WHY CHOOSE US?
Model portfolios offer multiple approaches to help clients pursue their investment objectives while freeing you to spend more time cultivating those relationships.
31 years average investment industry experience1
underlying funds were recognized among the Morningstar "Thrilling 36"2
Among the most recognized for third-party models and asset allocation3
Capital Group paid a licensing fee to publish the ratings data. Capital Group also commissioned A Material Company to conduct a survey of registered financial advisors during Q4 2023, in which respondents were asked to identify leaders in portfolio construction, models, and multi-asset investing.
OUR MODELS
Choose from a diverse suite of models
American Funds active models
Multi-asset solutions that use Capital Group's active mutual funds and ETFs.
Capital Group active-passive models
Multi-manager solutions that combine Capital Group's active funds with passive ETFs from providers such as Vanguard, Blackrock and Schwab.
Quarterly commentary
- Market recaps
- Model strengths and weaknesses
- Quarterly results
Model fact sheets
- Asset mix information
- Fund breakdowns
- Expense ratio comparisons
OUR PROCESS
Model portfolios align with investment objectives
We take client objectives, such as time horizon, risk tolerance, savings or withdrawal expectations, liquidity needs, unexpected expenses and longevity risks, and compare them to our success metrics in an ongoing analysis to determine whether our model portfolios are helping to meet client needs.
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Growth
OBJECTIVE
Long-term growth of capital
PRIMARY SUCCESS METRIC
Returns
Maximum drawdown is a measure of downside risk over a given time period; it is the maximum loss from the highest point to lowest point of (fund/portfolio) returns before a new high point is reached.
Annualized standard deviation (based on monthly returns) is a common measure of absolute volatility that tells how returns over time have varied from the mean. A lower number signifies lower volatility.
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Growth and income
OBJECTIVE
Long-term growth of capital and income
PRIMARY SUCCESS METRIC
Return and risk-adjusted return
Maximum drawdown is a measure of downside risk over a given time period; it is the maximum loss from the highest point to lowest point of (fund/portfolio) returns before a new high point is reached.
Annualized standard deviation (based on monthly returns) is a common measure of absolute volatility that tells how returns over time have varied from the mean. A lower number signifies lower volatility.
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Income
OBJECTIVE
Current income, long-term growth of capital and conservation of capital
PRIMARY SUCCESS METRIC
Volatility and yield
Maximum drawdown is a measure of downside risk over a given time period; it is the maximum loss from the highest point to lowest point of (fund/portfolio) returns before a new high point is reached.
Annualized standard deviation (based on monthly returns) is a common measure of absolute volatility that tells how returns over time have varied from the mean. A lower number signifies lower volatility.
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Preservation and income
OBJECTIVE
Current income and capital preservation
PRIMARY SUCCESS METRIC
Yield and drawdown
Maximum drawdown is a measure of downside risk over a given time period; it is the maximum loss from the highest point to lowest point of (fund/portfolio) returns before a new high point is reached.
Annualized standard deviation (based on monthly returns) is a common measure of absolute volatility that tells how returns over time have varied from the mean. A lower number signifies lower volatility.
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Key objectives
For each strategy under consideration, we consider several different factors that blend both quantitative and qualitative factors:
Asset class and objective exposure
We seek to identify the key objectives and appropriate asset classes for each model to ensure they align with its designated success metrics.
Diversification
Combining funds which may have different objectives and asset classes to create a diversified approach designed to align with investor risk and return profiles.
Flexibility
Flexibility is key to successful outcomes. We maintain a flexible approach in our models and adjust as necessary.
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Constant monitoring
We constantly monitor the portfolios
Continuous monitoring
- Returns, risks, asset classes and market capitalization exposures are monitored daily.
- Portfolios have defined asset allocation thresholds and are rebalanced if those thresholds are crossed.
Strategic management
- Flexible strategies in portfolios are a key differentiator and important design component.
- Use of flexible strategies gives portfolio managers the ability to observe investment opportunities in real time coming from underlying portfolio holdings.
Rebalancing
- The Capital Solutions Group (CSG) and its committees monitor individual fund weights daily and at quarter end.
