Interested trustees have similar qualifications,
skills and attributes as the independent trustees. Interested trustees are senior executive officers of Capital Research and Management
Company or its affiliates. This management role with the fund’s service providers also permits them to make a significant
contribution to the fund’s board.
Other officers
6
Name,
age and
position with fund
(year first elected
as an officer
2
)
|
Principal
occupation(s) during the past five years
and positions held with affiliated entities
or the Principal Underwriter of the fund
|
Hilda
L. Applbaum, 52
Senior Vice President
(1999)
|
Senior
Vice President – Capital World Investors, Capital Research and Management Company
|
Jeffrey
T. Lager, 44
Senior Vice President (2002)
|
Senior
Vice President – Capital World Investors, Capital Research and Management Company
|
James
R. Mulally, 60
Senior Vice President (2009)
|
Senior
Vice President – Fixed Income, Capital Research and Management Company
|
Paul
F. Roye, 59
Senior Vice President (2007)
|
Senior
Vice President – Fund Business Management Group, Capital Research and Management Company; Director, American Funds Service
Company*; former Director, Division of Investment Management, United States Securities and Exchange Commission
|
John
H. Smet, 56
Senior Vice President (2000)
|
Senior
Vice President – Fixed Income, Capital Research and Management Company; Director, The Capital Group Companies, Inc.*
|
American Balanced Fund - Page
19
|
Name,
age and
position with fund
(year first elected
as an officer
2
)
|
Principal
occupation(s) during the past five years
and positions held with affiliated entities
or the Principal Underwriter of the fund
|
Alan
N. Berro, 52
Vice President (2010)
|
Senior
Vice President – Capital World Investors, Capital Research and Management Company
|
Donald
H. Rolfe, 40
Vice President (2012)
|
Chief
Compliance Officer, Capital Research Company*; Chief Compliance Officer, Capital Research and Management Company; Vice President
and Senior Counsel – Fund Business Management Group, Capital Research and Management Company
|
Patrick
F. Quan, 54
Secretary (1986)
|
Vice
President – Fund Business Management Group, Capital Research and Management Company
|
Jeffrey
P. Regal, 41
Treasurer (2011)
|
Vice
President – Fund Business Management Group, Capital Research and Management Company
|
Julie
E. Lawton, 39
Assistant Secretary (2009)
|
Assistant
Vice President – Fund Business Management Group, Capital Research and Management Company
|
Dori
Laskin, 61
Assistant Treasurer (2011)
|
Vice
President – Fund Business Management Group, Capital Research and Management Company
|
Ari
M. Vinocor, 38
Assistant Treasurer (2012)
|
Vice
President – Fund Business Management Group, Capital Research and Management Company
|
|
*
|
Company affiliated with Capital Research and Management Company.
|
|
1
|
The term “independent” trustee refers to a trustee who is not an “interested person” of the fund within
the meaning of the 1940 Act.
|
|
2
|
Includes service as a director or officer of the fund’s predecessor, American Balanced Fund, Inc., a Maryland corporation.
Trustees and officers of the fund serve until their resignation, removal or retirement.
|
|
3
|
Funds
managed
by
Capital
Research
and
Management
Company,
including
the
American
Funds;
American
Funds
Insurance
Series,
®
which
serves
as
the
underlying
investment
vehicle
for
certain
variable
insurance
contracts;
American
Funds
Target
Date
Retirement
Series,
®
which
is
available
through
tax-favored
retirement
plans
and
IRAs;
American
Funds
Portfolio
Series;
SM
and
American
Funds
College
Target
Date
Series
SM
.
|
|
4
|
This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research
and Management Company) that are held by each trustee as a director/trustee of a public company or a registered investment company.
Unless otherwise noted, all directorships/trusteeships are current.
|
|
5
|
“Interested persons” of the fund within the meaning of the 1940 Act, on the basis of their affiliation with the
fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal
underwriter).
|
|
6
|
All of the officers listed, except Jeffrey T. Lager, are officers and/or directors/trustees of one or more of the other funds
for which Capital Research and Management Company serves as investment adviser.
|
The address for all trustees and
officers of the fund is 333 South Hope Street, 55th Floor, Los Angeles, California 90071, Attention: Secretary.
American Balanced Fund - Page
20
|
Fund shares owned by trustees
as of December 31, 2012:
Name
|
Dollar
range
1
of fund
shares owned
|
Aggregate
dollar range
1
of shares
owned in
all funds
in the
American Funds
family overseen
by trustee
|
Dollar
range
1,2
of
independent
trustees
deferred compensation
3
allocated
to fund
|
Aggregate
dollar
range
1,2
of
independent
trustees
deferred
compensation
3
allocated to
all funds
within
American Funds
family overseen
by trustee
|
“Independent” trustees
|
William
H. Baribault
4,5
|
$10,001
– $50,000
|
Over
$100,000
|
N/A
|
$1
– $10,000
|
Vanessa
C. L. Chang
|
$50,001
– $100,000
|
Over
$100,000
|
N/A
|
N/A
|
Linda
Griego
|
Over
$100,000
|
Over
$100,000
|
N/A
|
N/A
|
Leonade
D. Jones
|
Over
$100,000
|
Over
$100,000
|
Over
$100,000
|
Over
$100,000
|
William
D. Jones
|
Over
$100,000
|
Over
$100,000
|
$10,001
– $50,000
|
Over
$100,000
|
James
J. Postl
|
Over
$100,000
|
Over
$100,000
|
Over
$100,000
|
Over
$100,000
|
Margaret
Spellings
|
None
|
Over
$100,000
|
$1
– $10,000
|
$10,001
– $50,000
|
Isaac
Stein
|
Over
$100,000
|
Over
$100,000
|
Over
$100,000
|
Over
$100,000
|
American Balanced Fund - Page
21
|
Name
|
Dollar
range
1
of fund
shares owned
|
Aggregate
dollar range
1
of shares
owned in
all funds
in the
American Funds
family overseen
by trustee
|
“Interested” trustees
|
Gregory
D. Johnson
|
Over
$100,000
|
Over
$100,000
|
|
1
|
Ownership disclosure is made using the following ranges: None; $1 – $10,000; $10,001 – $50,000; $50,001 –
$100,000; and Over $100,000. The amounts listed for “interested” trustees include shares owned through The Capital
Group Companies, Inc. retirement plan and 401(k) plan.
|
|
2
|
N/A indicates that the listed individual, as of December
31, 2012, was not a trustee of a particular fund, did not
allocate deferred compensation to the fund or did not participate
in the deferred compensation plan.
|
|
3
|
Eligible trustees may defer their compensation under a nonqualified deferred compensation plan. Deferred amounts accumulate
at an earnings rate determined by the total return of one or more American Funds as designated by the trustee.
|
|
4
|
Mr.
Baribault
was
elected
to
the
board
effective
December
6,
2012.
|
|
5
|
Ownership
information
is
as
of
February
12,
2013.
|
Trustee compensation —
No compensation is paid by the fund to any officer or trustee who is a director, officer or employee of the investment adviser
or its affiliates. Except for the independent trustees listed in the “Board of trustees and officers — ‘Independent’
trustees” table under the “Management of the fund” section in this statement of additional information, all
other officers and trustees of the fund are directors, officers or employees of the investment adviser or its affiliates. The
boards of funds advised by the investment adviser typically meet either individually or jointly with the boards of one or more
other such funds with substantially overlapping board membership (in each case referred to as a “board cluster”).
The fund typically pays each independent trustee an annual fee, which ranges from $13,125 to $28,333, based primarily on the total
number of board clusters on which that independent trustee serves.
In addition, the fund generally pays
independent trustees attendance and other fees for meetings of the board and its committees. Board and committee chairs receive
additional fees for their services.
Independent trustees also receive attendance
fees for certain special joint meetings and information sessions with directors and trustees of other groupings of funds advised
by the investment adviser. The fund and the other funds served by each independent trustee each pay an equal portion of these attendance
fees.
No pension or retirement benefits are
accrued as part of fund expenses. Independent trustees may elect, on a voluntary basis, to defer all or a portion of their fees
through a deferred compensation plan in effect for the fund. The fund also reimburses certain expenses of the independent trustees.
American Balanced Fund - Page
22
|
Trustee compensation earned during
the fiscal year ended December 31, 2012:
Name
|
Aggregate
compensation
(including voluntarily
deferred compensation
1
)
from the fund
|
Total
compensation (including
voluntarily deferred
compensation
1
)
from all funds managed by
Capital Research and
Management
Company or its affiliates
2
|
William
H. Baribault
4
|
|
|
N/A
|
|
|
|
$276,990
|
|
Vanessa
C. L. Chang
|
|
|
$34,292
|
|
|
|
208,927
|
|
Linda
Griego
4
|
|
|
20,166
|
|
|
|
62,306
|
|
Leonade
D. Jones
3
|
|
|
42,460
|
|
|
|
346,125
|
|
William
D. Jones
3
|
|
|
42,460
|
|
|
|
266,250
|
|
James
J. Postl
3
|
|
|
50,999
|
|
|
|
153,000
|
|
Margaret
Spellings
3,4
|
|
|
20,886
|
|
|
|
242,616
|
|
Isaac
Stein
3
|
|
|
42,499
|
|
|
|
127,500
|
|
|
1
|
Amounts may be deferred by eligible trustees under a
nonqualified deferred compensation plan adopted by the fund
in 1993. Deferred amounts accumulate at an earnings rate determined
by the total return of one or more American Funds as designated
by the trustees. Compensation shown in this table for the fiscal
year ended December 31, 2012 does not include earnings on amounts
deferred in previous fiscal years. See footnote 4 to this table
for more information.
|
|
2
|
Funds
managed
by
Capital
Research
and
Management
Company,
including
the
American
Funds;
American
Funds
Insurance
Series,
®
which
serves
as
the
underlying
investment
vehicle
for
certain
variable
insurance
contracts;
American
Funds
Target
Date
Retirement
Series,
®
which
is
available
through
tax-favored
retirement
plans
and
IRAs;
American
Funds
Portfolio
Series;
SM
and
American
Funds
College
Target
Date
Series
SM
.
|
|
3
|
Since the deferred compensation plan’s adoption,
the total amount of deferred compensation accrued by the fund
(plus earnings thereon) through the end of the 2012 fiscal
year for participating trustees is as follows: Leonade D.
Jones ($204,374), William D. Jones ($68,740), James J. Postl
($317,340), Margaret Spellings ($5,059) and Isaac Stein ($155,572).
Amounts deferred and accumulated earnings thereon are not
funded and are general unsecured liabilities of the fund until
paid to the trustees.
|
|
4
|
Mr.
Baribault
was
elected
to
the
board
effective
December
6,
2012;
Ms.
Griego
was
elected
to
the
board
effective
July
1,
2012;
and
Ms.
Spellings
was
elected
to
the
board
effective
June
1,
2012.
|
As of February 1, 2013, the officers
and trustees of the fund and their families, as a group, owned beneficially or of record less than 1% of the outstanding shares
of the fund.
American Balanced Fund - Page
23
|
Fund organization and the board of
trustees —
The fund, an open-end, diversified management investment company, was organized as a Delaware corporation
on September 6, 1932, reorganized in Maryland on February 2, 1990 and was reorganized as a Delaware statutory trust on March 1,
2010. All fund operations are supervised by the fund’s board of trustees which meets periodically and performs duties required
by applicable state and federal laws.
Delaware law charges trustees with the
duty of managing the business affairs of the trust. Trustees are considered to be fiduciaries of the trust and owe duties of care
and loyalty to the trust and its shareholders.
Independent board members are paid certain
fees for services rendered to the fund as described above. They may elect to defer all or a portion of these fees through a deferred
compensation plan in effect for the fund.
The fund has several different classes
of shares. Shares of each class represent an interest in the same investment portfolio. Each class has pro rata rights as to voting,
redemption, dividends and liquidation, except that each class bears different distribution expenses and may bear different transfer
agent fees and other expenses properly attributable to the particular class as approved by the board of trustees and set forth
in the fund’s rule 18f-3 Plan. Each class’ shareholders have exclusive voting rights with respect to the respective
class’ rule 12b-1 plans adopted in connection with the distribution of shares and on other matters in which the interests
of one class are different from interests in another class. Shares of all classes of the fund vote together on matters that affect
all classes in substantially the same manner. Each class votes as a class on matters that affect that class alone. Note that 529
college savings plan account owners invested in Class 529 shares are not shareholders of the fund and, accordingly, do not have
the rights of a shareholder, such as the right to vote proxies relating to fund shares. As the legal owner of the fund’s
Class 529 shares, the Virginia College Savings Plan
SM
will vote any proxies relating to the fund’s Class 529 shares.
In addition, the trustees have the authority to establish new series and classes of shares, and to split or combine outstanding
shares into a greater or lesser number, without shareholder approval.
The fund does not hold annual meetings
of shareholders. However, significant matters that require shareholder approval, such as certain elections of board members or
a change in a fundamental investment policy, will be presented to shareholders at a meeting called for such purpose. Shareholders
have one vote per share owned.
The fund’s declaration of trust
and by-laws, as well as separate indemnification agreements with independent trustees, provide in effect that, subject to certain
conditions, the fund will indemnify its officers and trustees against liabilities or expenses actually and reasonably incurred
by them relating to their service to the fund. However, trustees are not protected from liability by reason of their willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the conduct of their office.
Removal of trustees by shareholders
—
At any meeting of shareholders, duly called and at which a quorum is present, shareholders may, by the affirmative
vote of the holders of two-thirds of the votes entitled to be cast, remove any trustee from office and may elect a successor or
successors to fill any resulting vacancies for the unexpired terms of removed trustees. In addition, the trustees of the fund will
promptly call a meeting of shareholders for the purpose of voting upon the removal of any trustees when requested in writing to
do so by the record holders of at least 10% of the outstanding shares.
American Balanced Fund - Page
24
|
Leadership structure —
The
board’s chair is currently an independent trustee who is not an “interested person” of the fund within the meaning
of the 1940 Act. The board has determined that an independent chair facilitates oversight and enhances the effectiveness of the
board. The independent chair’s duties include, without limitation, generally presiding at meetings of the board, approving
board meeting schedules and agendas, leading meetings of the independent trustees in executive session, facilitating communication
with committee chairs, and serving as the principal independent trustee contact for fund management and independent fund counsel.
Risk oversight —
Day-to-day
management of the fund, including risk management, is the responsibility of the fund’s contractual service providers, including
the fund’s investment adviser, principal underwriter/distributor and transfer agent. Each of these entities is responsible
for specific portions of the fund’s operations, including the processes and associated risks relating to the fund’s
investments, integrity of cash movements, financial reporting, operations and compliance. The board of trustees oversees the service
providers’ discharge of their responsibilities, including the processes they use to manage relevant risks. In that regard,
the board receives reports
regarding the operations of the
fund’s service providers
,
including risks. For example, the board receives reports from investment professionals regarding risks related to the
fund’s
investments and trading. The board also receives
compliance reports from the fund’s and the investment adviser’s
chief compliance officers addressing certain areas of risk.
Committees of the fund’s board,
as well as joint committees of independent board members of funds managed by Capital Research and Management Company, also explore
risk management procedures in particular areas and then report back to the full board. For example, the fund’s audit committee
oversees the processes and certain attendant risks relating to financial reporting, valuation of fund assets, and related controls.
Similarly, a joint review and advisory committee oversees certain risk controls relating to the fund’s transfer agency services.
Not all risks that may affect the fund
can be identified or processes and controls developed to eliminate or mitigate their effect. Moreover, it is necessary to bear
certain risks (such as investment-related risks) to achieve the fund’s objectives. As a result of the foregoing and other
factors, the ability of the fund’s service providers to eliminate or mitigate risks is subject to limitations.
Committees of the board of trustees
—
The fund has an audit committee comprised of William H. Baribault, Vanessa C. L. Chang,
Linda Griego, Leonade D. Jones, James J. Postl and Margaret Spellings, none of whom is an “interested
person” of the fund within the meaning of the 1940 Act. The committee provides oversight regarding the fund’s accounting
and financial reporting policies and practices, its internal controls and the internal controls of the fund’s principal
service providers. The committee acts as a liaison between the fund’s independent registered public accounting firm and
the full board of trustees. The audit committee held four meetings during the 2012 fiscal year.
The fund has a contracts committee
comprised of William H. Baribault, Vanessa C. L. Chang, Linda Griego, Leonade D. Jones,
William D. Jones, James J. Postl, Margaret Spellings and Isaac Stein, none of whom is an “interested
person” of the fund within the meaning of the 1940 Act. The committee’s principal function is to request, review and
consider the information deemed necessary to evaluate the terms of certain agreements between the fund and its investment adviser
or the investment adviser’s affiliates, such as the Investment Advisory and Service Agreement, Principal Underwriting Agreement,
Administrative Services Agreement and Plans of Distribution adopted pursuant to rule 12b-1 under the 1940 Act, that the fund may
enter
American Balanced Fund - Page
25
|
into, renew or continue, and to make
its recommendations to the full board of trustees on these matters. The contracts committee held one meeting during the 2012 fiscal
year.
