American Funds The Bond Fund of America® Class R-3 RBFCX

American Funds Bond Fund of America succeeds while avoiding extremes.

Aiding that avoidance is a management team composed almost entirely of generalists. Indeed, with the March 2025 swap of industry and firm veteran John Queen for mortgage-backed securities specialist David Betanzos, four of the strategy’s five named managers are now generalists. The lone exception, MBS expert Fergus MacDonald, runs his sleeve of the portfolio versus the Bloomberg Aggregate Bond Index, as do all the other managers, and has ample support from specialists in other bond sectors like corporates when he finds sectors outside mortgages attractive.

Capital Group’s multimanager system facilitates broad diversification. Each named manager can run their individual slice of the portfolio in line with their investment convictions, provided they consider firmwide portfolio strategy group guidance and adhere to the fund’s risk guardrails. The research portfolio, which collectively comprises a sixth sleeve, is run by roughly 30 analysts who each invest in their area of expertise, signaling to the managers where to find the best opportunities within a sector.

Those signals enhance security selection while also directing the strategy toward attractive parts of the market, such as securitized debt in recent years. The fund’s agency MBS stake rose from 11% to 37% between late 2021 and late 2023 before falling to about 28% in September 2025, but that was still 3.2 percentage points more than the benchmark’s and ranked in the intermediate-core bond Morningstar Category’s top third. The strategy has also leaned into asset-backed securities. The team has found higher-yielding, higher-quality secured debt with less interest rate sensitivity than what’s available in the corporate bond market, for example, where option-adjusted spreads are historically tight. That’s increased the fund’s ABS weighting from 4.9% at year-end 2023 to 7.0% by September 2025, then 6.5 and 2.2 percentage points more than the index and peer median, respectively.

The team doesn’t get every call right. Positioning the portfolio in anticipation of a steepening yield curve has more often than not hurt results the past few years, especially in 2023’s first half. Still, since Pramod Atluri took over as the principal investment officer at the beginning of 2020, the mutual fund version of this strategy through October 2025 has an excellent record versus its benchmark and peer group. And it looks even better when adjusted for volatility.

This is a topnotch option.

A successful overhaul.

As American Funds’ flagship bond offering, this strategy has benefited greatly from the firm’s post-2008 overhaul of its fixed-income operations, including fostering greater coordination among managers, enhancing their tools and resources, and adding external talent. All these factors, combined with strong, risk-aware execution, earn the strategy a High Process Pillar rating.

The strategy balances incentivizing its named managers to stick to a straightforward core bond approach while granting them flexibility to draw on their respective areas of expertise and broader firm resources, which are among the industry’s best. With each manager running a separate sleeve of the overall portfolio, they can overweight sectors within the Bloomberg US Aggregate Bond Index or pursue attractive out-of-benchmark opportunities, such as high-yield bonds or Treasury Inflation-Protected Securities. Unlike years past, however, when specialist managers were more prone to a niche focus, now all five managers and collectively the analyst-led research portfolio gauge their results against the Aggregate Bond index.

Guardrails for junk bond exposure and interest rate sensitivity, or duration, help keep risk in check. The fund’s stake in below-investment-grade bonds has rarely exceeded 4% under the current team, and in early 2024, the fund’s cap for junk-rated bonds fell officially to 5% from 10% previously. Duration has stayed within 0.6 years of the benchmark’s, though it can deviate up to 1.0 year.

Launched amid the early 1970s stock bear market, this fund employed a corporate credit-heavy, cash-bond approach until poor results in the 2007-09 credit crisis caused it to refashion itself and incorporate the tools of modern fixed-income investing, such as using derivatives to adjust the portfolio’s interest rate sensitivity, or duration, and its exposure to changing credit spreads. Whereas a high single-digit below-investment-grade stake used to be the norm here, a 2% to 4% allocation is now typical, and the fund will sometimes hedge a portion of that through index-level credit default swaps. Moreover, the team often buys BB rated debt it believes is poised to benefit from a near-term ratings upgrade, such as the fund’s current stake in Teva Pharmaceuticals bonds.

