We carefully
construct our
portfolios for
the long term.
Special feature page 8
ICA The Investment
Company of America®
Annual report
for the year ended
December 31, 2015
ICA seeks to achieve long-term growth of capital
and income.
The Investment Company of America is one of more
than 40 funds offered by one of the nation’s largest
mutual fund families, American Funds, from Capital
Group. For more than 80 years, Capital has invested
with a long-term focus based on thorough research
and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares
at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results
would have been lower. Results are for past periods and are not predictive of results
for future periods. Current and future results may be lower or higher than those shown.
Share prices and returns will vary, so investors may lose money. Investing for short
periods makes losses more likely. Investments are not FDIC-insured, nor are they
deposits of or guaranteed by a bank or any other entity, so they may lose value. For
current information and month-end results, visit americanfunds.com.
See page 5 for Class A share results with relevant sales charges deducted. For other share
class results, visit americanfunds.com and americanfundsretirement.com.
Investment results assume all distributions are reinvested and reflect applicable fees and
expenses. When applicable, investment results reflect fee waivers, without which results
would have been lower. Visit americanfunds.com for more information.
The fund’s 30-day yield for Class A shares as of January 31, 2016, reflecting the 5.75%
maximum sales charge and calculated in accordance with the U.S. Securities and Exchange
Commission formula, was 2.07%.
Investing outside the United States may be subject to risks, such as currency fluctuations,
political instability, differing securities regulations and periods of illiquidity. Global
diversification can help reduce these risks. Refer to the fund prospectus and the Risk
Factors section of this report for more information on these and other risks associated
with investing in the fund.
Fellow investors:
The U.S. economy saw incremental
improvement with mixed indicators,
and equity markets were reintroduced
to volatility, in this case related to the
economic slowdown in China and the
collapse of commodities. With this
backdrop, The Investment Company
of America (ICA) dipped 1.44% for the
12-month period ended December 31,
2015, with distributions reinvested. In
comparison, the unmanaged Standard &
Poor’s 500 Composite Index, a market
capitalization-weighted index based on
the results of 500 widely held common
stocks, returned 1.38% during the same
time period.
Special feature
8
The journey to 140:
Constructing ICA’s portfolio
Contents
1
Letter to investors
4
The value of a long-term
perspective
14 Summary investment portfolio
17 Financial statements
34 Board of trustees and other
officers
For the 20 years ended December 31,
2015, ICA posted an average annual
total return of 8.63% with distributions
reinvested, compared with 8.19% by the
S&P 500. Over its 82-year history, ICA
had an average annual total return of
12.07% with distributions reinvested,
compared with 10.78% by the S&P 500.
The global economy is a blurred picture
The underlying U.S. economy is slowly
improving, although less robustly
than investors might have hoped for
in a normal post-recession recovery.
While the unemployment rate has
been cut in recent years, wages have
remained stagnant. Gross domestic
product increased, however, not as
much as hoped.
Central bank stimulus measures
continued to support markets in the
U.S., Europe and Japan. The U.S. Federal
Reserve raised interest rates — by 25 basis
points — for the first time in seven years,
setting the stage for a more normalized
environment and potentially tighter
monetary policy in the years ahead. The
U.S. dollar rose against the euro and
most other currencies.
The euro zone was challenged by
high debt levels and weak growth.
China’s economic slowdown rattled
global stock markets in August
and again in early 2016. Emerging
markets stocks generally lagged their
developed-market counterparts by a
wide margin. Mergers-and-acquisitions
activity was robust, spurred on by
inexpensive financing.
The fund in review
Among sectors, strong stock selection
led consumer staples, as the fund’s
seventh-largest holding, Altria, rose
18.15%. Within information technology,
the fund’s third-largest holding, Alphabet
(formerly known as Google), increased
45.05%, helped by a value-creating
split into a core search business and a
research project business. The fund’s
fifth-largest holding, Oracle, lost 18.77%,
and 10th-largest holding, Accenture,
gained 17.01%.
It was a good year for Internet retailers
in general and Amazon in particular as it
rose 117.78% and was among the fund’s
strongest contributors. Health care stocks
also benefited the fund, led by Gilead
Sciences (7.35%). The fund’s largest
holding, Amgen, gained 1.91%, but the
ninth-largest holding, AbbVie, lost 9.47%.
The fund’s four weakest sectors were
energy, industrials, utilities and materials
consistent with the fall in oil and other
commodities. The crude oil price fell
towards $30/barrel on declining demand
and an overabundance of supply. While
the fund only held 6.68% of assets in
this sector, stock selection was weak
among energy stocks.
The fund paid investors a total of $0.62
a share in income dividends and $2.51
in long-term capital gains for the period.
The Investment Company of America
1
2015 results at a glance
Year ended December 31, 2015 (with all distributions reinvested)
ICA
(Class A shares)
Standard & Poor’s 500
Composite Index*
Income return
Capital return
1.69%
–3.13
2.13%
–0.75
Total return
–1.44%
1.38%
*The S&P 500 is unmanaged and, therefore, has no expenses. Investors cannot invest directly in
an index.
Dividends and capital gain distributions paid in 2015
Per Class A
share
Payment date
$0.145
0.145
0.145
0.185
March 13
June 19
September 18
December 18
Income dividends
$0.620
Capital gain distributions
$0.262
2.250
March 13
December 18
$2.512
Expense ratios and portfolio turnover rates1
Year ended December 31, 2015
Expense ratio
ICA
Industry average2
1
0.58%
1.10%
Portfolio
turnover rate
30%
47%
The expense ratio is the annual percentage of net assets used to pay fund expenses. The ratio shown
is for Class A shares as of the prospectus dated March 1, 2016 (unaudited). The portfolio turnover rate
is a measure of how often securities are bought and sold by a fund.
2
Lipper Growth & Income Funds Average (industry average expense ratio based on statistics for front-end
load funds, excluding funds of funds, for the most recent fiscal year-ends available as of 12/31/15).
2
The Investment Company of America
Looking over the horizon
Some portfolio managers in the
fund remain optimistic about the U.S.
economy, yet others note that risk is
more prevalent than in the past year
or two. For instance, the prices of
commodities have fallen, and activity
in the transportation and industrial
sectors has declined. This could be a
seasonal disappointment or something
more significant.
Overall sluggishness in the U.S. economy
can be due in part to weakness in other
countries. If China’s economy stalls, that
generally has global ramifications. While
China’s economy does not drive the
global economy, it certainly has a
strong influence.
The Federal Reserve’s interest rate hike
is a move to try and normalize monetary
policy after nearly seven years of
exceptional conditions following the
Great Recession. Whether the Fed can
continue on this course will depend on
how the economy develops over the next
year or so, including the potential impact
of unforeseen international events.
It is still a generally constructive
environment for the stock market for
2016. At this time next year we’ll have a
new president and hopefully there will be
more overall optimism in the economy.
Our long-term approach will not waver
We remain optimistic about continuing
to identify solid companies at good
valuations that we believe will prosper
in the long run. We thank you for your
confidence in our time-tested approach
to investing and look forward to
reporting to you again in six months.
The New Geography of Investing®
We invite you to read the feature,
which starts on page 8 and further
explains how The Investment Company
of America’s portfolio is constructed,
and why our approach has been
consistent over time.
Where a company does business can be more important than where it’s
located. Here’s a look at The Investment Company of America’s portfolio in
terms of where its equity holdings earn their revenue. The charts below show
the countries and regions in which the fund’s equity investments are located,
and where the revenue comes from.
Cordially,
Equity portion breakdown by domicile (%)
James B. Lovelace
Vice Chairman
Region
Fund
Index
United States
Canada
Europe
Japan
Asia-Pacific ex. Japan
Emerging markets
91%
1
6
1
—
1
100%
—
—
—
—
—
100%
100%
Region
Fund
Index
United States
Canada
Europe
Japan
Asia-Pacific ex. Japan
Emerging markets
58%
3
13
3
2
21
62%
2
13
3
1
19
100%
100%
Total
Donald D. O’Neal
President
February 8, 2016
For current information about the fund,
visit americanfunds.com.
Equity portion breakdown by revenue (%)
Total
Compared with the S&P 500 as a percent of net assets. All figures include convertible securities.
Source: Capital Group (as of December 31, 2015).
The Investment Company of America
3
The value of a long-term perspective (1934–2015)
Fund results shown are for Class A
shares and reflect deduction of the
maximum sales charge of 5.75% on
the $10,000 investment.1 Thus, the
net amount invested was $9,425.2
Results are for past periods and are
not predictive of results for future
periods. Current and future results
may be lower or higher than those
shown. Share prices and returns will
vary, so investors may lose money.
For current information and monthend results, visit americanfunds.com.
This chart illustrates a hypothetical $10,000 investment in
The Investment Company of America over the past 82 years,
from January 1, 1934, through December 31, 2015, showing
the high, low and closing values for each year.
$150,000,000
$100,000,000
The figures in the table below the chart include the fund’s
total return for each of those years. As you look through the
table, you will see that the fund’s total return can fluctuate
greatly from year to year. In some years, it was well into
double digits. In other years, the fund had a negative return.
Over the entire period, a $10,000 investment in the fund, with
all dividends reinvested, would have grown to $107,719,552,
compared with $44,324,528 in Standard & Poor’s 500
Composite Index.