The fund has a nominating and governance
committee comprised of Leonade D. Jones, William D. Jones, James J. Postl, Margaret Spellings
and Isaac Stein, none of whom is an “interested person” of the fund within the meaning of the 1940 Act. The committee
periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant
issues, and recommends any appropriate changes to the full board of trustees. The committee also evaluates, selects and nominates
independent trustee candidates to the full board of trustees. While the committee normally is able to identify from its own and
other resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered
as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee
of the fund, addressed to the fund’s secretary, and must be accompanied by complete biographical and occupational data on
the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the committee.
The nominating and governance committee held five meetings during the 2012 fiscal year.
Proxy voting procedures and principles
—
The fund’s investment adviser, in consultation with the fund’s board, has adopted Proxy Voting Procedures
and Principles (the “Principles”) with respect to voting proxies of securities held by the fund, other American Funds
and American Funds Insurance Series. The complete text of these principles is available on the American Funds website at americanfunds.com.
Proxies are voted by a committee of the appropriate equity investment division of the investment adviser under authority delegated
by the funds’ boards. Therefore, if more than one fund invests in the same company, they may vote differently on the same
proposal. In addition, the funds’ boards monitor the proxy voting process and generally provide guidance with respect to
the Principles through a joint proxy committee of the American Funds.
The investment adviser seeks to vote
all U.S. proxies; however, in certain circumstances it may be impracticable or impossible to do so. Proxies for companies outside
the U.S. also are voted, provided there is sufficient time and information available. After a proxy statement is received, the
investment adviser prepares a summary of the proposals contained in the proxy statement. A discussion of any potential conflicts
of interest also is included in the summary. For proxies of securities managed by a particular investment division of the investment
adviser, the initial voting recommendation is made by one or more of the division’s investment analysts familiar with the
company and industry. A second recommendation is made by a proxy coordinator (an investment analyst or other individual with experience
in corporate governance and proxy voting matters) within the appropriate investment division, based on knowledge of these Principles
and familiarity with proxy-related issues. The proxy summary and voting recommendations are made available to the appropriate
proxy voting committee for a final voting decision.
The analyst and proxy coordinator making
voting recommendations are responsible for noting any potential material conflicts of interest. One example might be where a board
member of one or more American Funds is also a board member of a company whose proxy is being voted. In such instances, proxy voting
committee members are alerted to the potential conflict. The proxy voting committee may then elect to vote the proxy or seek a
third-party recommendation or vote of an ad hoc group of committee members.
The Principles, which have been in effect
in substantially their current form for many years, provide an important framework for analysis and decision-making by all funds.
However, they
American Balanced Fund - Page
26
|
are not exhaustive and do not address
all potential issues. The Principles provide a certain amount of flexibility so that all relevant facts and circumstances can be
considered in connection with every vote. As a result, each proxy received is voted on a case-by-case basis considering the specific
circumstances of each proposal. The voting process reflects the funds’ understanding of the company’s business, its
management and its relationship with shareholders over time.
Information regarding how the fund voted
proxies relating to portfolio securities during the 12‑month period ended June 30 of each year will be available on or about
September 1 of each year (
a
) without charge, upon request by calling American Funds Service Company at 800/421‑4225,
(
b
) on the American Funds website and (
c
) on the SEC’s website at sec.gov.
The following summary sets forth the
general positions of the American Funds, American Funds Insurance Series and the investment adviser on various proposals. A copy
of the full Principles is available upon request, free of charge, by calling American Funds Service Company or visiting the American
Funds website.
Director matters —
The election of a company’s slate of nominees for director generally is supported. Votes may be withheld for some or all
of the nominees if this is determined to be in the best interest of shareholders. Separation of the chairman and CEO positions
also may be supported.
Governance provisions —
Typically, proposals to declassify a board (elect all directors annually) are supported based on the belief that this increases
the directors’ sense of accountability to shareholders. Proposals for cumulative voting generally are supported in order
to promote management and board accountability and an opportunity for leadership change. Proposals designed to make director elections
more meaningful, either by requiring a majority vote or by requiring any director receiving more withhold votes than affirmative
votes to tender his or her resignation, generally are supported.
Shareholder rights —
Proposals to repeal an existing poison pill generally are supported. (There may be certain circumstances, however, when a proxy
voting committee of a fund or an investment division of the investment adviser believes that a company needs to maintain anti-takeover
protection.) Proposals to eliminate the right of shareholders to act by written consent or to take away a shareholder’s right
to call a special meeting typically are not supported.
Compensation and benefit plans
—
Option plans are complicated, and many factors are considered in evaluating a plan. Each plan is evaluated based on
protecting shareholder interests and a knowledge of the company and its management. Considerations include the pricing (or repricing)
of options awarded under the plan and the impact of dilution on existing shareholders from past and future equity awards. Compensation
packages should be structured to attract, motivate and retain existing employees and qualified directors; however, they should
not be excessive.
Routine matters —
The
ratification of auditors, procedural matters relating to the annual meeting and changes to company name are examples of items considered
routine. Such items generally are voted in favor of management’s recommendations unless circumstances indicate otherwise.
American Balanced Fund - Page
27
|
Principal fund shareholders —
The following table identifies those investors who own of record, or are known by the fund to own beneficially, 5%
or more of any class of its shares as of the opening of business on February 1, 2013. Unless otherwise indicated, the ownership
percentages below represent ownership of record rather than beneficial ownership.
Name
and address
|
Ownership
|
Ownership
percentage
|
Edward
D. Jones & Co.
Omnibus Account
Maryland Heights, MO
|
Record
|
Class A
Class B
Class 529-A
Class 529-B
|
20.42%
10.09
11.55
5.42
|
First
Clearing, LLC
Custody Account
St, Louis, MO
|
Record
|
Class A
Class B
Class C
Class F-1
|
6.88
6.12
10.14
10.21
|
Pershing,
LLC
Jersey City, NJ
|
Record
|
Class A
Class B
Class C
Class F-1
Class F-2
|
6.78
8.32
7.70
13.84
18.99
|
National
Financial Services, LLC
Omnibus Account
New York, NY
|
Record
|
Class B
Class F-1
Class F-2
|
7.13
9.95
12.62
|
Merrill
Lynch
Omnibus Account
Jacksonville, FL
|
Record
|
Class C
Class F-1
Class F-2
Class R-5
|
11.43
5.70
25.86
12.67
|
Morgan Stanley & Co., Inc.
Omnibus Account
Jersey City, NJ
|
Record
|
Class
C
Class F-1
|
9.43
13.69
|
Charles
Schwab & Co., Inc.
Custody Account
San Francisco, CA
|
Record
|
Class F-1
Class F-2
|
8.30
5.43
|
UBS WM USA
Omnibus Account
Jersey City, NJ
|
Record
|
Class
F-1
|
7.58
|
Raymond James
Omnibus Account
St. Petersburg, FL
|
Record
|
Class
F-1
|
6.18
|
LPL
Financial
Omnibus Account
San Diego, CA
|
Record
|
Class
F-2
|
9.07
|
RBC Capital Markets, LLC
Omnibus Account
Minneapolis, MN
|
Record
|
Class
F-2
|
6.56
|
Capital Group Private Client Services Account
Los Angeles, CA
|
Record
Beneficial
|
Class
F-2
|
5.68
|
TD Ameritrade, Inc.
Omnibus Account
Omaha, NE
|
Record
|
Class
F-2
|
5.05
|
Hartford
Life Insurance Co. Separate Account
401K Plan
Hartford, CT
|
Record
Beneficial
|
Class
R-1
|
19.63
|
American Balanced Fund - Page
28
|
Name
and address
|
Ownership
|
Ownership
percentage
|
Asbestos Workers Local Union
Retirement Plan
Columbia, MD
|
Record
Beneficial
|
Class
R-1
|
6.70
|
ING
Life Insurance & Annuity
Hartford, CT
|
Record
|
Class R-3
Class R-4
|
16.83
5.41
|
Trader Joe’s Company
Retirement Plan
Englewood, CO
|
Record
Beneficial
|
Class
R-4
|
19.78
|
NFS,
LLC FEBO
401K Plan
Covington, KY
|
Record
Beneficial
|
Class R-4
Class R-6
|
6.24
7.72
|
John Hancock Life Insurance Co. USA
Omnibus Account
Boston, MA
|
Record
Beneficial
|
Class
R-5
|
26.33
|
TransAmerica Life Insurance Company
Los Angeles, CA
|
Record
|
Class
R-5
|
5.73
|
Aurora Healthcare
Overland Park,KS
|
Record
|
Class
R-5
|
5.37
|
American Funds 2020 Target Date
Retirement Fund
Los Angeles, CA
|
Record
|
Class
R-6
|
8.63
|
American Funds 2025 Target Date
Retirement Fund
Los Angeles, CA
|
Record
|
Class
R-6
|
7.65
|
American Funds 2030 Target Date
Retirement Fund
Los Angeles, CA
|
Record
|
Class
R-6
|
7.58
|
Mac & Co.
Retirement Plan
Pittsburgh, PA
|
Record
Beneficial
|
Class
R-6
|
7.12
|
American Funds Balanced Portfolio
Los Angeles, CA
|
Record
|
Class
R-6
|
6.85
|
American Funds 2015 Target Date
Retirement Fund
Los Angeles, CA
|
Record
|
Class
R-6
|
5.84
|
Unless otherwise noted, references
in this statement of additional information to Class F shares, Class R shares or Class 529 shares refer to both F share classes,
all R share classes or all 529 share classes, respectively.
Investment adviser —
Capital Research and Management Company, the fund’s investment adviser, founded in 1931, maintains research facilities in
the United States and abroad (Los Angeles, San Francisco, New York, Washington, D.C., London, Geneva, Hong Kong, Singapore and
Tokyo). These facilities are staffed with experienced investment professionals. The investment adviser is located at 333 South
Hope Street, Los Angeles, CA 90071. It is a wholly owned subsidiary of The Capital Group Companies, Inc., a holding company for
several investment management subsidiaries. Capital Research and Management Company manages equity assets through three equity
investment divisions and fixed-income assets through its fixed-income division. The three equity investment divisions —
Capital World Investors, Capital Research Global Investors and Capital International Investors — make investment decisions
on an independent basis. Portfolio counselors in Capital International Investors rely on a research
American Balanced Fund - Page
29
|
team that also provides investment
services to institutional clients and other accounts advised by affiliates of Capital Research and Management Company.
The investment adviser has adopted policies
and procedures that address issues that may arise as a result of an investment professional’s management of the fund and
other funds and accounts. Potential issues could involve allocation of investment opportunities and trades among funds and accounts,
use of information regarding the timing of fund trades, investment professional compensation and voting relating to portfolio securities.
The investment adviser believes that its policies and procedures are reasonably designed to address these issues.
Compensation of investment professionals
—
As described in the prospectus, the investment adviser uses a system of multiple portfolio counselors in managing fund
assets. In addition, Capital Research and Management Company’s investment analysts may make investment decisions with respect
to a portion of a fund’s portfolio within their research coverage.
Portfolio counselors and investment analysts
are paid competitive salaries by Capital Research and Management Company. In addition, they may receive bonuses based on their
individual portfolio results. Investment professionals also may participate in profit-sharing plans. The relative mix of compensation
represented by bonuses, salary and profit-sharing plans will vary depending on the individual’s portfolio results, contributions
to the organization and other factors.
To encourage a long-term focus, bonuses
based on investment results are calculated by comparing pretax total investment returns to relevant benchmarks over the most recent
year, a four-year rolling average and an eight-year rolling average with greater weight placed on the four-year and eight-year
rolling averages. For portfolio counselors, benchmarks may include measures of the marketplaces in which the fund invests and
measures of the results of comparable mutual funds. For investment analysts, benchmarks may include relevant market measures and
appropriate industry or sector indexes reflecting their areas of expertise. Capital Research and Management Company makes periodic
subjective assessments of analysts’ contributions to the investment process and this is an element of their overall compensation.
The investment results of each of the fund’s portfolio counselors may be measured against one or more benchmarks, depending
on his or her investment focus, such as: S&P 500; Lipper Growth & Income Funds Index; Barclays U.S. Aggregate Index; Lipper
General U.S. Government Funds Average and Lipper Intermediate Investment Grade Debt Funds Average. From time to time, Capital
Research and Management Company may adjust or customize these benchmarks to better reflect the universe of comparably managed
funds of competitive investment management firms.
Portfolio counselor fund holdings
and other managed accounts —
As described below, portfolio counselors may personally own shares of the fund. In addition,
portfolio counselors may manage portions of other mutual funds or accounts advised by Capital Research and Management Company or
its affiliates.
American Balanced Fund - Page
30
|
The following table reflects information
as of December 31, 2012:
Portfolio
counselor
|
Dollar
range
of fund
shares
owned
1
|
Number
of other
registered
investment
companies (RICs)
for which
portfolio
counselor
is a manager
(assets of RICs
in billions)
2
|
Number
of other
pooled
investment
vehicles (PIVs)
for which
portfolio
counselor
is a manager
(assets of PIVs
in billions)
3
|
Number
of other
accounts
for which
portfolio
counselor
is a manager
(assets of
other accounts
in billions)
4
|
Gregory
D. Johnson
|
$100,001
– $500,000
|
2
|
$77.1
|
None
|
None
|
Hilda
L. Applbaum
|
$100,001
– $500,000
|
2
|
$75.0
|
None
|
None
|
Jeffrey
T. Lager
|
$100,001
– $500,000
|
2
|
$67.4
|
None
|
None
|
James
R. Mulally
|
$100,001
– $500,000
|
5
|
$103.7
|
1
|
$0.03
|
None
|
John
H. Smet
|
$100,001
– $500,000
|
6
|
$135.4
|
None
|
None
|
Alan
N. Berro
|
Over
$1,000,000
|
6
|
$83.9
|
None
|
None
|
Dina
N. Perry
|
Over
$1,000,000
|
3
|
$170.9
|
1
|
$1.39
|
None
|
Eugene
P. Stein
|
$100,001
– $500,000
|
2
|
$67.4
|
None
|
None
|
|
1
|
Ownership disclosure is made using the following ranges: None; $1 – $10,000; $10,001 – $50,000; $50,001 –
$100,000; $100,001 – $500,000; $500,001 – $1,000,000; and Over $1,000,000. The amounts listed include shares owned
through The Capital Group Companies, Inc. retirement plan and 401(k) plan.
|
|
2
|
Indicates fund(s) where the portfolio counselor also has significant responsibilities for the day to day management of the
fund(s). Assets noted are the total net assets of the registered investment companies and are not the total assets managed by the
individual, which is a substantially lower amount. No fund has an advisory fee that is based on the performance of the fund.
|
|
3
|
Represents funds advised or sub-advised by Capital Research and Management Company or its affiliates and sold outside the United
States and/or fixed-income assets in institutional accounts managed by investment adviser subsidiaries of Capital Group International,
Inc., an affiliate of Capital Research and Management Company. Assets noted are the total net assets of the funds or accounts and
are not the total assets managed by the individual, which is a substantially lower amount. No fund or account has an advisory fee
that is based on the performance of the fund or account.
|
|
4
|
Reflects other professionally managed accounts held at companies affiliated with Capital Research and Management Company. Personal
brokerage accounts of portfolio counselors and their families are not reflected.
|
American Balanced Fund - Page
31
|
Investment Advisory and Service
Agreement —
The Investment Advisory and Service Agreement (the “Agreement”) between the fund and
the investment adviser will continue in effect until December 31, 2013, unless sooner terminated, and may be renewed from year
to year thereafter, provided that any such renewal has been specifically approved at least annually by (
a
) the board of
trustees, or by the vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the fund, and (
b
)
the vote of a majority of trustees who are not parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on such approval. The Agreement provides that the
investment adviser has no liability to the fund for its acts or omissions in the performance of its obligations to the fund not
involving willful misconduct, bad faith, gross negligence or reckless disregard of its obligations under the Agreement. The Agreement
also provides that either party has the right to terminate it, without penalty, upon 60 days’ written notice to the other
party, and that the Agreement automatically terminates in the event of its assignment (as defined in the 1940 Act). In addition,
the Agreement provides that the investment adviser may delegate all, or a portion of, its investment management responsibilities
to one or more subsidiary advisers approved by the fund’s board, pursuant to an agreement between the investment adviser
and such subsidiary. Any such subsidiary adviser will be paid solely by the investment adviser out of its fees.
In addition to providing investment advisory
services, the investment adviser furnishes the services and pays the compensation and travel expenses of persons to perform the
fund’s executive, administrative, clerical and bookkeeping functions, and provides suitable office space, necessary small
office equipment and utilities, general purpose accounting forms, supplies and postage used at the fund’s offices. The fund
pays all expenses not assumed by the investment adviser, including, but not limited to: custodian, stock transfer and dividend
disbursing fees and expenses; shareholder recordkeeping and administrative expenses; costs of the designing, printing and mailing
of reports, prospectuses, proxy statements and notices to its shareholders; taxes; expenses of the issuance and redemption of fund
shares (including stock certificates, registration and qualification fees and expenses); expenses pursuant to the fund’s
plans of distribution (described below); legal and auditing expenses; compensation, fees and expenses paid to independent trustees;
association dues; costs of stationery and forms prepared exclusively for the fund; and costs of assembling and storing shareholder
account data.