- If an individual underlying fund has crossed a proscribed threshold, the CSG will assess whether to rebalance the portfolio.
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Resources and quarterly updates
Get the latest information on our model portfolios
Review quarterly commentaries and updates on every American Funds Model Portfolio and easily sign up for regular updates.
Making portfolios personal
Explore insights around portfolio construction and request a consultation with Capital Group's analytics team.
Why Models?
Some of the highest growth advisors in the country are 24% more likely to utilize model portfolios in their practice and spend less time monitoring the markets.†
Stronger client relationships
Financial professionals who have outsourced investment management say it helps deliver stronger client relationships (83%), higher new client acquisition (74%) and increased client retention (82%).
Save time
Advisors who outsourced the majority of their investment management (50% or more) saved an average of 7.9 hours per week — time that can be spent on developing stronger client relationships.
Growth in total AUM
The benefits of outsourcing can be seen with the 91% of advisors who experienced growth in total assets under management.
Source: The Impact of Outsourcing, AssetMark, Inc. 2021
†Source: Pathways to Growth — 2023 Advisor Benchmark Study. Capital Group, partnering with behavior and analytics firm Escalent, conducted a multi-year advisor benchmarking study among a representative total of nearly 3,000 advisors.
Model portfolios are only available through registered investment advisers. This content is intended for registered investment advisers and their clients..
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
1The Capital Group Portfolio Solutions Committee (PSC) are the people who build and oversee the model portfolios. As of December 31, 2022, this group of seven portfolio managers has an average of 31 years of investment industry experience.
2Source: Morningstar, "The Thrilling 36" by Russel Kinnel, August, 2024. Morningstar`s screening took into consideration expense ratios, manager ownership, returns over manager`s tenure, and Morningstar Risk, Medallist and Parent ratings. The universe was limited to share classes accessible to individual investors with a minimum investment no greater than $50,000 and did not include funds of funds. Class A shares were evaluated for American Funds. Visit morningstar.com for more details. The funds named to the list were American Balanced Fund, American Mutual Fund, Capital Income Builder, The Growth Fund of America, The Income Fund of America, The New Economy Fund and New Perspective Fund. Not all funds are in all models or portfolio strategies.
3Source: Cogent BeatTM Advisor October 2023, 403 registered financial advisors who have an active book of business of at least $5M in AUM across five channels, with an average AUM of $249M and median AUM of $93M, participated in a web survey conducted from October 24 to November 7, 2023. Survey questions: Assume you were considering investing client assets in model portfolios. Which firm’s third-party models (asset managers and/or TAMPs) would you be most likely to consider? Which company or companies are described by this statement: Is a leader in asset allocation?
Model portfolios are provided to financial intermediaries who may or may not recommend them to clients. The portfolios consist of an allocation of funds for investors to consider and are not intended to be investment recommendations. The portfolios are asset allocations designed for individuals with different time horizons, investment objectives and risk profiles. Allocations may change and may not achieve investment objectives. If a cash allocation is not reflected in a model, the intermediary may choose to add one. Capital Group does not have investment discretion or authority over investment allocations in client accounts. Rebalancing approaches may differ depending on where the account is held. Investors should talk to their financial professional for information on other investment alternatives that may be available. In making investment decisions, investors should consider their other assets, income and investments. Visit capitalgroup.com for current allocations.
Figures shown are past results and are not predictive of results in future periods.
Model portfolios are subject to the risks associated with the underlying funds in the model portfolio. Investors should carefully consider investment objectives, risks, fees and expenses of the funds in the model portfolio, which are contained in the fund prospectuses. Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks. The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds. A nondiversified fund has the ability to invest a larger percentage of assets in securities of individual issuers than a diversified fund. As a result, a single issuer could adversely affect a nondiversified fund’s results more than if the fund invested a smaller percentage of assets in securities of that issuer. See the applicable prospectus for details.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
©2024 Morningstar, Inc. All Rights Reserved. Except for Lipper rating information, the information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar, its content providers nor Capital Group are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Information is calculated by Morningstar. Due to differing calculation methods, the figures shown here may differ from those calculated by Capital Group.
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This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.