Correspondence 0000051931-25-000925 from AMERICAN FUNDS CORPORATE BOND FUND (CIK 0001553195)
AMERICAN FUNDS CORPORATE BOND FUND (CIK 0001553195)
Date: Aug. 11, 2025 · CIK: 0001553195 · Accession: 0000051931-25-000925
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File numbers found in text: 811-03734, 811-03857, 811-22744, 811-23101, 811-23122
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Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071-1406
August 11, 2025
Mindy Rotter
Division of Investment Management – Disclosure
Review and Accounting Office
Securities and Exchange Commission
100 Pearl Street, Suite 20-100
New York, NY 10004
Re: American Funds Complex – SOX Review
Dear Ms. Rotter:
On behalf of Capital Research and
Management Company ("CRMC"), investment adviser to each of the funds set forth on Appendix I hereto (each a "Fund",
and collectively, the "Funds"), this letter responds to comments provided by the Staff of the Division of Investment Management
of the Securities and Exchange Commission (the "Staff") to CRMC by telephone on July 11, 2025 regarding the Staff's
recent SOX reviews for the Funds.
For your convenience, the substance
of the Staff's comments has been restated in italics below. CRMC's response to each comment is set out immediately under the
restated comment. As discussed on our July 11, 2025 telephone call, unless otherwise directly stated in the comment itself, the comment
applies as applicable to the Funds or to all of the Funds.
1. Form N-CSR Item 16(a) Controls and Procedures for the registrants of the Funds (each, a "Registrant")
does not disclose the conclusion as of a date within 90 days of the filing date of the report. Please file an amended Form N-CSR for each
Registrant to correct the Item 16(a) disclosure.
Response: We acknowledge your comment
and had intended to amend each Registrant's Form N-CSR filing to disclose under Item 16(a) the conclusion as of a date within 90
days of the filing date of the report, as follows:
"The Registrant's Principal Executive
Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant's disclosure controls and procedures
(as such term is defined in Rule 30a-3 under the Investment Company Act of 1940) as of a date within
90 days of the filing date of this report , that such controls and procedures are adequate and reasonably designed
to achieve the purposes described in paragraph (c) of such rule."
However, due to vendor system limitations,
amending such filings would have required a reprocessing of each tailored shareholder report within each N-CSR filing, including re-performing
all iXBRL tagging. In total, 187 tailored shareholder reports would need to have been re-tagged, and due to the time- and resource-intensive
nature of such tagging, with the exception of one Registrant, the Form N-CSRs for the next reporting period would have been filed and
made publicly available before the prior amended Form N-CSRs would have been filed. In light of these circumstances, as discussed with
the Staff, rather than amending each Form N-CSR to correct the Item 16(a) disclosure, we will include the correct disclosure (as shown
above) in each Form N-CSR going forward.
2. Form N-CSR Item 16(b) Controls and Procedures for the Registrants refers to a semi-annual period covered
by the report. Please utilize the language provided in Form N-CSR Item 16(b), which refers to a period covered by the report not isolated
to a particular semi-annual period and confirm in correspondence that there have been no such changes in the Registrant's internal
controls over financial reporting that occurred during the period.
Response : We acknowledge your comment
and had intended to amend each Registrant's From N-CSR filing to make this change, as reflected below. However, due to vendor system
limitations, amending such filings would have required a reprocessing of each tailored shareholder report within each N-CSR filing, including
re-performing all iXBRL tagging. In total, 187 tailored shareholder reports would need to have been re-tagged, and due to the time- and
resource-intensive nature of such tagging, with the exception of one Registrant, the Form N-CSRs for the next reporting period would have
been filed and made publicly available before the prior amended Form N-CSRs would have been filed. In light of these circumstances, as
discussed with the Staff, rather than amending each Form N-CSR to correct the Item 16(b) disclosure, we will include the correct disclosure
(as shown below) in each Form N-CSR going forward.
"There were no changes in the Registrant's
internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during
the Registrant's semi-annual period covered by this report that has materially
affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting."
We also confirm that there have been no
such changes to each Registrant's internal controls over financial reporting that occurred during the period covered by each Registrant's
report, as noted on Appendix I.
3. Please confirm in correspondence that each non-diversified Fund continues to maintain its non-diversified
status. The Staff notes that if any of the Funds have been operating as a diversified fund for more than three years, that fund will require
shareholder approval prior to changing its status back to a non-diversified fund.
Response: We confirm that each non-diversified
Fund either continues to operate as a non-diversified fund, or such non-diversified Fund has not yet operated for three years since its
inception and therefore retains the ability to operate as a non-diversified fund.
4. Certain Funds had exposure to derivatives during the last fiscal year end; however, the Tailored Shareholder
Reports ("TSRs") of such Funds do not discuss the effects of the derivatives on the performance of the fund. If the performance
was materially affected by the derivatives exposure, there should be a discussion of the impact in Management's Discussion of Fund
Performance ("MDFP") in the TSRs. Please ensure that future reports include disclosure discussing the impact of derivatives
on performance in the TSR.
