Growth Fund of America Seeks Board Elections, Fee Structure Changes

Growth Fund Of America DEF 14A Filing Summary
FieldDetail
CompanyGrowth Fund Of America
Form TypeDEF 14A
Filed DateSep 9, 2025
Risk Levelmedium
Pages15
Reading Time18 min
Key Dollar Amounts$1.70
Sentimentneutral

Sentiment: neutral

Topics: Proxy Statement, Shareholder Meeting, Board Elections, Advisory Fees, Fund Classification, Investment Company Act, Mutual Funds

TL;DR

**Vote FOR these proposals; they're streamlining fees and giving managers more flexibility, which should ultimately benefit shareholders.**

AI Summary

GROWTH FUND OF AMERICA, alongside other American Funds and Capital Group ETFs, is holding a special shareholder meeting on November 25, 2025, to address three key proposals. Shareholders are asked to elect Board members, a necessary step as it has been several years since the last election and subsequent board composition changes require shareholder approval to maintain the two-thirds elected board member ratio mandated by the 1940 Act. Additionally, ten specific bond funds, including American Funds Mortgage Fund and The Bond Fund of America, are seeking approval to amend their Investment Advisory and Service Agreements to transition from a fee schedule with both asset and income components to an asset-only advisory fee schedule. This change aims to stabilize fees for investors, eliminating potential increases during dynamic interest rate environments. Finally, American Funds Tax-Exempt Fund of New York (TEFNY) proposes to reclassify from a 'diversified' to a 'non-diversified' fund under the 1940 Act, which would grant its investment adviser, Capital Research and Management Company (CRMC), greater investment flexibility, albeit with additional risks.

Why It Matters

This DEF 14A filing is crucial for investors in GROWTH FUND OF AMERICA and other American Funds/Capital Group ETFs as it outlines significant governance and fee structure changes. The proposed shift to an asset-only advisory fee for ten bond funds could provide greater fee predictability for investors, especially in volatile interest rate markets, potentially impacting net returns. The reclassification of TEFNY to 'non-diversified' offers CRMC enhanced investment flexibility, which could lead to higher returns but also introduces increased risk concentration, directly affecting TEFNY shareholders. These changes reflect a broader industry trend towards adapting to market dynamics and optimizing fund operations, potentially setting a competitive precedent for other fund families.

Risk Assessment

Risk Level: medium — The risk level is medium due to the proposed reclassification of American Funds Tax-Exempt Fund of New York (TEFNY) from 'diversified' to 'non-diversified.' This change, while offering greater investment flexibility to Capital Research and Management Company (CRMC), introduces 'additional risks associated with investing in a non-diversified fund' as stated in Proposal 3, due to less stringent investment concentration limits under the 1940 Act.

Analyst Insight

Investors should carefully review the specific implications of the fee schedule changes for the ten bond funds they hold, as this could impact their net returns. For American Funds Tax-Exempt Fund of New York shareholders, understand the increased concentration risk associated with the proposed 'non-diversified' classification before casting your vote.

Financial Highlights

debt To Equity
0.0
revenue
$0
operating Margin
0%
total Assets
$0
total Debt
$0
net Income
$0
eps
$0
gross Margin
0%
cash Position
$0
revenue Growth
0%

Key Numbers

  • 2025-09-09 — Filing Date (Date the DEF 14A was filed)
  • 2025-11-25 — Shareholder Meeting Date (Date of the joint special meetings of shareholders)
  • 2025-08-28 — Record Date (Date for determining shareholders entitled to vote)
  • 3 — Number of Proposals (Total proposals presented for shareholder vote)
  • 10 — Number of Bond Funds (Funds proposing advisory fee schedule modification)
  • 67% — Majority Vote Threshold (1940 Act) (Required for proposals 2 and 3 if more than 50% of outstanding voting securities are present)
  • 50% — Majority Vote Threshold (1940 Act) (Required for proposals 2 and 3 based on outstanding voting securities)
  • 2/3 — Board Member Election Ratio (Minimum proportion of board members to be elected by shareholders after filling vacancies)
  • 9:00 a.m. — Meeting Time (Pacific Time for the special shareholder meetings)
  • 888-615-7476 — Computershare Contact Number (For shareholder assistance with voting)

Key Players & Entities

  • GROWTH FUND OF AMERICA (company) — Registrant for the DEF 14A filing
  • American Funds (company) — Group of funds involved in the joint proxy statement
  • Capital Group (company) — Parent company and location of shareholder meeting
  • Michael W. Stockton (person) — Executive Vice President of the Funds
  • Capital Research and Management Company (company) — Investment adviser for American Funds Tax-Exempt Fund of New York
  • American Funds Tax-Exempt Fund of New York (company) — Fund proposing reclassification from diversified to non-diversified
  • Computershare Fund Services (company) — Company hired to assist with shareholder meetings and proxy solicitation
  • SEC (regulator) — Regulates the filing of DEF 14A statements
  • Investment Company Act of 1940 (regulator) — Governs fund classifications and board election requirements
  • $1.70 (dollar_amount) — Estimated average cost per shareholder account for proxy solicitation

FAQ

What are the key proposals for the GROWTH FUND OF AMERICA shareholder meeting on November 25, 2025?

