American Funds, a family of mutual funds from Capital Group, has launched two new fixed income funds, American Funds Corporate Bond FundSM and American Funds Emerging Markets Bond Fund.
"Our newest bond funds will be managed in a disciplined way, based on rigorous research and a commitment to investor success that the American Funds have demonstrated over decades," says Mike Gitlin, Head of Fixed Income at Capital Group.
The Corporate Bond Fund will invest at least 80 per cent of its assets in corporate bonds and will invest exclusively in investment-grade securities. It will be benchmarked against the Barclay's US Corporate Investment Grade Bond Index. The fund may invest in debt securities issued by companies domiciled outside the United States, including issuers domiciled in developing countries. All securities held by the fund will be denominated in US dollars.
"American Funds knows corporate bonds and we have been managing investments in this asset class for over 40 years," says portfolio manager David Lee (pictured). "In our Corporate Bond Fund, we are seeking out the best investment-grade opportunities for investors using a disciplined and research-driven approach."
The Emerging Markets Bond Fund will invest at least 80 per cent of its assets in securities of emerging markets issuers, including sovereign debt and debt of companies located in or with substantial business in emerging markets. The fund may also invest in debt securities with a wide range of maturities of any quality, which gives the fund the ability to pursue a high level of total return over the long term. The fund may invest up to 100 per cent of its assets in securities denominated in currencies other than the US dollar.
"For more than two decades, The Capital Group has been managing dedicated emerging markets debt strategies for institutional investors and today we are proud to offer these services more broadly," says Gitlin. "The portfolio managers on the fund, Robert Neithart, Laurentius Harrer and Kirstie Spence, each have more than 20 years of experience investing in EM debt – this level of experience is quite rare on one fund, much less a new fund."