Response: Funds numbered 24–28
and 31–33 in Appendix I (collectively, the "Managed Risk Funds") invest in shares of other American Funds Insurance
Series funds and integrate an additional managed risk strategy. This strategy uses hedging instruments-primarily exchange-traded
futures contracts and/or exchange-traded put options-to seek to stabilize fund volatility around a target level and reduce downside
exposure. To the extent the use of derivatives in this strategy materially impacts a Managed Risk Fund's performance, we will include
appropriate disclosure in the MDFP section in future TSRs for these Funds.
For other Funds with derivatives exposure
that are not Managed Risk Funds, we respectfully submit that based on the way derivatives are used in such Funds, additional disclosure
in the MDFP regarding the specific impact of derivatives on fund performance would not provide meaningful insight to Fund investors. For
these Funds, derivatives are just one tool to express an investment thesis relating to a set of portfolio characteristics that are not
specific to derivatives, such as positioning on exposures to currencies, interest rate duration and yield curve, sectors or industries,
or security selection. The decision to use a derivative or a cash instrument is typically driven by implementation efficiency, liquidity,
or risk management considerations-not by a distinct investment thesis. As such, derivatives exposures in these Funds are not an
expression of a separate derivatives thesis, but an additional way to express the Fund's investment thesis on various portfolio
characteristics. Given this context, the isolated impact of derivatives on a Fund's performance is not material to investors. Therefore,
we respectfully believe that the MDFP appropriately discusses and evaluates Fund performance based on these key portfolio drivers (regardless
of whether the exposures were implemented through cash instruments or derivatives) and not on the specific instruments used to achieve
them.
5. American Funds Emerging Markets Bond Fund ("EMBF") and American Funds Strategic Bond Fund
("SBF") paid distributions from return of capital. Item B.23 of Form N-CEN was not checked "yes" for either Fund.
Please explain why these distributions were not required to be accompanied by a written statement pursuant to Section 19(a) of the Investment
Company Act of 1940.
Response: The distributions paid
by EMBF and SBF were not accompanied by a written statement pursuant to Section 19(a) of the Investment Company Act of 1940 because the
source of the distributions were wholly from accumulated undistributed net income determined in accordance with U.S. generally accepted
accounting principles ("U.S. GAAP"). As stated in Dear CFO letter 2019-02, Section 19(a) of the Investment Company Act of
1940 prohibits a fund from making a distribution from any source other than the fund's net income, determined in accordance with
good accounting practice, unless that payment is accompanied by a written statement which adequately discloses the source of
any payment or dividend distribution wholly
or partly from any source other than accumulated undistributed net income. The letter further clarifies that "good accounting practice"
means financial information prepared in accordance with U.S. GAAP.
The disclosure in the notes to the financial
statements of EMBF and SBF pertaining to the payment of a return of capital was made with specific reference to a tax-basis determination
of net income.
6. According to the Statement of Changes (included in Form N-CSR) of EMBF and SBF, EMBF and SBF had a
return of capital distribution. Please confirm that there is no reference to yields or dividends when describing distributions that may
contain return of capital distributions in the marketing materials, financial statement disclosures, and/or website disclosures of those
Funds, as those terms may be misinterpreted as income.
Response: The distribution yield
disclosed on the respective Funds' websites, along with equivalent materials, includes distributions paid from both income and return
of capital. The distribution yield is accompanied by a footnote stating that a "portion of the fund's distribution may be
classified as a return of capital. Please refer to the fund's Annual Report for details". The Annual Report in turn discloses
the dividends paid/accrued separately from distributions deemed a return of capital for tax purposes within the "Statements of changes
in net assets", "Notes to financial statements" and "Financial highlights" (see below).
7. With respect to American Funds Insurance Series – Washington Mutual Investors Fund ("AFIS
WMIF") and American Funds Insurance Series – Managed Risk Washington Mutual Investors Funds ("AFIS MWMIF"), the
investment objective disclosed in the notes to the financial statements is not consistent with the investment objective disclosed in the
prospectus. Please review the disclosure
and confirm in correspondence that going forward, the disclosures will be consistent.
Response: We acknowledge your comment
and going forward, the investment objective disclosed in the notes to the financial statements of AFIS WMIF and AFIS MWMIF will be updated
to be consistent with the investment objective disclosed in the prospectus.
8. With respect to each Fund numbered 24-33 on Appendix I, the risk factors identified in the applicable notes to the financial statements
provide that each such fund is non-diversified. However, the response to Item C.4 in the Form N-CEN filed on March 17, 2025 noted the
funds are diversified. Please explain in correspondence the difference in the disclosure.
