American Funds The Income Fund of America® Class A AMECX

On Oct. 1, 2026, David Daigle, a portfolio manager for this fund since October 2006, will step down from his management responsibilities for this strategy in order to reduce his workload. Daigle has managed a high-yield bond portfolio here, and his assets will be assumed by two experienced managers with similar mandates: Shannon Ward, a manager for this fund since 2017, and Andy Moth, who joined in December 2025. Given the depth of the team and the continuity of the investment approach, this change does not impact the strategy’s Above Average People rating. Daigle will remain a comanager on American Funds High-Income Trust, a role that he’s held since 2003. Ward and Moth have been managers of that strategy (which also earns an Above Average People rating) since 2016 and December 2024, respectively.

American Funds Income Fund of America’s manager roster continues to evolve. But the crew running this strategy continues to be better than most.

This income-seeking strategy will have seen a total of six equity managers depart from the start of 2022 through the end of 2025; several have been added during the period, and there will be five total remaining. The latest to leave include Caroline Randall on Oct. 1, 2025, in advance of her retirement from the firm, and Dimitrije Mitrinovic at the end of 2025 as part of a broader reorganization that will result in this fund’s equity portfolio being managed by one of the firm’s equity investment units instead of two.

The pace of recent turnover has been suboptimal, particularly when Randall and Mitrinovic were only named managers on the fund for just over five and two years, respectively. But veteran managers remain on board; three of the five equity managers as of Jan. 1, 2026, have worked on the fund for at least a decade. Another, Justin Toner, has worked on allocation strategies for the firm for nearly a decade. Meanwhile, the fixed-income manager roster has been much more stable and will be augmented on Jan. 1, 2026, by Andy Moth, a comanager of American Funds American High-Income Trust since December 2024. (This fund’s two other high-yield-focused managers have worked on High Income for 22 and nine years, respectively.)

The fund’s prudent approach to income investing, meanwhile, hasn’t changed since a wise tweak to lower the yield requirement for purchase of a security to 2.5% in 2021 after yields declined. The managers have had little trouble meeting that hurdle; as of September 2025, the yields of the equity managers’ individual portfolios ranged from 2.9% to 3.5%. The mandate has resulted in a significant tilt to stocks that land in the large-value corner of the Morningstar Style Box. But the equity portfolio (which typically ranges from 60% to 80% of assets) isn’t stuffed with lower-quality firms. Its financial health metrics, other than a higher debt/capital ratio, were roughly in line with the fund’s average global moderate allocation Morningstar Category peer.

The value tilt can occasionally be a substantial headwind—the fund trailed 90% of peers in the global moderate allocation Morningstar Category in 2023’s growth-stock rally, for example. But over the trailing five, 10, and 15 years ended November 2025, the fund topped most peers and the category benchmark on a risk-adjusted basis (as measured by Sharpe ratio).

Correction (Dec. 18, 2025): A previous version of this report misidentified manager Andy Moth as Andy Monk.

A prudent approach to income generation executed in a disciplined manner earns an Above Average Process rating.

Hilda Applbaum, who heads up the team of managers, occasionally shifts the fund's stock/bond mix based on the interest rate environment and equity yields. This element of the process creates a little uncertainty but has added modest value over time. A 60%-80% equity stake is typical.

The equity managers have a 2.5% yield target within their independently run sleeves; the firm lowered the target in 2021 to give them flexibility when yields declined. Managers may also invest up to 30% of the fund's assets in non-US stocks, which tend to offer higher payouts. Despite a rising equity market for much of the past three years, the yields of the individual equity sleeves ranged from 2.9% to 3.4% in September 2025. And the managers have achieved this without investing heavily in troubled, high-yielding firms.

The fixed-income portfolio often includes an above-average stake in lower-quality bonds relative to peers; high-yield bonds typically constitute 5%-10% of total assets compared with a recent category average of 2%. That said, the fund tends to focus on the middle of the high-yield credit-quality spectrum while avoiding the sketchiest fare. The firm's investment-grade fixed-income process has been strengthened through an improved toolkit and additional resources in recent years.

