Capital Group [profile] American Funds is getting to ready to launch its very first pure-play emerging markets equity fund, the American Funds Developing World Growth and Income Fund InvestmentNews' Jason Kephart reports.

It's an interesting time to launch. Kephart reports that diversified emerging-markets funds lost an average of 8 percent this year due to some slowdown in emerging markets countries, especially China.

The fund should concentrate on investing in dividend-paying emerging-markets stocks and will invest in a minimum of 80 percent of its assets in emerging markets companies or companies generating at least half of revenue from emerging markets, Kephart writes.American Funds World Fund is more conservative in its approach, says Kephart, noting only 42 percent of assets in emerging-markets companies as of June 30.

American Funds has been launching an impressive number of funds lately after launching just three in the aughts, Kephart says. The impetus may be steady outflows, Janet Yang, Morningstar mutual fund analyst, told Kephart. Kephart quotes her as saying, "Many years of steady outflows has caused them to rethink some practices…Now they're offering advisers and investors more traditional, style-specific strategies."

To read more, click here. 

Edited by: Casey Quinlan


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