$10,000,000
The results shown are before taxes on fund
distributions and sale of fund shares.
You can use this table to estimate how the value of your own
holdings has grown. Let’s say, for example, that you have
been reinvesting all of your dividends and want to know how
your investment has done since the end of 2005. At that time,
the value of the investment illustrated here was $57.4 million.
Since then, it has increased to $107.7 million. Thus, in the
same period, the value of your 2005 investment — regardless
of size — has also increased.
The S&P 500 is unmanaged and, therefore,
has no expenses. Investors cannot invest
directly in an index.
1
As outlined in the prospectus, the sales
charge is reduced for accounts (and
aggregated investments) of $25,000 or
more and is eliminated for purchases of
$1 million or more. There is no sales charge
on dividends or capital gain distributions
that are reinvested in additional shares.
2
The maximum initial sales charge was 8.5%
prior to July 1, 1988.
3
Includes dividends of $27,595,819 and
capital gain distributions of $55,802,079
reinvested in the years 1936 to 2015.
4
Includes reinvested capital gain distributions
of $6,525,803, but does not reflect income
dividends of $3,369,476 taken in cash.
5
Fund expense percentages do not reflect a
fee waiver and are provided as additional
information. They should not be subtracted
from any other figure on the table because
all fund results already reflect their effect.
$1,000,000
$100,000
$10,000
$8,000
Year ended
December 31
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
Year-by-year summary of results (dollars in thousands)
Dividends reinvested
Value at year-end
—
—
$0.4
1.0
0.2
0.5
0.9
1.3
1.2
1.1
1.2
1.2
$11.8
21.6
31.6
19.4
24.8
25.0
24.4
22.6
26.4
35.0
43.2
59.1
Dividends in cash
—
—
$0.4
1.0
0.2
0.5
0.8
1.1
1.0
0.9
0.9
0.9
Value at year-end
$11.8
21.6
31.0
18.3
23.2
22.9
21.5
18.8
20.9
26.9
32.1
42.9
Annual percentage returns assuming dividends reinvested
Income return
Capital return
0.0%
18.2%
0.0
83.1
1.8
44.0
3.2
(41.7)
0.9
26.7
2.2
(1.4)
3.6
(6.0)
5.2
(12.6)
5.3
11.5
4.2
28.6
3.5
19.8
2.8
34.0
ICA total return
18.2%
83.1
45.8
(38.5)
27.6
0.8
(2.4)
(7.4)
16.8
32.8
23.3
36.8
5
0.94%
1.13
1.19
1.53
1.89
2.02
1.88
1.95
2.13
1.72
1.45
1.06
Fund expenses
4
The Investment Company of America
1
Average annual total returns based on a $1,000 investment
(for periods ended December 31, 2015)*
Class A shares
1 year
5 years
10 years
–7.10%
9.38%
5.88%
*Assumes reinvestment of all distributions and payment of the
maximum 5.75% sales charge.
The total annual fund operating expense ratio is 0.58% for Class A
shares as of the prospectus dated March 1, 2016 (unaudited).
Investment results assume all distributions are reinvested and
reflect applicable fees and expenses. When applicable, investment
results reflect fee waivers, without which results would have been
lower. Visit americanfunds.com for more information.
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
196
1.8
2.4
2.7
2.7
3.2
3.4
3.5
3.9
4.1
5.1
5.6
6.2
6.5
7.0
8.1
8.4
9.1
9.6
10.7
12.1
15.5
18.4
22.6
2
57.7
58.2
58.4
63.9
76.6
90.3
101.3
101.7
158.9
199.2
220.6
194.4
281.5
321.4
336.0
413.6
358.8
440.9
512.6
650.7
657.1
846.9
990.6
88
1.3
1.7
1.8
1.7
1.9
2.0
2.0
2.1
2.1
2.6
2.7
3.0
3.0
3.2
3.6
3.6
3.8
3.9
4.3
4.7
5.9
6.9
8.3
40.7
39.3
37.7
39.4
45.2
51.2
55.3
53.4
80.8
98.5
106.3
90.9
128.0
142.9
145.6
175.4
148.2
177.8
202.3
251.6
248.0
312.5
356.6
30
3.0
(5.4)
4.2
(3.3)
4.6
(4.2)
4.6
4.8
4.9
14.9
4.4
13.4
3.9
8.3
3.9
(3.5)
4.0
52.1
3.2
22.2
2.8
8.0
2.8
(14.7)
3.4
41.4
2.5
11.7
2.5
2.0
2.5
20.6
2.2
(15.4)
2.7
20.2
2.4
13.9
2.4
24.5
2.4
(1.4)
2.8
26.1
2.7
14.3
(1
(2.4)
0.9
0.4
9.4
19.8
17.8
12.2
0.4
56.1
25.4
10.8
(11.9)
44.8
14.2
4.5
23.1
(13.2)
22.9
16.3
26.9
1.0
28.9
17.0
(1
0.98
1.10
1.08
0.96
1.01
0.93
0.81
0.85
0.88
0.86
0.80
0.76
0.68
0.64
0.62
0.59
0.61
0.59
0.58
0.57
0.52
0.50
0.49
0
5
The Investment Company of America
69
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
25.3
27.3
28.6
29.9
33.4
52.2
49.8
46.4
49.8
56.0
70.0
91.3
115.9
146.1
147.2
160.4
174.9
203.8
267.5
84.8
908.0
1,062.7
1,231.1
1,024.1
840.3
1,137.7
1,474.4
1,436.4
1,647.5
1,963.3
2,380.2
2,401.1
3,212.0
3,859.7
4,117.2
5,491.9
6,685.7
7,049.2
1988
1989
1990
1991
1992
318.7
370.8
406.3
320.4
357.8
7,989.3 10,338.6 10,409.0 13,171.9 14,092.3
9.0
9.4
9.6
9.7
10.6
15.9
14.3
12.8
13.3
14.4
17.3
21.7
26.4
31.6
30.3
31.7
33.2
37.3
47.5
54.4
60.7
64.1
48.7
53.0
09.6
307.4
349.7
394.7
317.9
245.5
317.7
398.1
374.3
414.4
475.7
552.2
530.9
670.6
774.5
792.0
1,017.9
1,200.5
1,220.9
1,327.4
1,652.8
1,598.8
1,969.9
2,052.2
2.6
13.3)
3.1
(0.5)
3.1
13.9
2.8
13.1
2.7
(19.5)
5.1
(23.0)
5.9
29.5
4.1
25.5
3.4
(6.0)
3.9
10.8
4.2
15.0
4.7
16.5
4.9
(4.0)
6.1
27.7
4.6
15.6
4.2
2.5
4.2
29.2
3.7
18.0
4.0
1.4
4.5
8.8
4.6
24.8
3.9
(3.2)
3.1
23.4
2.7
4.3
10.7)
2.6
17.0
15.9
(16.8)
(17.9)
35.4
29.6
(2.6)
14.7
19.2
21.2
0.9
33.8
20.2
6.7
33.4
21.7
5.4
13.3
29.4
0.7
26.5
7.0
0.48
0.55
0.51
0.49
0.47
0.49
0.48
0.46
0.49
0.49
0.47
0.46
0.45
0.46
0.44
0.47
0.43
0.41
0.42
0.48
0.52
0.55
0.59
0.58
The Investment Company of America
6
$107,719,5523
ICA with
dividends reinvested
$44,324,528
S&P 500 with
dividends reinvested
Value added by
reinvestment of
dividends
$9,787,1004
ICA with dividends
taken in cash
Average annual returns for 82 years (1/1/34–12/31/15)*
Income return
3.1%
Capital return
8.9%
Total return
12.0%
*Assumes reinvestment of all distributions and payment
of the maximum 5.75% sales charge.
Investment results assume all distributions are
reinvested and reflect applicable fees and expenses.
When applicable, investment results reflect fee waivers,
without which results would have been lower. Visit
americanfunds.com for more information.
$10,000
Original investment
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
374.4
407.2
450.1
480.1
510.3
584.1
651.8
743.4
804.1
833.3
864.3
887.4
1,196.3
1,364.6
1,319.3
1,466.7
1,264.7
1,272.4
1,345.5
1,707.1
1,548.6
1,939.3
1,849.1
15,729.4 15,753.9 20,578.7 24,560.6 31,881.2 39,193.5 45,682.2 47,435.2 45,258.6 38,709.1 48,891.6 53,674.5 57,361.4 66,504.4 70,456.8 45,983.8 58,481.1 64,830.6 63,692.5 73,628.5 97,503.5 109,291.9 107,719.6 3
54.0
57.3
61.7
64.3
67.0
75.4
82.8
93.0
99.0
100.7
102.2
103.0
136.3
152.1
144.0
156.9
131.5
129.2
133.8
166.1
2,234.2
2,180.6
2,779.7
3,247.9
4,142.7
5,008.2
5,748.5
5,875.5
5,507.5
4,616.9
5,713.5
6,163.0
6,446.5
7,313.2
7,601.9
4,835.7
5,986.9
6,496.8
6,249.9
7,055.0
147.4
181.3
2.7
8.9
2.6
(2.4)
2.9
27.7
2.3
17.0
2.1
27.7
1.8
21.1
1.7
14.9
1.6
2.2
1.7
(6.3)
1.8
(16.3)
2.2
24.1
1.8
8.0
2.2
4.7
2.4
13.5
2.0
3.9
2.1
(36.8)
2.8
24.4
2.2
8.7
2.0
(3.8)
2.7
12.9
2.1
30.3
2.0
10.1
1.7
(3.1)
11.6
0.2
30.6
19.3
29.8
22.9
16.6
3.8
(4.6)
(14.5)
26.3
9.8
6.9
15.9
5.9
(34.7)
27.2
10.9
(1.8)
15.6
32.4
12.1
(1.4)
0.59
0.60
0.60
0.59
0.56
0.55
0.55
0.56
0.57
0.59
0.59
0.57
0.57
0.57
0.56
0.59
0.66
0.61
0.61
0.62
0.61
0.59
0.58
9,179.2 10,102.3
169.8
9,787.1 4
The Investment Company of America
7
“Each portfolio manager must understand the prospects for
individual companies, the industry dynamics, the product lineup,
and the management philosophy.”
