*Assets under management by Capital Fixed Income Investors.
Data as at 31 December 2023
Risk factors you should consider before investing:
All data as at 31 December 2023 in US$ terms and attributable to Capital Group, unless otherwise stated.
Glossary
Bond – A debt instrument, essentially a loan, issued by governments (a sovereign bond) or corporates (a corporate bond) and financed by investors. The bond holders receive interest payments, known as a coupon, and the principal of the bond when it is due.
Excess return – Returns achieved above and beyond returns of a proxy, such as an index.
High-yield bond – A high yield bond is one with a lower credit rating than an investment grade bond. High yield bonds typically offer a higher rate of interest because of a greater risk of default.
Investment-grade bond – A bond issued by a corporation or sovereign that has been awarded a ‘Baa3’ or higher credit rating by Moody’s, or ‘BBB-’ or higher credit rating by Standard & Poor’s or Fitch.
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Risk factors you should consider before investing:
Bonds risk: The value of bonds can change as a result of interest rate changes – typically when interest rates rise, bond values fall. Funds investing in bonds are exposed to credit risk. A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless.
Counterparty risk: Other financial institutions provide services to the fund such as safekeeping of assets, or may serve as a counterparty to financial contracts such as derivatives. There is a risk the counterparty will not meet their obligations.
Derivative instruments risk: Derivatives are financial instruments deriving their value from an underlying asset and may be used to hedge existing exposures or to gain economic exposure. A derivative instrument may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.
Operational risk: The risk of potential loss resulting from inadequate or failed internal processes, people and systems or from external events.
Sustainability risk: Environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment of the fund.
Data as at 31 December 2023 and attributed to Capital Group, unless otherwise specified.