American Funds, Capital Group Seek Board Elections, Fee Revamp, Fund Reclassification

International Growth & Income Fund DEF 14A Filing Summary
FieldDetail
CompanyInternational Growth & Income Fund
Form TypeDEF 14A
Filed DateSep 9, 2025
Risk Levelmedium
Pages15
Reading Time18 min
Key Dollar Amounts$1.70
Sentimentmixed

Sentiment: mixed

Topics: Proxy Statement, Shareholder Meeting, Board Elections, Advisory Fees, Fund Reclassification, Investment Company Act of 1940, Capital Group, American Funds, Bond Funds, Risk Management

TL;DR

**Vote FOR these proposals; they're streamlining governance and adapting fees for bond funds, while TEFNY is grabbing more investment flexibility, which could juice returns but also ups the risk.**

AI Summary

INTERNATIONAL GROWTH & INCOME FUND, along with other American Funds and Capital Group ETFs, is holding a special shareholder meeting on November 25, 2025, to address three key proposals. Shareholders will vote on the election of Board members, a necessary step as it has been several years since the last election and changes in Board composition necessitate new elections to maintain the two-thirds shareholder-elected ratio required by the 1940 Act. Additionally, ten bond funds, including American Funds Mortgage Fund and American High-Income Trust, are seeking approval to amend their Investment Advisory and Service Agreements to transition from an asset and income-based fee schedule to an asset-only fee schedule, aiming for greater fee stability for investors. Finally, American Funds Tax-Exempt Fund of New York (TEFNY) proposes a reclassification 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 by removing the 5% issuer limit and 10% voting securities limit on 75% of its total assets. The Boards of all affected Funds unanimously recommend voting 'FOR' all proposals, estimating the cost of obtaining shareholder approval to be approximately $1.70 per shareholder account.

Why It Matters

This DEF 14A filing is crucial for investors in the INTERNATIONAL GROWTH & INCOME FUND and numerous other American Funds and Capital Group ETFs, as it outlines significant governance and operational changes. The election of Board members ensures proper oversight and adherence to regulatory requirements, directly impacting fund management. The proposed shift to an asset-only advisory fee schedule for ten bond funds could stabilize costs for investors, particularly in volatile interest rate environments, potentially enhancing net returns compared to competitors with more variable fee structures. Furthermore, TEFNY's reclassification to 'non-diversified' offers its adviser, CRMC, enhanced investment flexibility, which could lead to higher returns but also introduces increased risk, a critical consideration for risk-averse investors. These changes reflect a strategic adaptation to market conditions and regulatory frameworks, influencing the competitive positioning and long-term performance of these funds.

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), removes the 1940 Act's 5% issuer limit and 10% voting securities limit on 75% of its total assets, inherently increasing concentration risk for TEFNY shareholders. While the fee schedule change aims for stability, the diversification shift introduces a new layer of risk.

Analyst Insight

Investors should carefully review the specific implications of TEFNY's proposed non-diversified classification on their personal risk tolerance and portfolio allocation. For bond fund investors, the shift to an asset-only fee schedule could be beneficial, but they should monitor the actual impact on their expense ratios post-approval. Vote 'FOR' the Board elections to ensure continued governance, but understand the trade-offs for the other proposals.

Financial Highlights

total Assets
Not Disclosed
total Debt
Not Disclosed

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)
  • 9:00 a.m. Pacific Time — Meeting Time (Time of the Joint Special Meetings of Shareholders)
  • 3 — Number of Proposals (Total number of proposals to be voted upon by shareholders)
  • 10 — Number of Bond Funds (Number of bond funds proposing a change to their investment advisory fee schedule)
  • 2025-08-28 — Record Date (Date for determining shareholders entitled to vote)
  • $1.70 — Estimated Cost Per Shareholder Account (Average estimated cost for obtaining shareholder approval across all Funds)
  • 888-615-7476 — Computershare Contact Number (Phone number for shareholder assistance with voting)
  • 5% — Diversified Fund Issuer Limit (Maximum percentage of total assets invested in one issuer for diversified funds)
  • 10% — Diversified Fund Voting Securities Limit (Maximum percentage of outstanding voting securities held of one issuer for diversified funds)