8
The Investment Company of America
The journey to 140:
Constructing ICA’s portfolio
At year-end, The Investment Company of America held 140 distinct
stocks1 in its portfolio, representing all 10 sectors of the economy
and a multitude of industries. About 91% of the holdings were
U.S.-based companies, with the remaining stocks representing
13 other countries. How did the investment professionals of ICA
build from a blank slate to the ultimate total of 140 stocks1?
The managers of the fund
While the building blocks of ICA are
companies’ stocks, the architects are
its portfolio managers and investment
research analysts. The seven portfolio
managers on ICA have a median 29 years2
of investment experience and bring a wide
variety of backgrounds and interests. In the
multiple manager method known as The
Capital System,SM each portfolio manager
can select his or her highest conviction
investment ideas to create an individual
portfolio of stocks. Investment analysts
also can incorporate their best ideas by
investing in stocks in the research portfolio
(RP), which comprised approximately 24%
of ICA’s assets at year-end. Those eight
individual portfolios are then combined
to create the overall portfolio for ICA. This
results in a fund focused only on high
convictions, and that also has broad
diversification and a history of low volatility.
Fund President Don O’Neal and Principal
Investment Officer Jim Lovelace, each with
24 years on the fund — work together on
ICA’s mix of portfolio managers. “We put
a lot of thought into the lineup for ICA,”
says Don. “We ensure there are diverse
points of view and investment styles, and
a mix of veteran and up-and-coming
Chris Buchbinder
•
20 years of investment experience,
all with Capital Group
•
9 years on ICA
•
Based in San Francisco
•
34 holdings
portfolio managers, to provide a very
consistent approach over the long run
for our investors.”
Each portfolio manager must understand
the prospects for individual companies,
the industry dynamics, the product lineup,
and the management philosophy. All of
ICA’s portfolio managers honed those
skills through years of prior experience as
an investment analyst, conducting industry
and company research at a fundamental
level. Their area of research focus can
inform the types of investments they prefer,
however, portfolio managers are free to
pursue the most promising opportunities,
regardless of industry, while keeping
within the fund’s objectives.
At the beginning of his career, Jim was a
consumer products analyst, and consumer
products stocks have been the foundation
of his portfolios throughout his career.
Don covered chemicals, environmental
service and aerospace & defense. While
he brings a deep understanding of what
drives those businesses, Don often focuses
on other areas and relies on our own
analysts to bring forward the latest, most
fresh research.
Barry Crosthwaite
•
20 years of investment experience,
all with Capital Group
•
3 years on ICA
•
Based in San Francisco
•
42 holdings
The Investment Company of America
9
Joyce Gordon
•
36 years of investment experience,
all with Capital Group
•
15 years on ICA
•
Based in Los Angeles
•
36 holdings
Jim Lovelace
•
34 years of investment experience,
all with Capital Group
•
24 years on ICA
•
Based in Los Angeles
•
36 holdings
10
The Investment Company of America
The importance of fundamental research “The analysts must be well versed in every
Fundamental, company-by-company
company and in what the portfolio manager
research is at the core of the fund’s success, is seeking for their portfolio,” says Jim.
and many ideas start with the analysts who “There’s a dialogue that goes on between
cover various industries to find what they
them that’s an important part of the process.”
believe are the best companies in which to
Not everything a portfolio manager holds,
invest. “For me, the research always starts
however, is an analyst recommendation.
with our own investment analysts,” says
Some are held by portfolio managers
Don. “I consider them to be both expert
alone after extensive research by the
analysts and good investors.”
manager has revealed what they believe
to be promising growth prospects.
Portfolio manager Eric Richter was also
an analyst earlier in his career — covering
The varying investment styles
industrials — and he finds tremendous
A lot of attention is paid to having portfolio
value in the analysts’ work. “Analysts will
managers with different investment
attend our investment calls and discuss
approaches. Some portfolio managers
their areas of coverage,” says Eric. “I
will tend to be more defensive in their
collaborate a lot with the analysts, and a
investments, while others may hold more
large majority of individual companies
cyclical stocks, which are stocks that often
I invest in are ones they recommend.”
move in tandem with the strength or
weakness of the economy.
“The role of analyst research in building a
manager’s portfolio is absolutely crucial,” “We all have a visceral approach when it
continues Jim. “It’s a bedrock principle of
comes to identifying those things in an
Capital’s investment approach that we
investment that appeal to us,” says Jim.
dig deeply into every single company.
He describes his own preference for
We don’t just invest in themes or stories;
“companies with great franchises that
we take companies apart to make sure
I can hold through many economic
we understand how they’re making money.” cycles,” sometimes for at least five years.
This due diligence process really has made “I stay with companies until I feel they’re
a difference over time as evidenced by
overvalued or when managements lose
ICA’s results over more than eight decades their way. Otherwise, they might stay in
(please see page 4).
my portfolio for a long time.” For instance,
some of Jim’s 36 stocks3 have been held
Portfolio managers’ research efforts don’t
his entire 24 years2 on the fund.
stop when their tenure as an investment
analyst ends. “I’m doing management
Don concentrates on a company’s
meetings pretty continuously,” says Eric.
competitive position and the likely direction
“I spend about 50% of my work days out of
of returns and margins. He likes to get to
the office, and a clear majority of those are know a company’s management, and prefers
on company visits with analysts.” Eric will
those that are good allocators of capital.
attend both individual company site visits
He believes this generally indicates that
and conferences with several companies
the company is focused on returns and the
in attendance.
interests of shareholders, not just growth.
“It’s a bedrock principle of Capital’s investment approach
that we dig deeply into every single company. We don’t
just invest in themes or stories; we take companies apart
to make sure we understand how they’re making money.”
Eric’s current 36 holdings have little
exposure to consumer staples or retail
but a lot to energy, health care and
financials. This breakdown may, of course,
change over time. As a global manager
with responsibilities in two global
American Funds as well, Eric also tends
to have more non-U.S. stocks than other
portfolio managers.
Portfolio manager Chris Buchbinder
likes investments in which our research
reveals there are underlying strengths
that are underappreciated. These tend to
be companies with low valuations, but
with great potential for improved results
in the future. Brad Vogt is the newest
portfolio manager on the fund, but comes
from a long career investing in our growthand-income funds. He looks to invest in
fundamentally strong companies with
sustainable market positions and pays a
lot of attention to subscription businesses
with high levels of recurring revenue.
Kaitlyn Murphy
year-end that comprise nearly one-quarter
of ICA’s total fund assets. Similar to the
portfolio managers, the analysts who
contribute to the research portfolio hold
only their best investment ideas for the fund.
Research portfolio coordinator and
equity investment analyst
•
11 years of investment experience,
all with Capital Group*
•
Research responsibility:
“The RP involves a dynamic process,”
says Jim. “It’s tricky, because you want
it to reflect convictions, but you also
have to balance the views of almost two
dozen people.” Balancing those analyst
sentiments is investment analyst Kaitlyn
Murphy who coordinates the research
portfolio in addition to covering
chemicals and automobile & components
manufacturers. With 11 years of investing
experience, Kaitlyn closely follows what
analysts are doing and tests their
conviction along the way.
•
U.S. chemicals and automobile &
components manufacturers
•
Based in Los Angeles
•
100 holdings in the research portfolio
representing 22 investment analysts
“My overarching role is to make sure the
analysts’ convictions are fully reflected
in the research portfolio,” says Kaitlyn.
Depending on how their holdings do and
the strength of the analysts’ investment
views, she may ask some of them to add
or trim certain positions to ensure the RP
remains an accurate representation of
their best ideas.
*Years of experience as of January 8, 2016.
