American Funds Bond Fund of America A (ABNDX)

American Funds Bond Fund of America A (ABNDX) is a popular diversified bond mutual fund. This bond fund invests in U.S. government bonds, corporate debts.

American Funds is among the leader of mutual fund family. It offers variety of mutual funds including fixed income or bond funds, balanced funds, and equity or stock funds. One of the most popular funds is American Funds Bond Fund of America A fund. Details review is below.

American Funds Bond Fund of America A (ABNDX)

The American Funds Bond Fund of America fund’s objective is to provide as high a level of current income with consistent capital preservation. The fund generally invests >80% of assets in bonds and other fixed income securities. It invests a majority of its assets in debt securities rated A3/A- or better which is issued or guaranteed by US Government or other governments (including mortgages and other assets). It may invest its assets in corporate debts, mortgage related debts, and high yield bonds. This American Funds fund invests in debt securities with a wide range of maturities.

Fund Details

American Funds Bond Fund of America A

• Fund Inception Date: May 28, 1974
• Ticker Symbol: ABNDX (Class A)
• CUSIP: 097873103
• Beta (3yr): 0.95
• Rank in category (YTD): 33%
• Category: Intermediate-Term Bond
• Distribution: 1.75%
• Capital Gains: 0%
• Expense Ratio: 0.61%  
• Net Assets: $ 31.90 billion
• Number of Years Up: 34 years
• Number of Years Down: 2 years
• Average Duration: 4.72 years
• Annual Turnover Rate: 99.0%

Updated May 2017

This ABNDX fund has been managed by John A. Smet since January 1989. It was officially introduced to public in May 1974. The dividend yield of this fund is 3.33%. It is distributed on monthly basis. The latest dividend was distributed in October 25, 2011 ($0.04). The annual holdings turnover ratio (99.00%) is lower than the average in the Intermediate-Term Bond category. The fund annual expense ratio is 0.59%. The 12b1 fee is 0.24% and the front-end sales load fee is 3.75%.

The fund’s performance based on the load adjusted return is as follow:

• Year 2017: 1.88% (YTD)
• Year 2016: 2.74%
• Year 2015: 0.23%
• Year 2014: 5.53%
• Year 2013: -1.99%

Since its inception, this intermediate term bond fund has achieved 34 years of positive return and only 2 years of negative return. The highest achievement for 1-year total return so far was in 2009 with 14.91% and the lowest was in 2008 with -12.23%. The YTD return of this fund is 5.11%. This fund has 2-star rating from Morningstar.  The benchmark of this fund is Lipper Corporate Debt A-Rated Funds Average.

American Funds Bond Fund of America A (ABNDX) Performance

The minimum initial investment to start investing in either brokerage or IRA account of this IRA account is $250 with minimum subsequent investment of $50. There are 74 brokerages that provide this fund, such as Merrill Lynch, Schwab Retail, Ameriprise Brokerage, Fidelity Retail Funds Network, JP Morgan, E Trade Financial, Firstrade, etc. There are other classes of this fund, like:

• Class B: BFABX
• Class C: BFACX
• Class F-1: BFAFX
• Class F-2: ABNFX
• Class 529-A: CFAAX
• Class 529-B: CFABX
• Class 529-C: CFACX
• Class 529-F1: CFAFX

As of September 2011, the asset mix of this fund is 79.0% in US Bonds, 16.4% in Non-US Bonds and 4.6% in Cash & Equivalents. The top 5 portfolio holdings are Mortgage and Asset Backed Securities (36.4%), U.S. Corporate Bonds (20.3%), U.S. Treasuries (19.7%), Non-U.S. Corporate Bonds (10.4%) and Non-U.S. Governments/ Agencies (5.4%).

Pros:

• Popular among investors in retirement account
• Low minimum investment requirement (only $250)

Cons:

• It has a sales load
• average return

Disclosure: No Position

Other bond fund articles:

• American Century Zero Coupon 2015 Inv (BTFTX)
• Vanguard Intermediate-Term Bond Index Fund (VBIIX)