Differentiating the American s Insurance Series 2017 Invest in s Designed for Retirement
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. 2
Planning Your Strategy for Retirement With more than $120 billion in assets under management, American s Insurance Series is one of the largest families of funds for variable annuities.* Variable annuities can play a key role in an effective retirement and income-planning strategy. Millions of Americans use these tax-deferred vehicles to supplement their investment portfolio and help achieve their financial goals. When diversifying investments within their variable annuities, many investors choose contracts that offer options from American s Insurance Series (AFIS) a suite of funds designed specifically for use in variable annuity contracts. AFIS funds are managed according to a variety of investment objectives, ranging from growth to income to managed risk, and are offered by some of the nation s leading insurance companies. AFIS dates back to 1984, making it one of the oldest families of funds in the insurance investment industry. * As of December 31, 2016. availability will vary based on insurance company and contract. 3
American s Insurance Series American s from Capital Group The Capital Advantage SM Since 1931, American s, part of Capital Group, has helped investors pursue long-term investment success. Our consistent approach in combination with The Capital System SM has resulted in a superior long-term track record for American s Insurance Series. Aligned With Investor Success We base our decisions on a longterm perspective, which we believe aligns our goals with the interests of our clients. American s Insurance Series (AFIS) portfolio managers average 27 years of investment, including 22 years at our company, reflecting a career commitment to our long term approach. 1 Put Our Experience to Work Percentage of 10+ years AFIS portfolio 20+ years managers by years of 30+ years 100% 85 35 The Capital System SM The Capital System combines individual accountability with teamwork. s using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. An extensive global research effort is the backbone of our system. Research Is at Our Core 2 384 investment professionals 200 investment analysts 108 portfolio managers (52 in AFIS¹) 166 based outside the 52 countries of origin 45 languages spoken Superior Long-Term Track Record AFIS equity funds have beaten their comparable Lipper indexes in 89% of 10-year periods and 100% of 20-year periods. AFIS fixed income funds have beaten comparable Lipper indexes in 52% of 10-year periods and 81% of 20-year periods.³ We strive to keep management fees competitive. Over the past 20 years, most funds fees have been below industry averages. 4 Value of a Consistent Approach Percentage of 10-calendar-year periods in which AFIS equity fund Class 2 share values 2 : were positive doubled tripled 100% 61 28 Portfolios of Best Ideas We have the freedom and independence to pursue what we think are the best investments, and our robust discussions with diverse points of view help stress-test ideas. We really feel that our process gives us a competitive advantage in the long run. Don O Neal, Portfolio Manager 1 Based on the American s Insurance Series Prospectus dated May 1, 2017. 2 As of December 31, 2016. 3 Based on Class 2 share results for rolling periods through December 31, 2016. Periods covered are the shorter of the fund s lifetime or since the comparable Lipper index inception date (except for the Small Capitalization, for which the Lipper average was used). Please see back cover for important information. 4 Based on management fees for the 20-year period ended December 31, 2016, versus comparable Lipper categories, excluding funds of funds. Past results are not predictive of results in future periods. 4
American s Insurance Series Description American s With Most Similar Objective Investment Objective Distinguishing Characteristics Geographic Focus Portfolio Managers* *Growth s Growth Inception date: April 30, 1997 A flexible, global approach New Perspective To provide of capital Invests primarily in growthoriented stocks of companies around the world. 4 managers, 24 years of Small Capitalization Inception date: April 30, 1998 A small-company focus with a worldwide view SMALLCAP World To provide of capital Normally invests at least 80% of assets in stocks of companies around the world with market capitalization of $4 billion or less. 6 managers, 23 years of Growth Inception date: February 8, 1984 Seeks growth opportunities anywhere The Growth of America To provide growth of capital Seeks to invest in companies that appear to offer superior opportunities for growth. Up to 25% of assets can be invested in companies outside the United States. 6 managers, 29 years of International Inception date: May 1, 1990 Exclusively outside the EuroPacific Growth To provide of capital Invests in companies of all sizes outside the United States, including developing countries. Outside 4 managers, 23 years of New World Inception date: June 17, 1999 A focus on developing markets New World To provide long-term capital appreciation At least 35% of assets will be invested in stocks and bonds of issuers in developing countries. The fund also invests in stocks of companies with significant ties to the developing world, and up to 25% of assets in bonds offering exposure to developing countries. 4 managers, 29 years of *Based on American s Insurance Series Prospectus dated May 1, 2017. 5