Barry Crosthwaite has 42 current
holdings — more than any other portfolio
manager — and likes to invest in industries
that have good structures and seeks
companies with underappreciated growth
In many instances, Kaitlyn will have to
prospects, based partly on their track
records. Portfolio manager Joyce Gordon, facilitate transactions by making cash
available from the sale of one holding to
a dividend-focused investor with 36 years2
buy another. “We want to make sure that
of investing experience, places a strong
analysts who have high convictions in stocks
emphasis on companies that she believes
are able to add that stock,” says Kaitlyn.
can grow their dividends over time based
“And we’ll push back on an analyst when
on a variety of factors.
belief in a stock has waned, or when
stocks have done so well that they’ve
The research portfolio
become outsized in the RP.” This is done
One of the keys of ICA’s success over
to return some cash to the research
the years has been the research portfolio
where analysts can invest in their strongest portfolio in order to fund analysts’ other
high-confidence stocks.
convictions. In ICA, 22 analysts across all
industry sectors had 100 holdings at
Don O’Neal
•
31 years of investment experience,
all with Capital Group
•
24 years on ICA
•
Based in San Francisco
•
37 holdings
The Investment Company of America
11
12
The Investment Company of America
The attitude among the analysts is cooperative when it
comes to doing what is best for the research portfolio,
leading to a team-oriented approach within the group.
The attitude among the analysts is
cooperative when it comes to doing what
is best for the research portfolio, leading
to a team-oriented approach within the
group. “Kaitlyn will do a little coaching,
but ultimately, it’s each individual making
the decisions for their own portfolio, such
as how much to own,” explains Jim.
An analyst’s best communication tool is
the portfolio of stocks the analyst holds.
It’s what they feel most strongly about.
“I’m just ensuring that their actions are
aligned with what they’re saying, and
their portfolio reflects what they think is
appropriate for the fund,” says Kaitlyn.
The overall combination
“Create the portfolio that reflects your
convictions. That’s the overriding goal
of this system,” says Jim. The portfolio
managers and investment analysts bring
their talents, strengths and best ideas to
the work of building the portfolio. While
diversification occurs naturally among the
multiple managers of The Capital System,
every portfolio manager creates an
appropriate level of diversification in his
or her own portfolio. “You’re looking for
convictions, but you’re also trying to be
eclectic so that you have pretty decent
diversification to handle different
environments,” explains Jim.
“The conception of the RP is completely
stock-by-stock,” says Kaitlyn. “But we’re
always making sure we understand where
we have a larger weighting and where we
might have less exposure,” says Kaitlyn.
Eric Richter
With 37 holdings, Don’s portfolio is
reasonably well concentrated, but at the
same time he also looks at it from the
top down and asks whether the overall
positions make sense to him. Over the
long run, Don surmises he’s been a better
investor by keeping some diversification
in his portfolio.
•
24 years of investment experience and
has been with Capital Group for 16 years
•
8 years on ICA
•
Based in Washington D.C.
•
36 holdings
“The reason why is, this is a tough business,”
he says. “When you think you really ought
to own all of this and none of that, you may
be right for a little while, but situations
change, and it’s helpful to have a range of
intelligent investment opinions going on
rather than be singularly focused on a
narrow idea.”
And as you review the portfolio’s past year
for The Investment Company of America,
you will see this range of opinions in action.
The stocks that comprise the portfolio are
not thrown together ad hoc solely because
of statistics or because they are in an index.
The ICA portfolio is a combination of
many diverse styles and ideas — carried
out through fundamental hands-on
research and evaluation — and carefully
constructed to give you what we believe
is the best potential for strong results
over the long haul. n
Brad Vogt
•
29 years of investment experience,
all with Capital Group
•
1 year on ICA
•
Based in Washington, D.C.
•
35 holdings
1
The number of holdings represent distinct stocks
and do not include overlap, which are stocks held
by more than one portfolio manager and/or the
research portfolio.
2
Portfolio manager years of experience as of
March 1, 2016.
3
As of December 31, 2015. The portfolio manager’s
number of holdings may have changed since then.
The Investment Company of America
13
Summary investment portfolio
December 31, 2015
Industry sector diversification
Percent of net assets
Information technology 17.44%
Health care 15.92%
Industrials 11.60%
Consumer staples 11.01%
Consumer discretionary 9.18%
Other industries 29.94%
Convertible stocks .07%
Short-term securities & other assets less
liabilities
Common stocks 95.09%
Energy
6.68%
ConocoPhillips
Halliburton Co.
Kinder Morgan, Inc.
Other securities
4.84%
Shares
19,732,699
14,168,576
28,621,000
Value
(000)
$ 921,320
482,298
427,025
2,971,072
4,801,715
Materials
3.95%
Dow Chemical Co.
Monsanto Co.
Other securities
10,975,000
8,937,000
564,993
880,473
1,392,472
2,837,938
Industrials
11.60%
CSX Corp.
General Dynamics Corp.
General Electric Co.
Illinois Tool Works Inc.
Norfolk Southern Corp.
Union Pacific Corp.
Other securities
24,015,771
9,669,200
29,165,000
6,550,000
10,806,318
14,909,444
623,209
1,328,161
908,490
607,054
914,106
1,165,919
2,790,770
8,337,709
Consumer
discretionary
9.18%
Amazon.com, Inc.1
Comcast Corp., Class A
General Motors Co.
Home Depot, Inc.
Las Vegas Sands Corp.
Time Warner Inc.
Viacom Inc., Class B
Other securities
1,729,000
8,996,517
17,871,309
7,870,000
11,000,000
6,957,932
12,390,760
1,168,614
507,673
607,803
1,040,807
482,240
449,969
510,004
1,834,156
6,601,266
Consumer staples
11.01%
Altria Group, Inc.
Coca-Cola Co.
ConAgra Foods, Inc.
Kraft Heinz Co.
Mead Johnson Nutrition Co.
Mondelez International, Inc.
PepsiCo, Inc.
Philip Morris International Inc.
Other securities
22,945,000
15,744,600
10,910,100
6,124,722
6,498,579
9,875,000
4,420,000
19,930,019
1,335,628
676,388
459,970
445,635
513,063
442,795
441,646
1,752,048
1,853,329
7,920,502
14
The
Company
of of
America
TheInvestment
Investment
Company
America
Shares
Health care
15.92%
AbbVie Inc.
Alexion Pharmaceuticals, Inc.1
Amgen Inc.
Gilead Sciences, Inc.
Medtronic PLC
Stryker Corp.
UnitedHealth Group Inc.
Other securities
22,274,421
3,207,000
22,603,272
11,830,391
10,025,000
5,727,725
6,294,832
Value
(000)
$ 1,319,537
611,735
3,669,189
1,197,117
771,123
532,335
740,524
2,604,761
11,446,321
Financials
6.34%
American International Group, Inc.
Berkshire Hathaway Inc., Class B1
Other securities
15,234,000
5,984,300
944,051
790,167
2,822,257
4,556,475
Information
technology
17.44%
Accenture PLC, Class A
Alphabet Inc., Class A1
Alphabet Inc., Class C1
Avago Technologies Ltd.
Intel Corp.
Microsoft Corp.
Oracle Corp.
Texas Instruments Inc.
Western Union Co.2
Other securities
11,746,460
1,161,880
1,721,609
7,061,000
29,526,000
17,084,100
41,932,300
26,962,173
35,700,000
1,227,505
903,954
1,306,495
1,024,904
1,017,171
947,826
1,531,787
1,477,797
639,387
2,461,710
12,538,536
Telecommunication
services
5.51%
AT&T Inc.
CenturyLink, Inc.
Verizon Communications Inc.
Other securities
25,435,334
18,267,000
53,186,795
875,230
459,598
2,458,294
169,395
3,962,517
Utilities
2.65%
Dominion Resources, Inc.
Exelon Corp.
Other securities
12,183,324
30,030,000
824,080
833,933
245,569
1,903,582
Miscellaneous
4.81%
Other common stocks in initial period of acquisition
Total common stocks (cost: $50,263,576,000)
3,456,576
68,363,137
Convertible stocks 0.07%
Miscellaneous
0.07%
Other convertible stocks in initial period of acquisition
47,481
Total convertible stocks (cost: $46,806,000)
47,481
The
InvestmentCompany
CompanyofofAmerica
America
The
Investment
15
Short-term securities 4.87%
Principal amount
(000)
Value
(000)
$1,682,106
59,700
$ 1,681,365
59,665
1,757,378
Federal Home Loan Bank 0.10%–0.58% due 1/8/2016–7/18/2016
Intel Corp. 0.40% due 2/25/2016
Other securities
Total short-term securities (cost: $3,498,408,000)
3,498,408
Total investment securities 100.03% (cost: $53,808,790,000)
Other assets less liabilities (0.03)%
71,909,026
(19,736)
Net assets 100.00%
$71,889,290
This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See inside back cover for
details on how to obtain a complete schedule of portfolio holdings.
As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not
previously been publicly disclosed.
“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. "Miscellaneous" and "Other securities" include
securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair
value procedures was $4,929,979,000, which represented 6.86% of the net assets of the fund. This entire amount relates to certain securities trading outside the
U.S. whose values were adjusted as a result of significant market movements following the close of local trading. Some securities within “Other securities” (with an
aggregate value of $863,909,000, which represented 1.20% of the net assets of the fund) were acquired in transactions exempt from registration under section 4(2)
of the Securities Act of 1933 and may be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers.
Investments in affiliates
A company is an affiliate of the fund under the Investment Company Act of 1940 if the fund’s holdings in that company represent 5% or
more of the outstanding voting shares. The value of the fund’s affiliated-company holdings is either shown in the summary investment
portfolio or included in the value of “Other securities” under the respective industry sectors. Further details on such holdings and
related transactions during the year ended December 31, 2015, appear below.
