American Funds U.S. Government Securities Fund® Class A AMUSX

Despite a pending manager change, American Funds U.S. Government Securities remains one of the best offerings in the intermediate-government Morningstar Category, thanks to its skilled managers and risk-conscious approach.

Experienced leadership and a well-balanced mix of talent enable each manager to focus on their respective areas of strength, helping the team stand out among the category’s best. Capital Group has thoughtfully prepared for comanager David Betanzos’ retirement, effective Dec. 1, 2026, by naming Pratyoosh Pratyoosh as a named manager in November 2025. He was a natural choice given his direct support of the strategy, experience managing part of its research portfolio, and expertise in agency mortgage-backed securities. The fund’s Principal Investment Officer Fergus MacDonald has managed the fund since 2009 and took the reins in January 2015, when the firm also named rates specialist Ritchie Tuazon a comanager. Capital Group’s multimanager system divides assets among the three managers and a four-person, analyst-led research portfolio. MacDonald oversees the fund’s overall exposures while giving each sleeve manager and the research team flexibility to invest according to their expertise and convictions.

A team-based, risk-aware approach drives the fund’s investments across government sectors, primarily in agency MBS, Treasuries, and Treasury Inflation-Protected Securities while avoiding nonagency MBS and fund leverage. MacDonald integrates insights from the firm’s risk and quantitative solutions team for necessary adjustments and relies on the fixed-income portfolio strategy group for top-down insights that shape the portfolio.

The managers actively tweak agency MBS and Treasuries positions based on relative value and economic outlook. Over the trailing five years through June 2026, agency MBS and nominal Treasuries ranged from 11% to 63% and 29% to 75% of the assets, respectively. The team’s willingness to actively manage the portfolio’s duration (a measure of interest rate sensitivity) is another lever that can drive performance. They typically maintain duration within 1.0 year of the Bloomberg Government/Mortgage Index, but it has strayed outside this guideline by up to 1.6 years, as it did in mid-2020.

Long-term performance is strong, thanks to the fund’s excellent protection during periods of broad market stress. From February 2015, MacDonald’s first full month as PIO, through September 2026, the R6 shares outpaced more than 90% of their rivals on both an absolute and volatility-adjusted basis. Still, the team’s active duration management can cause short-term volatility. Its yield-curve steepener position, which combines a longer-duration stance with overweightings at the front end of the curve, helped the fund reach the top of the category in 2025 but left it among the category’s worst performers through September 2026.

Complementary skill sets underpin a collaborative, risk-conscious approach, supporting an Above Average Process rating.

Capital Group’s multimanager system grants the three named managers and the analyst-led research portfolio discretion over their respective sleeves, while PIO Fergus MacDonald keeps the aggregate portfolio’s exposures in balance. MacDonald and Pratyoosh Pratyoosh contribute securitized-debt expertise, complemented by Ritchie Tuazon’s background in duration and yield-curve positioning. With David Betanzos set to retire by the end of 2026, Pratyoosh will largely inherit his sleeve and should see his allocation ramp up relatively quickly. The managers’ complementary strengths support active allocation across securitized debt, Treasuries, and TIPS.

The team takes a cautious approach supported by extensive collaboration across the firm. It focuses on government-backed debt and steers clear of nonagency MBS and fund-level leverage. The fixed-income portfolio strategy group helps establish the portfolio’s top-down positioning, while the managers supplement those views with input from the interest rates group and bottom-up research from a broad analyst bench. MacDonald also consults the risk and quantitative solutions team to identify and make appropriate portfolio adjustments.

The managers seek to generate more excess return from duration and yield-curve positioning than most intermediate-government category peers, drawing on the firm’s broad internal resources. Although the team generally keeps duration within 1.0 year of the Bloomberg Government/Mortgage Index, it occasionally moves beyond that range. Because the index’s duration can differ considerably from the category’s Bloomberg US Government Index and the typical peer, the fund’s interest rate exposure can stand out. Its duration ranged from approximately 4.5 to 7.0 years over the five-year period ended June 2026.

The managers began adding duration in September 2024 as they identified signs of an economic slowdown, particularly in the labor market, and expected the Federal Reserve to cut rates more aggressively than markets anticipated. Despite trimming duration somewhat in the second half of 2025, they added to it again in 2026 as yields rose across the curve and valuations improved. As of June 2026, the fund’s 6.2-year duration exceeded those of its benchmark and median peer by 0.6 years.

The team leverages its expertise in MBS to identify attractive relative value opportunities and is willing to make sizable allocation shifts. For instance, the fund’s MBS stake ranged from 11% to 63% of assets over the five-year period ended June 2026. As mortgage spreads tightened in 2021, the allocation fell to roughly 17% of assets by June, more than 40 percentage points below its level a year earlier. The team subsequently rebuilt the position, which reached a recent peak of 59% of assets in June 2024, before trimming it again as mortgage valuations became rich. As of June 2026, MBS accounted for 33% of the portfolio, down nearly 13 percentage points from a year earlier.

Treasury allocations tend to move inversely to MBS exposure as the managers adjust the portfolio based on mortgage valuations. Over the same period, Treasury and TIPS allocations ranged from 29% to 75% and from 2% to 30%, respectively. The managers increased their out-of-benchmark TIPS position to 28% by year-end 2021 and maintained it through the first quarter of 2023. However, as inflation, measured by the Consumer Price Index, moved closer to the Fed’s 2% target, they gradually reduced the allocation to less than 5% beginning in 2024, though they modestly increased it in 2026 as inflation accelerated. The managers also added substantially to Treasuries between 2023 and 2026 as mortgage valuations became less attractive. Treasuries accounted for 51% of assets as of June 2026, up from 29% in December 2023.

