November 5, 2019
Mark Cowan
Senior Counsel
U.S. Securities and Exchange Commission
Division of Investment Management, Disclosure Review Office
100 F Street, N.E.
Washington, D.C. 20549
Re: American Funds International Vantage Fund
Initial Registration Statement on Form N-1A
File Nos. 333-233374 and 811-23467
American Funds Global Insight Fund
Initial Registration Statement on Form N-1A
File Nos. 333-233375 and 811-23468
Capital Group U.S. Equity Fund
Initial Registration Statement on Form N-1A
File Nos. 333-233376 and 811-23469
Dear Mr. Cowan:
In response to the written comments you provided on September 18, 2019, October 22, 2019 and October 25, 2019, to the initial registration statements filed on Form N-1A on behalf of American Funds International Vantage Fund, American Funds Global Insight Fund and Capital Group U.S. Equity Fund (each, a “Fund” and together, the “Funds”), we hereby file for each Fund Pre-Effective Amendment No. 1 to the registration statement under the Securities Act of 1933 (the “1933 Act”) and Amendment No. 1 to the registration statement under the Investment Company Act of 1940 (the “1940 Act”) (such amendments, collectively, the “Amendments”) pursuant to Rule 472 of the 1933 Act. We appreciate your prompt response to the previous filing.
Our responses to your comments are set forth below. The Amendments reflect additional information that was not contained in the initial registration statements.
General Comments
Response: We have updated the registration statements to address this comment.
Principal Investment Strategies and Risks
Response: The following disclosure is included in the statement of information regarding how the domicile of an issuer is determined:
In determining the domicile of an issuer, the fund’s investment adviser will consider the domicile determination of a leading provider of global indexes, such as Morgan Stanley Capital International, and may also take into account such factors as where the issuer’s securities are listed and where the issuer is legally organized, maintains principal corporate offices, conducts its principal operations and/or generates revenues.
Response: The risk of investing in convertible securities is included in the statement of additional information. The Funds are not currently invested in convertible securities to a significant degree, and so we do not consider such investments to be a principal risk of the Funds at this time. If and when the Funds invest in convertible securities to a significant degree, we will update the prospectus disclosure to reflect this risk. As requested in your subsequent written comments received on October 22, 2019, we have also revised the strategy description accordingly.
Response: For American Funds International Vantage Fund and American Funds Global Insight Fund, we have included separate risk disclosure for emerging markets in the statutory prospectus. Although the Funds have flexibility to invest up to 10% in emerging markets, current and historical levels of investments in emerging markets are lower. As such, we believe that separate risk disclosure for emerging markets is appropriately included in the statutory prospectus, but not in the summary prospectus, at this time. If and when the Funds invest in emerging markets to a more significant degree, we will update the summary prospectus disclosure to reflect this risk as well.
Response: The Funds are actively managed and rely on the professional judgment of their investment adviser to make decisions about the Funds’ portfolio investments. It is not an investment strategy of the Funds to invest in securities of issuers in any particular country, region, industry or sector in any amount. However, because the investment portfolios of the Funds are actively managed and because, from time to time, the Funds may have significant exposure to a particular country, region, industry or sector, each Fund’s prospectus includes disclosure regarding the risk of such exposure.
Response: We have added the following disclosure to the statement of additional information in response to this comment:
For purposes of the fund’s investment limitations, investments in depositary receipts are deemed to be investments in the underlying securities. For example, an American Depositary Receipt representing ownership of common stock of a non-U.S. issuer will be treated as common stock of a non-U.S. issuer.
Response: We have updated the registration statements of Capital Group U.S. Equity Fund and Capital Group Global Equity Fund to include risk disclosure in the statutory prospectus on depositary receipts, including ADRs.
Response: While investing in emerging markets is not a principal strategy of the fund, our risk factor on “Investing outside the United States” does note that the risks of investing outside the Untied States may be heightened in connection with investing in emerging markets. Since investments outside of the United States may include some
investments in emerging markets, we think it’s helpful to note to investors that there may be additional risks associated with those investments.
