What are the tax implications of investing in American Funds?

Investing in American Funds can have tax implications. The funds are subject to capital gains taxes, which are incurred when the funds sell securities at a profit. Shareholders may receive taxable distributions from the funds, including dividends and capital gains. The amount of taxes paid will depend on various factors, including the shareholder's income bracket and the type of account the investment is held in (taxable or tax-advantaged). It's important to note that American Funds strives to minimize tax consequences for their investors through effective management strategies, such as tax-efficient trading. However, investors should consult with a tax advisor to understand the specific tax implications of their investment in American Funds and how it fits into their overall tax strategy.