American s Insurance Series Description American s With Most Similar Objective Investment Objective Distinguishing Characteristics Geographic Focus Portfolio Managers* *Growth-and-Income s Blue Chip Income and Growth Inception date: July 5, 2001 High-quality investing with a dividend focus Washington Mutual Investors SM To produce income exceeding the average yield on stocks generally and to provide an opportunity for growth of principal consistent with sound common stock investing Invests primarily in dividendpaying stocks of larger established companies. Up to 10% of assets may be invested in stocks of larger companies outside the United States that are listed or traded in the 3 managers, 22 years of Growth and Income Inception date: May 1, 2006 Blue chip focus across the globe Capital World Growth and Income To provide of capital while providing current income Invests primarily in dividendpaying companies around the world that we believe to be relatively resilient during market declines. 4 managers, 25 years of Growth-Income Inception date: February 8, 1984 A story of consistency The Investment Company of America To achieve of capital and income Invests in companies with the potential for capital appreciation and/or dividend payments. Up to 15% of assets may be invested in securities of issuers outside the United States. 5 managers, 25 years of International Growth and Income Inception date: November 18, 2008 A focus on quality companies outside the International Growth and Income SM To provide of capital while providing current income Invests primarily in larger, wellestablished companies outside the United States, including developing countries. The fund focuses on companies with strong earnings that pay dividends. Outside 3 managers, 23 years of *Based on the American s Insurance Series Prospectus dated May 1, 2017. 6
American s Insurance Series Description American s With Most Similar Objective Investment Objective Distinguishing Characteristics Geographic Focus Portfolio Managers* Equity-Income Capital Income Builder Inception date: May 1, 2014 Striving for above-average current income and rising income Capital Income Builder Seeks to provide (1) a level of current income that exceeds the average yield on stocks generally and (2) a growing stream of income over the years Normally invests at least 90% of assets in income-producing securities. At least 50% of assets are invested in equities with a broad range of capitalizations. Up to 50% of assets may be invested outside the United States, including developing countries. 4 managers, 30 years of The fund s secondary objective is to provide growth of capital Asset Allocation Asset Allocation Inception date: August 1, 1989 A strategic approach to diversification N/A To provide high total return (including income and capital gains) consistent with preservation of capital over the long term Invests in a diversified portfolio of stocks and bonds. The fund may invest up to 15% of assets in equity securities from outside the United States and up to 25% of debt securities in lower rated bonds. 6 managers, 25 years of Balanced Balanced Inception date: May 2, 2011 Disciplined global flexibility American s Balanced SM Seeks the balanced accomplishment of three objectives: of capital, conservation of principal and current income Invests in stocks and bonds around the world, including developing countries. Typically, stocks will account for at least 45% of assets and bonds at least 30% of assets. 5 managers, 30 years of *Based on the American s Insurance Series Prospectus dated May 1, 2017. 7
American s Insurance Series Description American s With Most Similar Objective Investment Objective Distinguishing Characteristics Geographic Focus Portfolio Managers* *Bond s Bond Inception date: January 2, 1996 Seeks income and consistency through diversity The Bond of America To provide as high a level of current income as is consistent with the preservation of capital Invests in nearly every sector of the bond market, with a preference for higher quality issues. 2 managers, 24 years of Bond Inception date: October 4, 2006 Searching the world for high total return Capital World Bond To provide, over the long term, a high level of total return consistent with prudent investment management Invests in government and corporate bonds issued in both developed and developing countries. Investment decisions consider a bond s potential for appreciation and currency gains as well as yield. Up to 35% of assets may be invested in lower rated bonds. 4 managers, 30 years of High-Income Bond Inception date: February 8, 1984 A researchintensive approach to high-yield investing American High- Income Trust To provide a high level of current income A secondary investment objective is capital appreciation Invests primarily in high-yield, lower quality bonds. Up to 25% of assets may be invested in securities of issuers outside the United States. 3 managers, 28 years of *Based on the American s Insurance Series Prospectus dated May 1, 2017. 8
American s Insurance Series Description American s With Most Similar Objective Investment Objective Distinguishing Characteristics Geographic Focus Portfolio Managers 1 *Bond s Mortgage Inception date: May 2, 2011 Building on research American s Mortgage To provide current income and preservation of capital Invests primarily in mortgagerelated securities sponsored or guaranteed by the government and other AAA/Aaa-rated mortgage-related securities. Up to 10% of assets may be invested in high-quality mortgage-related securities from issuers outside the United States that are dollardenominated. 2 managers, average 21 years of Ultra-Short Bond 2 Inception date: February 8, 1984 Seeks quality through diversity N/A To provide current income, consistent with the maturity and quality standards applicable to the fund, and preservation of capital and liquidity Holds a diversified mix of high-quality money market instruments. 1 manager, 41 years of Government/AAA-Rated Securities Inception date: December 2, 1985 A quality foundation Government Securities To provide a high level of current income consistent with preservation of capital Holds mostly securities guaranteed or sponsored by the government and mortgagebacked securities that can offer more stability than stocks and high yield bonds. 3 managers, 17 years of The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies, such as Standard & Poor s, Moody s and/or Fitch, as an indication of an issuer s creditworthiness. shares of Government/AAA-Rated Securities are not guaranteed by the government. 1 Based on the American s Insurance Series Prospectus dated May 1, 2017. 2 Effective May 1, 2016, Cash Management was converted to American s Insurance Series Ultra-Short Bond. 9
