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Rating:American Funds Plans Funds of Funds Not Rated 5.0 Email Routing List Email & Route  Print Print
Tuesday, January 10, 2012

American Funds Plans Funds of Funds

News summary by MFWire's editors

American Funds [profile] is shaking up its product lineup in response to advisor demand. The Los Angeles-based mutual fund arm of Capital Group will add eight funds of funds to its roster in May [SEC filing]. That is five more than the fund firm has opened during the past decade.

The move comes as American Funds continues to bleed AUM, reports InvestmentNews. Lipper data shows American Funds facing $70 billion of outflows through November of last year. Its AUM was down to $863 billion from $944 billion in 2009.

Spokesman Chuck Freadhoff told the pub that "advisors and investors have asked us to put together a series of funds that would allow them to invest in multiple funds in a single investment."

Each of the mutual funds will invest in other American Funds mutual funds. They will include tax-exempt preservation, preservation, tax-advantaged income, income, balanced, growth and income, growth and global growth strategies, according to the report.

These mutual funds will make it easier for investors to create a diversified portfolio without buying four or five funds, adds Freadhoff.

In an SEC filing, American Funds stated that to keep the expenses of these eight funds down, they will be able to use the underlying funds' institutional share classes. No expense ratios were listed in the prospectus. 

Edited by: HFD

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