The fund's equity stake shifts based on where management finds the best opportunities for high and stable income. Equity exposure has hovered between 63% and 74% of assets since late 2013, with lead portfolio manager Hilda Applbaum generally reallocating capital to bond managers, or adding a few percentage points of cash, in advance of downturns. For example, concerns about stock valuations led to cuts before equity declines in the second half of 2018 and early 2020. A move out of equities and into cash and high-yield bonds in late 2021 and early 2022 helped stave off losses as well. Since stocks began rebounding in late 2022, Applbaum has gradually moved assets to fixed income as stocks appreciated and bond yields remained attractive, but the equity weighting hasn’t dipped much below 70%.

High-yield credit exposure has been fairly stable in recent years after bouncing around due to market volatility. The managers added to their stake in bonds rated BB or lower in the early 2020 downturn, then sold again in the rally; high yield was less than 2.5% of total assets in September 2020. A year later, the high-yield stake exceeded 6% of fund assets and constituted nearly a third of a smaller underlying bond sleeve. The overall high-yield stake has since moved up to about 8.6% of total assets in September 2025. The managers also kept interest rate sensitivity fairly low in 2022, which helped substantially as the Fed boosted rates. The fund's duration has since moved up and sits at 4.4 years, a bit lower than the 4.9-year category average.

Turnover among the equity managers has been above average over the past four years. But the team remains experienced, supporting an Above Average People rating.

All told, five equity managers and five fixed-income managers will be named on this fund as of Jan. 1, 2026, and while that cohort remains skilled, it has experienced some change. From the start of 2022 through 2025, this fund will have lost six equity managers. The latest to leave include Caroline Randall on Oct. 1, 2025, in advance of her retirement from the firm, and Dimitrije Mitrinovic at the end of 2025 as part of a broader reorganization that will result in this fund’s equity portfolio being managed by one of the firm’s equity investment units instead of two. That’s a lot of departures, and Randall and Mitrinovic logged relatively short tenures of five and two years, respectively. But four of the five equity managers, as of Jan. 1, 2026, have extensive experience picking dividend-paying stocks for either this fund or another of the firm’s asset-allocation strategies. And Hilda Applbaum, who also decides on asset-allocation changes for this fund, has been a named manager since 1997.

Four other managers run fixed-income sleeves and will be joined by a fifth, Andy Moth, on Jan. 1, 2026. The firm's taxable fixed-income team has significantly strengthened its resources in recent years, and its investment-grade bond funds have generally garnered higher Morningstar Medalist Ratings. The firm's high-yield effort, a key element of this fund’s bond sleeve, has also earned higher ratings of late.

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.

This fund has generated strong results, particularly on a risk-adjusted basis.

The fund’s A share class surpassed more than 90% of its global moderate allocation Morningstar Category peers and the Morningstar Moderate Target Risk Index category benchmark on total return, Sharpe ratio, and alpha over the trailing five, 10, and 15 years through November 2025.

The fund's value tilt compared with its typical category peer means it can struggle when growth stocks thrive. Indeed, the fund lagged 90% of category peers in 2023 when tech stocks rallied. But the fund has typically held up well in downturns despite above-average exposure to high-yield bonds. In 2022's sharp decline, for example, the fund lost about 7 percentage points less than the category average and 8 less than the category index. The fund outperformed both in 2024 due to strong security selection, even as growth stocks did well.

The fund's yield has also risen as stocks' payouts and bond yields have climbed amid rising interest rates. In the 12 months ended November 2025, the A shares yielded 3.51%, up from 2.70% four years earlier. That's well above the category median, though lower than the majority of multi-asset income funds.

American Funds Income Fund of Amer A's Prospectus Adjusted Expense Ratio is 0.56% per year. It places it in the cheapest quintile of the Morningstar US Fund Global Moderate Allocation Category, where the median fee is 0.92% per year. This cost positioning translates into a Medalist Rating Price Score of 1.88, 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.