Capital Group Continues Fee Reductions and Series Simplification Across its Canadian Lineup

TORONTO, Sept. 12, 2018 /CNW/ - Capital International Asset Management (Canada), Inc. ("Capital Group") announced today changes designed to simplify pricing and reduce fees for its embedded-commission offerings. Capital Group plans to reduce the administration fee for Series A, AH and T4 units of its mutual funds (the "Funds"), and redesignate Series E and EH units into corresponding Series A and AH units, subject to receiving a positive recommendation from its Funds' Independent Review Committee.

"We're continuing efforts to streamline and pass along efficiencies to investors," said Mark Tiffin, president and director of Capital Group in Canada. "We remain committed to offering investors access to extensive global research at a low cost."

Series A, Series AH and Series T4 fee reductions
As part of Capital Group's commitment to low fees, the administration fee for Series A, T4, and AH of the Funds will be reduced by up to 6 basis points to match the current administration fee for Series E or Series EH units. This change is effective October 1, 2018.

Below is a summary of the proposed changes based on each fund's asset levels as of July 31, 2018:

Series A and T4 administration fees
Based on fund net assets as of July 31, 2018

Fund	Current	New (as of October 1, 2018)
Capital Group Emerging Markets Total Opportunities^SM Fund (Canada)	0.23%	0.17%
Capital Group Global Equity Fund^SM (Canada)	0.10%	0.05%
Capital Group International Equity Fund^SM(Canada)	0.21%	0.15%
Capital Group Canadian Focused Equity Fund^SM(Canada)	0.18%	0.13%
Capital Group U.S. Equity Fund^SM (Canada)	0.18%	0.13%
Capital Group Canadian Core Plus Fixed Income Fund^SM (Canada)	0.20%	0.15%
Capital Group Global Balanced Fund^SM (Canada)	0.14%	0.08%
Capital Group World Bond Fund^SM (Canada)	0.20%	0.14%

Series AH administration fee
Based on fund net assets as of July 31, 2018

Fund	Current	New (as of October 1, 2018)
Capital Group World Bond Fund^SM (Canada)	0.26%	0.20%

Administration fees decline as assets grow
Capital Group's asset-based fee structure allows administration fees to decline as fund assets grow. As a fund's assets pass certain thresholds, its administration fee is reduced, enabling investors to benefit from economies of scale and contributing to a lower management expense ratio (MER).

The following table shows the full schedule of the administration fee reductions across all fund asset thresholds, effective October 1, 2018.

Lower fees as assets grow:
Series A and T4 administration fee schedule

Fund	Administration fees based on fund net assets
	Current			New (as of October 1, 2018)
	Under $500M	$500M - $1B	Over $1B	Under $500M	$500M - $1B	Over $1B
Capital Group Emerging Markets Total Opportunities^SM Fund (Canada)	0.23%	0.17%	0.14%	0.17%	0.11%	0.08%
Capital Group Global Equity Fund^SM (Canada)	0.19%	0.13%	0.10%	0.13%	0.08%	0.05%
Capital Group International Equity Fund^SM(Canada)	0.21%	0.15%	0.12%	0.15%	0.09%	0.06%
Capital Group Canadian Focused Equity Fund^SM(Canada)	0.18%	0.13%	0.10%	0.13%	0.07%	0.04%
Capital Group U.S. Equity Fund^SM (Canada)	0.18%	0.13%	0.10%	0.13%	0.07%	0.04%
Capital Group Canadian Core Plus Fixed Income Fund^SM (Canada)	0.20%	0.14%	0.11%	0.15%	0.08%	0.05%
Capital Group Global Balanced Fund^SM (Canada)	0.20%	0.14%	0.11%	0.14%	0.08%	0.05%
Capital Group World Bond Fund^SM (Canada)	0.20%	0.14%	0.11%	0.14%	0.08%	0.06%

Lower fees as assets grow:
Series AH administration fee schedule

Fund	Administration fees based on fund net assets
	Current			New (as of October 1, 2018)
	Under $500M	$500M - $1B	Over $1B	Under $500M	$500M - $1B	Over $1B
Capital Group World Bond Fund^SM (Canada)	0.26%	0.20%	0.17%	0.20%	0.14%	0.12%

Lower administration fees on October 1st; lower expected MERs over time
Investors will benefit from these reductions beginning October 1, 2018, as fund operating expenses — which include administration fees — are calculated and accrued daily. These lower administration fees are expected to result in lower MERs for Series A, AH and T4 over time.

MERs published in the Funds' December 31, 2018, annual reports will reflect partial administration fee reductions as MER calculations used in these reports reflect fees in the prior 12-month period. Full reductions will be reflected in the MERs published in the June 30, 2019, semi-annual reports.

Redesignation of Series E and EH
Subject to receiving a positive recommendation from the Funds' Independent Review Committee, Capital Group will simplify pricing by combining certain series. On or about January 4, 2019, Series E and EH units of the Funds will be redesignated into corresponding Series A and AH units, which will offer the same management and administration fees as Series E and EH units at that time. Series E and EH units will no longer be offered after the close of business on December 31, 2018. 

Series E and EH units held as of January 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 from Series E or Series EH units into Series A or Series AH units of the same fund is not considered a disposition for tax purposes.

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 January 4, 2019.

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

In addition, lower fees can help contribute to better results for investors. Management expense ratios have three components: the fund's management fee, operating expenses (which include administration fees), and taxes on those fees. Lower fees — and lower taxes on those fees — result in lower MERs. "Capital Group is continuing its longstanding practice of making decisions based on the long-term interest of investors," said Tiffin.

Information about these changes will be available in the Funds' amended simplified prospectus, which will be available through SEDAR at www.sedar.com and through the Manager's website at capitalgroup.com/ca.

About Capital Group
Capital International Asset Management (Canada), Inc. and Capital Group Funds are part of Capital Group, a global investment management firm originating in Los Angeles, California. Since 1931, Capital Group has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. As of June 30, 2018, Capital Group manages more than US$1.8 trillion in equity and fixed income assets for millions of individual and institutional investors around the world.

SOURCE Capital Group Canada

Media Contact: Caroline Semerdjian, [email protected], [phone], Website: capitalgroup.com/ca