American Funds High Income Trust Fund (AHITX) Class A

With $15 billion total asset, this American Funds American High Income Trust is one of the most popular taxable high yield bond funds. This fund also has a high distribution rate of 8.54%. You can find the fund review below.

American Funds American High Income Trust A (AHITX)

This American Funds American High Income Trust fund objective is to provide a high level of current income. The fund’s secondary investment objective is to achieve capital appreciation. This fund invests primarily in higher yielding and generally lower quality debt including corporate loan obligations. It may also invest a portion of its assets in securities of foreign issuers.

Fund Details

The American High Income Trust A

• Fund Inception Date: February 19, 1988
• Ticker Symbol: AHITX
• CUSIP: 026547109
• Beta (3yr): 0.71
• Rank in category (YTD): 61%
• Category: High Yield Bond
• Distribution: 8.54%
• Capital Gains: 0%
• Expense Ratio: 0.68%  
• Net Assets: $ 15.98 billion
• Number of Years Up: 18 years
• Number of Years Down: 4 years
• Average Duration: 3.7 years
• Average Life: 5.9 years
• Annual Turnover Rate: 47.0%

Updated on 11/13/2011

This High-Yield Bond fund of American Funds has a high dividend yield of 8.54%. It is distributed on monthly basis. The recent payment of the dividend was in October 28, 2011 ($0.07). The fund total net assets are $15.98 billion. The annual expense ratio of AHITX fund is 0.68%. This is lower compared to the average in the High Yield Bond category (1.16%). This fund is currently managed by David D. Barclay. He has been managing this fund since December 1989.

This high yield bond fund has returned 8.86% over the past three year and 7.17% over the past ten year. The YTD return of this fund is -2.95%. The best 1-year total return of this fund among 18 years of positive return was in 2009 with 48.42%. The worst 1-year total return was occured in 2008 with -27.52%. The 3-year beta is 0.71. This fund has 3-stars rating from Morningstar. If you are interested in best rated bond fund, please check my previous article.

There are 75 brokerages that provide this fund include Scottrade Load, Merrill Lynch, Edward Jones, Schwab Retail, JP Morgan, Vanguard, E Trade Financial, Firstrade, Royal Alliance, Raymond James, etc. To start investing in this fund, investor only need as little as $250 to open a brokerage or IRA account. The next investment needed is $50. There is 0.22% 12b1 fee and the front end sales load fee is 3.75%. There are lots of other classes available for this American High-Income Trust, such as:

• Class B: AHTBX
• Class C: AHTCX
• Class F-1: AHTFX
• Class F-2: AHIFX
• Class 529-A: CITAX
• Class 529-B: CITBX
• Class 529-C: CITCX
• Class 529-E: CITEX
• Class 529-F-1: CITFX

The portfolio assets of this high yield bond fund as of September 2011 is U.S. Corporate Bonds (74.3%), Non-U.S. Corporate and Governmental Bonds (16.7%), Cash & Equivalents (4.9%), Stocks (1.6%), Other (1.5%), Mortgage-Backed Securities (0.6%), U.S. Treasuries (0.3%) and Municipal Securities (0.1%). The asset mix is U.S. Bonds (76.6%), Non-U.S. Bonds (16.9%), Cash& Equivalents (4.9%), U.S. Equities (1.5%) and Non-U.S. Equities (0.1%).

According to the fund’s prospectus, the principal risks for investing in this fund include: investing in lower rated bonds, thinly traded securities, investing in bonds, market conditions, investing outside the United States, and Management risk.

Disclosure: No Position

Other taxable bond fund article:

• T. Rowe Price High Yield Fund (PRHYX)