American Funds adds investment-grade and emerging markets bond funds

By Susanna Moon

Chicago, Aug. 1 – Capital Group Cos. Inc.’s family of mutual funds, American Funds, added two new fixed-income funds, one that invests in high-grade debt and the other in emerging markets.

American Funds Corporate Bond Fund will invest at least 80% of its assets in corporate bonds and exclusively in investment-grade securities, benchmarked against the Barclay's U.S. Corporate Investment Grade Bond index.

The corporate fund may invest in bonds issued by companies domiciled outside the United States, including issuers domiciled in developing countries. All securities held by the fund will be denominated in dollars.

American Funds Emerging Markets Bond Fund will invest at least 80% 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 emerging markets fund may also invest in bonds “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 release said. The fund may invest up to 100% of its assets in securities denominated in currencies other than the dollar.

"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," Mike Gitlin, head of fixed income at Capital Group, said in a company press release.

Capital Group is a Los Angeles-based investment firm.

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