Western Union Co.
Avon Products, Inc.
Chesapeake Energy Corp.3
Hasbro, Inc.3
Beginning
shares
Additions
Reductions
Ending
shares
35,700,000
—
13,100,000
6,405,000
—
23,520,341
24,400,000
—
—
—
5,500,000
1,498,641
35,700,000
23,520,341
32,000,000
4,906,359
$22,134
1,920
3,577
9,827
$639,387
95,257
—
—
$37,458
$734,644
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.
1
Security did not produce income during the last 12 months.
Represents an affiliated company as defined under the Investment Company Act of 1940.
3
Unaffiliated issuer at 12/31/2015.
2
See Notes to Financial Statements
16
The
Company
of of
America
TheInvestment
Investment
Company
America
Value of
affiliates at
12/31/2015
(000)
Dividend
income
(000)
Financial statements
Statement of assets and liabilities at December 31, 2015
(dollars in thousands)
Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $53,102,695)
Affiliated issuers (cost: $706,095)
Cash denominated in currencies other than U.S. dollars (cost: $5,131)
Cash
Receivables for:
Sales of investments
Sales of fund’s shares
Dividends
Other
$71,174,382
734,644
115,700
57,696
106,687
2,476
$71,909,026
5,131
9,044
282,559
72,205,760
Liabilities:
Payables for:
Purchases of investments
Repurchases of fund’s shares
Investment advisory services
Services provided by related parties
Trustees’ deferred compensation
Other
99,963
175,554
14,709
17,017
7,086
2,141
316,470
Net assets at December 31, 2015
$71,889,290
Net assets consist of:
Capital paid in on shares of beneficial interest
Undistributed net investment income
Undistributed net realized gain
Net unrealized appreciation
$53,053,482
377,600
358,256
18,099,952
Net assets at December 31, 2015
$71,889,290
(dollars and shares in thousands, except per-share amounts)
Shares of beneficial interest issued and outstanding (no stated par value) —
unlimited shares authorized (2,155,462 total shares outstanding)
Net assets
Class A
Class B
Class C
Class F-1
Class F-2
Class 529-A
Class 529-B
Class 529-C
Class 529-E
Class 529-F-1
Class R-1
Class R-2
Class R-2E
Class R-3
Class R-4
Class R-5E
Class R-5
Class R-6
$54,725,058
155,930
1,635,215
2,458,720
1,949,795
2,132,554
24,557
474,998
78,023
60,720
82,589
636,776
673
860,576
983,205
9
754,668
4,875,224
Shares
outstanding
1,639,939
4,683
49,440
73,835
58,449
64,036
737
14,308
2,349
1,825
2,492
19,189
20
25,869
29,531
—*
22,624
146,136
Net asset value
per share
$33.37
33.29
33.08
33.30
33.36
33.30
33.32
33.20
33.21
33.27
33.15
33.18
33.33
33.27
33.29
33.36
33.36
33.36
*Amount less than one thousand.
See Notes to Financial Statements
The
InvestmentCompany
CompanyofofAmerica
America
The
Investment
17
Statement of operations for the year ended December 31, 2015
(dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. taxes of $10,020;
also includes $37,458 from affiliates)
Interest
Fees and expenses*:
Investment advisory services
Distribution services
Transfer agent services
Administrative services
Reports to shareholders
Registration statement and prospectus
Trustees’ compensation
Auditing and legal
Custodian
Other
$ 1,771,579
7,718
178,638
182,646
66,438
14,372
2,650
1,857
447
1,579
1,816
2,764
Net investment income
Net realized gain and unrealized depreciation:
Net realized gain (loss) on:
Investments (includes $20,843 net loss from affiliates)
Currency transactions
Net unrealized (depreciation) appreciation on:
Investments
Currency translations
$ 1,779,297
453,207
1,326,090
5,040,451
(4,968)
5,035,483
(7,421,726)
180
(7,421,546)
Net realized gain and unrealized depreciation
(2,386,063)
Net decrease in net assets resulting from operations
$(1,059,973)
*Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.
Statements of changes in net assets
Year ended December 31
2015
Operations:
Net investment income
Net realized gain
Net unrealized depreciation
2014
$ 1,326,090
5,035,483
(7,421,546)
$ 1,581,896
7,246,568
(548,284)
(1,059,973)
8,280,180
(1,243,682)
(5,083,682)
(1,336,966)
(6,231,464)
(6,327,364)
(7,568,430)
Net capital share transactions
3,820,897
4,823,324
Total (decrease) increase in net assets
(3,566,440)
5,535,074
Net assets:
Beginning of year
75,455,730
69,920,656
$71,889,290
$75,455,730
Net (decrease) increase in net assets resulting from operations
Dividends and distributions paid to shareholders:
Dividends from net investment income
Distributions from net realized gain on investments
Total dividends and distributions paid to shareholders
End of year (including undistributed net investment income:
$377,600 and $298,582, respectively)
See Notes to Financial Statements
18
The
Company
of of
America
TheInvestment
Investment
Company
America
Notes to financial statements
1. Organization
The Investment Company of America (the “fund”) is registered under the Investment Company Act of 1940 as an open-end, diversified
management investment company. The fund seeks long-term growth of capital and income.
The fund has 18 share classes consisting of five retail share classes (Classes A, B and C, as well as two F share classes, F-1 and F-2), five
529 college savings plan share classes (Classes 529-A, 529-B, 529-C, 529-E and 529-F-1) and eight retirement plan share classes
(Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education.
The retirement plan share classes are generally offered only through eligible employer-sponsored retirement plans. The fund’s share
classes are described further in the following table:
Contingent deferred sales charge upon
redemption
Share class
Initial sales charge
Conversion feature
Classes A and 529-A
Up to 5.75%
None (except 1% for certain redemptions
within one year of purchase without an
initial sales charge)
None
Classes B and 529-B*
None
Declines from 5% to 0% for redemptions
within six years of purchase
Classes B and 529-B convert to
Classes A and 529-A, respectively,
after eight years
Class C
None
1% for redemptions within one year of
purchase
Class C converts to Class F-1
after 10 years
Class 529-C
None
1% for redemptions within one year of
purchase
None
Class 529-E
None
None
None
Classes F-1, F-2 and 529-F-1
None
None
None
Classes R-1, R-2, R-2E, R-3, R-4,
R-5E, R-5 and R-6
None
None
None
*Class B and 529-B shares of the fund are not available for purchase.
On November 20, 2015, the fund made an additional retirement plan share class (Class R-5E) available for sale pursuant to an
amendment to its registration statement filed with the U.S. Securities and Exchange Commission. Refer to the fund’s prospectus for more
details.
Holders of all share classes have equal pro rata rights to the assets, dividends and liquidation proceeds of the fund. Each share class has
identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and
expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution, transfer agent and administrative
services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of
different per-share dividends by each share class.
2. Significant accounting policies
The fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial
Accounting Standards Board. The fund’s financial statements have been prepared to comply with U.S. generally accepted accounting
principles (“U.S. GAAP“). These principles require the fund’s investment adviser to make estimates and assumptions that affect reported
amounts and disclosures. Actual results could differ from those estimates. Subsequent events, if any, have been evaluated through the
date of issuance in the preparation of the financial statements. The fund follows the significant accounting policies described in this
section, as well as the valuation policies described in the next section on valuation.
Security transactions and related investment income — Security transactions are recorded by the fund as of the date the trades are
executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the
securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its
payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis.
Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the
security.
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19
Class allocations — Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses
are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as
distribution, transfer agent and administrative services, are charged directly to the respective share class.
Dividends and distributions to shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.
Currency translation — Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are
translated into U.S. dollars at the exchange rates supplied by one or more pricing vendors on the valuation date. Purchases and sales of
investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions.
The effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized
appreciation or depreciation on investments in the fund’s statement of operations. The realized gain or loss and unrealized appreciation
or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
3. Valuation
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as
defined by U.S. GAAP. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York
time each day the New York Stock Exchange is open.
Methods and inputs — The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets
and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic
conditions evolve.
Equity securities 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 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, are generally valued at prices obtained from one or more pricing vendors.
Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs
that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However,
these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.
Fixed-income class
Examples of standard inputs
All
Benchmark yields, transactions, bids, offers, quotations from dealers and
trading systems, new issues, 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, financial
or collateral performance and other reference data (collectively referred to
as “standard inputs”)
Corporate bonds & notes; convertible securities
Standard inputs and underlying equity of the issuer
Bonds & notes of governments & government agencies
Standard inputs and interest rate volatilities
Mortgage-backed; asset-backed obligations
Standard inputs and cash flows, prepayment information, default rates,
delinquency and loss assumptions, collateral characteristics, credit
enhancements and specific deal information
When the fund’s investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or deemed to be not
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, or equity securities traded principally among fixed-income dealers, are
generally valued in the manner described for either equity or fixed-income securities, depending on which method is deemed most
appropriate by the fund’s investment adviser.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the fund’s
investment adviser are fair valued as determined in good faith under fair valuation guidelines adopted by authority of the fund’s board of
trustees as further described. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange
Commission rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment
20
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America
adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to 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. In
addition, the closing prices of equity securities that trade in markets outside U.S. time zones may be adjusted to reflect significant events
that occur after the close of local trading but before the net asset value of each share class of the fund is determined. 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.
