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 March 31, 2025

Key takeaways for the quarter

  • Markets saw pronounced broadening in the first quarter of 2025, with international stocks outpacing U.S. stocks and value indexes outpacing growth indexes.
  • While defensive and higher yielding equities did well, information technology was a particular laggard both in the U.S. and globally.
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Fixed income

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

As of March 31, 2025

Key takeaways for the quarter

  • Fixed income markets were generally positive to start the year. Rising concerns around U.S. policy and tariffs, and softening economic indicators, led to an uptick in equity market volatility. The U.S. Federal Reserve (Fed) hit pause on interest rate cuts in the quarter as it revised its outlook for inflation upward and its outlook for the economy downward. The Fed has indicated it is seeking clarity on new policies from the Trump administration before it makes any further decisions. Amidst this, U.S. Treasury and mortgage-backed securities 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.
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Model portfolios

Model portfolio asset allocation remains focused on long-term goals and investment opportunities despite geopolitical and economic risks, and potentially volatile market shifts.

As of March 31, 2025

Key takeaways for the quarter

  • Markets were upended in the first quarter as the U.S. presidential transition brought trade tensions and the threat of tariffs, causing equities to slip.
  • As expected in such an environment, the growth models of the American Funds Model Portfolios, with their focus on capital appreciation, had lower returns relative to their benchmarks. The dividend-focused growth-and-income models were more successful, most with better returns than their benchmarks on a gross basis and some also exceeding or in line with them net-of-fees.
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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.

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Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
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