American Funds U.S. Government Securities Fund® Class 529-A CGTAX

Capital Group announced that comanager David Betanzos will retire from American Funds U.S. Government Securities and the firm effective Dec. 1, 2026. This news does not affect the strategy’s High People and Above Average Process Pillar ratings or its Morningstar Medalist Ratings across share classes.

A Capital Group veteran of more than two decades, Betanzos has served as a named manager on the strategy since 2015. Consistent with Capital Group’s multimanager approach, Betanzos oversees a sleeve of the strategy’s USD 24 billion portfolio, combining Treasuries and agency mortgage-backed securities. The ample lead time of this retirement announcement to ensure a smooth transition and strong supporting resources don’t dent our confidence in this team.

The remaining managers will stay in place, with principal investment officer Fergus MacDonald continuing to lead the strategy. MacDonald and comanagers Ritchie Tuazon and Pratyoosh Pratyoosh will absorb Betanzos’ sleeve. Pratyoosh will likely assume a larger allocation than the 13% of assets he managed as of March 2026. An agency mortgage-backed securities specialist, Pratyoosh became a named comanager in November 2025 and currently oversees a smaller sleeve than the other managers. Although he is relatively new as a named manager on this strategy, he has managed portfolios since 2023 as part of the research-managed sleeve.

American Funds US Government Securities benefits from a highly skilled team that delivers government exposure while nimbly positioning interest rate risk.

Morningstar has enhanced the way we assess excess return opportunity for funds, which is a key component in our Morningstar Medalist Rating calculation. More of this strategy’s Medalist Ratings than usual, therefore, change with this update, even in the absence of changes to pillar ratings or fund costs. As a result, three share classes will reflect these updates.

Experienced leadership and a well-balanced mix of talent enable each manager to focus on their respective areas of strength, helping this stand out among the category’s best. The fund’s principal investment officer, or PIO, Fergus MacDonald, on the fund since 2009, took the reins in January 2015 at the same time the firm added securitized debt expert David Betanzos and rates specialist Ritchie Tuazon comanagers. Capital Group’s multimanager system divides assets among these managers and a four-person analyst-led research portfolio, with MacDonald overseeing overall portfolio exposure as a PIO while giving each sleeve manager and the research portfolio flexibility to invest based on their expertise and focus on what they do best.

The firm announced that securitized debt expert Mr. Pratyoosh will join as a fourth manager on Nov. 1, 2025. This will be his first stint as a portfolio manager, and his fund’s assets will grow gradually, so he can establish his approach within the broader team.

Capital Group’s team-based, risk-aware approach drives the fund’s investments across government sectors, primarily in agency mortgage-backed securities, Treasuries, and Treasury Inflation-Protected Securities while avoiding nonagency MBS and fund leverage. MacDonald integrates insights from the firm’s risk and quantitative solutions team for necessary adjustments and relies on the fixed-income portfolio strategy group for top-down insights that shape the portfolio.

The team’s willingness to manage the portfolio’s duration (a measure of interest rate sensitivity) is another lever that can add value. They maintain duration within 1.0 year of the Bloomberg Government/Mortgage Index, but it has strayed outside this guideline by up to 1.6 years, as it did in mid-2020. However, it doesn't always work out. For example, anticipating a steepening yield curve and lengthening duration out of concern that 2023's March banking panic could spread drove the R6 shares' 2.4% second-quarter drop, which placed last among intermediate-government Morningstar Category peers.

Even with short-term setbacks, the fund’s long-term result stands out. Since February 2015 (MacDonald’s first full month as a PIO), the R6 shares’ 1.7% annualized return through September 2025 ranked in the top decile within the category.

Complementary strengths drive a collaborative and risk-conscious approach, earning an Above Average Process Pillar rating.

Capital Group’s multimanager system gives the three named managers and the analyst-led research portfolio discretion over their own sleeves, while PIO Fergus MacDonald ensures the overall portfolio’s exposures remain balanced. MacDonald and David Betanzos bring securitized debt expertise, while Ritchie Tuazon adds deep knowledge of duration and yield curves. Together, their complementary skills and expertise enable them to actively manage allocations among securitized debt, Treasuries, and TIPS.

The team blends effective collaboration with caution. They focus on government-backed debt and avoid nonagency MBS and fund level leverage. The fixed-income portfolio strategy group provides top-down views that help shape the portfolio, while the managers draw on the firm’s interest rates group and bottom-up research from a broad pool of analysts. MacDonald incorporates feedback from the firm's risk and quantitative solutions team to make necessary adjustments.