A manager change does not sway our conviction in this experienced and capable team; it continues to earn a High People rating.

Capital Group announced that comanager David Betanzos, who has managed this fund since 2015, is set to retire from the firm by the end of 2026. Reflecting the firm’s thoughtful approach to succession planning, Pratyoosh Pratyoosh, an analyst who has directly supported the strategy and managed a portion of its research portfolio, was named comanager in November 2025 to succeed Betanzos. Pratyoosh was a natural successor given their shared expertise in agency MBS and macroeconomics. His model- and data-driven approach to mortgage analysis also complements the existing managers’ macro-oriented skill set.

The rest of the management roster remains intact. Fergus MacDonald, who has managed the fund since 2009 and served as its PIO since 2015, continues to guide the strategy in that capacity. Ritchie Tuazon, who became a named manager in January 2015, contributes expertise in rates and TIPS. Tuazon and MacDonald have managed the fund together for more than 10 years, and each brings more than 25 years of industry experience.

The firm’s time-tested multimanager system further enhances the team’s capabilities. The fund’s assets are divided roughly evenly among its three managers and an analyst-led research portfolio. Each manager invests independently according to their expertise and convictions while drawing on Capital Group’s extensive fixed-income resources. Meanwhile, a four-person team comprising two rates and two mortgage specialists manages the research portfolio. These analysts average 18 years of industry experience and add another layer of specialized insight.

Manager ownership, which reflects alignment with investors, is solid. All four named managers have at least USD 100,000 in the fund, with Pratyoosh investing more than USD 500,000.

Capital Group stands out from the pack as it enhances capabilities around strong core competencies. It earns a High Parent rating.

Since 1931, Capital Group, parent of American Funds, has thoughtfully built out capabilities to become one of the world’s largest asset managers, managing more than USD 3 trillion dollars. Building on the success of its long-term-oriented, multiple-manager system for global equities, the firm has developed robust fixed-income and multi-asset units, each managing more than USD 500 billion. In January 2026, as part of its periodic review of its now five distinct research organizations, Capital Group implemented changes to its equity investment subsidiaries. This exercise resulted in most equity strategies having at least one portfolio manager change, but according to the firm, it better balances each of Capital Group’s three equity groups in terms of investment breadth and helps the firm better align leadership opportunities across the groups. These kinds of shifts have occurred before, with the last coming in 2018.

Capital Group has also turned its attention to some modern opportunities. To address public/private market convergence trends, it launched in April 2025 two semiliquid funds with private market giant KKR. In keeping with its signature portfolio management approach, it splits those funds into multiple sleeves, which are managed independently by distinct managers at each firm. Capital Group plans to deepen this relationship with target-date and model portfolios, as well as public/private equity funds. On the other end of the spectrum, although the firm is firmly dedicated to active management, it has also acknowledged investor preference for passive investing and has thus partnered with indexing stalwarts Vanguard, BlackRock, and Schwab on active/passive models. Capital Group’s proven investment prowess, strong reputation among investors, and scale mean it can be selective with its partnerships.

In addressing another recent trend, since early 2022, the firm has launched more than 25 active exchange-traded funds globally, most of which are distinct, but several are similar to some of its legacy American Funds mutual funds. Unlike some of its peers, though, it has not filed for SEC exemptive relief to offer ETFs as a share class.

That’s a lot of change for such a storied and sizable firm, but Capital Group has a long history of serving investors well.

Long-term absolute and risk-adjusted performance is compelling, but its active duration management can lead to some volatility.

Over manager Fergus MacDonald's tenure since February 2015 (his first full month as a PIO), the R6 shares' 1.25% annualized return through September 2026 beat the intermediate-government category peer median and Bloomberg Government/Mortgage Index by 28 and 32 basis points, respectively. This result ranked within the category’s top decile, while its Sharpe ratio, a measure of risk-adjusted returns, was the best in the category.

The team’s risk-conscious approach may hold it back when markets reward risk-taking, but it has provided investors with good protection when the broader credit market has sold off. During the 11 periods since 2019 when US high-yield bond spreads widened by more than 10%, the fund held up better than its peer group 9 times and its Bloomberg Government/Mortgage benchmark 7 times. Its defensive qualities were particularly evident during the pandemic-driven selloff in March 2020, when the fund’s 3.7% gain topped the category.

The managers’ willingness to add value through active duration and yield-curve positioning can lead to elevated volatility at times. The fund’s curve-steepener stance, which pairs a longer duration with overweightings at the front end of the yield curve, was the primary driver of its category-best performance in 2025 as the Fed cut rates. However, that stance became the primary detractor in 2026, when inflation concerns drove yields higher across the curve. The fund’s 3.98% year-to-date loss through September 2026 trailed more than 90.0% of its peers.

American Funds US Government Sec A's Prospectus Adjusted Expense Ratio is 0.65% per year. It places it in the second-most-expensive quintile of the Morningstar US Fund Intermediate Government Category, where the median fee is 0.4% per year. This cost positioning translates into a Medalist Rating Price Score of -0.93, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.