American Funds New World Fund® Class 529-F-3 FWWNX

American Funds’ parent Capital Group announced that manager Matt Hochstetler stepped off American Funds New World (including several non-US domiciled vehicles and a sibling exchange-traded fund) on Aug. 1, 2026, and departed the firm. He had spent just over half of his 20-year investment career at Capital Group and managed roughly 5% of the fund’s assets. In response, the firm made a sensible addition to the management team, naming Leo Hee as a comanager. Hee has managed a sleeve of American Funds International Growth and Income and American Funds World Growth and Income for more than 10 and six years, respectively, so he’s well-versed in foreign investing. Both strategies also have some emerging-market exposure, and that’s relevant for this strategy. Hee has 33 years of industry experience and has been at the firm for more than 20 years. The management team of Brad Freer, Saurav Jain, Dawid Justus, Carl Kawaja, Winnie Kwan, Piyada Phanaphat, Akira Shiraishi, Kirstie Spence, Tomonori Tani, Lisa Thompson, and Chris Thomsen remains in place. As such, these changes do not alter the strategy’s High People rating or its Morningstar Medalist Ratings.

American Funds New World (which includes the Capital Group New World vehicles in Luxembourg, Australia, and Japan) benefits from a seasoned management team, robust resources, and a sensible, risk-averse approach.

Although the firm made some lineup changes at the start of 2026 following a comprehensive internal review, the strategy continues to benefit from a deep bench of capable managers. Two managers moved subsidiaries but continue to oversee assets, while Carl Kawaja assumed a leadership role. In addition, Rob Lovelace, who ran just 5% of assets, stepped off on April 1, 2026, while Saurav Jain was disclosed as a manager. Jain has served as a comanager on another emerging-market strategy for more than five years, so this is well within his wheelhouse. Overall, 12 managers run the fund, supported by more than 200 analysts. Eleven of the managers focus on equities, with one overseeing a modest fixed-income sleeve. All managers have more than 15 years of investment experience with the firm.

The strategy’s long-term success reflects its flexible, risk-averse approach to emerging markets. In addition to investing directly in emerging-market companies, managers can allocate assets to developed-market firms that generate at least 20% of revenue from emerging economies, often resulting in a less volatile portfolio than peers. This flexibility expands the opportunity set and has led to top holdings such as Microsoft, Nvidia, and Broadcom, and Airbus alongside emerging-market names.

Another recent change—the shift in prospectus benchmark to the MSCI Emerging Markets Index from the MSCI ACWI Index—should have minimal impact, according to the firm. The team continues to employ a bottom-up approach focused on identifying the most compelling opportunities that meet its revenue criteria, regardless of domicile.

This differentiated approach produces a portfolio that stands apart from both peers in the diversified emerging-markets Morningstar Category and the MSCI Emerging Markets Index. Its above-average exposure to developed markets has contributed to lower volatility and stronger downside protection, while still participating meaningfully in market rallies.

That same positioning can lead to relative underperformance during periods when emerging markets lead, as observed in 2025, when the fund lagged the benchmark and finished in the category’s bottom half. Still, long-term results remain compelling. The strategy ranked in the top quartile of the category over the trailing 10-, 15-, and 20-year periods through March 2026. Overall, it remains a strong option for broad emerging-market exposure.

The strategy earns an Above Average Process rating for its flexible, risk-averse approach. It seeks to damp the volatility typically associated with emerging-market equities by investing a share of the portfolio in developed-market firms that derive significant revenue from emerging economies and, more recently and to a lesser extent, developing-market debt.

Management's revenue-centric approach to investing means that results are driven more by emerging markets' growth than might otherwise be the case. The team believes that while emerging markets are expanding faster than developed markets, emerging-market firms aren't necessarily the best way to capitalize on that growth. In some cases, developed-market multinationals may be better positioned. Firms with at least a fifth of their revenue or assets attributable to the developing world are fair game here, provided at least 45% of the strategy's assets are invested directly in emerging-market-domiciled securities.

At the beginning of 2026, the firm moved the strategy’s prospectus benchmark to the MSCI Emerging Markets Index from the MSCI ACWI, which it had long used. This change should have minimal impact, according to the firm, as the managers maintain a bottom-up approach focused on identifying the most compelling opportunities, regardless of domicile. Developed-market holdings remain part of the toolkit when they offer superior prospects.