Processes and structure — The fund’s board of trustees has delegated authority to the fund’s investment adviser to make fair value
determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation
Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation
Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment
adviser’s valuation teams. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as
deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues.
The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees with supplemental information
to support the changes. The fund’s board and audit committee also regularly review reports that describe fair value determinations and
methods.
The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income
valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market
data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual
control self-evaluation program facilitated by the investment adviser’s compliance group.
Classifications — The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value
the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on
significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Certain securities
trading outside the U.S. may transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market
movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment
adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are
not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are
reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following
table presents the fund’s valuation levels as of December 31, 2015 (dollars in thousands):
Investment securities
Level 1
Level 2*
Level 3
Total
Assets:
Common stocks:
Energy
Materials
Industrials
Consumer discretionary
Consumer staples
Health care
Financials
Information technology
Telecommunication services
Utilities
Miscellaneous
Convertible stocks
Short-term securities
$ 4,194,841
2,693,478
8,337,709
6,313,817
7,606,827
10,762,267
3,773,878
11,836,637
3,793,122
1,903,582
2,217,000
47,481
—
$ 606,874
144,460
—
287,449
313,675
684,054
782,597
701,899
169,395
—
1,239,576
—
3,498,408
$—
—
—
—
—
—
—
—
—
—
—
—
—
$ 4,801,715
2,837,938
8,337,709
6,601,266
7,920,502
11,446,321
4,556,475
12,538,536
3,962,517
1,903,582
3,456,576
47,481
3,498,408
Total
$63,480,639
$8,428,387
$—
$71,909,026
*Securities with a value of $4,929,979,000, which represented 6.86% of the net assets of the fund, were classified as Level 2 due to significant market movements
following the close of local trading.
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4. Risk factors
Investing in the fund may involve certain risks including, but not limited to, those described below.
Market conditions — The prices of, and the income generated by, the common stocks and other securities held by the fund may decline —
sometimes rapidly or unpredictably — due to various factors, including events or conditions affecting the general economy or particular
industries; overall market changes; local, regional or global political, social or economic instability; governmental or governmental
agency responses to economic conditions; and currency exchange rate, interest rate and commodity price fluctuations.
Issuer risks — The prices of, and the income generated by, securities held by the fund may decline in response to various factors directly
related to the issuers of such securities, including reduced demand for an issuer’s goods or services, poor management performance and
strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives.
Investing in income-oriented stocks — Income provided by the fund may be reduced by changes in the dividend policies of, and the
capital resources available for dividend payments at, the companies in which the fund invests.
Investing in growth-oriented stocks — Growth-oriented common stocks and other equity-type securities (such as preferred stocks,
convertible preferred stocks and convertible bonds) may involve larger price swings and greater potential for loss than other types of
investments.
Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations or revenues outside the U.S.,
may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts,
terrorism and war) in the countries or regions in which the issuers operate or generate revenue. These securities may also lose value due
to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Issuers of these securities may
be more susceptible to actions of foreign governments, such as the imposition of price controls or punitive taxes, that could adversely
impact revenues. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside
the U.S. may also be subject to different accounting practices and different regulatory, legal and reporting standards and practices, and
may be more difficult to value, than those in the U.S. In addition, the value of investments outside the U.S. may be reduced by foreign
taxes, including foreign withholding taxes on interest and dividends. Further, there may be increased risks of delayed settlement of
securities purchased or sold by the fund. The risks of investing outside the U.S. may be heightened in connection with investments in
emerging markets.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk
that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause
the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.
5. Taxation and distributions
Federal income taxation — The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to
mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to
income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
As of and during the period ended December 31, 2015, the fund did not have a liability for any unrecognized tax benefits. The fund
recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations.
During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2012 and by state tax authorities for tax years
before 2011.
Non-U.S. taxation — Dividend and interest income are recorded net of non-U.S. taxes paid. The fund may file withholding tax reclaims in
certain jurisdictions to recover a portion of amounts previously withheld. As a result of rulings from European courts, the fund filed for
additional reclaims related to prior years. These reclaims are recorded when the amount is known and there are no significant
uncertainties on collectability.
Distributions — Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis,
which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily
to different treatment for items such as currency gains and losses; short-term capital gains and losses; unrealized appreciation of certain
22
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investments in securities outside the U.S.; deferred expenses; and income on certain investments. The fiscal year in which amounts are
distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial
reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax
purposes.
During the year ended December 31, 2015, the fund reclassified $3,200,000 and $190,000 from undistributed net investment income to
undistributed net realized gain and capital paid in on shares of beneficial interest, respectively, and $128,817,000 from undistributed net
realized gain to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.
As of December 31, 2015, the tax-basis components of distributable earnings, unrealized appreciation (depreciation) and cost of
investment securities were as follows (dollars in thousands):
Undistributed ordinary income
$
399,127
Gross unrealized appreciation on investment securities
Gross unrealized depreciation on investment securities
Net unrealized appreciation on investment securities
22,337,651
(3,893,602)
18,444,049
Cost of investment securities
53,464,977
The tax character of distributions paid to shareholders was as follows (dollars in thousands):
Year ended December 31, 2015
Share class
Ordinary
income
Long-term
capital gains
Total
dividends and
distributions
paid
Year ended December 31, 2014
Ordinary
income
Long-term
capital gains
Total
dividends and
distributions
paid
$4,835,143
25,504
147,247
208,522
148,398
183,803
3,990
41,998
6,800
4,941
7,735
59,808
2
77,606
82,279
$5,893,887
29,070
165,733
252,233
180,221
221,579
4,472
46,890
8,013
6,040
8,703
67,464
2
91,304
99,645
Class A
Class B
Class C
Class F-1
Class F-2
Class 529-A
Class 529-B
Class 529-C
Class 529-E
Class 529-F-1
Class R-1
Class R-2
Class R-2E1
Class R-3
Class R-4
Class R-5E3
Class R-5
Class R-6
$ 964,849
1,713
15,215
40,913
35,900
34,966
227
4,033
1,090
1,135
775
6,268
2
11,961
16,551
—2
15,178
92,906
$3,872,351
11,723
116,413
174,320
137,282
150,267
1,850
33,720
5,525
4,356
5,916
45,710
27
61,045
69,289
1
53,155
340,732
$4,837,200
13,436
131,628
215,233
173,182
185,233
2,077
37,753
6,615
5,491
6,691
51,978
29
73,006
85,840
1
68,333
433,638
$1,058,744
3,566
18,486
43,711
31,823
37,776
482
4,892
1,213
1,099
968
7,656
—2
13,698
17,366
16,450
79,036
67,108
330,580
83,558
409,616
Total
$1,243,682
$5,083,682
$6,327,364
$1,336,966
$6,231,464
$7,568,430
1
Class R-2E shares were offered beginning August 29, 2014.
Amount less than one thousand.
3
Class R-5E shares were offered beginning November 20, 2015.
2
6. Fees and transactions with related parties
CRMC, the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. (“AFD”), the principal underwriter of
the fund’s shares, and American Funds Service Company® (“AFS”), the fund’s transfer agent. CRMC, AFD and AFS are considered related
parties to the fund.
Investment advisory services — The fund has an investment advisory and service agreement with CRMC that provides for monthly fees
accrued daily. These fees are based on a series of decreasing annual rates beginning with 0.390% on the first $1 billion of daily net assets
and decreasing to 0.219% on such assets in excess of $89 billion. For the year ended December 31, 2015, the investment advisory
services fee was $178,638,000, which was equivalent to an annualized rate of 0.238% of average daily net assets.
The
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23
Class-specific fees and expenses — Expenses that are specific to individual share classes are accrued directly to the respective share class.
The principal class-specific fees and expenses are further described below:
Distribution services — The fund has plans of distribution for all share classes, except Class F-2, R-5E, R-5 and R-6 shares. Under the
plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund
shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net
assets, ranging from 0.25% to 1.00% as noted in this section. In some cases, the board of trustees has limited the amounts that may
be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets
to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide
certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them
for their sales activities.
For Class A and 529-A shares, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid
by AFD for certain shares sold without a sales charge. These share classes reimburse AFD for amounts billed within the prior
15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of December 31, 2015, there
were no unreimbursed expenses subject to reimbursement for Class A or 529-A shares.
Share class
Class A
Class 529-A
Classes B and 529-B
Classes C, 529-C and R-1
Class R-2
Class R-2E
Classes 529-E and R-3
Classes F-1, 529-F-1 and R-4
Currently approved limits
0.25%
0.25
1.00
1.00
0.75
0.60
0.50
0.25
Plan limits
0.25%
0.50
1.00
1.00
1.00
0.85
0.75
0.50
Transfer agent services — The fund has a shareholder services agreement with AFS under which the fund compensates AFS for
providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent
services on behalf of fund shareholders.