Response: We note that each Fund
numbered 23-33 on Appendix I is a diversified fund, consistent with the response to Item C.4 in Form N-CEN. We acknowledge the notes to
the financial statements for such Funds include the below non-diversification risk disclosure, which was included because such funds could
invest in underlying managed risk funds that were previously non-diversified. This non-diversification risk disclosure was removed from
the prospectuses of these previously non-diversified managed risk funds effective May 1, 2025. However, due to timing, the disclosure
was not removed from the notes to the financial statements because the December 31, 2024 audited financial statements were finalized prior
to finalization of the prospectuses. In the next set of financial statements for the semi-annual period ended June 30, 2025, the non-diversification
risk disclosure will be removed from the notes to the financial statements to align with the risk factors in the prospectuses.
"Nondiversification risk –
As nondiversified funds, the managed risk funds have the ability to invest a larger percentage of their assets in the securities of a
smaller number of issuers than a diversified fund. To the extent that the fund invests a larger percentage of its assets in securities
of one or more issuers, poor performance by these securities could have a greater adverse impact on a managed risk fund's investment
results."
Thank you for your consideration
of our responses to your comments. If you have any questions, please do not hesitate to contact me at (213) 615-4618 or at charlene.kim@capgroup.com.
Sincerely,
/s/ Charlene Kim
Charlene Kim
Senior Counsel
Appendix I
NO.
SERIES ID
FYE
FILE #
FUND /
SERIES NAME
REGISTRANT NAME
1
S000039110
5/31/2024
811-22744
AMERICAN FUNDS CORPORATE BOND FUND
AMERICAN FUNDS CORPORATE BOND FUND
2
S000053060
12/31/2024
811-23122
AMERICAN FUNDS EMERGING MARKETS BOND FUND
AMERICAN FUNDS EMERGING MARKETS BOND FUND
3
S000052313
12/31/2024
811-23101
AMERICAN FUNDS STRATEGIC BOND FUND
AMERICAN FUNDS STRATEGIC BOND FUND
4
S000009618
3/31/2025
811-03734
EUROPACIFIC GROWTH FUND
EUROPACIFIC GROWTH FUND
5
S000008786
12/31/2024
811-03857
GLOBAL GROWTH FUND
AMERICAN FUNDS INSURANCE SERIES
6
S000008790
12/31/2024
811-03857
GLOBAL SMALL CAPITALIZATION FUND
AMERICAN FUNDS INSURANCE SERIES
7
S000008791
12/31/2024
811-03857
GROWTH FUND
AMERICAN FUNDS INSURANCE SERIES
8
S000008792
12/31/2024
811-03857
INTERNATIONAL FUND
AMERICAN FUNDS INSURANCE SERIES
9
S000008793
12/31/2024
811-03857
NEW WORLD FUND
AMERICAN FUNDS INSURANCE SERIES
10
S000008794
12/31/2024
811-03857
WASHINGTON MUTUAL INVESTORS FUND
AMERICAN FUNDS INSURANCE SERIES
11
S000088658
12/31/2024
811-03857
U.S. SMALL AND MID CAP EQUITY FUND
AMERICAN FUNDS INSURANCE SERIES
12
S000013710
12/31/2024
811-03857
CAPITAL WORLD GROWTH AND INCOME FUND
AMERICAN FUNDS INSURANCE SERIES
13
S000008795
12/31/2024
811-03857
GROWTH-INCOME FUND
AMERICAN FUNDS INSURANCE SERIES
14
S000023461
12/31/2024
811-03857
INTERNATIONAL GROWTH AND INCOME FUND
AMERICAN FUNDS INSURANCE SERIES
15
S000045163
12/31/2024
811-03857
CAPITAL INCOME BUILDER
AMERICAN FUNDS INSURANCE SERIES
NO.
SERIES ID
FYE
FILE #
FUND /
SERIES NAME
REGISTRANT NAME
16
S000008796
12/31/2024
811-03857
ASSET ALLOCATION FUND
AMERICAN FUNDS INSURANCE SERIES
17
S000031859
12/31/2024
811-03857
AMERICAN FUNDS GLOBAL BALANCED FUND
AMERICAN FUNDS INSURANCE SERIES
18
S000008797
12/31/2024
811-03857
THE BOND FUND OF AMERICA
AMERICAN FUNDS INSURANCE SERIES
19
S000013796
12/31/2024
811-03857
CAPITAL WORLD BOND FUND
AMERICAN FUNDS INSURANCE SERIES
20
S000008787
12/31/2024
811-03857
AMERICAN HIGH-INCOME TRUST
AMERICAN FUNDS INSURANCE SERIES
21
S000031860
12/31/2024
811-03857
AMERICAN FUNDS MORTGAGE FUND
AMERICAN FUNDS INSURANCE SERIES
22
S000008789
12/31/2024
811-03857
ULTRA-SHORT BOND FUND
AMERICAN FUNDS INSURANCE SERIES
23
S000008788
12/31/2024
811-03857
U.S. GOVERNMENT SECURITIES FUND
AMERICAN FUNDS INSURANCE SERIES
24
S000040665
12/31/2024
811-03857
MANAGED RISK GROWTH FUND
AMERICAN FUNDS INSURANCE SERIES
25
S000040666
12/31/2024
811-03857