Key Players & Entities

  • INTERNATIONAL GROWTH & INCOME FUND (company) — Registrant and one of the Funds holding a special shareholder meeting
  • American Funds (company) — Group of funds involved in the joint proxy statement
  • Capital Group (company) — Group of funds involved in the joint proxy statement 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 (CRMC)
  • American Funds Tax-Exempt Fund of New York (company) — Fund proposing a change in diversification classification (TEFNY)
  • Computershare Fund Services (company) — Company hired to assist with shareholder meetings and proxy solicitation
  • SEC (regulator) — Securities and Exchange Commission
  • Jennifer L. Butler (person) — Secretary of the Funds
  • Courtney R. Taylor (person) — Secretary of the Funds

FAQ

What are the key proposals for the INTERNATIONAL GROWTH & INCOME FUND shareholder meeting on November 25, 2025?

Shareholders of INTERNATIONAL GROWTH & INCOME FUND and other American Funds and Capital Group ETFs will vote on three proposals: electing Board members, approving an amendment to the Investment Advisory and Service Agreement for ten bond funds to modify their fee schedules, and approving a change in American Funds Tax-Exempt Fund of New York's classification from 'diversified' to 'non-diversified.'

Why is the INTERNATIONAL GROWTH & INCOME FUND electing new Board members?

The election of Board members is necessary because it has been several years since the Funds held shareholder meetings for this purpose, and subsequent changes in Board composition necessitate new elections. This ensures that at least two-thirds of the Board members are elected by shareholders, as required by the Investment Company Act of 1940.

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

For American Funds Mortgage Fund and nine other bond funds, the proposed amendment will change the investment advisory and service fee schedule from one with both asset and income components to an asset-only fee schedule. This aims to create stability and consistency in fees, eliminating potential increases during periods of rising interest rates.

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

The reclassification of American Funds Tax-Exempt Fund of New York (TEFNY) to 'non-diversified' means it will no longer be subject to the 1940 Act's limits that restrict diversified funds from investing more than 5% of total assets in one issuer or holding more than 10% of an issuer's voting securities for 75% of its portfolio. This grants its adviser, CRMC, greater investment flexibility but also introduces additional risks associated with higher concentration.

What is the Board's recommendation for the proposals in the INTERNATIONAL GROWTH & INCOME FUND proxy statement?

The Board of Directors or Trustees of each Fund, including INTERNATIONAL GROWTH & INCOME FUND, unanimously recommends that shareholders vote 'FOR' proposals 1, 2, and 3, believing each proposal is in the best interests of shareholders.

What is the estimated cost for the Funds to obtain shareholder approval for these proposals?

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 affected Funds.

What happens if the proposals for INTERNATIONAL GROWTH & INCOME FUND are not approved?

If there are not enough votes to approve a proposal for a Fund, the meeting may be adjourned to solicit further proxy votes. If a proposal is not ultimately approved (excluding EMEF or EUPAC for Proposal 1), the Fund will continue to operate as it currently does.

When and where will the Joint Special Meetings of Shareholders 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, starting at 9:00 a.m. Pacific Time.

Who is Capital Research and Management Company (CRMC) in relation to 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.

How can shareholders of INTERNATIONAL GROWTH & INCOME FUND cast their votes?

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.

Risk Factors

  • 1940 Act Compliance for Board Elections [medium — regulatory]: The Investment Company Act of 1940 requires that at least two-thirds of a fund's Board members be elected by shareholders. The current proposal addresses situations where this ratio may be compromised due to changes in Board composition, necessitating shareholder elections to maintain compliance. Failure to meet this ratio could lead to regulatory 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 removes the 5% issuer limit and 10% voting securities limit on 75% of total assets, granting greater investment flexibility but also potentially increasing concentration risk for investors.
  • Cost of Shareholder Approval Process [low — operational]: The estimated cost for obtaining shareholder approval across all affected funds is approximately $1.70 per shareholder account. This represents an operational expense associated with governance and compliance activities.