Administrative services — The fund has an administrative services agreement with CRMC under which the fund compensates CRMC
for providing administrative services to Class A, C, F, 529 and R shares. These services include, but are not limited to, coordinating,
monitoring, assisting and overseeing third parties that provide services to fund shareholders. Under the agreement, Class A shares
pay an annual fee of 0.01% and Class C, F, 529 and R shares pay an annual fee of 0.05% of their respective average daily net assets.
529 plan services — Each 529 share class is subject to service fees to compensate the Virginia College Savings Plan (“Virginia529“) for
its oversight and administration of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates
beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to
0.05% on such assets in excess of $70 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the
average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. The fee is included in
other expenses in the fund’s statement of operations. Virginia529 is not considered a related party to the fund.
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For the year ended December 31, 2015, class-specific expenses under the agreements were as follows (dollars in thousands):
Share class
Class A
Class B
Class C
Class F-1
Class F-2
Class 529-A
Class 529-B
Class 529-C
Class 529-E
Class 529-F-1
Class R-1
Class R-2
Class R-2E
Class R-3
Class R-4
Class R-5E†
Class R-5
Class R-6
Total class-specific expenses
Distribution
services
$132,899
2,222
17,242
6,369
Not applicable
4,978
355
4,959
407
—
911
5,190
—*
4,578
2,536
Not applicable
Not applicable
Not applicable
$182,646
Transfer agent
services
$52,296
209
1,574
3,018
2,053
1,720
33
413
36
48
91
2,162
—*
1,439
962
—*
374
10
$66,438
Administrative
services
$ 5,762
Not applicable
866
1,276
948
1,111
18
251
41
31
46
348
—*
459
508
—*
398
2,309
$14,372
529 plan
services
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
$1,969
32
444
72
55
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
$2,572
*Amount less than one thousand.
†
Class R-5E shares were offered beginning November 20, 2015.
Trustees’ deferred compensation — Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their
compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other
American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the
selected funds. Trustees’ compensation of $447,000 in the fund’s statement of operations includes $386,000 in current fees (either paid in
cash or deferred) and a net increase of $61,000 in the value of the deferred amounts.
Affiliated officers and trustees — Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFD and
AFS. No affiliated officers or trustees received any compensation directly from the fund.
7. Warrants
As of December 31, 2015, the fund had warrants outstanding which may be exercised at any time for the purchase of 818,231 Class A
shares at approximately $5.24 per share. If these warrants had been exercised as of December 31, 2015, the net asset value of each share
class would have been reduced by less than $0.02 per share. No warrants were exercised during the year ended December 31, 2015, or
the prior fiscal year ended December 31, 2014.
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25
8. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
Reinvestments of
dividends and distributions
Sales1
Share class
Amount
Year ended December 31, 2015
Class A
$3,254,687
Class B
2,578
Class C
312,217
Class F-1
462,170
Class F-2
617,068
Class 529-A
194,197
Class 529-B
755
Class 529-C
44,579
Class 529-E
6,841
Class 529-F-1
12,826
Class R-1
14,057
Class R-2
140,340
Class R-2E
657
Class R-3
186,975
Class R-4
214,087
10
Class R-5E3
Class R-5
110,628
Class R-6
1,247,966
Total net increase
(decrease)
Shares
88,779
70
8,583
12,580
16,784
5,307
21
1,223
187
351
385
3,851
18
5,123
5,876
—2
3,022
34,173
Repurchases1
Amount
Shares
Net increase
(decrease)
Amount
Shares
Amount
$4,700,777
13,368
129,974
211,394
146,792
185,157
2,077
37,744
6,614
5,491
6,682
51,935
28
72,898
85,822
—
68,311
433,638
140,518
400
3,940
6,336
4,395
5,549
62
1,140
199
164
202
1,568
1
2,189
2,572
—
2,039
12,978
$(6,027,281)
(151,682)
(412,026)
(478,800)
(372,889)
(262,431)
(23,954)
(66,679)
(9,919)
(12,674)
(23,185)
(210,894)
(10)
(246,074)
(215,586)
—
(167,879)
(478,480)
(165,181)
(4,122)
(11,321)
(13,127)
(10,255)
(7,182)
(652)
(1,831)
(272)
(350)
(636)
(5,805)
—2
(6,752)
(5,887)
—
(4,561)
(13,237)
$1,928,183
(135,736)
30,165
194,764
390,971
116,923
(21,122)
15,644
3,536
5,643
(2,446)
(18,619)
675
13,799
84,323
10
11,060
1,203,124
$6,822,638
186,333
$6,158,702
184,252
$(9,160,443)
(251,171)
$3,820,897
Year ended December 31, 2014
Class A
$3,263,761
Class B
5,051
Class C
287,635
Class F-1
619,565
Class F-2
771,196
Class 529-A
201,751
Class 529-B
1,075
Class 529-C
48,579
Class 529-E
7,048
Class 529-F-1
13,709
Class R-1
16,242
Class R-2
135,815
26
Class R-2E4
Class R-3
184,997
Class R-4
210,201
Class R-5
155,679
Class R-6
1,106,012
84,516
131
7,503
16,154
19,780
5,250
28
1,264
183
352
422
3,544
1
4,812
5,462
3,975
28,925
$5,720,607
28,895
163,114
247,499
143,257
221,486
4,472
46,873
8,010
6,038
8,691
67,402
1
91,232
99,605
83,478
409,615
152,396
773
4,388
6,608
3,816
5,913
119
1,257
215
161
233
1,808
—2
2,439
2,660
2,224
10,909
$(6,185,028)
(197,048)
(486,900)
(747,253)
(240,922)
(240,042)
(28,794)
(62,850)
(10,696)
(9,096)
(18,965)
(187,138)
—
(261,582)
(231,203)
(280,612)
(367,164)
(160,753)
(5,174)
(12,816)
(19,313)
(6,232)
(6,221)
(753)
(1,636)
(278)
(236)
(492)
(4,894)
—
(6,844)
(5,980)
(7,349)
(9,521)
$2,799,340
(163,102)
(36,151)
119,811
673,531
183,195
(23,247)
32,602
4,362
10,651
5,968
16,079
27
14,647
78,603
(41,455)
1,148,463
182,302
$7,350,275
195,919
$(9,555,293)
(248,492)
$4,823,324
Total net increase
(decrease)
$7,028,342
Shares
64,116
(3,652)
1,202
5,789
10,924
3,674
(569)
532
114
165
(49)
(386)
19
560
2,561
—2
500
33,914
119,414
76,159
(4,270)
(925)
3,449
17,364
4,942
(606)
885
120
277
163
458
1
407
2,142
(1,150)
30,313
129,729
1
Includes exchanges between share classes of the fund.
Amount less than one thousand.
3
Class R-5E shares were offered beginning November 20, 2015.
4
Class R-2E shares were offered beginning August 29, 2014.
2
9. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of
$22,432,466,000 and $21,416,737,000, respectively, during the year ended December 31, 2015.
