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 December 31, 2024

Key takeaways for the quarter

  • Global equity markets were mostly negative in Q4, with the largest U.S.-based companies being the standout exception.
  • In addition to the concentration of large U.S. tech companies dominating the global benchmarks, certain idiosyncratic factors held back some of our funds' results in the short term.

Fixed income

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

As of December 31, 2024

Key takeaways for the quarter

  • Fixed income markets generally lost ground in the fourth quarter. The U.S. Federal Reserve (Fed) delivered two 25-basis-point cuts, while also signaling fewer expected cuts in 2025. US economic resilience and uncertainty over the incoming Trump administration fueled volatility in some areas of fixed income markets. The yield curve is no longer inverted (where short-term interest rates are higher than long-term rates), though it remained relatively flat. Below investment-grade (BB/Ba and below) credit and shorter duration bonds delivered some of the highest returns for the quarter.  
  • Over five- and ten-year 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 and investment opportunities amid geopolitical and economic risks and potentially volatile market shifts.

As of December 31, 2024

Key takeaways for the quarter

  • Global stocks and U.S. bonds rose for the year, despite market swings in the fourth quarter, with U.S. equities fueling gains.
  • The Portfolio Solutions Committee (PSC) and Capital Solutions Group (CSG) will continue to fine-tune strategic allocations where needed in 2025 to mitigate risks and meet long-term portfolio objectives, while underlying fund managers take an active approach to company and security-specific research.

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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.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
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Past results are not predictive of results in future periods.
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