The key proposals are the election of Board members, the approval of an amendment to the Investment Advisory and Service Agreement to modify the fee schedule for ten specific bond funds, and the approval of a change in American Funds Tax-Exempt Fund of New York's classification from 'diversified' to 'non-diversified.'

Why is GROWTH FUND OF AMERICA proposing to elect Board members now?

The election of Board members is necessary because it has been several years since the last shareholder meeting for this purpose, and subsequent changes in the Board's composition necessitate new elections to ensure at least two-thirds of Board members are elected by shareholders, as required by the 1940 Act.

How will the proposed fee schedule change affect investors in American Funds Mortgage Fund?

The proposed fee schedule change for American Funds Mortgage Fund will transition from an advisory fee with both asset and income components to an asset-only advisory fee. This aims to create stability and consistency in fees, eliminating potential increases during periods of rising or higher interest rates.

What does changing American Funds Tax-Exempt Fund of New York's classification to 'non-diversified' mean for shareholders?

Changing American Funds Tax-Exempt Fund of New York's classification to 'non-diversified' means the fund will no longer be subject to certain 1940 Act limits on investment concentration, such as investing more than 5% of assets in one issuer. This grants greater investment flexibility to Capital Research and Management Company (CRMC) but introduces additional risks associated with less diversification.

What is the voting requirement for the proposals concerning GROWTH FUND OF AMERICA?

For Proposal 1 (Board elections), approval requires a plurality of votes cast for most funds, while EUPAC and EMEF require a majority of votes cast. For Proposals 2 and 3, approval requires the affirmative vote of a majority of the outstanding voting securities of each applicable fund, as defined by the 1940 Act.

Who is Capital Research and Management Company (CRMC) in relation to these funds?

Capital Research and Management Company (CRMC) is the investment adviser for American Funds Tax-Exempt Fund of New York and is one of the 'Advisers' mentioned in the filing, along with Capital International, Inc. (CIInc).

What happens if the proposals for GROWTH FUND OF AMERICA are not approved?

If there are not enough votes to approve a proposal, the meeting may be adjourned to solicit further proxy votes. If a proposal is not ultimately approved, the affected fund will continue to operate as it currently does. For EMEF or EUPAC, if Proposal 1 is not approved, current trustees will continue to serve.

How much will the proxy solicitation cost per shareholder account for GROWTH FUND OF AMERICA and related funds?

The estimated cost for obtaining shareholder approval of the proposals, including printing, mailing, and proxy solicitation, will average approximately $1.70 per shareholder account across all Funds.

Where and when will the special shareholder meetings for GROWTH FUND OF AMERICA be held?

The joint special meetings of shareholders will be held on November 25, 2025, at the office of Capital Group, located at 333 South Hope Street, Los Angeles, California 90071, at 9:00 a.m. Pacific Time.

How can shareholders of GROWTH FUND OF AMERICA cast their votes?

Shareholders can vote online, by phone, by mail using the enclosed proxy card, or in person at the shareholder meeting. Instructions and identifying numbers are provided on the proxy card or meeting notice.

Risk Factors

  • 1940 Act Compliance for Board Composition [medium — regulatory]: The Growth Fund of America and other funds require shareholder approval to elect Board members to maintain the mandated two-thirds elected board member ratio under the 1940 Act, especially after several years without elections and subsequent board composition changes. Failure to maintain this ratio could lead to compliance issues.
  • Diversified vs. Non-Diversified Fund Classification [medium — regulatory]: American Funds Tax-Exempt Fund of New York (TEFNY) proposes to reclassify from a 'diversified' to a 'non-diversified' fund under the 1940 Act. This change grants greater investment flexibility to the adviser, CRMC, but introduces additional risks for investors, as non-diversified funds are not subject to the same strict limits on investments in single issuers.
  • Investment Advisory Fee Stability [low — market]: Ten specific bond funds are seeking to amend their Investment Advisory and Service Agreements to transition from a fee schedule with both asset and income components to an asset-only schedule. This aims to stabilize fees by eliminating potential increases during dynamic interest rate environments, which could otherwise impact fund performance and investor costs.

Industry Context

The mutual fund industry, particularly large players like American Funds and Capital Group, operates under significant regulatory oversight from the SEC, primarily governed by the Investment Company Act of 1940. Key trends include adapting fee structures to market conditions, ensuring robust corporate governance through board composition, and offering diverse fund classifications to meet investor needs and provide flexibility to investment managers.

