EUPAC Fund Shareholders to Vote on Board, Fee Structure, and Diversification Changes

Eupac Fund DEF 14A Filing Summary
FieldDetail
CompanyEupac Fund
Form TypeDEF 14A
Filed DateSep 9, 2025
Risk Levelmedium
Pages15
Reading Time18 min
Key Dollar Amounts$1.70
Sentimentmixed

Sentiment: mixed

Topics: Fund Governance, Advisory Fees, Diversification Strategy, Shareholder Meeting, Investment Company Act of 1940, Capital Group, Bond Funds

TL;DR

**EUPAC Fund's proxy vote is a no-brainer 'FOR' to stabilize fees and give managers more flexibility, but watch TEFNY's new 'non-diversified' status for higher risk.**

AI Summary

EUPAC Fund, 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 being asked to elect Board members, a necessity due to changes in Board composition and to allow for future appointments without additional meetings. Additionally, ten specific bond funds, including American Funds Mortgage Fund and The Bond Fund of America, propose to amend their Investment Advisory and Service Agreements to adopt an asset-only advisory fee schedule, aiming for fee stability by eliminating the income component which causes variability during dynamic interest rate environments. Finally, American Funds Tax-Exempt Fund of New York (TEFNY) seeks approval to reclassify from a 'diversified' to a 'non-diversified' fund under the 1940 Act, granting its investment adviser, Capital Research and Management Company (CRMC), greater investment flexibility, albeit with increased risk. The Boards of all affected Funds unanimously recommend a 'FOR' vote on all proposals, estimating an average cost of $1.70 per shareholder account for proxy solicitation.

Why It Matters

This DEF 14A filing outlines critical governance and operational changes for EUPAC Fund and numerous other American Funds and Capital Group ETFs, directly impacting investors' returns and risk profiles. The proposed shift to an asset-only advisory fee for ten bond funds aims to stabilize costs, a significant factor for investors in volatile interest rate markets, potentially making these funds more predictable compared to competitors with variable fee structures. For TEFNY, the reclassification to 'non-diversified' offers its adviser, CRMC, enhanced flexibility to pursue higher returns but also introduces greater concentration risk, which investors must weigh against potential benefits. The election of Board members ensures proper oversight and strategic direction for all participating funds, maintaining investor confidence in a competitive asset management landscape.

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 increased asset concentration, as explicitly stated in Proposal 3. While other proposals aim for stability or governance, this specific change directly impacts the fund's risk profile.

Analyst Insight

Investors should vote 'FOR' the Board elections and the advisory fee schedule changes to support governance and fee stability. However, shareholders of American Funds Tax-Exempt Fund of New York should carefully consider the implications of the 'non-diversified' classification, understanding it allows for higher concentration risk in exchange for potential flexibility, and assess if this aligns with their personal risk tolerance.

Financial Highlights

debt To Equity
N/A
revenue
$1.70
operating Margin
N/A
total Assets
N/A
total Debt
N/A
net Income
N/A
eps
N/A
gross Margin
N/A
cash Position
N/A
revenue Growth
+0.0%

Key Numbers

  • $1.70 — Estimated cost per shareholder account (Average cost for obtaining shareholder approval of proposals)
  • November 25, 2025 — Shareholder Meeting Date (Date when special shareholder meetings will be held)
  • August 28, 2025 — Record Date (Date for determining shareholders entitled to vote)
  • 10 — Number of bond funds (Funds proposing a change to an asset-only advisory fee schedule)
  • 1 — Fund proposing reclassification (American Funds Tax-Exempt Fund of New York changing to non-diversified)
  • 9:00 a.m. Pacific Time — Meeting Time (Start time for the joint special meetings of shareholders)
  • 888-615-7476 — Computershare Contact Number (Phone number for shareholder assistance with voting)

Key Players & Entities

  • EUPAC Fund (company) — registrant in 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 TEFNY
  • American Funds Tax-Exempt Fund of New York (company) — fund proposing diversification classification change
  • Computershare Fund Services (company) — company hired to assist with shareholder meetings and collect votes
  • November 25, 2025 (date) — date of the special shareholder meeting
  • August 28, 2025 (date) — record date for shareholder voting
  • $1.70 (dollar_amount) — estimated average cost per shareholder account for proxy solicitation

FAQ

What are the key proposals EUPAC Fund shareholders are voting on?