Industry Context

The mutual fund industry, particularly within the American Funds and Capital Group families, is subject to ongoing regulatory oversight and governance requirements. Key trends include adapting fee structures for investor benefit, ensuring compliance with the Investment Company Act of 1940, and maintaining appropriate board composition. Funds are increasingly focused on providing fee stability and investment flexibility in response to market dynamics and regulatory frameworks.

Regulatory Implications

The proposals directly address compliance with the Investment Company Act of 1940, specifically regarding board election requirements and the classification of funds as diversified or non-diversified. Changes to investment advisory agreements also fall under regulatory scrutiny to ensure they are in the best interest of shareholders.

What Investors Should Do

  1. Vote on Board Member Elections: Shareholders are asked to elect board members to ensure compliance with the 1940 Act's two-thirds shareholder-elected ratio. Vote 'FOR' to maintain proper governance.
  2. Approve Fee Structure Changes: For specific bond funds (e.g., American Funds Mortgage Fund, American High-Income Trust), vote 'FOR' the proposed shift to an asset-only fee schedule to enhance fee stability.
  3. Consider Fund Classification Change: For American Funds Tax-Exempt Fund of New York, vote 'FOR' the reclassification to a non-diversified fund to grant the advisor greater investment flexibility, while being aware of the associated risks.
  4. Review Proxy Materials: Shareholders should carefully read the Joint Proxy Statement to understand the details of each proposal before casting their vote.
  5. Submit Your Vote: Utilize the provided options (phone, internet, mail) to submit your proxy vote by the meeting date of November 25, 2025.

Key Dates

  • 2025-09-09: Filing Date — Indicates when the proxy statement was officially submitted to regulatory bodies, 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 meetings. Only those holding shares on this date can participate in the voting process.
  • 2025-11-25: Shareholder Meeting Date — The date when shareholders will vote on the proposed resolutions, including the election of board members and changes to investment advisory agreements and fund classifications.
  • 2025-11-25: Meeting Time — Specifies the exact time (9:00 a.m. Pacific Time) the shareholder meetings will commence, crucial for shareholders to be aware of for participation or proxy submission deadlines.

Glossary

DEF 14A
A definitive proxy statement filed with the SEC by companies, providing shareholders with information about matters to be voted on at a shareholder meeting. (This document contains the details of the proposals and recommendations for shareholders of INTERNATIONAL GROWTH & INCOME FUND and other related 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 are relevant to the proposals concerning board elections (maintaining shareholder-elected ratio) and fund classification (diversified vs. non-diversified).)
Diversified Fund
Under the 1940 Act, a diversified fund has limitations on its investments, typically not allowing more than 5% of its assets to be invested in any single issuer and not holding more than 10% of the voting securities of any single issuer for 75% of its assets. (American Funds Tax-Exempt Fund of New York is proposing to change its classification from diversified to non-diversified, which would remove these specific investment restrictions.)
Non-Diversified Fund
A fund that does not meet the definition of a diversified fund under the 1940 Act. It is not subject to the same strict limits on investments in single issuers or voting securities. (This is the proposed new classification for American Funds Tax-Exempt Fund of New York, offering greater investment flexibility to its advisor.)
Investment Advisory and Service Agreement
The contract between a fund and its investment advisor that outlines the services provided and the fees charged. (Ten bond funds are seeking shareholder approval to amend these agreements, specifically to change the fee structure from asset and income-based to asset-only.)

Year-Over-Year Comparison

This filing represents a joint proxy statement for multiple funds within the American Funds and Capital Group families, addressing specific governance and operational proposals. Unlike a typical annual report, it focuses on a special meeting rather than a comprehensive review of past financial performance. Key metrics such as revenue growth, net income, or margins are not directly comparable as this document is primarily concerned with shareholder voting on specific proposals rather than reporting historical financial results.

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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