, which is powered by our global research, we are changing portfolios in real time. That means repositioning portfolios to take advantage of attractive investment opportunities.

Closing thoughts?

  • The U.S. is very resilient. In the U.S., low interest rates and low energy prices are stimulative to the economy. And the monetary and fiscal stimulus we are seeing in markets around the world is essential too, all of which will help the economies to recover.
  • It’s as important as ever to have a long-term view, and to stay invested.
  • One thing we have seen over nearly nine decades is that fear and uncertainty are the enemy of successful investing, often causing clients to do the wrong thing at the wrong time. While difficult, the key is to look through the current situation and stay the course. Stick to your long-term plan and objectives. Ultimately, that strategy should be rewarded.
  • It’s the same strategy we employ at our company.
  • At Capital we are here to help in any way possible to see you through these difficult market conditions. We are committed to that simple mission, sprung from our founding 89 years ago: “Improving people’s lives through successful investing.”
  • Thank you for your time today. We wish you, your family and friends the best of health.

 

End disclosure:

Past results are not predictive of results in future periods.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

Investing outside the U.S. involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks.

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.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.

American Funds Distributors, Inc. member FINRA.

Any reference to a company, product or service does not constitute endorsement or recommendation for purchase and should not be considered investment advice.

© 2020 Capital Group. All rights reserved.

Our core beliefs are what guide us, especially through these volatile markets.

•  Power of partnership

•  Long-term view

•  Distinctive investment approach 

•  Fundamental research

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 mutual fund prospectuses and summary prospectuses, which can be obtained from a financial professional, and should be read carefully before investing. Similar information about collective investment trusts can be obtained from Capital Group or participants' plan provider or employer.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

Use of this website is intended for U.S. residents only.

American Funds Distributors, Inc., member FINRA.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.

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.

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.