EUPAC Fund shareholders, along with others, are voting on three key proposals: the election of Board members, the approval of an amendment to the Investment Advisory and Service Agreement for ten specific bond funds to modify their fee schedules to an asset-only model, and the reclassification of American Funds Tax-Exempt Fund of New York from a 'diversified' to a 'non-diversified' fund.

Why is EUPAC Fund proposing a change to the investment advisory fee schedule for certain funds?

EUPAC Fund and other American Funds are proposing to change the investment advisory fee schedule for ten bond funds to an asset-only model to create stability and consistency in fees. The current structure, which includes both asset and income components, leads to variability, especially during dynamic interest rate environments, potentially resulting in higher fees during rising rates.

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

Changing American Funds Tax-Exempt Fund of New York (TEFNY) to 'non-diversified' means the fund will no longer be subject to certain regulatory limits under the 1940 Act regarding asset concentration. This grants its investment adviser, Capital Research and Management Company (CRMC), greater investment flexibility but also introduces additional risks associated with investing a larger percentage of assets in fewer issuers.

When and where will the EUPAC Fund shareholder meeting take place?

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

Who is Michael W. Stockton and what is his role in this filing?

Michael W. Stockton is the Executive Vice President of the Funds. He signed the letter to shareholders dated September 9, 2025, encouraging them to vote at the upcoming complex-wide shareholder meeting and stating the Board's unanimous recommendation to vote 'FOR' the proposals.

What is the estimated cost associated with obtaining shareholder approval for these proposals?

The estimated cost associated with obtaining shareholder approval for these proposals, including printing, mailing, and proxy solicitation, will average approximately $1.70 per shareholder account across all affected Funds. These costs will be borne by the Funds.

What happens if the proposals are not approved by EUPAC Fund shareholders?

If EUPAC Fund's shareholders do not ultimately approve Proposal 1 (election of Board members), the Fund will continue to operate as it currently does, and the Fund's current trustees will continue to serve. For other Funds, if proposals are not approved, the Fund will continue to operate as it currently does, or the meeting may be adjourned to solicit further votes.

How can EUPAC Fund shareholders vote on the proposals?

EUPAC Fund shareholders can vote their shares online, by phone, by mail using the enclosed proxy card, or in person at the shareholder meeting. Instructions and identifying numbers for online or phone voting are provided on the proxy card or meeting notice.

What is the role of Capital Research and Management Company (CRMC) in these proposals?

Capital Research and Management Company (CRMC) is the investment adviser for American Funds Tax-Exempt Fund of New York (TEFNY). CRMC believes that changing TEFNY's classification to a non-diversified fund will benefit TEFNY by giving it greater investment flexibility.

What is the significance of the 'plurality' and 'majority of outstanding voting securities' vote requirements?

For Proposal 1 (Board elections), EUPAC Fund requires an affirmative vote of a majority of votes cast, while most other funds require a plurality. For Proposals 2 and 3, approval requires the affirmative vote of a 'majority of the outstanding voting securities' as defined by the 1940 Act, which is the lesser of 67% of votes cast (if over 50% outstanding are present) or more than 50% of outstanding voting securities.

Risk Factors

  • Classification Change to Non-Diversified Fund [medium — regulatory]: American Funds Tax-Exempt Fund of New York (TEFNY) is seeking to reclassify from a 'diversified' to a 'non-diversified' fund under the 1940 Act. This change grants greater investment flexibility to its adviser, CRMC, but also introduces increased investment risk for shareholders due to the removal of specific limits on investments in any single issuer.
  • Dynamic Interest Rate Environments [medium — market]: Ten bond funds are proposing to move to an asset-only advisory fee schedule from a schedule with both asset and income components. This change aims to provide fee stability by eliminating the income component, which causes fee variability during dynamic interest rate environments, thus protecting investors from potentially higher fees.
  • Board Member Election Necessity [low — operational]: Shareholder meetings are being held to elect Board members due to changes in Board composition. This is necessary to allow for future appointments without additional meetings, ensuring continued governance and operational efficiency. The cost associated with this proxy solicitation is estimated at $1.70 per shareholder account.

