COLLEGE PLANNING | ESTATE PLANNING | INVESTING | PORTFOLIO SPOTLIGHT | REAL ESTATE | RETIREMENT | TAX PLANNING
American Funds Capital Income Builder Fund
CAIFX $ 101 billion
PERFORMANCE YTD 1 yr . 3 yr . 5 yr . 10 yr . 15 yr .
( A Class shares ) 2.96 % -2.65% 10.22 % 5.26 % 5.72 % 4.71 %
800.421.4225 • capitalgroup . com
EQUITY SECTOR ALLOCATION ( As a % of portfolio )
Financials 13.7 % Consumer Staples 10.1 % Healthcare 9.6 % Industrials 7.3 % Information Technology 7.0 % Utilities 6.5 % Energy 6.0 % Real Estate 6.0 % Consumer Discretionary 2.9 % Materials 2.9 % Communication Services 2.9 %
Performance numbers as of 4 / 6 / 23 , AUM as of 2 / 28 / 23 , sector weightings as of 12 / 31 / 22 . ( Performance and fund stats are for the F2 Class shares , which began trading in August 2008 . The 15-year performance figure is for the A Class shares that began trading in 1987 .) Sources : Capital Group and Morningstar .
Growth And Income In A Tidy Package
The American Funds Capital Income Builder Fund aims for capital growth and steady income . By Jeff Schlegel
SOME INVESTORS SEEK GROWTH OF CAPITAL , WHILE others prefer a steady income stream . Of course , some investors want both attributes in a single product , and that ’ s the raison d ’ être of the American Funds Capital Income Builder Fund .
The fund ’ s stated objective is to generate current income that “ exceeds the average yield on U . S . stocks generally ” and provide a growing income stream through the years . The fund ’ s secondary objective is to provide growth of capital .
But what exactly does “ generally ” mean when it comes to trying to top the average yield paid by U . S . companies ? “ We want to provide above-average income , but it doesn ’ t necessarily mean we look to provide the highest yield level in the market ,” says Aline Avzaradel , an equity manager and one of the fund ’ s 12 portfolio managers . “ We aim for a combination of above-average yield and above-average growth .”
She adds that the fund ’ s yield target changes depending on market movements . “ We have a dividend that ’ s distributed quarterly , and yields will vary . But it will always be an abovemarket yield .”
The fund ’ s recent 30-day SEC yield was 2.64 % as of early April while the S & P 500 ’ s dividend yield was only 1.65 %. According to Morningstar analyst Greg Carlson , the fund ’ s pre-fee yield typically ranks in the upper echelon of global allocation funds .
As for capital growth , the fund ’ s average annual returns in measurable periods stretching back 15 years have consistently placed it in either the top half or top quartile of its global allocation category , according to Morningstar . And in those two measurable periods ( three years and 15 years ) when it was in the top half and not the top quartile , the fund ’ s average annual returns nonetheless topped the average annual performance of its peers .
The investment mix of this equity-income product averages roughly 70 % stocks and 30 % fixed income , though that ratio can differ by as much as 10 percentage points depending on economic conditions and shifting market opportunities . This
52 | FINANCIAL ADVISOR MAGAZINE | MAY 2023 WWW . FA-MAG . COM