While the fund’s corporate-bond weighting tends to stay between 20% and 30% of assets, with positioning in that range dependent on the team’s assessment of changing credit spreads, exposure to Treasuries and securitized debt can oscillate significantly. As rising long-term yields weighed on MBS valuations a few years ago, the team found an opportunity. The fund’s agency MBS stake rose from 11% to 37% between late 2021 and late 2023 before falling to about 28% in September 2025, but that was still 3.2 percentage points more than the Bloomberg US Aggregate Bond Index’s and ranked in the intermediate-core bond category’s top third. More recently, the strategy has leaned into ABS. The team has found higher-yielding, higher-quality secured debt with less interest rate sensitivity than what’s available in the corporate bond market, for example, where option-adjusted spreads are historically tight. That’s increased the fund’s ABS weighting from 4.9% at year-end 2023 to 7.0% by September 2025, then 6.5 and 2.2 percentage points more than the index and peer median, respectively.

The fund’s weighting in out-of-benchmark TIPS neared 15% in mid-2022, as the managers thought the market was mispricing the potential for continued high inflation growth. The TIPS allocation helped in 2022’s first half but hurt thereafter, and by September 2023, the team had cut that exposure to less than 2%, around where it has remained since.

Experienced, capable, and invested.

American Funds’ multimanager system helps to handle this fund's roughly USD 100 billion asset base, the intermediate-core bond category's biggest active offering. The fund's High People Pillar rating reflects its strengths as well as the investment team’s experience, ability, and fund ownership.

American Funds’ parent Capital Group splits this fund’s assets between its five named managers and the analyst-led research portfolio. Generalist Pramod Atluri, a former corporate bond analyst and core manager at Fidelity, joined Capital Group in February 2016 and began overseeing money here about six months later. He took over as the fund’s principal investment officer at the start of 2020. Fellow generalists include David Hoag, Chit Purani, and John Queen. Queen is the team’s newest addition. He has spent 23 of his 35 years in the industry at Capital but only began managing a sleeve here in an undisclosed capacity in 2024 before the firm publicly named him as a manager in March 2025. Purani is also a recent addition with a March 2024 start date, while Hoag is the longest-tenured manager, having run a portion of the portfolio since 2009. MBS expert Fergus MacDonald has even more experience here than Hoag, though. He has run a sleeve of the portfolio since 2015, but before that, he supported the fund as an analyst for 11 years.

The five managers, whose industry experience ranges from 21 to 37 years, can invest their individual sleeves of the overall portfolio in line with their backgrounds and convictions, provided they consider firmwide portfolio strategy group guidance and adhere to the fund’s risk guardrails. The roughly 30-person research portfolio includes experts in Treasuries, agency and nonagency MBS, emerging-markets debt, and investment-grade corporate bonds.

Atluri, Hoag, MacDonald, and Purani each have more than USD 1 million in the fund, while Queen invests between USD 500,001 and USD 1 million.

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.

Excellent.

Since the start of 2020, when Pramod Atluri took over as the principal investment officer, the mutual fund version of this strategy has an excellent record versus its benchmark and peer group. Its cheapest R6 shares’ 1.7% annualized gain through October 2025 beat the Bloomberg US Aggregate Bond Index by 88 basis points while placing near the top decile of distinct intermediate-core bond category rivals. Volatility-adjusted results were even better. The R6 shares’ information ratio versus the category index (a risk-adjusted measure of excess return relative to excess standard deviation) ranked first out of more than 120 peers.

Outperformance of its benchmark and median peer over rolling three-year periods has been consistent under the current team, but the strategy is willing to lag in any given quarter or even year to set itself up for longer-term success. Defensive positioning, including underweighting MBS and reducing credit exposure, hurt in 2019, for example, when the R6 shares’ bottom-half 8.41% gain trailed the index by 31 basis points. That cautious posture, however, helped in the early 2020’s selloff. So, too did deft moves before and after it. Having increased the fund’s Treasury stake in February out of concern about the coronavirus’ then potential impact, the managers responded to the Federal Reserve’s interest rate cut by selectively adding MBS and corporates bonds, including high-yield issues, which helped when the market rallied. The fund’s 11.11% return in 2020 beat the index by 3.61 percentage points and was one of the peer group’s best.

Results thus far in 2025 have been competitive. The R6 shares’ 7.02% gain through October beat the index by 22 basis points and ranked in the peer group’s top quintile. Relative to the index, underweighting Treasuries in favor of agency MBS helped the strategy, as did the team’s preference for higher-coupon mortgages within that bond sector.

American Funds Bond Fund of Amer R3's Prospectus Adjusted Expense Ratio is 0.88% per year. It places it in the most expensive quintile of the Morningstar US Fund Intermediate Core Bond Category, where the median fee is 0.46% per year. This cost positioning translates into a Medalist Rating Price Score of -1.82, 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.