The management fee is based on the
following annualized rates and average daily net asset levels:
Net asset level
Rate
|
In
excess of
|
Up
to
|
0.42%
|
$
|
0
|
$
|
500,000,000
|
0.324
|
|
500,000,000
|
|
1,000,000,000
|
0.30
|
|
1,000,000,000
|
|
1,500,000,000
|
0.282
|
|
1,500,000,000
|
|
2,500,000,000
|
0.27
|
|
2,500,000,000
|
|
4,000,000,000
|
0.262
|
|
4,000,000,000
|
|
6,500,000,000
|
American Balanced Fund - Page
32
|
Rate
|
In
excess of
|
Up
to
|
0.255
|
|
6,500,000,000
|
|
10,500,000,000
|
0.25
|
|
10,500,000,000
|
|
13,000,000,000
|
0.245
|
|
13,000,000,000
|
|
17,000,000,000
|
0.24
|
|
17,000,000,000
|
|
21,000,000,000
|
0.235
|
|
21,000,000,000
|
|
27,000,000,000
|
0.230
|
|
27,000,000,000
|
|
34,000,000,000
|
0.225
|
|
34,000,000,000
|
|
44,000,000,000
|
0.220
|
|
44,000,000,000
|
|
55,000,000,000
|
0.215
|
|
55,000,000,000
|
|
71,000,000,000
|
0.210
|
|
71,000,000,000
|
|
|
For the fiscal years ended December
31, 2012, 2011 and 2010, the investment adviser received from the fund management fees of $128,211,000, $121,350,000 and $116,289,000,
respectively.
Administrative services —
The investment adviser and its affiliates provide certain administrative services for shareholders of the fund’s Class A,
C, F, R and 529 shares. Services include, but are not limited to, coordinating, monitoring, assisting and overseeing third parties
that provide services to fund shareholders.
These services are provided pursuant
to an Administrative Services Agreement (the “Administrative Agreement”) between the fund and the investment adviser
relating to the fund’s Class A, C, F, R and 529 shares. The Administrative Agreement will continue in effect until December
31, 2013, unless sooner renewed or terminated, and may be renewed from year to year thereafter, provided that any such renewal
has been specifically approved at least annually by the vote of a majority of the members of the fund’s board who are not
parties to the Administrative Agreement or interested persons (as defined in the 1940 Act) of any such party, cast in person at
a meeting called for the purpose of voting on such approval. The fund may terminate the Administrative Agreement at any time by
vote of a majority of independent board members. The investment adviser has the right to terminate the Administrative Agreement
upon 60 days’ written notice to the fund. The Administrative Agreement automatically terminates in the event of its assignment
(as defined in the 1940 Act).
Under the Administrative Agreement, the
investment adviser receives an administrative services fee at the annual rate of .01% of the average daily net assets of the fund
attributable to Class A shares and .05% of the average daily net assets of the fund attributable to Class C, F, R and 529 shares
for administrative services provided to these share classes. Administrative services fees are paid monthly and accrued daily.
American Balanced Fund - Page
33
|
During the 2012 fiscal year, administrative
services fees were:
|
Administrative
services fee
|
Class
A
|
$3,315,000
|
Class
C
|
2,174,000
|
Class
F-1
|
649,000
|
Class
F-2
|
169,000
|
Class
529-A
|
986,000
|
Class
529-B
|
80,000
|
Class
529-C
|
333,000
|
Class
529-E
|
54,000
|
Class
529-F-1
|
36,000
|
Class
R-1
|
65,000
|
Class
R-2
|
570,000
|
Class
R-3
|
1,270,000
|
Class
R-4
|
1,281,000
|
Class
R-5
|
911,000
|
Class
R-6
|
910,000
|
American Balanced Fund - Page
34
|
Principal Underwriter and plans
of distribution —
American Funds Distributors, Inc. (the “Principal Underwriter”) is the principal
underwriter of the fund’s shares. The Principal Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071;
6455 Irvine Center Drive, Irvine, CA 92618; 3500 Wiseman Boulevard, San Antonio, TX 78251; and 12811 North Meridian Street, Carmel,
IN 46032.
The Principal Underwriter receives revenues
relating to sales of the fund’s shares, as follows:
|
·
|
For Class A and 529-A shares, the Principal Underwriter receives commission revenue consisting
of the balance of the Class A and 529-A sales charge remaining after the allowances by the Principal Underwriter to investment
dealers.
|
|
·
|
For Class B and 529-B shares sold prior to April 21, 2009, the Principal Underwriter sold its rights
to the .75% distribution-related portion of the 12b-1 fees paid by the fund, as well as any contingent deferred sales charges,
to a third party. The Principal Underwriter compensated investment dealers for sales of Class B and 529-B shares out of the proceeds
of this sale and kept any amounts remaining after this compensation was paid.
|
|
·
|
For Class C and 529-C shares, the Principal Underwriter receives any contingent deferred sales
charges that apply during the first year after purchase.
|
In addition, the fund reimburses the Principal
Underwriter for advancing immediate service fees to qualified dealers and advisers upon the sale of Class C and 529-C shares. The
fund also reimbursed the Principal Underwriter for advancing immediate service fees to qualified dealers on sales of Class B and
529-B shares prior to April 21, 2009. The fund also reimburses the Principal Underwriter for service fees (and, in the case of
Class 529-E shares, commissions) paid on a quarterly basis to intermediaries, such as qualified dealers or financial advisers,
in connection with investments in Class F-1, 529-F-1, 529-E, R-1, R-2, R-3 and R-4 shares.
American Balanced Fund - Page
35
|
Commissions, revenue or service fees
retained by the Principal Underwriter after allowances or compensation to dealers were:
|
Fiscal
year
|
Commissions,
revenue
or fees retained
|
Allowance
or
compensation
to dealers
|
Class
A
|
|
2012
|
|
|
$11,180,000
|
|
$51,491,000
|
|
|
|
2011
|
|
|
9,313,000
|
|
43,051,000
|
|
|
|
2010
|
|
|
9,763,000
|
|
45,627,000
|
|
Class
B
|
|
2012
|
|
|
N/A
|
|
N/A
|
|
|
|
2011
|
|
|
N/A
|
|
N/A
|
|
|
|
2010
|
|
|
26,000
|
|
—
|
|
Class
C
|
|
2012
|
|
|
—
|
|
4,549,000
|
|
|
|
2011
|
|
|
404,000
|
|
3,612,000
|
|
|
|
2010
|
|
|
399,000
|
|
3,721,000
|
|
Class
529-A
|
|
2012
|
|
|
1,213,000
|
|
5,765,000
|
|
|
|
2011
|
|
|
1,141,000
|
|
5,457,000
|
|
|
|
2010
|
|
|
1,115,000
|
|
5,418,000
|
|
Class
529-B
|
|
2012
|
|
|
N/A
|
|
N/A
|
|
|
|
2011
|
|
|
N/A
|
|
N/A
|
|
|
|
2010
|
|
|
3,000
|
|
—
|
|
Class
529-C
|
|
2012
|
|
|
—
|
|
801,000
|
|
|
|
2011
|
|
|
42,000
|
|
728,000
|
|
|
|
2010
|
|
|
—
|
|
742,000
|
|
Plans of distribution —
The fund has adopted plans of distribution (the “Plans”) pursuant to rule 12b-1 under the 1940 Act. The Plans permit
the fund to expend amounts to finance any activity primarily intended to result in the sale of fund shares, provided the fund’s
board of trustees has approved the category of expenses for which payment is being made.
Each Plan is specific to a particular
share class of the fund. As the fund has not adopted a Plan for Class F-2, Class R-5 or Class R-6, no 12b-1 fees are paid from
Class F-2, Class R-5 or Class R-6 share assets and the following disclosure is not applicable to these share classes.
Payments under the Plans may be made
for service-related and/or distribution-related expenses. Service-related expenses include paying service fees to qualified dealers.
Distribution-related expenses include commissions paid to qualified dealers. The amounts actually paid under the Plans for the
past fiscal year, expressed as a percentage of the fund’s average daily net assets attributable to the applicable share class,
are disclosed in the prospectus under “Fees and expenses of the fund.” Further information regarding the amounts available
under each Plan is in the “Plans of Distribution” section of the prospectus.
American Balanced Fund - Page
36
|
Following is a brief description of the
Plans:
Class A and 529-A —
For Class A and 529-A shares, up to .25% of the fund’s average daily net assets attributable to such shares is reimbursed
to the Principal Underwriter for paying service-related expenses, and the balance available under the applicable Plan may be paid
to the Principal Underwriter for distribution-related expenses. The fund may annually expend up to .25% for Class A shares and
up to .50% for Class 529-A shares under the applicable Plan.
Distribution-related expenses for
Class A and 529-A shares include dealer commissions and wholesaler compensation paid on sales of shares of $1 million or more purchased
without a sales charge. Commissions on these “no load” purchases (which are described in further detail under the “Sales
Charges” section of this statement of additional information) in excess of the Class A and 529-A Plan limitations and not
reimbursed to the Principal Underwriter during the most recent fiscal quarter are recoverable for five quarters, provided that
the reimbursement of such commissions does not cause the fund to exceed the annual expense limit. After five quarters, these commissions
are not recoverable.
Class B and 529-B —
The Plans for Class B and 529-B shares provide for payments to the Principal Underwriter of up to .25% of the fund’s average
daily net assets attributable to such shares for paying service-related expenses and .75% for distribution-related expenses, which
include the financing of commissions paid to qualified dealers.
Other share classes (Class C,
529-C, F-1, 529-F-1, 529-E, R-1, R-2, R-3 and R-4) —
The Plans for each of the other share classes that have adopted
Plans provide for payments to the Principal Underwriter for paying service-related and distribution-related expenses of up to the
following amounts of the fund’s average daily net assets attributable to such shares:
Share class
|
Service
related
payments
1
|
Distribution
related
payments
1
|
Total
allowable
under
the Plans
2
|
Class C
|
0.25%
|
0.75%
|
1.00%
|
Class 529-C
|
0.25
|
0.75
|
1.00
|
Class F-1
|
0.25
|
—
|
0.50
|
Class 529-F-1
|
0.25
|
—
|
0.50
|
Class 529-E
|
0.25
|
0.25
|
0.75
|
Class R-1
|
0.25
|
0.75
|
1.00
|
Class R-2
|
0.25
|
0.50
|
1.00
|
Class R-3
|
0.25
|
0.25
|
0.75
|
Class R-4
|
0.25
|
—
|
0.50
|
|
1
|
Amounts in these columns represent the amounts approved by the board of trustees under the applicable Plan.
|
|
2
|
The fund may annually expend the amounts set forth in this column under the current Plans with the approval of the board of
trustees.
|
American Balanced Fund - Page
37
|
During the 2012 fiscal year, 12b-1
expenses accrued and paid, and if applicable, unpaid, were:
|
12b-1
expenses
|
12b-1
unpaid liability
outstanding
|
Class
A
|
$79,734,000
|
|
$6,640,000
|
|
Class
B
|
14,271,000
|
|
1,021,000
|
|
Class
C
|
43,377,000
|
|
3,934,000
|
|
Class
F-1
|
3,241,000
|
|
349,000
|
|
Class
529-A
|
4,347,000
|
|
382,000
|
|
Class
529-B
|
1,590,000
|
|
132,000
|
|
Class
529-C
|
6,614,000
|
|
696,000
|
|
Class
529-E
|
537,000
|
|
56,000
|
|
Class
529-F-1
|
—
|
|
—
|
|
Class
R-1
|
1,300,000
|
|
119,000
|
|
Class
R-2
|
8,461,000
|
|
873,000
|
|
Class
R-3
|
12,629,000
|
|
1,205,000
|
|
Class
R-4
|
6,393,000
|
|
654,000
|
|
Approval of the Plans —
As required by rule 12b-1 and the 1940 Act, the Plans (together with the Principal Underwriting Agreement) have been approved by
the full board of trustees and separately by a majority of the independent trustees of the fund who have no direct or indirect
financial interest in the operation of the Plans or the Principal Underwriting Agreement. In addition, the selection and nomination
of independent trustees of the fund are committed to the discretion of the independent trustees during the existence of the Plans.
Potential benefits of the Plans to the
fund include quality shareholder services, savings to the fund in transfer agency costs, and benefits to the investment process
from growth or stability of assets. The Plans may not be amended to materially increase the amount spent for distribution without
shareholder approval. Plan expenses are reviewed quarterly by the board of trustees and the Plans must be renewed annually by the
board of trustees.
A portion of the fund’s 12b-1 expense
is paid to financial advisers to compensate them for providing ongoing services. If you have questions regarding your investment
in the fund or need assistance with your account, please contact your financial adviser. If you need a financial adviser, please
call American Funds Distributors at (800) 421-4120 for assistance.
Fee to Virginia College Savings Plan
—
With respect to Class 529 shares, as compensation for its oversight and administration, Virginia College Savings Plan
receives a quarterly fee accrued daily and calculated at the annual rate of .10% on the first $30 billion of the net assets invested
in Class 529 shares of the American Funds, .09% on net assets between $30 billion and $60 billion, .08% on net assets between $60
billion and $90 billion, .07% on net assets between $90 billion and $120 billion, and .06% on net assets between $120 billion
and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of average net assets of Class
529 shares of the American Funds for the last month of the prior calendar quarter.
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Other compensation to dealers
—
As of July 2012, the top dealers (or their affiliates) that American Funds Distributors anticipates will receive
additional compensation (as described in the prospectus) include:
AXA Advisors, LLC
Cadaret, Grant & Co., Inc.
Cambridge Investment Research, Inc.
Cetera Financial Group
Financial Network Investment Corporation
Genworth Financial Securities Corporation
Multi-Financial Securities Corporation
Primevest Financial Services, Inc.
Commonwealth Financial Network
D.A. Davidson & Co.
Edward Jones
H. Beck, Inc.
Hefren-Tillotson, Inc.
HTK / Janney Montgomery Group
Hornor, Townsend & Kent, Inc.
Janney Montgomery Scott LLC
ING Group
ING Financial Advisers, LLC
ING Financial Partners, Inc.
J. J. B. Hilliard, W. L. Lyons,
LLC
Lincoln Network
Lincoln Financial Advisors Corporation
Lincoln Financial Securities Corporation
LPL Group
LPL Financial LLC
Uvest Investment Services
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Metlife Enterprises
Metlife Securities Inc.
New England Securities
Tower Square Securities, Inc.
Walnut Street Securities, Inc.
MML Investors Services, Inc.
Morgan Stanley Smith Barney LLC
NFP Securities, Inc.
Northwestern Mutual Investment Services,
LLC
NPH / Jackson National
Invest Financial Corporation
Investment Centers of America,
Inc.
National Planning Corporation
SII Investments, Inc.
Park Avenue Securities LLC
PFS Investments Inc.
Raymond James Group
Morgan Keegan & Company, Inc.
Raymond James & Associates,
Inc.
Raymond James Financial Services
Inc.
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RBC Capital Markets Corporation
Robert W. Baird & Co. Incorporated
Stifel, Nicolaus & Company,
Incorporated
The Advisor Group
FSC Securities Corporation
Royal Alliance Associates, Inc.
SagePoint Financial, Inc.
Transamerica Financial Advisors,
Inc.
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
Wells Fargo Network
First Clearing LLC
Wells Fargo Advisors Financial
Network, LLC
Wells Fargo Advisors Investment
Services Group
Wells Fargo Advisors Latin American
Channel
Wells Fargo Advisors Private Client
Group
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Execution of portfolio transactions
The investment adviser places orders
with broker-dealers for the fund’s portfolio transactions. Purchases and sales of equity securities on a securities exchange
or an over-the-counter market are effected through broker-dealers who receive commissions for their services. Generally, commissions
relating to securities traded on foreign exchanges will be higher than commissions relating to securities traded on U.S. exchanges
and may not be subject to negotiation. Equity securities may also be purchased from underwriters at prices that include underwriting
fees. Purchases and sales of fixed-income securities are generally made with an issuer or a primary market-maker acting as principal
with no stated brokerage commission. The price paid to an underwriter for fixed-income securities includes underwriting fees. Prices
for fixed-income securities in secondary trades usually include undisclosed compensation to the market-maker reflecting the spread
between the bid and ask prices for the securities.
In selecting broker-dealers, the
investment adviser strives to obtain “best execution” (the most favorable total price reasonably attainable under
the circumstances) for the fund’s portfolio transactions, taking into account a variety of factors. These factors include
the size and type of transaction, the nature and character of the markets for the security to be purchased or sold, the cost,
quality, likely speed and reliability of the executions, the broker-dealer’s or execution venue’s ability to offer
liquidity and anonymity and the potential for minimizing market impact. The investment adviser considers these factors, which
involve qualitative judgments, when selecting broker-dealers and execution venues for fund portfolio transactions. The investment
adviser views best execution as a process that should be evaluated over time as part of an overall relationship with particular
broker-dealer firms. The fund does not consider the investment adviser as having an obligation to obtain the lowest commission
rate available for a portfolio transaction to the exclusion of price, service and qualitative considerations.