Investment Results
Response: We have updated the registration statements in response to this comment to add year-to-date return information as of September 30, 2019, which is the end of the most recent quarter.
Response: In connection with the reorganization, former shareholders of the predecessor funds will receive Class F-3 shares of the reorganized funds. All other share classes will begin operations on the effective date, and so there will not be return information available for those share classes on the effective date. We will show return information for the other share classes after they have had annual returns for at least one calendar year.
Investment objectives, strategies and risks
Response: For each Fund, in expanding on the strategy of investing in common stocks described in Item 4, the Item 9 strategy explains that the stocks of companies may be in various industries with a broad range of capitalizations. For American Funds Global Insight Fund, we have also added the following language to Item 9 in order to provide more detail on the types of securities in which the fund may invest:
Under normal market conditions, the fund will invest at least 80% of its net assets in equity-type securities, which may include depositary receipts representing ownership in common stock.
Additionally, below are our responses to the written comments that you provided to us on October 25, 2019:
· | We include additional detail on the system of multiple portfolio managers described in Item 4 in the section of the statutory prospectus entitled “The Capital System.” Under this system, cash in the Fund is divided into segments that are managed by individual equity managers. The managers have flexibility to invest in any region or sector. As such, and given the existing disclosure in the statutory prospectus, we do not believe that any additional disclosure is required in Item 9. |
· | We added the following paragraph to Item 9 and revised Item 4 to include only a summary version of this paragraph by removing the underlined sentence: |
The fund relies on the professional judgment of its investment adviser to make decisions about the fund’s portfolio investments. The basic investment philosophy of the investment adviser is to seek to invest in attractively valued companies that, in its opinion, represent good, long-term investment opportunities. The investment adviser believes that an important way to accomplish this is through fundamental analysis, which may include meeting with company executives and employees, suppliers, customers and competitors. Securities may be sold when the investment adviser believes that they no longer represent relatively attractive investment opportunities.
· | Holding cash or money market instruments can be used as part of the investment strategy in addition to for temporary defensive purposes. We believe this is already described in Item 9. We do not view holding cash to be a “principal” investment strategy and so have not added it as a strategy in Item 4. |
Response: We confirm supplementally that, in accordance with Item 3, Instruction 3(f), if “acquired fund fees and expenses” (AFFE) exceed 0.01% of the average net assets of the respective Fund, the Fund will include a line item in the Fee Table for AFFE.
Disclosure of Portfolio Holdings
Response: We have updated the disclosure as follows to address this comment:
Affiliated persons of the fund, including officers of the fund and employees of the investment adviser and its affiliates, who receive portfolio holdings information are subject to restrictions and limitations on the use and handling of such information pursuant to applicable codes of ethics, including requirements not to trade in securities based on confidential and proprietary investment information, to maintain the confidentiality of such information, and to pre-clear securities trades and report securities transactions activity, as applicable. For more information on these restrictions and limitations, please see the “Code of ethics” section in this statement of additional information and the Code of Ethics. Third-party service providers of the fund and other entities, as described in this statement of additional information, receiving such information are subject to confidentiality obligations and obligations that would prohibit them from trading in securities based on such information. When portfolio holdings information is disclosed other than through the American Funds website to persons not affiliated with the fund, such persons will be bound by agreements (including confidentiality agreements) or fiduciary or other obligations that restrict and limit their use of the information to legitimate business uses only. None of the fund, its investment adviser or any of their affiliates receives compensation or other consideration in connection with the disclosure of information about portfolio securities.
Financial Statements, Exhibits, and Other Information
Response: We have updated the registration statements to address this comment.
Thank you for your consideration of our responses to your comments. Pursuant to Rule 461 under the Securities Act and on behalf of the Funds and the Funds’ principal underwriter, American Funds Distributors, Inc., we respectfully request that the effectiveness of each Fund’s Registration Statement be accelerated to November 8, 2019.
If you have any questions, please do not hesitate to contact me at (213) 615-0423 or Tim McHale at (213) 615-0404.
Sincerely,
Rachel V. Nass
Counsel