American Funds' multimanager system lets the strategy's 12 named managers play to their strengths. Each runs an independent sleeve of the portfolio, which enhances diversification and further mutes overall volatility. Currency exposure is typically hedged only when risks appear elevated.

Since the strategy’s 1999 inception, it has on average kept more than a third of its assets in developed-market stocks (excluding South Korea and Taiwan). There's been a fair amount of variability in that stake, though. Developed-market equity exposure has increased since bottoming at roughly 20% in June 2005. As of December 2025, that weighting stood at 41.6% thanks in part to its US exposure, while the strategy's emerging-market equity stake by domicile was 54.2% (including Korea and Taiwan). Judged by revenue sources, however, the strategy has more emerging-market exposure. As of December, the portfolio received about 64% of its revenue from the developing world.

The portfolio holds less in East Asian stocks than the MSCI Emerging Markets Index. It has been significantly light in South Korea and Taiwan. While the strategy’s China allocation has grown over the past decade, its 13.1% stake was much lower than the index’s 22.4% as of December 2025. Most notably, the strategy has underweighted technology giants, such as Taiwan Semiconductor and Samsung, and Chinese companies Tencent and Alibaba, which top the index.

The strategy’s previously sizable bond sleeve has shrunk. From mid-2008 to 2015, bonds absorbed between 8% and 17% of assets. Since then, however, the fund’s fixed-income sleeve has declined to less than 4%, recently clocking in at 2.8%.

The strategy’s structural advantages, combined with the managers’ experience, skill, and deep bench of support, justify a High People rating. Capital Group, the parent of American Funds, has split the strategy's equity stake between subsidiaries Capital Research Global Investors, Capital World Investors, and Capital International Investors.

After a firmwide self-assessment, this strategy underwent some personnel changes at the start of 2026. Two managers, Dawid Justus and Piyada Phanaphat, moved subsidiaries but remain on the fund. Justus served as CWI’s principal investment officer, in charge of allocating capital across CWI’s management team. With his move to CRGI, veteran leader Carl Kawaja took over as CWI’s PIO. Additionally, Rob Lovelace, who only ran 5% of assets, stepped off the strategy on April 1, 2026, while Saurav Jain was disclosed as a manager. Jain has served as a comanager on another emerging-market strategy for more than five years, so this is well within his wheelhouse. These moves should have minimal impact.

This strategy remains in the hands of firm veterans with exceptional support. Brad Freer leads the whole strategy and CRGI's side, which includes Christopher Thomsen, Winnie Kwan, Justus, and Phanaphat. Kawaja heads up CWI's team of Tomonori Tani and Matt Hochstetler, while Lisa Thompson oversees CII’s group, including Akira Shiraishi and Jain. Finally, Kirstie Spence runs a fixed-income sleeve here. Each manager runs an independent portfolio sleeve, with Freer, Kawaja, and Thompson ensuring stylistic balance across the strategy. In total, 12 managers oversee the fund, supported by more than 200 analysts.

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.

The strategy has produced strong long-term results. Over the trailing 10-, 15-, and 20-year periods ended March 2026, the R6 shares’ annualized returns topped those of the MSCI Emerging Markets Index and landed in the top 25% of the diversified emerging-markets category. The fund fared even better on a risk-adjusted basis, thanks to muted volatility and superior downside protection.

The fund can, however, lag in emerging-market rallies thanks to its broad geographic exposure, which includes a large allocation to developed markets. That was evident in 2025 as foreign stocks, and in particular emerging markets, outperformed. The strategy’s 28.6% gain lagged the emerging-market index by 5 percentage points and landed in the category’s bottom half. Underweighting top index holdings such as Samsung and Alibaba hurt, as did developed-market holdings Novo Nordisk and Microsoft.

Yet, investors who stuck with the strategy through bouts of underperformance have done well, as it has typically outperformed in downturns. The R6 shares’ five-year downside capture ratio shows it has only lost 77% of the amount relative to the MSCI Emerging Markets Index.

The strategy typically is more growth-oriented than the benchmark, which has helped it perform well in broad growth-led market rallies. For example, in 2023’s strong market, the strategy handily outpaced the index.

American Funds New World 529-F-3's Prospectus Adjusted Expense Ratio is 0.62% per year. It places it in the cheapest quintile of the Morningstar US Fund Diversified Emerging Mkts Category, where the median fee is 1.04% per year. This cost positioning translates into a Medalist Rating Price Score of 1.72, 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.