The investment adviser may execute portfolio
transactions with broker-dealers who provide certain brokerage and/or investment research services to it, but only when in the
investment adviser’s judgment the broker-dealer is capable of providing best execution for that transaction. The receipt
of these services permits the investment adviser to supplement its own research and analysis and makes available the views of,
and information from, individuals and the research staffs of other firms. Such views and information may be provided in the form
of written reports, telephone contacts and meetings with securities analysts. These services may include, among other things, reports
and other communications with respect to individual companies, industries, countries and regions, economic, political and legal
developments, as well as scheduling meetings with corporate executives and seminars and conferences related to relevant subject
matters. The investment adviser considers these services to be supplemental to its own internal research efforts and therefore
the receipt of investment research from broker-dealers does not tend to reduce the expenses involved in the investment adviser’s
research efforts. If broker-dealers were to discontinue providing such services it is unlikely the investment adviser would attempt
to replicate them on its own, in part because they would then no longer provide an independent, supplemental viewpoint. Nonetheless,
if it were to attempt to do so, the investment adviser would incur substantial additional costs. Research services that the investment
adviser receives from broker-dealers may be used by the investment adviser in servicing the fund and other funds and accounts that
it advises; however, not all such services will necessarily benefit the fund.
The investment adviser may pay commissions
in excess of what other broker-dealers might have charged, including on an execution-only basis, for certain portfolio transactions
in recognition of brokerage and/or investment research services provided by a broker-dealer. In
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this regard, the investment adviser has
adopted a brokerage allocation procedure consistent with the requirements of Section 28(e) of the U.S. Securities Exchange Act
of 1934. Section 28(e) permits an investment adviser to cause an account to pay a higher commission to a broker-dealer that provides
certain brokerage and/or investment research services to the investment adviser, if the investment adviser makes a good faith determination
that such commissions are reasonable in relation to the value of the services provided by such broker-dealer to the investment
adviser in terms of that particular transaction or the investment adviser’s overall responsibility to the fund and other
accounts that it advises. Certain brokerage and/or investment research services may not necessarily benefit all accounts paying
commissions to each such broker-dealer; therefore, the investment adviser assesses the reasonableness of commissions in light of
the total brokerage and investment research services provided by each particular broker-dealer.
In accordance with its internal brokerage
allocation procedure, each equity investment division of the investment adviser periodically assesses the brokerage and investment
research services provided by each broker-dealer from which it receives such services. Using its judgment, each equity investment
division of the investment adviser provides its trading desks with information regarding the relative value of services provided
by particular broker-dealers. Neither the investment adviser nor the fund incurs any obligation to any broker-dealer to pay for
research by generating trading commissions. As part of its ongoing relationships with broker-dealers, the investment adviser routinely
meets with firms, typically at the firm’s request, to discuss the level and quality of the brokerage and research services
provided, as well as the perceived value and cost of such services. In valuing the brokerage and investment research services the
investment adviser receives from broker-dealers in connection with its good faith determination of reasonableness, the investment
adviser does not attribute a dollar value to such services, but rather takes various factors into consideration, including the
quantity, quality and usefulness of the services to the investment adviser.
The investment adviser seeks, on an ongoing
basis, to determine what the reasonable levels of commission rates are in the marketplace. The investment adviser takes various
considerations into account when evaluating such reasonableness, including, (
a
) rates quoted by broker-dealers, (
b
)
the size of a particular transaction in terms of the number of shares and dollar amount, (
c
) the complexity of a particular
transaction, (
d
) the nature and character of the markets on which a particular trade takes place, (
e
) the ability
of a broker-dealer to provide anonymity while executing trades, (
f
) the ability of a broker-dealer to execute large trades
while minimizing market impact, (
g
) the extent to which a broker-dealer has put its own capital at risk, (
h
) the
level and type of business done with a particular broker-dealer over a period of time, (
i
) historical commission rates,
and (
j
) commission rates that other institutional investors are paying.
When executing portfolio transactions
in the same equity security for the funds and accounts, or portions of funds and accounts, over which the investment adviser,
through its equity investment divisions, has investment discretion, each of the investment divisions normally aggregates its respective
purchases or sales and executes them as part of the same transaction or series of transactions. When executing portfolio transactions
in the same fixed-income security for the fund and the other funds or accounts over which it or one of its affiliated companies
has investment discretion, the investment adviser normally aggregates such purchases or sales and executes them as part of the
same transaction or series of transactions. The objective of aggregating purchases and sales of a security is to allocate executions
in an equitable manner among the funds and other accounts that have concurrently authorized a transaction in such security.
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The investment adviser may place orders
for the fund’s portfolio transactions with broker-dealers who have sold shares of the funds managed by the investment adviser
or its affiliated companies; however, it does not consider whether a broker-dealer has sold shares of the funds managed by the
investment adviser or its affiliated companies when placing any such orders for the fund’s portfolio transactions.
Forward currency contracts are traded
directly between currency traders (usually large commercial banks) and their customers. The cost to the fund of engaging in such
contracts varies with factors such as the currency involved, the length of the contract period and the market conditions then prevailing.
Because such contracts are entered into on a principal basis, their prices usually include undisclosed compensation to the market
maker reflecting the spread between the bid and ask prices for the contracts. The fund may incur additional fees in connection
with the purchase or sale of certain contracts.
Brokerage commissions paid on portfolio
transactions for the fiscal years ended December 31, 2012, 2011 and 2010 amounted to $9,048,000, $15,840,000 and $14,166,000,
respectively. The volume of trading activity decreased during the year, resulting in a decrease in brokerage commissions paid
on portfolio transactions.
The fund is required to disclose information
regarding investments in the securities of its “regular” broker-dealers (or parent companies of its regular broker-dealers)
that derive more than 15% of their revenue from broker-dealer, underwriter or investment adviser activities. A regular broker-dealer
is (
a
) one of the 10 broker-dealers that received from the fund the largest amount of brokerage commissions by participating,
directly or indirectly, in the fund’s portfolio transactions during the fund’s most recently completed fiscal year;
(
b
) one of the 10 broker-dealers that engaged as principal in the largest dollar amount of portfolio transactions of the
fund during the fund’s most recently completed fiscal year; or (
c
) one of the 10 broker-dealers that sold the largest
amount of securities of the fund during the fund’s most recently completed fiscal year.
At the end of the fund’s most
recently completed fiscal year, the fund’s regular broker-dealers included Citigroup Global Markets Inc., Goldman Sachs
& Co., Morgan Stanley & Co. LLC and UBS AG. At the end of the fund’s most recently completed fiscal year, the fund
held equity securities of Citigroup Inc. in the amount of $375,820,000 and Goldman Sachs Group, Inc. in the amount of $852,955,000.
The fund held debt securities of Citigroup Inc. in the amount of $83,267,000, Goldman Sachs Group, Inc. in the amount of $95,885,000,
Morgan Stanley in the amount of $27,445,000 and UBS AG in the amount of $18,772,000.
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Disclosure of portfolio holdings
The fund’s investment adviser,
on behalf of the fund, has adopted policies and procedures with respect to the disclosure of information about fund portfolio securities.
These policies and procedures have been reviewed by the fund’s board of trustees and compliance will be periodically assessed
by the board in connection with reporting from the fund’s Chief Compliance Officer.
Under these policies and procedures,
the fund’s complete list of portfolio holdings available for public disclosure, dated as of the end of each calendar quarter,
is permitted to be posted on the American Funds website no earlier than the tenth day after such calendar quarter. In practice,
the public portfolio typically is posted on the website within 30 days after the end of the calendar quarter. In addition, the
fund’s list of top 10 equity portfolio holdings measured by percentage of net assets invested, dated as of the end of each
calendar month, is permitted to be posted on the American Funds website no earlier than the tenth day after such month. Such portfolio
holdings information may then be disclosed to any person pursuant to an ongoing arrangement to disclose portfolio holdings information
to such person no earlier than one day after the day on which the information is posted on the American Funds website. The fund’s
custodian, outside counsel and auditor, each of which requires portfolio holdings information for legitimate business and fund
oversight purposes, may receive the information earlier. See the “General information” section in this statement of
additional information for further information about the fund’s custodian, outside counsel and auditor.
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 preclear 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, as described in this statement of additional information, receiving
such information are subject to confidentiality obligations. When portfolio holdings information is disclosed other than through
the American Funds website to persons not affiliated with the fund (which, as described above, would typically occur no earlier
than one day after the day on which the information is posted on the American Funds website), such persons will be bound by agreements
(including confidentiality agreements) or fiduciary obligations that restrict and limit their use of the information to legitimate
business uses only. Neither the fund nor its investment adviser or any affiliate thereof receives compensation or other consideration
in connection with the disclosure of information about portfolio securities.
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Subject to board policies, the authority
to disclose a fund’s portfolio holdings, and to establish policies with respect to such disclosure, resides with the appropriate
investment-related committees of the fund’s investment adviser. In exercising their authority, the committees determine whether
disclosure of information about the fund’s portfolio securities is appropriate and in the best interest of fund shareholders.
The investment adviser has implemented policies and procedures to address conflicts of interest that may arise from the disclosure
of fund holdings. For example, the investment adviser’s code of ethics specifically requires, among other things, the safeguarding
of information about fund holdings and contains prohibitions designed to prevent the personal use of confidential, proprietary
investment information in a way that would conflict with fund transactions. In addition, the investment adviser believes that its
current policy of not selling portfolio holdings information and not disclosing such information to unaffiliated third parties
until such holdings have been made public on the American Funds website (other than to certain fund service providers for legitimate
business and fund oversight purposes) helps reduce potential conflicts of interest between fund shareholders and the investment
adviser and its affiliates.
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Price of shares
Shares are purchased at the offering
price or sold at the net asset value price next determined after the purchase or sell order is received by the fund or the Transfer
Agent provided that your request contains all information and legal documentation necessary to process the transaction. The Transfer
Agent may accept written orders for the sale of fund shares on a future date. These orders are subject to the Transfer Agent’s
policies, which generally allow shareholders to provide a written request to sell shares at the net asset value on a specified
date no more than five business days after receipt of the order by the Transfer Agent. Any request to sell shares on a future date
will be rejected if the request is not in writing, if the requested transaction date is more than five business days after the
Transfer Agent receives the request or if the request does not contain all information and legal documentation necessary to process
the transaction.
The offering or net asset value price
is effective for orders received prior to the time of determination of the net asset value and, in the case of orders placed with
dealers or their authorized designees, accepted by the Principal Underwriter, the Transfer Agent, a dealer or any of their designees.
In the case of orders sent directly to the fund or the Transfer Agent, an investment dealer should be indicated. The dealer is
responsible for promptly transmitting purchase and sell orders to the Principal Underwriter.
Orders received by the investment dealer
or authorized designee, the Transfer Agent or the fund after the time of the determination of the net asset value will be entered
at the next calculated offering price. Note that investment dealers or other intermediaries may have their own rules about share
transactions and may have earlier cut-off times than those of the fund. For more information about how to purchase through your
intermediary, contact your intermediary directly.
Prices that appear in the newspaper
do not always indicate prices at which you will be purchasing and redeeming shares of the fund, since such prices generally reflect
the previous day’s closing price, while purchases and redemptions are made at the next calculated price. The price you pay
for shares, the offering price, is based on the net asset value per share, which is calculated once daily as of approximately
4 p.m. New York time, which is the normal close of trading on the New York Stock Exchange, each day the New York Stock Exchange
is open. If, for example, the New York Stock Exchange closes at 1 p.m. New York time, the fund’s share price would still
be determined as of 4 p.m. New York time. In such example, portfolio securities traded on the New York
Stock Exchange would be valued at their closing price unless the investment adviser determines that a fair value adjustment is
appropriate due to subsequent events. The New York Stock Exchange is currently closed on weekends and on the following
holidays: New Year’s Day; Martin Luther King, Jr. Day; Presidents’ Day; Good Friday; Memorial Day; Independence Day;
Labor Day; Thanksgiving; and Christmas Day. Each share class of the fund has a separately calculated net asset value (and share
price).
All portfolio securities of funds managed
by Capital Research and Management Company (other than American Funds Money Market Fund
®
) are valued, and the net
asset values per share for each share class are determined, as indicated below. The fund follows standard industry practice by
typically reflecting changes in its holdings of portfolio securities on the first business day following a portfolio trade.
Equity securities, including depositary
receipts, are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on
which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any
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sales, at the last available bid
price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including
short-term securities purchased with more than 60 days left to maturity, are generally valued at prices obtained from one or more
pricing vendors. The pricing vendors base bond prices on, among other things, benchmark yields, transactions, bids, offers, quotations
from dealers and trading systems, new issues, underlying equity of the issuer, interest rate volatilities, spreads and other relationships
observed in the markets among comparable securities and proprietary pricing models such as yield measures calculated using factors
such as cash flows, prepayment information, default rates, delinquency and loss assumptions, financial or collateral characteristics
or performance, credit enhancements, liquidation value calculations, specific deal information and other reference data. The fund’s
investment adviser performs certain checks on vendor prices prior to calculation of the fund’s net asset value. When the
investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative),
fixed-income securities will be valued in good faith at the mean quoted bid and ask prices that are reasonably and timely available
(or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and
equity characteristics (e.g., convertible bonds, preferred stocks, units comprised of more than one type of security, etc.), or
equity securities traded principally among fixed-income dealers, are generally valued in the manner described above for either
equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser.
Securities with original maturities
of one year or less having 60 days or less to maturity are amortized to maturity based on their cost if acquired within 60 days
of maturity, or if already held on the 60th day, based on the value determined on the 61st day. Forward currency contracts are
valued at the mean of representative quoted bid and ask prices, generally based on prices supplied by one or more pricing vendors.
Assets or liabilities initially expressed
in terms of currencies other than U.S. dollars are translated prior to the next determination of the net asset value of the fund’s
shares into U.S. dollars at the prevailing market rates.
Securities and other assets for which
representative market quotations are not readily available or are considered unreliable by the investment adviser are valued at
fair value as determined in good faith under fair value guidelines adopted by authority of the fund’s board. Subject to
board oversight, the fund’s board has delegated the obligation to make fair valuation determinations to a valuation committee
established by the fund’s investment adviser. The board receives regular reports describing fair-valued securities and the
valuation methods used.
The valuation committee has adopted guidelines
and procedures (consistent with SEC rules and guidance) to consider certain relevant principles and factors when making all fair
value determinations. As a general principle, securities lacking readily available market quotations, or that have quotations that
are considered unreliable by the investment adviser, are valued in good faith by the valuation committee based upon what the fund
might reasonably expect to receive upon their current sale. Fair valuations and valuations of investments that are not actively
trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.
The valuation committee considers relevant indications of value that are reasonably and timely available to it in determining the
fair value to
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be assigned to a particular security,
such as the type and cost of the security, contractual or legal restrictions on resale of the security, relevant financial or business
developments of the issuer, actively traded similar or related securities, conversion or exchange rights on the security, related
corporate actions, significant events occurring after the close of trading in the security and changes in overall market conditions.
The valuation committee employs additional fair value procedures to address issues related to equity holdings of applicable fund
portfolios outside the United States. Securities owned by these funds trade in markets that open and close at different times,
reflecting time zone differences. If significant events occur after the close of a market (and before these fund’s net asset
values are next determined) which affect the value of portfolio securities, appropriate adjustments from closing market prices
may be made to reflect these events. Events of this type could include, for example, earthquakes and other natural disasters or
significant price changes in other markets (e.g., U.S. stock markets).
Each class of shares represents interests
in the same portfolio of investments and is identical in all respects to each other class, except for differences relating to
distribution, service and other charges and expenses, certain voting rights, differences relating to eligible investors, the designation
of each class of shares, conversion features and exchange privileges. Expenses attributable to the fund, but not to a particular
class of shares, are borne by each class pro rata based on relative aggregate net assets of the classes. Expenses directly attributable
to a class of shares are borne by that class of shares. Liabilities attributable to particular share classes, such as liabilities
for repurchase of fund shares, are deducted from total assets attributable to such share classes.
Net assets so obtained for each share
class are then divided by the total number of shares outstanding of that share class, and the result, rounded to the nearest cent,
is the net asset value per share for that class.
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Taxes and distributions
Disclaimer:
Some of the following information may not apply to certain shareholders, including those holding fund shares in a tax-favored
account, such as a retirement plan or education savings account. Shareholders should consult their tax advisers about the application
of federal, state and local tax law in light of their particular situation.
Taxation as a regulated investment
company
— The fund intends to qualify each year as a “regulated investment company” under Subchapter M of
the Internal Revenue Code of 1986, as amended (the “Code”), so that it will not be liable for federal tax on income
and capital gains distributed to shareholders. In order to qualify as a regulated investment company, and avoid being subject to
federal income taxes, the fund intends to distribute substantially all of its net investment income and realized net capital gains
on a fiscal year basis, and intends to comply with other tests applicable to regulated investment companies under Subchapter M.
The Code includes savings provisions
allowing the fund to cure inadvertent failures of certain qualification tests required under Subchapter M. However, should the
fund fail to qualify under Subchapter M, the fund would be subject to federal, and possibly state, corporate taxes on its taxable
income and gains, and distributions to shareholders would be taxed as dividend income to the extent of the fund’s earnings
and profits.