American s Insurance Series AFIS managed risk funds invest in shares of a corresponding traditional AFIS fund but add a managed risk strategy overlay. The funds seek to manage portfolio volatility and downside risk primarily through the use of exchange-traded futures contracts in a managed risk strategy operated by a subadviser, Milliman Financial Risk Management LLC. Underlying Details Investment Objective Name Distinguishing Characteristics *Growth s Managed Risk Growth Inception date: May 1, 2013 Portfolio Managers Two American s managers with an average of 36 years of investment * One subadviser manager with 12 years of * Geographic Focus Growth of capital while seeking to manage volatility and provide downside protection Growth Seeks to invest in companies that appear to offer superior opportunities for growth. Up to 25% of assets can be invested in companies outside the United States. Managed Risk International Inception date: May 1, 2013 Long-term growth of capital while seeking to manage volatility and provide downside protection International Invests in companies of all sizes outside the United States, including developing countries. Outside *Growth-and-Income s Managed Risk Blue Chip Income and Growth Inception date: May 1, 2013 To produce income exceeding the average yield on stocks generally and to provide an opportunity for growth of principal consistent with sound common stock investing while seeking to manage volatility and provide downside protection Blue Chip Income and Growth Invests primarily in dividend-paying stocks of larger established companies. Up to 10% of assets may be invested in stocks of larger companies outside the United States that are listed or traded within the Managed Risk Growth-Income Inception date: May 1, 2013 Long-term growth of capital and income while seeking to manage volatility and provide downside protection Growth- Income Invests in companies with the potential for capital appreciation and/or dividend payments. Up to 15% of assets may be invested in securities of issuers outside the United States. Asset Allocation Managed Risk Asset Allocation Inception date: September 28, 2012 To provide high total return (including income and capital gains) consistent with preservation of capital over the long term while seeking to manage volatility and provide downside protection Asset Allocation Invests in a diversified portfolio of stocks and bonds. The fund may invest up to 15% of assets in equity securities from outside the United States and up to 25% of debt securities in lower rated bonds. Futures contracts may not provide an effective hedge of the underlying securities because changes in the prices of futures contracts may not track those of the securities they are intended to hedge. In addition, the managed risk strategy may not effectively protect the funds from market declines and will limit the funds participation in market gains. The use of the managed risk strategy could cause the fund s return to lag that of the underlying fund in certain rising market conditions. *Based on the American s Insurance Series Managed Risk Prospectus dated May 1, 2017. 10
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. Past results are not predictive of results in future periods. The comparable Lipper indexes referenced in the Superior Long-Term Track Record section on page 4 are: s Index ( Growth ), Growth s Index (Growth ), International s Index (International ), Emerging Markets s Index (New World ), Growth & Income s Index (Blue Chip Income and Growth, Growth-Income ), Balanced s Index (Asset Allocation ), Core Bond s Index (Bond ), High Yield s Index (High-Income Bond ) and General Government s Index ( Government/AAA-Rated Securities ). The Lipper Small-/Mid-Cap s Average was used for Small Capitalization. Class 2 shares began operations on April 30, 1997. Results encompassing periods prior to that date assume a hypothetical investment in Class 1 shares and include deduction of the additional 0.25% annual expense for Class 2 shares under the series plans of distribution. Results for the Lipper indexes/averages do not reflect sales charges. Lipper indexes track the largest mutual funds (no more than 30), represented by one share class per fund, in the corresponding Lipper category. Lipper averages reflect the current composition of all eligible mutual funds (all share classes) within a given category. Investment allocations of funds of funds may not achieve fund objectives. There are expenses associated with underlying funds in addition to fund of funds expenses. The funds risks are directly related to the risks of the underlying funds as described below. Investing outside the United States involves risks such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks. The return of principal for bond funds and funds with significant underlying bond holdings is not guaranteed. shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. American s Insurance Series serves as an underlying investment option for multiple insurance products, including variable annuity contracts and variable life insurance policies. Variable annuity and variable life insurance contracts contain certain fees and expenses not reflected here. Availability of funds will vary based on the insurance contract offered. Lit. No. INGEFSX-998-0717P Litho in USA CGD/CIP/9174-S58743 2017 American s Distributors, Inc. Printed on recycled paper