Policies FAQ

As investment professionals, we have a fiduciary responsibility to base our investment decisions solely on the financial objectives stated in each American Fund’s prospectus. We take into consideration all material factors in assessing the merits of an investment, including considerations like human rights issues. We recognize that these issues can be potentially significant factors in some companies’ long-term prospects for success. Considering these issues is therefore an important element of our investment research and analysis.

American Funds does not categorize any of its funds as “socially responsible.”

At various times, individuals and groups urge investment firms to divest their holdings in all companies doing business in countries whose governments are violating or threatening the human rights of their own or other countries’ residents. They do so in the belief that total divestment from a country is the best way to bring about needed change.

While some believe total divestment is necessary for change, others generally prefer that the world stay engaged with the offending countries or governments because they believe engagement provides the best — or only — way to continue a meaningful dialogue about material issues. Moreover, many recognize that divestiture can sometimes be counterproductive, especially when it harms not just the current government but also the economy on which the victims of repression depend for their livelihoods.

Other individuals or groups focus their attention not on whole countries but on individual companies. Shareholders in several mutual fund organizations have considered (and rejected) proxy proposals sponsored by investors that ask fund boards to adopt policies preventing the funds from investing in any company that the board determines is substantially contributing to human rights violations.

Human rights issues are important and are among the factors that can affect companies’ long-term prospects for success. Any human rights issues that may affect companies are considered by our investment professionals as part of the investment management process. This approach is consistent with the stated investment objectives and policies of the funds. We believe considering these issues on a company-by-company basis and as part of the investment management process is preferable either to having the fund boards make these decisions or to dealing with divestiture at the level of the entire country.

We will continue to weigh the impact of these issues and monitor relevant developments as part of our ongoing management of the American Funds.

Yes. Employees of American Funds (part of the Capital Group Companies) are expected to maintain the highest ethical standards when conducting business. Read The Capital Group Companies Code of Ethics (PDF).

American Funds’ conservative approach focuses on diversified, long-term investing. Since sector funds are generally not consistent with this philosophy, we do not choose to offer them.

No. Allowing new investors to transfer assets into American Funds at net asset value would be unfair to existing clients who have paid the appropriate sales charge. It is important to remember, however, that American Funds offers a series of breakpoints on investments starting at $25,000 that can substantially reduce or eliminate the sales charge. In addition, sales charges can be reduced through rights of accumulation or by purchasing under a statement of intention. Purchases that qualify for NAV are outlined in the funds’ prospectuses. Since transfer from other fund families is not included in the prospectus as a means of purchasing without a sales charge, American Funds Distributors® cannot make exceptions to this policy.

Generally, account statements are mailed whenever there is activity in an account. If your clients have signed up to receive transaction confirmations or quarterly statements electronically, they will receive an e-mail when this information is available online. For information about a specific client account, you can log in to a client account.

Consolidated statements, available for certain types of accounts, provide a summary of fund holdings and account transactions. They may be requested either verbally or in writing and will be mailed (or emailed if requested by the shareholder) quarterly. To check the eligibility of a specific account, please contact Account Services at (800) 421-0180.

Throughout the year, we vote by proxy on thousands of proposals from all types of corporations, ranging from small businesses to international companies. In some situations, we don’t vote proxies for companies outside the U.S., particularly when the expense outweighs the benefit to shareholders, liquidity issues exist, documents are not sufficient to make an informed decision or if we are not notified of a scheduled meeting.

American Funds Proxy Voting Results