Amounts not distributed by the fund on
a timely basis in accordance with a calendar year distribution requirement may be subject to a nondeductible 4% excise tax. Unless
an applicable exception applies, to avoid the tax, the fund must distribute during each calendar year an amount equal to the sum
of (1) at least 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year, (2) at
least 98.2% of its capital gains in excess of its capital losses for the twelve month period ending on October 31, and (3) all
ordinary income and capital gains for previous years that were not distributed during such years.
Dividends paid by the fund from ordinary
income or from an excess of net short-term capital gain over net long-term capital loss are taxable to shareholders as ordinary
income dividends. For corporate shareholders, a portion of the fund’s ordinary income dividends may be eligible for the 70%
deduction for dividends received by corporations to the extent the fund’s income consists of dividends paid by U.S. corporations.
This deduction does not include dividends received from non-U.S. corporations and dividends on stocks the fund has not held for
more than 45 days during the 90-day period beginning 45 days before the stock became ex-dividend (90 and 180 days for certain preferred
stock). Corporate shareholders can only apply the lower rate to the qualified portion of a fund’s dividends if they have
held the shares in the fund on which the dividends were paid for the applicable 45 day or 90 day holding period surrounding the
ex-dividend date of the fund’s dividends.
The fund may declare a capital gain distribution
consisting of the excess of net realized long-term capital gains over net realized short-term capital losses. Net capital gains
for a fiscal year are computed by taking into account any capital loss carryforward of the fund. For fund fiscal years beginning
on or after December 22, 2010, capital losses may be carried forward indefinitely and retain their character as either short-term
or long-term. Under prior law, net capital losses could be carried forward for eight tax years and were treated as short-term capital
losses. The fund is required to use capital losses arising in fiscal years beginning on or after December 22, 2010 before using
capital losses arising in fiscal years prior to December 22, 2010.
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The fund may retain a portion of net
capital gain for reinvestment and may elect to treat such capital gain as having been distributed to shareholders of the fund.
Shareholders may receive a credit for the tax that the fund paid on such undistributed net capital gain and would increase the
basis in their shares of the fund by the difference between the amount of includible gains and the tax deemed paid by the shareholder.
Distributions of net capital gain that
the fund properly designates as a capital gain distribution generally will be taxable as long-term capital gain, regardless of
the length of time the shares of the fund have been held by a shareholder. Any loss realized upon the redemption of shares held
at the time of redemption for six months or less from the date of their purchase will be treated as a long-term capital loss to
the extent of any capital gain distributions (including any undistributed amounts treated as distributed capital gains, as described
above) during such six-month period.
Capital gain distributions by the fund
result in a reduction in the net asset value of the fund’s shares. Investors should consider the tax implications of buying
shares just prior to a capital gain distribution. The price of shares purchased at that time includes the amount of the forthcoming
distribution. Those purchasing just prior to a distribution will subsequently receive a partial return of their investment capital
upon payment of the distribution, which will be taxable to them.
Redemptions and exchanges of fund
shares —
Redemptions of shares, including exchanges for shares of other American Funds, may result in federal, state
and local tax consequences (gain or loss) to the shareholder.
Any loss realized on a redemption or
exchange of shares of the fund will be disallowed to the extent substantially identical shares are reacquired within the 61-day
period beginning 30 days before and ending 30 days after the shares are disposed of. Any loss disallowed under this rule will be
added to the shareholder’s tax basis in the new shares purchased.
If a shareholder exchanges or otherwise
disposes of shares of the fund within 90 days of having acquired such shares, and if, as a result of having acquired those shares,
the shareholder subsequently pays a reduced or no sales charge for shares of the fund, or of a different fund acquired before January
31
st
of the year following the year the shareholder exchanged or otherwise disposed of the original fund shares, the
sales charge previously incurred in acquiring the fund’s shares will not be taken into account (to the extent such previous
sales charges do not exceed the reduction in sales charges) for the purposes of determining the amount of gain or loss on the exchange,
but will be treated as having been incurred in the acquisition of such other fund(s).
Tax consequences of investments in
non-U.S. securities —
Dividend and interest income received by the fund from sources outside the United States may be
subject to withholding and other taxes imposed by such foreign jurisdictions. Tax conventions between certain countries and the
United States, however, may reduce or eliminate these foreign taxes. Some foreign countries impose taxes on capital gains with
respect to investments by foreign investors.
If more than 50% of the value of the
total assets of the fund at the close of the taxable year consists of securities of foreign corporations, the fund may elect to
pass through to shareholders the foreign taxes paid by the fund. If such an election is made, shareholders may claim a credit or
deduction on their federal income tax returns for, and will be required to treat as part of the amounts distributed to them, their
pro rata portion of qualified taxes paid by the fund to foreign
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countries. The application of the foreign
tax credit depends upon the particular circumstances of each shareholder.
Foreign currency gains and losses, including
the portion of gain or loss on the sale of debt securities attributable to fluctuations in foreign exchange rates, are generally
taxable as ordinary income or loss. These gains or losses may increase or decrease the amount of dividends payable by the fund
to shareholders. A fund may elect to treat gain and loss on certain foreign currency contracts as capital gain and loss instead
of ordinary income or loss.
If the fund invests in stock of certain
passive foreign investment companies (PFICs), the fund intends to mark-to-market these securities and recognize any gains at the
end of its fiscal and excise tax years. Deductions for losses are allowable only to the extent of any previously recognized gains.
Both gains and losses will be treated as ordinary income or loss, and the fund is required to distribute any resulting income.
If the fund is unable to identify an investment as a PFIC security and thus does not make a timely mark-to-market election, the
fund may be subject to adverse tax consequences.
Other tax considerations —
After the end of each calendar year, individual shareholders holding fund shares in taxable accounts will receive a statement of
the federal income tax status of all distributions. Shareholders of the fund also may be subject to state and local taxes on distributions
received from the fund.
For fund shares acquired on or after
January 1, 2012, the fund is required to report cost basis information for redemptions, including exchanges, to both shareholders
and the IRS.
Shareholders may obtain more information
about cost basis online at americanfunds.com/costbasis.
Under the backup withholding provisions
of the Code, the fund generally will be required to withhold federal income tax on all payments (other than exempt-interest dividends)
made to a shareholder if the shareholder either does not furnish the fund with the shareholder’s correct taxpayer identification
number or fails to certify that the shareholder is not subject to backup withholding. Backup withholding also applies if the IRS
notifies the shareholder or the fund that the taxpayer identification number provided by the shareholder is incorrect or that the
shareholder has previously failed to properly report interest or dividend income.
The foregoing discussion of U.S. federal
income tax law relates solely to the application of that law to U.S. persons (i.e., U.S. citizens and legal residents and U.S.
corporations, partnerships, trusts and estates). Each shareholder who is not a U.S. person should consider the U.S. and foreign
tax consequences of ownership of shares of the fund, including the possibility that such a shareholder may be subject to a U.S.
withholding tax at a rate of 30% (or a lower rate under an applicable income tax treaty) on dividend income received by the shareholder.
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Unless otherwise noted, all references
in the following pages to Class A, B, C or F-1 shares also refer to the corresponding Class 529-A, 529-B, 529-C or 529-F-1 shares.
Class 529 shareholders should also refer to the applicable program description for information on policies and services specifically
relating to these accounts. Shareholders holding shares through an eligible retirement plan should contact their plan’s administrator
or recordkeeper for information regarding purchases, sales and exchanges.
Purchase and exchange of shares
Purchases by individuals —
As described in the prospectus, you may generally open an account and purchase fund shares by contacting a financial adviser or
investment dealer authorized to sell the fund’s shares. You may make investments by any of the following means:
Contacting your financial adviser
—
Deliver or mail a check to your financial adviser.
By mail —
For initial
investments, you may mail a check, made payable to the fund, directly to the address indicated on the account application. Please
indicate an investment dealer on the account application. You may make additional investments by filling out the “Account
Additions” form at the bottom of a recent transaction confirmation and mailing the form, along with a check made payable
to the fund, using the envelope provided with your confirmation.
The amount of time it takes for
us to receive regular U.S. postal mail may vary and there is no assurance that we will receive such mail on the day you expect.
Mailing addresses for regular U.S. postal mail can be found in the prospectus. To send investments or correspondence to us via
overnight mail or courier service, use either of the following addresses:
American Funds
12711 North Meridian Street
Carmel, IN 46032-9181
American Funds
5300 Robin Hood Rd.
Norfolk, VA 23513-2407
By telephone —
Using
the American FundsLine. Please see the “Shareholder account services and privileges” section of this statement of additional
information for more information regarding this service.
By Internet —
Using
americanfunds.com. Please see the “Shareholder account services and privileges” section of this statement of additional
information for more information regarding this service.
By wire —
If you are
making a wire transfer, instruct your bank to wire funds to:
Wells Fargo Bank
ABA Routing No. 121000248
Account No. 4600-076178
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Your bank should include the following
information when wiring funds:
For credit to the account of:
American Funds Service Company
(fund’s name)
For further credit to:
(shareholder’s fund account number)
(shareholder’s name)
You may contact American Funds Service
Company at 800/421-4225 if you have questions about making wire transfers.
Other purchase information —
Class 529 shares may be purchased only through CollegeAmerica by investors establishing qualified higher education savings
accounts. Class 529-E shares may be purchased only by investors participating in CollegeAmerica through an eligible employer plan.
The American Funds state tax-exempt funds are qualified for sale only in certain jurisdictions, and tax-exempt funds in general
should not serve as retirement plan investments. In addition, the fund and the Principal Underwriter reserve the right to reject
any purchase order.
Class R-5 and R-6 shares may be made
available to certain charitable foundations organized and maintained by The Capital Group Companies, Inc. or its affiliates.
Class R-5 and R-6 shares may also
be made available to the Virginia College Savings Plan for use in the Virginia Education Savings Trust and the Virginia Prepaid
Education Program and other registered investment companies approved by the fund’s investment adviser or distributor. Class
R-6 shares are also available to other post employment benefits plans.
Purchase minimums and maximums —
All investments are subject to the purchase minimums and maximums described in the prospectus. As noted in the prospectus, purchase
minimums may be waived or reduced in certain cases.
In the case of American Funds non-tax-exempt
funds, the initial purchase minimum of $25 may be waived for the following account types:
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·
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Payroll deduction retirement plan accounts (such as, but not limited to, 403(b), 401(k), SIMPLE
IRA, SARSEP and deferred compensation plan accounts); and
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·
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Employer-sponsored CollegeAmerica accounts.
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The following account types may be established
without meeting the initial purchase minimum:
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·
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Retirement accounts that are funded with employer contributions; and
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·
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Accounts that are funded with monies set by court decree.
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The following account types may be established
without meeting the initial purchase minimum, but shareholders wishing to invest in two or more funds must meet the normal initial
purchase minimum of each fund:
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·
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Accounts that are funded with (
a)
transfers of assets, (
b
) rollovers from retirement
plans, (
c
) rollovers from 529 college savings plans or (
d
) required minimum distribution automatic exchanges; and
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·
|
American Funds Money Market Fund accounts registered in the name of clients of Capital Guardian
Trust Company’s Capital Group Private Client Services division.
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Certain accounts held on the fund’s
books, known as omnibus accounts, contain multiple underlying accounts that are invested in shares of the fund. These underlying
accounts are maintained by entities such as financial intermediaries and are subject to the applicable initial purchase minimums
as described in the prospectus and this statement of additional information. However, in the case where the entity maintaining
these accounts aggregates the accounts’ purchase orders for fund shares, such accounts are not required to meet the fund’s
minimum amount for subsequent purchases.
Exchanges —
You
may only exchange shares into other American Funds within the same share class. However, exchanges from Class A shares of American
Funds Money Market Fund may be made to Class C shares of other American Funds for dollar cost averaging purposes. Exchanges are
not permitted from Class A shares of American Funds Money Market Fund to Class C shares of American Funds Short-Term Tax-Exempt
Bond Fund, Intermediate Bond Fund of America, Limited Term Tax-Exempt Bond Fund of America or Short-Term Bond Fund of America.
Exchange purchases are subject to the minimum investment requirements of the fund purchased and no sales charge generally applies.
However, exchanges of shares from American Funds Money Market Fund are subject to applicable sales charges, unless the American
Funds Money Market Fund shares were acquired by an exchange from a fund having a sales charge, or by reinvestment or cross-reinvestment
of dividends or capital gain distributions. Exchanges of Class F shares generally may only be made through fee-based programs
of investment firms that have special agreements with the fund’s distributor and certain registered investment advisers.
You may exchange shares of other classes
by contacting the Transfer Agent, by contacting your investment dealer or financial adviser, by using American FundsLine or americanfunds.com,
or by telephoning 800/421‑4225 toll‑free, or faxing (see “American Funds Service Company service areas”
in the prospectus for the appropriate fax numbers) the Transfer Agent. For more information, see “Shareholder account services
and privileges” in this statement of additional information.
These transactions have the same tax consequences as ordinary
sales and purchases.
Shares held in employer-sponsored retirement
plans may be exchanged into other American Funds by contacting your plan administrator or recordkeeper. Exchange redemptions and
purchases are processed simultaneously at the share prices next determined after the exchange order is received (see “Price
of shares” in this statement of additional information).
Conversion —
Currently,
Class C shares of the fund automatically convert to Class F-1 shares in the month of the 10-year anniversary of the purchase date.
The board of trustees of the fund reserves the right at any time, without shareholder approval, to amend the conversion feature
of the Class C shares, including without limitation, providing for conversion into a different share
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class or for no conversion. In making
its decision, the board of trustees will consider, among other things, the effect of any such amendment on shareholders.
Frequent trading of fund shares —
As noted in the prospectus, certain redemptions may trigger a purchase block lasting 30 calendar days under the fund’s “purchase
blocking policy.” Under this policy, systematic redemptions will not trigger a purchase block and systematic purchases will
not be prevented if the entity maintaining the shareholder account is able to identify the transaction as a systematic redemption
or purchase. For purposes of this policy, systematic redemptions include, for example, regular periodic automatic redemptions and
statement of intention escrow share redemptions. Systematic purchases include, for example, regular periodic automatic purchases
and automatic reinvestments of dividends and capital gain distributions. Generally, purchases and redemptions will not be considered
“systematic” unless the transaction is pre-scheduled for a specific date.
Other potentially abusive activity
—
In addition to implementing purchase blocks, American Funds Service Company will monitor for other types of activity
that could potentially be harmful to the American Funds — for example, short-term trading activity in multiple funds. When
identified, American Funds Service Company will request that the shareholder discontinue the activity. If the activity continues,
American Funds Service Company will freeze the shareholder account to prevent all activity other than redemptions of fund shares.
Moving between share classes
If you wish to “move”
your investment between share classes (within the same fund or between different funds), we generally will process your request
as an exchange of the shares you currently hold for shares in the new class or fund. Below is more information about how sales
charges are handled for various scenarios.
Exchanging Class B shares for
Class A shares —
If you exchange Class B shares for Class A shares during the contingent deferred sales charge period
you are responsible for paying any applicable deferred sales charges attributable to those Class B shares, but you will not be
required to pay a Class A sales charge. If, however, you exchange your Class B shares for Class A shares after the contingent deferred
sales charge period, you are responsible for paying any applicable Class A sales charges.
Exchanging Class C shares for
Class A shares —
If you exchange Class C shares for Class A shares, you are still responsible for paying any Class C
contingent deferred sales charges and applicable Class A sales charges.
Exchanging Class C shares for
Class F shares —
If you are part of a qualified fee-based program and you wish to exchange your Class C shares for Class
F shares to be held in the program, you are still responsible for paying any applicable Class C contingent deferred sales charges.
Exchanging Class F shares
for Class A shares —
You can exchange Class F shares held in a qualified fee-based program for Class A shares
without paying an initial Class A sales charge if you are leaving or have left the fee-based program. You can exchange Class F
shares received in a conversion from Class C shares for Class A shares at any time without paying an initial Class A sales charge
if you notify American Funds Service Company of the conversion when you make your request. If you have already redeemed your Class
F shares, the foregoing requirements apply and you must purchase Class A
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shares within 90 days after
redeeming your Class F shares to receive the Class A shares without paying an initial Class A sales charge.
Exchanging Class A shares for
Class F shares —
If you are part of a qualified fee-based program and you wish to exchange your Class A shares for Class
F shares to be held in the program, any Class A sales charges (including contingent deferred sales charges) that you paid or are
payable will not be credited back to your account.
Exchanging Class A shares for
Class R shares —
Provided it is eligible to invest in Class R shares, a retirement plan currently invested in Class A
shares may exchange its shares for Class R shares. Any Class A sales charges that the retirement plan previously paid will not
be credited back to the plan’s account.
Exchanging Class F-1 shares for
Class F-2 shares —
If you are part of a qualified fee-based program that offers Class F-2 shares, you may exchange your
Class F-1 shares for Class F-2 shares to be held in the program.
Moving between other share classes
—
If you desire to move your investment between share classes and the particular scenario is not described in this statement
of additional information, please contact American Funds Service Company at 800/421‑4225 for more information.
