Capital Group to reduce fund fees, simplify series

Capital International Asset Management (Canada), Inc. (Capital Group) is reducing fees on certain series of its funds, as well as simplifying its fund lineup.

Capital Group says in a release that it plans to reduce the administration fee by up to six basis points for Series A, AH and T4 units of its mutual funds, to match the current administration fee for Series E or Series EH units. The change is effective Oct. 1.

The table below summarizes the proposed changes to fund fees based on each fund’s asset levels as of July 31.

Fund (Series A and T4)	Current fee	New fee (as of Oct. 1)
Capital Group Emerging Markets Total Opportunities Fund (Canada)	0.23%	0.17%
Capital Group Global Equity Fund (Canada)	0.10%	0.05%
Capital Group International Equity Fund(Canada)	0.21%	0.15%
Capital Group Canadian Focused Equity Fund(Canada)	0.18%	0.13%
Capital Group U.S. Equity Fund (Canada)	0.18%	0.13%
Capital Group Canadian Core Plus Fixed Income Fund (Canada)	0.20%	0.15%
Capital Group Global Balanced Fund (Canada)	0.14%	0.08%
Capital Group World Bond Fund (Canada)	0.20%	0.14%

Fund (Series AH)	Current	New (as of Oct. 1)
Capital Group World Bond Fund (Canada)	0.26%	0.20%

Capital Group’s administration fees decline as fund assets grow. The following table shows the schedule of administration fee reductions across fund asset thresholds, effective Oct. 1.

Fund (Series A and T4)	Administration fees based on fund net assets
	Current fees			New fees (as of Oct. 1)
	Under $500M	$500M to $1B	Over $1B	Under $500M	$500M to $1B	Over $1B
Capital Group Emerging Markets Total Opportunities Fund (Canada)	0.23%	0.17%	0.14%	0.17%	0.11%	0.08%
Capital Group Global Equity Fund (Canada)	0.19%	0.13%	0.10%	0.13%	0.08%	0.05%
Capital Group International Equity Fund(Canada)	0.21%	0.15%	0.12%	0.15%	0.09%	0.06%
Capital Group Canadian Focused Equity Fund(Canada)	0.18%	0.13%	0.10%	0.13%	0.07%	0.04%
Capital Group U.S. Equity Fund (Canada)	0.18%	0.13%	0.10%	0.13%	0.07%	0.04%
Capital Group Canadian Core Plus Fixed Income Fund (Canada)	0.20%	0.14%	0.11%	0.15%	0.08%	0.05%
Capital Group Global Balanced Fund (Canada)	0.20%	0.14%	0.11%	0.14%	0.08%	0.05%
Capital Group World Bond Fund (Canada)	0.20%	0.14%	0.11%	0.14%	0.08%	0.06%

Fund (Series AH)	Administration fees based on fund net assets
	Current fees			New fees (as of Oct. 1)
	Under $500M	$500M to $1B	Over $1B	Under $500M	$500M to $1B	Over $1B
Capital Group World Bond Fund (Canada)	0.26%	0.20%	0.17%	0.20%	0.14%	0.12%

Capital Group also plans to redesignate Series E and EH units into corresponding Series A and AH units on or about Jan. 4, 2019, which will offer the same management and administration fees as Series E and EH units at that time.

Offering fewer series makes it easier for both advisors and unitholders to select and hold the most appropriate series, says the release. And, since Series A and AH units have a low investment minimum of $500 (per fund, per account), the changes will allow greater access to lower prices, it says.

Series E and EH units will no longer be offered after the close of business on Dec. 31, 2018.

Series E and EH units held as of Jan. 4, 2019, unless directed otherwise in writing by a unitholder’s dealer, will automatically change at no cost into corresponding Series A and AH units of the same fund. This automatic change isn’t considered a disposition for tax purposes, says the release.

Following the redesignation, all existing optional plans for Series E and EH units, including automatic investment plans and systematic withdrawals plans, will automatically be moved to corresponding Series A and AH units, unless otherwise indicated by the unitholder’s dealer. Holders of Series E and Series EH units will be provided written notice of this change prior to Jan. 4, 2019.

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