Industry Context

The mutual fund industry, particularly within the American Funds and Capital Group families, is characterized by a wide range of offerings catering to diverse investor needs, from fixed income to equity and target-date solutions. These firms operate in a highly competitive landscape, where adapting to market conditions, regulatory changes, and investor preferences for fee structures is crucial for sustained success and asset gathering.

Regulatory Implications

The proposed reclassification of American Funds Tax-Exempt Fund of New York to a non-diversified status under the 1940 Act highlights the regulatory framework governing fund structures and investment flexibility. Changes to advisory fee schedules, while driven by market dynamics, must also comply with regulations ensuring fair treatment of investors.

What Investors Should Do

  1. Vote on Board Member Elections: Shareholders are asked to vote for the election of Board members to ensure proper governance and operational continuity. The Board unanimously recommends a 'FOR' vote.
  2. Approve Advisory Fee Schedule Changes: For holders of the ten specified bond funds, vote on the proposed shift to an asset-only advisory fee schedule to enhance fee stability. The Board recommends a 'FOR' vote.
  3. Approve Reclassification of TEFNY: Shareholders of American Funds Tax-Exempt Fund of New York should vote on the proposed change from a diversified to a non-diversified fund status, understanding the increased flexibility and associated risks. The Board recommends a 'FOR' vote.
  4. Review Joint Proxy Statement: Carefully read the full Joint Proxy Statement to understand the details and implications of each proposal before casting your vote.
  5. Vote by Mail, Phone, or Internet: Utilize the provided methods to submit your vote by the meeting date to ensure your voice is heard, as attendance is not required.

Key Dates

  • 2025-11-25: Special Shareholder Meeting — Shareholders will vote on key proposals including board elections, changes to advisory fee schedules for bond funds, and reclassification of a tax-exempt fund. The meeting time is 9:00 a.m. Pacific Time.
  • 2025-08-28: Record Date — Determines which shareholders are entitled to vote at the November 25, 2025 meeting.
  • 2025-09-09: Mailing of Joint Proxy Statement — Informs shareholders about the upcoming meeting and the proposals requiring their vote.

Glossary

DEF 14A
A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information to shareholders about matters to be voted on at an annual or special meeting. (This document is the proxy statement outlining the proposals for the EUPAC Fund and other American Funds.)
Investment Company Act of 1940
A U.S. federal law that regulates the organization and operation of mutual funds and other investment companies. (Key provisions of this act govern fund classification (diversified vs. non-diversified) and board composition requirements, which are central to proposals 1 and 3.)
Diversified Fund
Under the 1940 Act, a fund that limits its investments such that not more than 5% of its total assets are invested in securities of any one issuer, and it does not hold more than 10% of the voting securities of any one issuer for at least 75% of its total assets. (American Funds Tax-Exempt Fund of New York is proposing to change its classification from diversified to non-diversified.)
Non-Diversified Fund
Under the 1940 Act, a fund that is not classified as diversified. These funds have greater flexibility in their investment holdings. (The proposed change for American Funds Tax-Exempt Fund of New York will allow for greater investment flexibility.)
Asset-Only Advisory Fee Schedule
A fee structure for investment advisory services that is calculated solely based on a percentage of the fund's total assets under management. (Ten bond funds are proposing to adopt this type of fee schedule to achieve greater fee stability.)
Proxy Statement
A document that is required by the SEC to be distributed to shareholders before a shareholder meeting, detailing the matters to be voted upon. (This is the primary document for shareholders to understand the proposals and cast their votes.)

Year-Over-Year Comparison

This filing is a proxy statement for a special shareholder meeting, not an annual report. Therefore, direct year-over-year comparisons of financial metrics like revenue growth or net income are not applicable. The focus is on specific proposals requiring shareholder approval, such as board elections and changes to fund structures and fee agreements, rather than a review of past financial performance.

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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