Non-reportable transactions —
Automatic conversions described in the prospectus will be non-reportable for tax purposes. In addition, an exchange of shares from
one share class of a fund to another share class of the same fund will be treated as a non-reportable exchange for tax purposes,
provided that the exchange request is received in writing by American Funds Service Company and processed as a single transaction.
However, a movement between a 529 share class and a non-529 share class of the same fund will be reportable.
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Sales charges
Class A purchases
Purchases by certain 403(b) plans
A 403(b) plan may not invest in
Class A or C shares unless such plan was invested in Class A or C shares before January 1, 2009.
Participant accounts of a 403(b)
plan that were treated as an individual-type plan for sales charge purposes before January 1, 2009, may continue to be treated
as accounts of an individual-type plan for sales charge purposes. Participant accounts of a 403(b) plan that were treated as an
employer-sponsored plan for sales charge purposes before January 1, 2009, may continue to be treated as accounts of an employer-sponsored
plan for sales charge purposes. Participant accounts of a 403(b) plan that is established on or after January 1, 2009, are treated
as accounts of an employer-sponsored plan for sales charge purposes.
Purchases by SEP plans and SIMPLE
IRA plans
Participant accounts in a Simplified
Employee Pension (SEP) plan or a Savings Incentive Match Plan for Employees of Small Employers IRA (SIMPLE IRA) plan will be aggregated
together for Class A sales charge purposes if the SEP plan or SIMPLE IRA plan was established after November 15, 2004, by an employer
adopting a prototype plan produced by American Funds Distributors, Inc. In the case where the employer adopts any other plan (including,
but not limited to, an IRS model agreement), each participant’s account in the plan will be aggregated with the participant’s
own personal investments that qualify under the aggregation policy. A SEP plan or SIMPLE IRA plan with a certain method of aggregating
participant accounts as of November 15, 2004, may continue with that method so long as the employer has not modified the plan document
since that date.
Other purchases
Pursuant to a determination of eligibility
by a vice president or more senior officer of the Capital Research and Management Company Fund Administration Unit, or by his or
her designee, Class A shares of the American Funds stock, stock/bond and bond funds may be sold at net asset value to:
(1)
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current or retired directors, trustees, officers and advisory board members of, and certain lawyers who provide services to, the funds managed by Capital Research and Management Company, current or retired employees of Washington Management Corporation, current or retired employees and partners of The Capital Group Companies, Inc. and its affiliated companies, certain family members of the above persons, and trusts or plans primarily for such persons;
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(2)
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currently registered
representatives and assistants directly employed by such representatives, retired registered representatives with respect to accounts
established while active, or full-time employees (collectively, “Eligible Persons”) (and their (
a
) spouses
or equivalents if recognized under local law,
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(
b
) parents
and children, including parents and children in step and adoptive relationships, sons-in-law and daughters-in-law, and (
c
)
parents-in-law, if the Eligible Persons or the spouses, children or parents of the Eligible Persons are listed in the account
registration with the parents-in-law) of dealers who have sales agreements with the Principal Underwriter (or who clear transactions
through such dealers), plans for the dealers, and plans that include as participants only the Eligible Persons, their spouses,
parents and/or children;
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(3)
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currently registered investment advisers (“RIAs”) and assistants directly employed by such RIAs, retired RIAs with respect to accounts established while active, or full-time employees (collectively, “Eligible Persons”) (and their (
a
) spouses or equivalents if recognized under local law, (
b
) parents and children, including parents and children in step and adoptive relationships, sons-in-law and daughters-in-law and (
c
) parents-in-law, if the Eligible Persons or the spouses, children or parents of the Eligible Persons are listed in the account registration with the parents-in-law) of RIA firms that are authorized to sell shares of the funds, plans for the RIA firms, and plans that include as participants only the Eligible Persons, their spouses, parents and/or children;
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(4)
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companies exchanging securities with the fund through a merger, acquisition or exchange offer;
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(5)
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insurance company separate accounts;
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(6)
|
accounts managed by subsidiaries of The Capital Group Companies, Inc.;
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(7)
|
The Capital Group Companies,
Inc. and its affiliated companies;
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(8)
|
an individual or entity with a substantial business relationship with The Capital Group Companies, Inc. or its affiliates, or an individual or entity related or relating to such individual or entity;
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(9)
|
wholesalers and full-time employees directly supporting wholesalers involved in the distribution of insurance company separate accounts whose underlying investments are managed by any affiliate of The Capital Group Companies, Inc.; and
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(10)
|
full-time employees of banks that have sales agreements with the Principal Underwriter, who are solely dedicated to directly supporting the sale of mutual funds.
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Shares are offered at net asset
value to these persons and organizations due to anticipated economies in sales effort and expense. Once an account is established
under this net asset value privilege, additional investments can be made at net asset value for the life of the account.
Transfers to CollegeAmerica
—
A transfer from the Virginia Prepaid Education Program
SM
or the Virginia Education
Savings Trust
SM
to a CollegeAmerica account will be made with no sales charge. No commission
will be paid to the dealer on such a transfer.
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Moving between accounts —
Investments in certain account types may be moved to other account types without incurring additional Class A sales charges. These
transactions include, for example:
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·
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redemption proceeds from a non-retirement account (for example, a joint tenant account) used to
purchase fund shares in an IRA or other individual-type retirement account;
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·
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required minimum distributions from an IRA or other individual-type retirement account used to
purchase fund shares in a non-retirement account; and
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·
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death distributions paid to a beneficiary’s account that are used by the beneficiary to purchase
fund shares in a different account.
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Loan repayments —
Repayments
on loans taken from a retirement plan or an individual-type retirement account are not subject to sales charges if American Funds
Service Company is notified of the repayment.
Dealer commissions and compensation
—
Commissions (up to 1.00%) are paid to dealers who initiate and are responsible for certain Class A share purchases
not subject to initial sales charges. These purchases consist of purchases of $1 million or more, purchases by employer-sponsored
defined contribution-type retirement plans investing $1 million or more or with 100 or more eligible employees, and purchases made
at net asset value by certain retirement plans, endowments and foundations with assets of $50 million or more. Commissions on such
investments (other than IRA rollover assets that roll over at no sales charge under the fund’s IRA rollover policy as described
in the prospectus) are paid to dealers at the following rates: 1.00% on amounts of less than $4 million, .50% on amounts of at
least $4 million but less than $10 million and .25% on amounts of at least $10 million. Commissions are based on cumulative investments
over the life of the account with no adjustment for redemptions, transfers, or market declines. For example, if a shareholder has
accumulated investments in excess of $4 million (but less than $10 million) and subsequently redeems all or a portion
of the account(s), purchases following the redemption will generate a dealer commission of .50%.
A dealer concession of up to 1% may be
paid by the fund under its Class A plan of distribution to reimburse the Principal Underwriter in connection with dealer and wholesaler
compensation paid by it with respect to investments made with no initial sales charge.
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Sales charge reductions and waivers
Reducing your Class A sales charge
—
As described in the prospectus, there are various ways to reduce your sales charge when purchasing Class A shares.
Additional information about Class A sales charge reductions is provided below.
Statement of intention —
By establishing a statement of intention (the “Statement”), you enter into a nonbinding commitment to purchase shares
of the American Funds (excluding American Funds Money Market Fund) over a 13-month period and receive the same sales charge (expressed
as a percentage of your purchases) as if all shares had been purchased at once, unless the Statement is upgraded as described below.
The Statement period starts on the
date on which your first purchase made toward satisfying the Statement is processed. Your accumulated holdings (as described in
the paragraph below titled “Rights of accumulation”) eligible to be aggregated as of the day immediately before the
start of the Statement period may be credited toward satisfying the Statement.
You may revise the commitment you
have made in your Statement upward at any time during the Statement period. If your prior commitment has not been met by the time
of the revision, the Statement period during which purchases must be made will remain unchanged. Purchases made from the date of
the revision will receive the reduced sales charge, if any, resulting from the revised Statement. If your prior commitment has
been met by the time of the revision, your original Statement will be considered met and a new Statement will be established.
The Statement will be considered
completed if the shareholder dies within the 13-month Statement period. Commissions to dealers will not be adjusted or paid on
the difference between the Statement amount and the amount actually invested before the shareholder’s death.
When a shareholder elects to use
a Statement, shares equal to 5% of the dollar amount specified in the Statement may be held in escrow in the shareholder’s
account out of the initial purchase (or subsequent purchases, if necessary) by the Transfer Agent. All dividends and any capital
gain distributions on shares held in escrow will be credited to the shareholder’s account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified Statement period, the purchaser may be required to
remit to the Principal Underwriter the difference between the sales charge actually paid and the sales charge which would have
been paid if the total of such purchases had been made at a single time. Any dealers assigned to the shareholder’s account
at the time a purchase was made during the Statement period will receive a corresponding commission adjustment if appropriate.
If the difference is not paid by the close of the Statement period, the appropriate number of shares held in escrow will be redeemed
to pay such difference. If the proceeds from this redemption are inadequate, the purchaser may be liable to the Principal Underwriter
for the balance still outstanding.
In addition, if you currently have
individual holdings in American Legacy variable annuity contracts or variable life insurance policies that were established on
or before March 31, 2007, you may continue to apply purchases under such contracts and policies to a Statement.
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Shareholders purchasing shares at
a reduced sales charge under a Statement indicate their acceptance of these terms and those in the prospectus with their first
purchase.
Aggregation —
Qualifying
investments for aggregation include those made by you and your “immediate family” as defined in the prospectus, if
all parties are purchasing shares for their own accounts and/or:
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·
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individual-type employee benefit plans, such as an IRA, single-participant Keogh-type plan, or
a participant account of a 403(b) plan that is treated as an individual-type plan for sales charge purposes (see “Purchases
by certain 403(b) plans” under “Sales charges” in this statement of additional information);
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·
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SEP plans and SIMPLE IRA plans established after November 15, 2004, by an employer adopting any
plan document other than a prototype plan produced by American Funds Distributors, Inc.;
|
|
·
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business accounts solely controlled by you or your immediate family (for example, you own the entire
business);
|
|
·
|
trust accounts established by you or your immediate family (for trusts with only one primary beneficiary,
upon the trustor’s death the trust account may be aggregated with such beneficiary’s own accounts; for trusts with
multiple primary beneficiaries, upon the trustor’s death the trustees of the trust may instruct American Funds Service Company
to establish separate trust accounts for each primary beneficiary; each primary beneficiary’s separate trust account may
then be aggregated with such beneficiary’s own accounts);
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·
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endowments or foundations established and controlled by you or your immediate family; or
|
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·
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529 accounts, which will be aggregated at the account owner level (Class 529-E accounts may only
be aggregated with an eligible employer plan).
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Individual purchases by a trustee(s)
or other fiduciary(ies) may also be aggregated if the investments are:
|
·
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for a single trust estate or fiduciary account, including employee benefit plans other than the
individual-type employee benefit plans described above;
|
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·
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made for two or more employee benefit plans of a single employer or of affiliated employers as
defined in the 1940 Act, excluding the individual-type employee benefit plans described above;
|
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·
|
for a diversified common trust fund or other diversified pooled account not specifically formed
for the purpose of accumulating fund shares;
|
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·
|
for nonprofit, charitable or educational organizations, or any endowments or foundations established
and controlled by such organizations, or any employer-sponsored retirement plans established for the benefit of the employees of
such organizations, their endowments, or their foundations;
|
|
·
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for participant accounts of a 403(b) plan that is treated as an employer-sponsored plan for sales
charge purposes (see “Purchases by certain 403(b) plans” under “Sales charges” in this statement of additional
information), or made for participant
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accounts of two or more such plans, in each case of a single employer or affiliated employers as
defined in the 1940 Act; or
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·
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for a SEP or SIMPLE IRA plan established after November 15, 2004, by an employer adopting a prototype
plan produced by American Funds Distributors, Inc.
|
Purchases made for nominee or street
name accounts (securities held in the name of an investment dealer or another nominee such as a bank trust department instead of
the customer) may not be aggregated with those made for other accounts and may not be aggregated with other nominee or street name
accounts unless otherwise qualified as described above.
Concurrent purchases —
As described in the prospectus, you may reduce your Class A sales charge by combining purchases of all classes of shares
in the American Funds, as well as applicable holdings in the American Funds Target Date Retirement Series, American Funds Portfolio
Series and American Funds College Target Date Series. Shares of American Funds Money Market Fund purchased through an exchange,
reinvestment or cross-reinvestment from a fund having a sales charge also qualify. However, direct purchases of American Funds
Money Market Fund are excluded. If you currently have individual holdings in American Legacy variable annuity contracts or variable
life insurance policies that were established on or before March 31, 2007, you may continue to combine purchases made under such
contracts and policies to reduce your Class A sales charge.
Rights of accumulation —
Subject to the limitations described in the aggregation policy, you may take into account your accumulated holdings
in all share classes of the American Funds, as well as applicable holdings in the American Funds Target Date Retirement Series,
American Funds Portfolio Series and American Funds College Target Date Series, to determine your sales charge on investments in
accounts eligible to be aggregated. Direct purchases of American Funds Money Market Fund are excluded. Subject to your investment
dealer’s or recordkeeper’s capabilities, your accumulated holdings will be calculated as the higher of (
a
)
the current value of your existing holdings (the “market value”) as of the day prior to your American Funds investment
or (
b
) the amount you invested (including reinvested dividends and capital gains, but excluding capital appreciation) less
any withdrawals (the “cost value”). Depending on the entity on whose books your account is held, the value of your
holdings in that account may not be eligible for calculation at cost value. For example, accounts held in nominee or street name
may not be eligible for calculation at cost value and instead may be calculated at market value for purposes of rights of accumulation.
The value of all of your holdings
in accounts established in calendar year 2005 or earlier will be assigned an initial cost value equal to the market value of those
holdings as of the last business day of 2005. Thereafter, the cost value of such accounts will increase or decrease according to
actual investments or withdrawals. You must contact your financial adviser or American Funds Service Company if you have additional
information that is relevant to the calculation of the value of your holdings.
When determining your American Funds
Class A sales charge, if your investment is not in an employer-sponsored retirement plan, you may also continue to take into account
the market value (as of the day prior to your American Funds investment) of your individual holdings in various American Legacy
variable annuity contracts and variable
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life insurance policies that were
established on or before March 31, 2007. An employer-sponsored retirement plan may also continue to take into account the market
value of its investments in American Legacy Retirement Investment Plans that were established on or before March 31, 2007.
You may not purchase Class C or
529-C shares if such combined holdings cause you to be eligible to purchase Class A or 529-A shares at the $1 million or more sales
charge discount rate (i.e. at net asset value).
If you make a gift of American Funds
Class A shares, upon your request, you may purchase the shares at the sales charge discount allowed under rights of accumulation
of all of your American Funds and applicable American Legacy accounts.
CDSC waivers for Class A, B and C
shares —
As noted in the prospectus, a contingent deferred sales charge (“CDSC”) may be waived for redemptions
due to death or post-purchase disability of a shareholder (this generally excludes accounts registered in the names of trusts and
other entities). In the case of joint tenant accounts, if one joint tenant dies, a surviving joint tenant, at the time he or she
notifies the Transfer Agent of the other joint tenant’s death and removes the decedent’s name from the account, may
redeem shares from the account without incurring a CDSC. Redemptions made after the Transfer Agent is notified of the death of
a joint tenant will be subject to a CDSC.
In addition, a CDSC may be waived for
the following types of transactions, if together they do not exceed 12% of the value of an “account” (defined below)
annually (the “12% limit”):
|
·
|
Required minimum distributions taken from retirement accounts upon the shareholder’s attainment
of age 70½ (required minimum distributions that continue to be taken by the beneficiary(ies) after the account owner is
deceased also qualify for a waiver).
|
|
·
|
Redemptions through an automatic withdrawal plan (“AWP”) (see “Automatic withdrawals”
under “Shareholder account services and privileges” in this statement of additional information). For each AWP payment,
assets that are not subject to a CDSC, such as shares acquired through reinvestment of dividends and/or capital gain distributions,
will be redeemed first and will count toward the 12% limit. If there is an insufficient amount of assets not subject to a CDSC
to cover a particular AWP payment, shares subject to the lowest CDSC will be redeemed next until the 12% limit is reached. Any
dividends and/or capital gain distributions taken in cash by a shareholder who receives payments through an AWP will also count
toward the 12% limit. In the case of an AWP, the 12% limit is calculated at the time an automatic redemption is first made, and
is recalculated at the time each additional automatic redemption is made. Shareholders who establish an AWP should be aware that
the amount of a payment not subject to a CDSC may vary over time depending on fluctuations in the value of their accounts. This
privilege may be revised or terminated at any time.
|
For purposes of this paragraph, “account”
means your investment in the applicable class of shares of the particular fund from which you are making the redemption.
CDSC waivers are allowed only in the
cases listed here and in the prospectus. For example, CDSC waivers will not be allowed on redemptions of Class 529-B and 529-C
shares due to termination of CollegeAmerica; a determination by the Internal Revenue Service that
American Balanced Fund - Page
63
|
CollegeAmerica does not qualify as a
qualified tuition program under the Code; proposal or enactment of law that eliminates or limits the tax-favored status of CollegeAmerica;
or elimination of the fund by the Virginia College Savings Plan as an option for additional investment within CollegeAmerica.