Regulatory Implications

The proposals directly address regulatory requirements under the 1940 Act. Maintaining the two-thirds elected board ratio is critical for ongoing compliance. The reclassification of TEFNY from diversified to non-diversified has significant implications for its investment strategy and risk profile, requiring careful monitoring by both the adviser and investors.

What Investors Should Do

  1. Review the Joint Proxy Statement thoroughly to understand the details of each proposal.
  2. Vote your shares by the deadline, using the provided phone, internet, or mail options.
  3. Contact Computershare at 888-615-7476 if you have any questions or require assistance with voting.

Key Dates

  • 2025-09-09: Filing Date — Indicates when the proxy statement was officially submitted to the SEC, marking the beginning of the formal disclosure period for the upcoming shareholder meeting.
  • 2025-08-28: Record Date — Determines which shareholders are eligible to vote at the special meeting, crucial for understanding voting power and participation.
  • 2025-11-25: Shareholder Meeting Date — The date when shareholders will vote on the proposed resolutions, including board elections and changes to fund agreements.
  • 2025-11-25: Meeting Time — Specifies the start time (9:00 a.m. Pacific Time) for the joint special meetings of shareholders.

Glossary

DEF 14A
A definitive proxy statement filed with the SEC by publicly traded companies and mutual funds, providing detailed information about matters to be voted on at a shareholder meeting. (This document contains the proposals and information shareholders need to make informed voting decisions.)
Investment Company Act of 1940 (1940 Act)
A U.S. federal law that regulates the organization and operation of mutual funds and other investment companies. (Key provisions of the Act are relevant to the proposals, including board composition requirements and fund classification (diversified vs. non-diversified).)
Diversified Fund
Under the 1940 Act, a diversified fund has limitations on its investments, generally stating that it cannot invest more than 5% of its assets in any single issuer and cannot hold more than 10% of an issuer's voting securities. (American Funds Tax-Exempt Fund of New York is proposing to change its classification from diversified to non-diversified, which will alter these investment constraints.)
Non-Diversified Fund
Under the 1940 Act, a non-diversified fund (also known as an 'open-end management investment company') is not subject to the same strict percentage limitations on investments in single issuers as diversified funds. (This classification offers greater investment flexibility to the fund's adviser but may entail higher risk for investors.)
Investment Advisory and Service Agreement
A contract between an investment company (like a mutual fund) and its investment adviser, outlining the services to be provided and the fees to be paid. (Ten bond funds are seeking shareholder approval to amend these agreements to change their fee structure from asset and income components to an asset-only component.)
Proxy Statement
A document that the SEC requires companies to send to shareholders before a shareholder meeting, containing information about the matters to be voted upon. (This document is the primary communication to shareholders regarding the proposals and how to vote.)

Year-Over-Year Comparison

This filing is a proxy statement for a special shareholder meeting and does not contain comparative financial performance data like revenue or net income from a prior fiscal year. The key focus is on upcoming votes regarding board elections, advisory fee adjustments for ten bond funds, and a classification change for the Tax-Exempt Fund of New York. The 'vsLastFiling' comparison is not applicable in the context of a proxy statement for a special meeting.

Filing Stats: 4,405 words · 18 min read · ~15 pages · Grade level 13.7 · Accepted 2025-09-09 16:17:58

Key Financial Figures

  • $1.70 — average across all Funds approximately $1.70 per shareholder account. How many vote

Filing Documents

– The Proposals

Part I – The Proposals     Proposal 1 – To elect Board members of the Funds   3 Proposal 2 – To approve the proposed amendment of the Investment Advisory and Service Agreement to modify the investment advisory and service fee schedule for each of American Funds Mortgage Fund, American High -Income Trust, The Bond Fund of America, U.S. Government Securities Fund, Intermediate Bond Fund of America, American High -Income Municipal Bond Fund, Limited Term Tax -Exempt Bond Fund of America, The Tax -Exempt Bond Fund of America, The Tax -Exempt Fund of California, and American Funds Tax -Exempt Fund of New York   8 Proposal 3 – To approve the proposed change to the diversification classification for American Funds Tax -Exempt Fund of New York from a diversified to a non -diversified registered investment company   13 Part II     Additional Information about the Funds   15 Audit Committee   16 Further Information About Voting and the Shareholder Meetings   17 EXHIBITS     Exhibit A – Series and Included Fund(s )     Exhibit B – Form of Nominating and Governance Committee Charte r     APPENDICES     Appendix 1 – Board Member and Nominee Informatio n     Appendix 2 – Board and Committee Meetings; Committee Compositio n     Appendix 3 – Board Member Compensation and Fund Ownershi p     Appendix 4 – Executive Officer s     Appendix 5 – Total Shares Outstandin g     Appendix 6 – Principal Beneficial Holder s     Appendix 7 – Independent Auditors and Related Fee s     Appendix 8 – Comparison of Current and Proposed A

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