The managers aim to derive more excess return from duration and yield-curve management than most intermediate-government category peers by leveraging the firm’s broad internal resources. As a result, while the team keeps duration within 1.0 year of the Bloomberg Government/Mortgage Index, it occasionally moves beyond that parameter. This index’s duration can be quite different from the category’s Bloomberg US Government Index and its typical peer at times. The fund’s duration fluctuated between approximately 3.0 and 7.0 years over the trailing five-year period ended in June 2025. As they saw signs of economic slowing, especially in the labor market, and expected the Federal Reserve might cut rates more than markets anticipated, the fund extended its duration; its 6.4-year duration as of June 2025 was more than a year longer than in September 2024.

The team leverages their expertise in MBS to seek attractive relative value and will make big moves in certain markets. For instance, the fund’s MBS stake ranged between 11% and 63% of assets over the trailing five years ended in June 2025. When mortgage spreads tightened in 2021, this stake dropped to around 17% of assets by June 2021, more than 40 percentage points lower than the previous year. The fund’s 46% in MBS as of June 2025 was much higher than in 2021, though, as the managers saw less attractive value, they trimmed the allocation by more than 10 percentage points from a year ago.

They manage Treasury allocations in line with mortgage valuations. Treasury and TIPS have ranged between 16% and 47% and 2% and 30%, respectively, over the same period. By the end of 2021, the managers increased the fund's Treasury allocation to 47% from 35% the previous year and raised its out-of-benchmark TIPS exposure to 28%. This level remained steady until the first quarter of 2023. However, as the shelter component of the Consumer Price Index indicated that overall inflation was approaching the Fed's 2% target, the managers reduced the TIPS stake to 5% as of June 2025.

The managers’ deep expertise across government securities and time working together stands out among the category’s top teams. Combined with Capital Group's multimanager system, it allows this seasoned team to focus on what it does best; it earns a High People Pillar rating.

This veteran group brings a great mix of specialized expertise. Manager Fergus MacDonald, who has managed the fund since 2009, became the fund's PIO in January 2015, at which time David Betanzos and Ritchie Tuazon also joined. MacDonald brings more than three decades of securitized debt market experience, while Betanzos (27 years) adds securitized debt expertise, and Tuazon (25 years) brings skill in areas such as rates and TIPS. This trio has worked together for more than 10 years, and their complementary skills have been key drivers of the enduring success in identifying attractive relative value across government securities.

The firm’s time-tested system enhances the managers’ expertise further. Capital Group's multimanager system divides the fund's assets roughly evenly among the three managers and the analyst-led research portfolio, and each can invest their sleeves of the overall portfolio in line with their backgrounds and convictions while consistently benefiting from the firm’s leading fixed-income resources. A four-person analyst team manages the research portfolio, which includes two rates and two mortgage specialists who average 18 years of industry experience, adding another layer of insight.

Securitized debt expert Mr. Pratyoosh will join the already seasoned team as a fourth named portfolio manager on Nov. 1, 2025. He has 18 years of industry experience, including 12 at Capital Group. Over time, he will build his allocation to a full share of assets as he gradually ramps up.

Manager ownership, which reflects alignment with investors, is strong. MacDonald invests more than USD 1 million, while Betanzos and Tuazon each invest between USD 100,001 and USD 500,000.

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.

Long-term absolute and risk-adjusted performance is compelling, but its active duration management can, at times, lead to divergent returns.

Over manager Fergus MacDonald's tenure since February 2015 (his first full month as a PIO), the R6 shares' 1.7% annualized return through September 2025 beat the intermediate-government category peer median and Bloomberg Government/Mortgage Index by 43 and 46 basis points, respectively. This result outpaced most of its category peers, while its Sharpe ratio (a measure of return relative to standard deviation) ranked in the top decile.

The fund's conservative guardrails translate to a performance headwind relative to bolder peers when markets reward a riskier appetite, but it should shine when bouts of credit or rate volatility recalibrate prices. For instance, during the pandemic-driven selloff in March 2020, the fund's 3.7% gain outpaced both the peer median and index. Because of its allocation to and selection decisions within agency pass-throughs, the fund also kept up with its peers throughout the year during the subsequent rebound. Over the full 2020 calendar year, the fund's 9.9% return bested all but one of its peers.

The manager's willingness to add value via duration and yield-curve positioning does not always help. Anticipating a steepening yield curve and adding duration out of concern that 2023's March banking panic could spread drove the R6 shares' 2.4% second-quarter drop, which lagged the index by 130 basis points and placed last among distinct category rivals.

The fund’s position in MBS continues to add value; its 6.7% year-to-date return through September 2025 ranked near the top quintile.

American Funds US Government Sec 529A's Prospectus Adjusted Expense Ratio is 0.65% per year. It places it in the second-most-expensive quintile of the Morningstar US Fund Intermediate Government Category, where the median fee is 0.45% per year. This cost positioning translates into a Medalist Rating Price Score of -0.84, 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.