American Balanced Fund - Page
64
|
Selling shares
The methods for selling (redeeming) shares
are described more fully in the prospectus. If you wish to sell your shares by contacting American Funds Service Company directly,
any such request must be signed by the registered shareholders. To contact American Funds Service Company via overnight mail or
courier service, see “Purchase and exchange of shares.”
A signature guarantee may be required
for certain redemptions. In such an event, your signature may be guaranteed by a domestic stock exchange or the Financial Industry
Regulatory Authority, bank, savings association or credit union that is an eligible guarantor institution. The Transfer Agent reserves
the right to require a signature guarantee on any redemptions.
Additional documentation may be required
for sales of shares held in corporate, partnership or fiduciary accounts. You must include with your written request any shares
you wish to sell that are in certificate form.
If you sell Class A, B or C shares and
request a specific dollar amount to be sold, we will sell sufficient shares so that the sale proceeds, after deducting any applicable
CDSC, equals the dollar amount requested.
If you hold multiple American Funds and
a CDSC applies to the shares you are redeeming, the CDSC will be calculated based on the applicable class of shares of the particular
fund from which you are making the redemption.
Redemption proceeds will not be mailed
until sufficient time has passed to provide reasonable assurance that checks or drafts (including certified or cashier’s
checks) for shares purchased have cleared (which may take up to 10 business days from the purchase date). Except for delays relating
to clearance of checks for share purchases or in extraordinary circumstances (and as permissible under the 1940 Act), sale proceeds
will be paid on or before the seventh day following receipt and acceptance of an order. Interest will not accrue or be paid on
amounts that represent uncashed distribution or redemption checks.
You may request that redemption proceeds
of $1,000 or more from American Funds Money Market Fund be wired to your bank by writing American Funds Service Company. A signature
guarantee is required on all requests to wire funds.
American Balanced Fund - Page
65
|
Shareholder account services and
privileges
The following services and privileges
are generally available to all shareholders. However, certain services and privileges described in the prospectus and this statement
of additional information may not be available for Class 529 shareholders or if your account is held with an investment dealer
or through an employer-sponsored retirement plan.
Automatic investment plan —
An automatic investment plan enables you to make monthly or quarterly investments in the American Funds through automatic debits
from your bank account. To set up a plan, you must fill out an account application and specify the amount that you would like to
invest and the date on which you would like your investments to occur. The plan will begin within 30 days after your account application
is received. Your bank account will be debited on the day or a few days before your investment is made, depending on the bank’s
capabilities. The Transfer Agent will then invest your money into the fund you specified on or around the date you specified. If
the date you specified falls on a weekend or holiday, your money will be invested on the following business day. However, if the
following business day falls in the next month, your money will be invested on the business day immediately preceding the weekend
or holiday. If your bank account cannot be debited due to insufficient funds, a stop-payment or the closing of the account, the
plan may be terminated and the related investment reversed. You may change the amount of the investment or discontinue the plan
at any time by contacting the Transfer Agent.
Automatic reinvestment —
Dividends and capital gain distributions are reinvested in additional shares of the same class and fund at net asset value unless
you indicate otherwise on the account application. You also may elect to have dividends and/or capital gain distributions paid
in cash by informing the fund, the Transfer Agent or your investment dealer. Dividends and capital gain distributions paid to retirement
plan shareholders or shareholders of the 529 share classes will be automatically reinvested.
If you have elected to receive dividends
and/or capital gain distributions in cash, and the postal or other delivery service is unable to deliver checks to your address
of record, or you do not respond to mailings from American Funds Service Company with regard to uncashed distribution checks, your
distribution option may be automatically converted to having all dividends and other distributions reinvested in additional shares.
Cross-reinvestment of dividends and
distributions —
For all share classes, except the 529 classes of shares, you may cross-reinvest dividends and capital
gains (distributions) into other American Funds in the same share class at net asset value, subject to the following conditions:
(1) the aggregate value of your account(s)
in the fund(s) paying distributions equals or exceeds $5,000 (this is waived if the value of the account in the fund receiving
the distributions equals or exceeds that fund’s minimum initial investment requirement);
(2) if the value of the account of
the fund receiving distributions is below the minimum initial investment requirement, distributions must be automatically reinvested;
and
(3) if you discontinue the cross-reinvestment
of distributions, the value of the account of the fund receiving distributions must equal or exceed the minimum initial investment
requirement. If you do not meet this requirement within 90 days of notification, the fund has the right to automatically redeem
the account.
American Balanced Fund - Page
66
|
Automatic exchanges —
For
all share classes, you may automatically exchange shares of the same class in amounts of $50 or more among any of the American
Funds on any day (or preceding business day if the day falls on a nonbusiness day) of each month you designate.
Automatic withdrawals —
Depending
on the type of account, for all share classes except R shares, you may automatically withdraw shares from any of the American Funds.
You can make automatic withdrawals of $50 or more. You can designate the day of each period for withdrawals and request that checks
be sent to you or someone else. Withdrawals may also be electronically deposited to your bank account. The Transfer Agent will
withdraw your money from the fund you specify on or around the date you specify. If the date you specified falls on a weekend or
holiday, the redemption will take place on the previous business day. However, if the previous business day falls in the preceding
month, the redemption will take place on the following business day after the weekend or holiday. You should consult with your
adviser or intermediary to determine if your account is eligible for automatic withdrawals.
Withdrawal payments are not to be considered
as dividends, yield or income. Generally, automatic investments may not be made into a shareholder account from which there are
automatic withdrawals. Withdrawals of amounts exceeding reinvested dividends and distributions and increases in share value would
reduce the aggregate value of the shareholder’s account. The Transfer Agent arranges for the redemption by the fund of sufficient
shares, deposited by the shareholder with the Transfer Agent, to provide the withdrawal payment specified.
Redemption proceeds from an automatic
withdrawal plan are not eligible for reinvestment without a sales charge.
Account statements —
Your
account is opened in accordance with your registration instructions. Transactions in the account, such as additional investments,
will be reflected on regular confirmation statements from the Transfer Agent. Dividend and capital gain reinvestments, purchases
through automatic investment plans and certain retirement plans, as well as automatic exchanges and withdrawals, will be confirmed
at least quarterly.
American FundsLine and americanfunds.com
—
You may check your share balance, the price of your shares or your most recent account transaction; redeem
shares (up to $125,000 per American Funds shareholder each day) from nonretirement plan accounts; or exchange shares around the
clock with American FundsLine or using americanfunds.com. To use American FundsLine, call 800/325-3590 from a TouchTone™
telephone. Redemptions and exchanges through American FundsLine and americanfunds.com are subject to the conditions noted above
and in “Telephone and Internet purchases, redemptions and exchanges” below. You will need your fund number (see the
list of the American Funds under the “General information — fund numbers” section in this statement of
additional information), personal identification number (generally the last four digits of your Social Security number or other
tax identification number associated with your account) and account number.
Generally, all shareholders are automatically
eligible to use these services. However, if you are not currently authorized to do so, you may complete an American FundsLink Authorization
Form. Once you establish this privilege, you, your financial adviser or any person with your account information may use these
services.
Telephone and Internet purchases,
redemptions and exchanges —
By using the telephone (including American FundsLine) or the Internet (including americanfunds.com),
or fax purchase,
American Balanced Fund - Page
67
|
redemption and/or exchange options, you
agree to hold the fund, the Transfer Agent, any of its affiliates or mutual funds managed by such affiliates, and each of their
respective directors, trustees, officers, employees and agents harmless from any losses, expenses, costs or liabilities (including
attorney fees) that may be incurred in connection with the exercise of these privileges. Generally, all shareholders are automatically
eligible to use these services. However, you may elect to opt out of these services by writing the Transfer Agent (you may also
reinstate them at any time by writing the Transfer Agent). If the Transfer Agent does not employ reasonable procedures to confirm
that the instructions received from any person with appropriate account information are genuine, it and/or the fund may be liable
for losses due to unauthorized or fraudulent instructions. In the event that shareholders are unable to reach the fund by telephone
because of technical difficulties, market conditions or a natural disaster, redemption and exchange requests may be made in writing
only.
Checkwriting —
You may establish
check writing privileges for Class A shares (but not Class 529-A shares) of American Funds Money Market Fund upon meeting
the fund’s initial purchase minimum of $1,000. This can be done by using an account application. If you request check writing
privileges, you will be provided with checks that you may use to draw against your account. These checks may be made payable to
anyone you designate and must be signed by the authorized number of registered shareholders exactly as indicated on your account
application.
Redemption of shares —
The
fund’s declaration of trust permits the fund to direct the Transfer Agent to redeem the shares of any shareholder for their
then current net asset value per share if at such time the shareholder of record owns shares having an aggregate net asset value
of less than the minimum initial investment amount required of new shareholders as set forth in the fund’s current registration
statement under the 1940 Act, and subject to such further terms and conditions as the board of trustees of the fund may from time
to time adopt.
While payment of redemptions normally
will be in cash, the fund’s declaration of trust permits payment of the redemption price wholly or partly with portfolio
securities or other fund assets under conditions and circumstances determined by the fund’s board of trustees. For example,
redemptions could be made in this manner if the board determined that making payments wholly in cash over a particular period would
be unfair and/or harmful to other fund shareholders.
Share certificates —
Shares
are credited to your account. The fund does not issue share certificates.
American Balanced Fund - Page
68
|
General information
Custodian of assets —
Securities
and cash owned by the fund, including proceeds from the sale of shares of the fund and of securities in the fund’s portfolio,
are held by JP Morgan Chase Bank NA, 270 Park Avenue, New York, NY 10017-2070, as Custodian. If the fund holds securities of issuers
outside the U.S., the Custodian may hold these securities pursuant to subcustodial arrangements in banks outside the U.S. or branches
of U.S. banks outside the U.S.
Transfer agent services —
American Funds Service Company, a wholly owned subsidiary of the investment adviser, maintains the records of shareholder
accounts, processes purchases and redemptions of the fund’s shares, acts as dividend and capital gain distribution disbursing
agent, and performs other related shareholder service functions. The principal office of American Funds Service Company is located
at 6455 Irvine Center Drive, Irvine, CA 92618. Transfer agent fees are paid according to a fee schedule, based principally on
the number of accounts serviced, contained in a Shareholder Services Agreement between the fund and American Funds Service Company.
In the case of certain shareholder accounts,
third parties who may be unaffiliated with the investment adviser provide transfer agency and shareholder services in place of
American Funds Service Company. These services are rendered under agreements with American Funds Service Company or its affiliates
and the third parties receive compensation according to such agreements. Compensation for transfer agency and shareholder services,
whether paid to American Funds Service Company or such third parties, is ultimately paid from fund assets and is reflected in the
expenses of the fund as disclosed in the prospectus.
During the 2012 fiscal year, transfer
agent fees, gross of any payments made by American Funds Service Company to third parties, were:
|
Transfer
agent fee
|
Class
A
|
$43,767,000
|
Class
B
|
1,856,000
|
Class
C
|
5,499,000
|
Class
F-1
|
1,257,000
|
Class
F-2
|
348,000
|
Class
529-A
|
1,870,000
|
Class
529-B
|
175,000
|
Class
529-C
|
674,000
|
Class
529-E
|
77,000
|
Class
529-F-1
|
68,000
|
American Balanced Fund - Page
69
|
Class
R-1
|
134,000
|
Class
R-2
|
3,733,000
|
Class
R-3
|
3,966,000
|
Class
R-4
|
2,441,000
|
Class
R-5
|
888,000
|
Class
R-6
|
9,000
|
Independent registered public
accounting firm —
Deloitte & Touche LLP, 695 Town Center Drive, Costa Mesa, CA 92626, serves as the fund’s
independent registered public accounting firm, providing audit services, preparation of tax returns and review of certain documents
to be filed with the U.S. Securities and Exchange Commission. The financial statements included in this statement of additional
information from the annual report have been audited by Deloitte & Touche LLP, an independent registered public accounting
firm, as stated in their report appearing herein. Such financial statements have been so included in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing. The selection of the fund’s independent registered
public accounting firm is reviewed and determined annually by the board of trustees.
Independent legal counsel —
Bingham McCutchen LLP, 355 South Grand Avenue, Suite 4400, Los Angeles, CA 90071, serves as independent legal counsel (“counsel”)
for the fund and for independent trustees in their capacities as such. A determination with respect to the independence of the
fund’s counsel will be made at least annually by the independent trustees of the fund, as prescribed by the 1940 Act and
related rules.
Prospectuses, reports to shareholders
and proxy statements —
The fund’s fiscal year ends on December 31. Shareholders are provided updated summary
prospectuses annually and at least semi-annually with reports showing the fund’s investment portfolio or summary investment
portfolio, financial statements and other information. Shareholders may request a copy of the fund’s current prospectus
at no cost by calling 800/421-4225 or by sending an email request to prospectus@americanfunds.com. Shareholders may also access
the fund’s current summary prospectus, prospectus, statement of additional information and shareholder reports at americanfunds.com/prospectus.
The fund’s annual financial statements are audited by the fund’s independent registered public accounting firm, Deloitte
& Touche LLP. In addition, shareholders may also receive proxy statements for the fund. In an effort to reduce the volume
of mail shareholders receive from the fund when a household owns more than one account, the Transfer Agent has taken steps to
eliminate duplicate mailings of summary prospectuses, shareholder reports and proxy statements. To receive additional copies of
a summary prospectus, report or proxy statement, shareholders should contact the Transfer Agent.
Shareholders may also elect to receive
updated summary prospectuses, annual reports and semi-annual reports electronically by signing up for electronic delivery on our
website, americanfunds.com. Upon electing the electronic delivery of updated summary prospectuses and other reports, a shareholder
will no longer automatically receive such documents in paper form by mail. A shareholder who elects electronic delivery is able
to cancel this service at any time and return to receiving updated summary prospectuses and other reports in paper form by mail.
American Balanced Fund - Page
70
|
Summary prospectuses, prospectuses, annual
reports and semi-annual reports that are mailed to shareholders by the American Funds organization are printed with ink containing
soy and/or vegetable oil on paper containing recycled fibers.
Codes of ethics —
The fund
and Capital Research and Management Company and its affiliated companies, including the fund’s Principal Underwriter, have
adopted codes of ethics that allow for personal investments, including securities in which the fund may invest from time to time.
These codes include a ban on acquisitions of securities pursuant to an initial public offering; restrictions on acquisitions of
private placement securities; preclearance and reporting requirements; review of duplicate confirmation statements; annual recertification
of compliance with codes of ethics; blackout periods on personal investing for certain investment personnel; ban on short-term
trading profits for investment personnel; limitations on service as a director of publicly traded companies; disclosure of personal
securities transactions; and policies regarding political contributions.
American Balanced Fund - Page
71
|
Determination of net asset value,
redemption price and maximum offering price per share for Class A shares — December 31, 2012
Net
asset value and redemption price per share
(Net assets divided by shares outstanding)
|
|
$20.40
|
Maximum offering
price per share
(100/94.25 of net asset value per share,
which takes into account the fund’s current maximum
sales charge)
|
|
$21.64
|
Other information —
The
fund reserves the right to modify the privileges described in this statement of additional information at any time.
The fund’s financial statements,
including the investment portfolio and the report of the fund’s independent registered public accounting firm contained
in the annual report, are included in this statement of additional information.
