American Funds Global Small Cap
Objective And StrategyObjective
Long-term growth of capital.
Global Small Capitalization fund focuses on small global companies with less than $6 billion in market cap that have the potential to grow. The portfolio managers believe that companies of this size are nimble and can react more easily to changes in the market. These companies tend not to have to worry about business legacies and analysts look for those that have the potential to be disruptive and change the world by creating new markets. In normal market conditions, the fund will invest at least 40% of assets outside the U.S., including emerging markets. Once the investable universe is defined, each portfolio manager has his or her own style of investing when it comes to deciding which companies they will add to their portfolios. Through bottom-up fundamental research, portfolio managers seek to identify companies that provide the best risk / return characteristics given the objectives. Fund guidelines: • The fund will invest primarily in common stocks, government and corporate bonds (denominated in U.S. dollars and other currencies), and cash and equivalents • Up to 10% of the fund’s assets may be invested in straight debt securities rated Baa1/BBB+ or below
* This portfolio invests in securities of foreign issuers which involves risks not typically associated with domestic issuers, including currency fluctuations and the possibility of political and economic instability. Emerging markets involve risks in addition to those generally associated with foreign securities, because political and economic structures in many emerging markets may be undergoing significant evolution and rapid development.
* This portfolio invests (or may invest) in securities of companies with micro-, small-, or mid-capitalization. Any investment in micro-, small-, or mid-capitalization companies involves greater risk than that customarily associated with investments in larger, more established companies because of the greater business risks of smaller size, limited markets and financial resources, narrower product lines, and frequent lack of management depth. As such, micro- or small-cap companies may be more subject to erratic and abrupt market movements than securities of larger, more established companies.
* The value of your investment in a Fund is based on the net asset value ("NAV") of the underlying funds and, in turn, the securities that the underlying funds hold. The Funds are subject to the risk that one or more underlying funds will not perform as expected or will under perform other similar funds or that the combination of underlying funds selected by the Funds' investment will not perform as expected. The Funds will be exposed to all of the risk of an investment in the underlying Funds.
* Growth stocks can perform differently from the market as a whole and other types of stocks and tend to be more expensive relative to their earnings or assets compared with other types of stocks. As a result, growth stocks tend to be more sensitive to changes in their earnings and can be more volatile than other types of stocks.
* The investment adviser to the fund actively managed the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.