INVESTMENTS

Quarterly commentaries

Hear from our investment professionals about recent market activity in equities, fixed income and model portfolios.

Equities

Investors should consider remaining balanced with geographic diversity, exposure to dividend payers and growth that isn’t too concentrated.

As of March 31, 2024

Key takeaways for the quarter

  • Global equity markets rode a strong first quarter, with the U.S. equity market hitting numerous all-time highs and all 28 equity-focused and multi-asset American Funds (F-2 shares) and ETFs (at market price) delivering positive returns on the quarter. 
  • Despite the prior year’s dominance of the so-called “Magnificent 7,” their recent splintering stock returns provide a cautionary sign for index investing in the current market.

Fixed income

We believe important portfolio roles for fixed income funds include income, inflation protection, capital preservation and diversification from equities.

As of March 31, 2024

Key takeaways for the quarter

  • In the first quarter, the fixed income market was pressured by higher yields as investors recalibrated their expectations of rate cuts on the back of resilient economic data. Below investment grade (BB/Ba and below) debt was a notable exception, with both high-yield corporate bonds and municipals landing in positive territory.
  • Over longer term periods, the majority of fixed income American Funds (Class F-2) continued to deliver positive absolute returns and positive relative returns compared to their primary benchmarks.

Model portfolios

Model portfolio asset allocation remains focused on long-term goals amid the potential for different economic scenarios.

As of March 31, 2024

Key takeaways for the quarter

  • Underlying fund managers continue to find a wide range of equity opportunities despite heavy levels of market concentration.
  • The Portfolio Solutions Committee and Capital Solutions Group balance the four roles of fixed income according to specific long-term model goals.

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Capital Group offers a wide variety of investments, all backed by deep fundamental research and driven by clients' real-life goals.

Past results are not predictive of results in future periods.

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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 opinion 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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Magnificent Seven refers to seven companies (Microsoft, Apple, Alphabet, Amazon, NVIDIA, Meta and Tesla) whose stocks came to dominate the U.S. stock market indexes in 2023. The phenomenon is reminiscent of previous periods of market concentration, including "FAANG" stocks in the mid-2010s and "Nifty 50" stocks in the 1960s and '70s.