American Balanced Fund - Page
72
|
Fund numbers — Here are the fund
numbers for use with our automated telephone line, American FundsLine
®
, or when making
share transactions:
|
Fund
numbers
|
Fund
|
Class
A
|
|
Class
B
|
|
Class
C
|
|
Class
F-1
|
|
Class
F-2
|
|
|
Stock
and stock/bond funds
|
|
|
|
|
|
|
|
|
|
|
|
AMCAP Fund
®
|
002
|
|
202
|
|
302
|
|
402
|
|
602
|
|
|
American Balanced
Fund
®
|
011
|
|
211
|
|
311
|
|
411
|
|
611
|
|
|
American Funds
Global Balanced Fund
SM
|
037
|
|
237
|
|
337
|
|
437
|
|
637
|
|
|
American Mutual
Fund
®
|
003
|
|
203
|
|
303
|
|
403
|
|
603
|
|
|
Capital Income
Builder
®
|
012
|
|
212
|
|
312
|
|
412
|
|
612
|
|
|
Capital World
Growth and Income Fund
®
|
033
|
|
233
|
|
333
|
|
433
|
|
633
|
|
|
EuroPacific Growth
Fund
®
|
016
|
|
216
|
|
316
|
|
416
|
|
616
|
|
|
Fundamental Investors
SM
|
010
|
|
210
|
|
310
|
|
410
|
|
610
|
|
|
The Growth Fund
of America
®
|
005
|
|
205
|
|
305
|
|
405
|
|
605
|
|
|
The Income Fund
of America
®
|
006
|
|
206
|
|
306
|
|
406
|
|
606
|
|
|
International
Growth and Income Fund
SM
|
034
|
|
234
|
|
334
|
|
434
|
|
634
|
|
|
The Investment
Company of America
®
|
004
|
|
204
|
|
304
|
|
404
|
|
604
|
|
|
The New Economy
Fund
®
|
014
|
|
214
|
|
314
|
|
414
|
|
614
|
|
|
New Perspective
Fund
®
|
007
|
|
207
|
|
307
|
|
407
|
|
607
|
|
|
New World Fund
®
|
036
|
|
236
|
|
336
|
|
436
|
|
636
|
|
|
SMALLCAP World
Fund
®
|
035
|
|
235
|
|
335
|
|
435
|
|
635
|
|
|
Washington Mutual
Investors Fund
SM
|
001
|
|
201
|
|
301
|
|
401
|
|
601
|
|
|
Bond
funds
|
|
|
|
|
|
|
|
|
|
|
|
American Funds
Mortgage Fund
®
|
042
|
|
242
|
|
342
|
|
442
|
|
642
|
|
|
American Funds
Short-Term Tax-Exempt
Bond Fund
®
|
039
|
|
N/A
|
|
N/A
|
|
439
|
|
639
|
|
|
American Funds
Tax-Exempt Fund of
New York
®
|
041
|
|
241
|
|
341
|
|
441
|
|
641
|
|
|
American High-Income
Municipal Bond Fund
®
|
040
|
|
240
|
|
340
|
|
440
|
|
640
|
|
|
American High-Income
Trust
®
|
021
|
|
221
|
|
321
|
|
421
|
|
621
|
|
|
The Bond Fund
of America
®
|
008
|
|
208
|
|
308
|
|
408
|
|
608
|
|
|
Capital World
Bond Fund
®
|
031
|
|
231
|
|
331
|
|
431
|
|
631
|
|
|
Intermediate Bond
Fund of America
®
|
023
|
|
223
|
|
323
|
|
423
|
|
623
|
|
|
Limited Term Tax-Exempt
Bond Fund
of America
®
|
043
|
|
243
|
|
343
|
|
443
|
|
643
|
|
|
Short-Term Bond
Fund of America
®
|
048
|
|
248
|
|
348
|
|
448
|
|
648
|
|
|
The Tax-Exempt
Bond Fund of America
®
|
019
|
|
219
|
|
319
|
|
419
|
|
619
|
|
|
The Tax-Exempt
Fund of California
®
*
|
020
|
|
220
|
|
320
|
|
420
|
|
620
|
|
|
The Tax-Exempt
Fund of Maryland
®
*
|
024
|
|
224
|
|
324
|
|
424
|
|
624
|
|
|
The Tax-Exempt
Fund of Virginia
®
*
|
025
|
|
225
|
|
325
|
|
425
|
|
625
|
|
|
U.S. Government
Securities Fund
®
|
022
|
|
222
|
|
322
|
|
422
|
|
622
|
|
|
Money
market fund
|
|
|
|
|
|
|
|
|
|
|
|
American Funds
Money Market Fund
®
|
059
|
|
259
|
|
359
|
|
459
|
|
659
|
|
|
___________
*Qualified for sale only in certain
jurisdictions.
American Balanced Fund - Page
73
|
|
Fund
numbers
|
Fund
|
Class
529-A
|
|
Class
529-B
|
|
Class
529-C
|
|
Class
529-E
|
|
Class
529-F-1
|
|
|
Stock
and stock/bond funds
|
|
|
|
|
|
|
|
|
|
|
|
AMCAP Fund
|
1002
|
|
1202
|
|
1302
|
|
1502
|
|
1402
|
|
|
American Balanced
Fund
|
1011
|
|
1211
|
|
1311
|
|
1511
|
|
1411
|
|
|
American Funds Global
Balanced Fund
|
1037
|
|
1237
|
|
1337
|
|
1537
|
|
1437
|
|
|
American Mutual Fund
|
1003
|
|
1203
|
|
1303
|
|
1503
|
|
1403
|
|
|
Capital Income Builder
|
1012
|
|
1212
|
|
1312
|
|
1512
|
|
1412
|
|
|
Capital World Growth
and Income Fund
|
1033
|
|
1233
|
|
1333
|
|
1533
|
|
1433
|
|
|
EuroPacific Growth
Fund
|
1016
|
|
1216
|
|
1316
|
|
1516
|
|
1416
|
|
|
Fundamental Investors
|
1010
|
|
1210
|
|
1310
|
|
1510
|
|
1410
|
|
|
The Growth Fund of
America
|
1005
|
|
1205
|
|
1305
|
|
1505
|
|
1405
|
|
|
The Income Fund of
America
|
1006
|
|
1206
|
|
1306
|
|
1506
|
|
1406
|
|
|
International Growth
and Income Fund
|
1034
|
|
1234
|
|
1334
|
|
1534
|
|
1434
|
|
|
The Investment Company
of America
|
1004
|
|
1204
|
|
1304
|
|
1504
|
|
1404
|
|
|
The New Economy Fund
|
1014
|
|
1214
|
|
1314
|
|
1514
|
|
1414
|
|
|
New Perspective Fund
|
1007
|
|
1207
|
|
1307
|
|
1507
|
|
1407
|
|
|
New World Fund
|
1036
|
|
1236
|
|
1336
|
|
1536
|
|
1436
|
|
|
SMALLCAP World Fund
|
1035
|
|
1235
|
|
1335
|
|
1535
|
|
1435
|
|
|
Washington Mutual
Investors Fund
|
1001
|
|
1201
|
|
1301
|
|
1501
|
|
1401
|
|
|
Bond
funds
|
|
|
|
|
|
|
|
|
|
|
|
American Funds Mortgage
Fund
|
1042
|
|
1242
|
|
1342
|
|
1542
|
|
1442
|
|
|
American High-Income
Trust
|
1021
|
|
1221
|
|
1321
|
|
1521
|
|
1421
|
|
|
The Bond Fund of
America
|
1008
|
|
1208
|
|
1308
|
|
1508
|
|
1408
|
|
|
Capital World Bond
Fund
|
1031
|
|
1231
|
|
1331
|
|
1531
|
|
1431
|
|
|
Intermediate Bond
Fund of America
|
1023
|
|
1223
|
|
1323
|
|
1523
|
|
1423
|
|
|
Short-Term Bond Fund
of America
|
1048
|
|
1248
|
|
1348
|
|
1548
|
|
1448
|
|
|
U.S. Government Securities
Fund
|
1022
|
|
1222
|
|
1322
|
|
1522
|
|
1422
|
|
|
Money
market fund
|
|
|
|
|
|
|
|
|
|
|
|
American Funds Money
Market Fund
|
1059
|
|
1259
|
|
1359
|
|
1559
|
|
1459
|
|
|
American Balanced Fund - Page
74
|
|
Fund
numbers
|
Fund
|
Class
R-1
|
|
Class
R-2
|
|
Class
R-3
|
|
Class
R-4
|
|
Class
R-5
|
|
Class
R-6
|
|
Stock
and stock/bond funds
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCAP
Fund
|
2102
|
|
2202
|
|
2302
|
|
2402
|
|
2502
|
|
2602
|
|
American
Balanced Fund
|
2111
|
|
2211
|
|
2311
|
|
2411
|
|
2511
|
|
2611
|
|
American
Funds Global Balanced Fund
|
2137
|
|
2237
|
|
2337
|
|
2437
|
|
2537
|
|
2637
|
|
American
Mutual Fund
|
2103
|
|
2203
|
|
2303
|
|
2403
|
|
2503
|
|
2603
|
|
Capital
Income Builder
|
2112
|
|
2212
|
|
2312
|
|
2412
|
|
2512
|
|
2612
|
|
Capital
World Growth and Income Fund
|
2133
|
|
2233
|
|
2333
|
|
2433
|
|
2533
|
|
2633
|
|
EuroPacific
Growth Fund
|
2116
|
|
2216
|
|
2316
|
|
2416
|
|
2516
|
|
2616
|
|
Fundamental
Investors
|
2110
|
|
2210
|
|
2310
|
|
2410
|
|
2510
|
|
2610
|
|
The Growth
Fund of America
|
2105
|
|
2205
|
|
2305
|
|
2405
|
|
2505
|
|
2605
|
|
The Income
Fund of America
|
2106
|
|
2206
|
|
2306
|
|
2406
|
|
2506
|
|
2606
|
|
International
Growth and Income Fund
|
2134
|
|
2234
|
|
2334
|
|
2434
|
|
2534
|
|
2634
|
|
The Investment
Company of America
|
2104
|
|
2204
|
|
2304
|
|
2404
|
|
2504
|
|
2604
|
|
The New
Economy Fund
|
2114
|
|
2214
|
|
2314
|
|
2414
|
|
2514
|
|
2614
|
|
New Perspective
Fund
|
2107
|
|
2207
|
|
2307
|
|
2407
|
|
2507
|
|
2607
|
|
New World
Fund
|
2136
|
|
2236
|
|
2336
|
|
2436
|
|
2536
|
|
2636
|
|
SMALLCAP
World Fund
|
2135
|
|
2235
|
|
2335
|
|
2435
|
|
2535
|
|
2635
|
|
Washington
Mutual Investors Fund
|
2101
|
|
2201
|
|
2301
|
|
2401
|
|
2501
|
|
2601
|
|
Bond
funds
|
|
|
|
|
|
|
|
|
|
|
|
|
American
Funds Mortgage Fund
|
2142
|
|
2242
|
|
2342
|
|
2442
|
|
2542
|
|
2642
|
|
American
High-Income Trust
|
2121
|
|
2221
|
|
2321
|
|
2421
|
|
2521
|
|
2621
|
|
The Bond
Fund of America
|
2108
|
|
2208
|
|
2308
|
|
2408
|
|
2508
|
|
2608
|
|
Capital
World Bond Fund
|
2131
|
|
2231
|
|
2331
|
|
2431
|
|
2531
|
|
2631
|
|
Intermediate
Bond Fund of America
|
2123
|
|
2223
|
|
2323
|
|
2423
|
|
2523
|
|
2623
|
|
Short-Term
Bond Fund of America
|
2148
|
|
2248
|
|
2348
|
|
2448
|
|
2548
|
|
2648
|
|
U.S.
Government Securities Fund
|
2122
|
|
2222
|
|
2322
|
|
2422
|
|
2522
|
|
2622
|
|
Money
market fund
|
|
|
|
|
|
|
|
|
|
|
|
|
American
Funds Money Market Fund
|
2159
|
|
2259
|
|
2359
|
|
2459
|
|
2559
|
|
2659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Balanced Fund - Page
75
|
|
Fund
numbers
|
Fund
|
Class
A
|
Class
R-1
|
|
Class
R-2
|
|
Class
R-3
|
|
Class
R-4
|
|
Class
R-5
|
|
Class
R-6
|
|
American
Funds Target Date
Retirement Series
®
|
American Funds 2055
Target Date
Retirement Fund
®
|
082
|
2182
|
|
2282
|
|
2382
|
|
2482
|
|
2582
|
|
2682
|
|
American Funds 2050
Target Date
Retirement Fund
®
|
069
|
2169
|
|
2269
|
|
2369
|
|
2469
|
|
2569
|
|
2669
|
|
American Funds 2045
Target Date
Retirement Fund
®
|
068
|
2168
|
|
2268
|
|
2368
|
|
2468
|
|
2568
|
|
2668
|
|
American Funds 2040
Target Date
Retirement Fund
®
|
067
|
2167
|
|
2267
|
|
2367
|
|
2467
|
|
2567
|
|
2667
|
|
American Funds 2035
Target Date
Retirement Fund
®
|
066
|
2166
|
|
2266
|
|
2366
|
|
2466
|
|
2566
|
|
2666
|
|
American Funds 2030
Target Date
Retirement Fund
®
|
065
|
2165
|
|
2265
|
|
2365
|
|
2465
|
|
2565
|
|
2665
|
|
American Funds 2025
Target Date
Retirement Fund
®
|
064
|
2164
|
|
2264
|
|
2364
|
|
2464
|
|
2564
|
|
2664
|
|
American Funds 2020
Target Date
Retirement Fund
®
|
063
|
2163
|
|
2263
|
|
2363
|
|
2463
|
|
2563
|
|
2663
|
|
American Funds 2015
Target Date
Retirement Fund
®
|
062
|
2162
|
|
2262
|
|
2362
|
|
2462
|
|
2562
|
|
2662
|
|
American Funds 2010
Target Date
Retirement Fund
®
|
061
|
2161
|
|
2261
|
|
2361
|
|
2461
|
|
2561
|
|
2661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
numbers
|
Fund
|
Class
529-A
|
|
Class
529-B
|
|
Class
529-C
|
|
Class
529-E
|
|
Class
529-F-1
|
|
|
American Funds
College Target Date Series
SM
|
|
|
|
|
|
|
|
|
|
|
|
American Funds
College 2030 Fund
SM
|
1094
|
|
1294
|
|
1394
|
|
1594
|
|
1494
|
|
|
American Funds
College 2027 Fund
SM
|
1093
|
|
1293
|
|
1393
|
|
1593
|
|
1493
|
|
|
American Funds
College 2024 Fund
SM
|
1092
|
|
1292
|
|
1392
|
|
1592
|
|
1492
|
|
|
American Funds
College 2021 Fund
SM
|
1091
|
|
1291
|
|
1391
|
|
1591
|
|
1491
|
|
|
American Funds
College 2018 Fund
SM
|
1090
|
|
1290
|
|
1390
|
|
1590
|
|
1490
|
|
|
American Funds
College 2015 Fund
SM
|
1089
|
|
1289
|
|
1389
|
|
1589
|
|
1489
|
|
|
American Funds
College Enrollment Fund
SM
|
1088
|
|
1288
|
|
1388
|
|
1588
|
|
1488
|
|
|
American Balanced Fund - Page
76
|
|
Fund
numbers
|
Fund
|
Class
A
|
|
Class
B
|
|
Class
C
|
|
Class
F-1
|
|
Class
F-2
|
|
|
American Funds
Portfolio Series
SM
|
|
|
|
|
|
|
|
|
|
|
|
American Funds
Global Growth Portfolio
SM
|
055
|
|
255
|
|
355
|
|
455
|
|
655
|
|
|
American Funds
Growth Portfolio
SM
|
053
|
|
253
|
|
353
|
|
453
|
|
653
|
|
|
American Funds
Growth and Income Portfolio
SM
|
051
|
|
251
|
|
351
|
|
451
|
|
651
|
|
|
American Funds
Balanced Portfolio
SM
|
050
|
|
250
|
|
350
|
|
450
|
|
650
|
|
|
American Funds
Income Portfolio
SM
|
047
|
|
247
|
|
347
|
|
447
|
|
647
|
|
|
American Funds
Tax-Advantaged
Income Portfolio
SM
|
046
|
|
246
|
|
346
|
|
446
|
|
646
|
|
|
American Funds
Preservation Portfolio
SM
|
045
|
|
245
|
|
345
|
|
445
|
|
645
|
|
|
American Funds
Tax-Exempt
Preservation Portfolio
SM
|
044
|
|
244
|
|
344
|
|
444
|
|
644
|
|
|
|
Class
529-A
|
|
Class
529-B
|
|
Class
529-C
|
|
Class
529-E
|
|
Class
529-F-1
|
|
|
American Funds Global
Growth Portfolio
|
1055
|
|
1255
|
|
1355
|
|
1555
|
|
1455
|
|
|
American Funds Growth
Portfolio
|
1053
|
|
1253
|
|
1353
|
|
1553
|
|
1453
|
|
|
American Funds Growth
and Income Portfolio
|
1051
|
|
1251
|
|
1351
|
|
1551
|
|
1451
|
|
|
American Funds Balanced
Portfolio
|
1050
|
|
1250
|
|
1350
|
|
1550
|
|
1450
|
|
|
American Funds Income
Portfolio
|
1047
|
|
1247
|
|
1347
|
|
1547
|
|
1447
|
|
|
American Funds Tax-Advantaged
Income Portfolio
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
American Funds Preservation
Portfolio
|
1045
|
|
1245
|
|
1345
|
|
1545
|
|
1445
|
|
|
American Funds Tax-Exempt
Preservation Portfolio
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
Class
R-1
|
|
Class
R-2
|
|
Class
R-3
|
|
Class
R-4
|
|
Class
R-5
|
|
Class
R-6
|
|
American Funds Global
Growth Portfolio
|
2155
|
|
2255
|
|
2355
|
|
2455
|
|
2555
|
|
2655
|
|
American Funds Growth
Portfolio
|
2153
|
|
2253
|
|
2353
|
|
2453
|
|
2553
|
|
2653
|
|
American Funds Growth
and Income Portfolio
|
2151
|
|
2251
|
|
2351
|
|
2451
|
|
2551
|
|
2651
|
|
American Funds Balanced
Portfolio
|
2150
|
|
2250
|
|
2350
|
|
2450
|
|
2550
|
|
2650
|
|
American Funds Income
Portfolio
|
2147
|
|
2247
|
|
2347
|
|
2447
|
|
2547
|
|
2647
|
|
American Funds Tax-Advantaged
Income Portfolio
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
American Funds Preservation
Portfolio
|
2145
|
|
2245
|
|
2345
|
|
2445
|
|
2545
|
|
2645
|
|
American Funds Tax-Exempt
Preservation Portfolio
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
American Balanced Fund - Page
77
|