26
The
Company
of of
America
TheInvestment
Investment
Company
America
Financial highlights
(Loss) income from
investment operations1
Dividends and distributions
Net
investment
income2
Net (losses)
gains on
securities (both
realized and
unrealized)
Total from
investment
operations
Dividends
(from net
investment
income)
Distributions
(from capital
gains)
Total
dividends
and
distributions
Net asset
value,
end
of period
Total
return3
$37.08
36.70
30.16
27.09
28.16
$.66
.85
.61
.60
.57
$(1.24)
3.60
9.07
3.61
(1.06)
$ (.58)
4.45
9.68
4.21
(.49)
$(.62)
(.73)
(.63)
(.72)
(.58)
$(2.51)
(3.34)
(2.51)
(.42)
—
$(3.13)
(4.07)
(3.14)
(1.14)
(.58)
$33.37
37.08
36.70
30.16
27.09
(1.44)% $54,725
12.09
58,430
32.42
55,032
15.60
44,501
(1.76)
42,643
36.97
36.58
30.06
26.99
28.05
.37
.58
.34
.37
.35
(1.23)
3.56
9.04
3.60
(1.06)
(.86)
4.14
9.38
3.97
(.71)
(.31)
(.41)
(.35)
(.48)
(.35)
(2.51)
(3.34)
(2.51)
(.42)
—
(2.82)
(3.75)
(2.86)
(.90)
(.35)
33.29
36.97
36.58
30.06
26.99
(2.20)
11.26
31.42
14.74
(2.53)
156
308
461
552
838
1.34
1.34
1.37
1.38
1.38
1.00
1.52
1.00
1.25
1.27
36.77
36.42
29.95
26.90
27.97
.36
.54
.33
.36
.34
(1.22)
3.56
9.00
3.59
(1.06)
(.86)
4.10
9.33
3.95
(.72)
(.32)
(.41)
(.35)
(.48)
(.35)
(2.51)
(3.34)
(2.51)
(.42)
—
(2.83)
(3.75)
(2.86)
(.90)
(.35)
33.08
36.77
36.42
29.95
26.90
(2.24)
11.20
31.36
14.70
(2.58)
1,635
1,774
1,791
1,620
1,767
1.39
1.39
1.41
1.43
1.42
.98
1.41
.95
1.21
1.24
37.01
36.63
30.11
27.04
28.12
.62
.82
.58
.58
.56
(1.23)
3.59
9.06
3.62
(1.07)
(.61)
4.41
9.64
4.20
(.51)
(.59)
(.69)
(.61)
(.71)
(.57)
(2.51)
(3.34)
(2.51)
(.42)
—
(3.10)
(4.03)
(3.12)
(1.13)
(.57)
33.30
37.01
36.63
30.11
27.04
(1.53)
12.02
32.32
15.58
(1.84)
2,459
2,518
2,366
1,842
1,744
.67
.67
.68
.67
.66
1.70
2.13
1.68
1.98
2.01
37.07
36.69
30.15
27.08
28.15
.72
.90
.68
.67
.63
(1.23)
3.62
9.07
3.61
(1.06)
(.51)
4.52
9.75
4.28
(.43)
(.69)
(.80)
(.70)
(.79)
(.64)
(2.51)
(3.34)
(2.51)
(.42)
—
(3.20)
(4.14)
(3.21)
(1.21)
(.64)
33.36
37.07
36.69
30.15
27.08
(1.26)
12.31
32.69
15.86
(1.54)
1,950
1,762
1,107
770
604
.41
.39
.41
.40
.40
1.97
2.32
1.96
2.25
2.27
37.01
36.64
30.11
27.05
28.12
.62
.81
.57
.57
.55
(1.24)
3.58
9.07
3.60
(1.06)
(.62)
4.39
9.64
4.17
(.51)
(.58)
(.68)
(.60)
(.69)
(.56)
(2.51)
(3.34)
(2.51)
(.42)
—
(3.09)
(4.02)
(3.11)
(1.11)
(.56)
33.30
37.01
36.64
30.11
27.05
(1.55)
11.97
32.32
15.47
(1.84)
2,132
2,234
2,030
1,562
1,362
.69
.69
.71
.72
.70
1.68
2.10
1.66
1.93
1.97
36.99
36.60
30.07
27.00
28.06
.32
.53
.30
.33
.32
(1.22)
3.56
9.04
3.60
(1.05)
(.90)
4.09
9.34
3.93
(.73)
(.26)
(.36)
(.30)
(.44)
(.33)
(2.51)
(3.34)
(2.51)
(.42)
—
(2.77)
(3.70)
(2.81)
(.86)
(.33)
33.32
36.99
36.60
30.07
27.00
(2.32)
11.10
31.27
14.58
(2.63)
24
48
70
81
111
1.47
1.47
1.50
1.52
1.50
.87
1.38
.87
1.12
1.16
Net asset
value,
beginning
of period
Net assets,
end of period
(in millions)
Ratio of
expenses to
average
net assets
Ratio of
net income
to average
net assets2
.58%
.59
.61
.62
.61
1.79%
2.21
1.76
2.02
2.05
Class A:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class B:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class C:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class F-1:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class F-2:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class 529-A:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class 529-B:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
See page 29 for footnotes.
The
InvestmentCompany
CompanyofofAmerica
America
The
Investment
27
Financial highlights (continued)
(Loss) income from
investment operations1
Dividends and distributions
Net
investment
income2
Net (losses)
gains on
securities (both
realized and
unrealized)
Total from
investment
operations
Dividends
(from net
investment
income)
Distributions
(from capital
gains)
Total
dividends
and
distributions
Net asset
value,
end
of period
Total
return3
$36.90
36.54
30.04
26.99
28.06
$.33
.51
.30
.34
.33
$(1.22)
3.58
9.04
3.59
(1.06)
$ (.89)
4.09
9.34
3.93
(.73)
$(.30)
(.39)
(.33)
(.46)
(.34)
$(2.51)
(3.34)
(2.51)
(.42)
—
$(2.81)
(3.73)
(2.84)
(.88)
(.34)
$33.20
36.90
36.54
30.04
26.99
(2.31)%
11.13
31.29
14.59
(2.62)
36.91
36.55
30.05
26.99
28.07
.53
.71
.49
.49
.47
(1.23)
3.58
9.03
3.61
(1.07)
(.70)
4.29
9.52
4.10
(.60)
(.49)
(.59)
(.51)
(.62)
(.48)
(2.51)
(3.34)
(2.51)
(.42)
—
(3.00)
(3.93)
(3.02)
(1.04)
(.48)
33.21
36.91
36.55
30.05
26.99
(1.77)
11.70
31.96
15.23
(2.15)
78
82
77
61
55
.93
.93
.95
.97
.97
1.44
1.86
1.41
1.68
1.70
36.98
36.61
30.09
27.03
28.10
.70
.89
.65
.63
.61
(1.24)
3.59
9.05
3.61
(1.06)
(.54)
4.48
9.70
4.24
(.45)
(.66)
(.77)
(.67)
(.76)
(.62)
(2.51)
(3.34)
(2.51)
(.42)
—
(3.17)
(4.11)
(3.18)
(1.18)
(.62)
33.27
36.98
36.61
30.09
27.03
(1.32)
12.23
32.59
15.74
(1.62)
61
61
51
37
31
.47
.46
.49
.50
.49
1.91
2.32
1.88
2.15
2.19
36.84
36.49
30.01
26.95
28.02
.35
.54
.33
.36
.35
(1.21)
3.56
9.01
3.60
(1.06)
(.86)
4.10
9.34
3.96
(.71)
(.32)
(.41)
(.35)
(.48)
(.36)
(2.51)
(3.34)
(2.51)
(.42)
—
(2.83)
(3.75)
(2.86)
(.90)
(.36)
33.15
36.84
36.49
30.01
26.95
(2.22)
11.19
31.36
14.74
(2.55)
83
94
87
73
74
1.40
1.40
1.40
1.41
1.41
.97
1.40
.96
1.23
1.25
36.88
36.53
30.03
26.98
28.05
.37
.55
.34
.37
.35
(1.23)
3.56
9.04
3.59
(1.06)
(.86)
4.11
9.38
3.96
(.71)
(.33)
(.42)
(.37)
(.49)
(.36)
(2.51)
(3.34)
(2.51)
(.42)
—
(2.84)
(3.76)
(2.88)
(.91)
(.36)
33.18
36.88
36.53
30.03
26.98
(2.21)
11.20
31.45
14.70
(2.55)
637
722
698
584
577
1.36
1.37
1.36
1.40
1.41
1.01
1.43
1.00
1.25
1.25
37.06
.51
(1.23)
(.72)
(.50)
(2.51)
(3.01)
33.33
(1.83)
1
1.04
1.48
40.36
.25
.25
.50
(.46)
(3.34)
(3.80)
37.06
1.086,7
—8
36.97
36.60
30.09
27.03
28.10
.52
.71
.48
.49
.47
(1.23)
3.58
9.05
3.60
(1.06)
(.71)
4.29
9.53
4.09
(.59)
(.48)
(.58)
(.51)
(.61)
(.48)
(2.51)
(3.34)
(2.51)
(.42)
—
(2.99)
(3.92)
(3.02)
(1.03)
(.48)
33.27
36.97
36.60
30.09
27.03
Net asset
value,
beginning
of period
Net assets,
end of period
(in millions)
Ratio of
expenses to
average
net assets
Ratio of
net income
to average
net assets2
1.46%
1.46
1.49
1.50
1.49
.91%
1.33
.88
1.14
1.18
Class 529-C:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
$475
509
471
372
336
Class 529-E:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class 529-F-1:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class R-1:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class R-2:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class R-2E:
Year ended 12/31/2015
Period from 8/29/2014
to 12/31/20144,5
.236,7
.626,7
Class R-3:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
28
The
Company
of of
America
TheInvestment
Investment
Company
America
(1.79)
11.68
31.94
15.19
(2.11)
860
936
912
743
737
.95
.96
.96
.98
.97
1.41
1.83
1.40
1.67
1.70
(Loss) income from
investment operations1
Dividends and distributions
Net
investment
income2
Net (losses)
gains on
securities (both
realized and
unrealized)
Total from
investment
operations
Dividends
(from net
investment
income)
Distributions
(from capital
gains)
Total
dividends
and
distributions
Net asset
value,
end
of period
Total
return3
$37.00
36.63
30.11
27.04
28.12
$.63
.83
.59
.59
.56
$(1.23)
3.58
9.06
3.61
(1.07)
$ (.60)
4.41
9.65
4.20
(.51)
$(.60)
(.70)
(.62)
(.71)
(.57)
$(2.51)
(3.34)
(2.51)
(.42)
—
$(3.11)
(4.04)
(3.13)
(1.13)
(.57)
$33.29
37.00
36.63
30.11
27.04
(1.50)% $ 983
12.02
998
32.37
909
15.60
705
(1.83)
660
.64%
.65
.65
.65
.65
1.73%
2.15
1.72
2.00
2.02
36.83
.07
(1.08)
(1.01)
(.21)
(2.25)
(2.46)
33.36
(2.64)7
.057
.207
37.07
36.69
30.15
27.08
28.15
.74
.96
.70
.68
.65
(1.23)
3.58
9.07
3.61
(1.07)
(.49)
4.54
9.77
4.29
(.42)
(.71)
(.82)
(.72)
(.80)
(.65)
(2.51)
(3.34)
(2.51)
(.42)
—
(3.22)
(4.16)
(3.23)
(1.22)
(.65)
33.36
37.07
36.69
30.15
27.08
(1.20)
12.36
32.77
15.92
(1.50)
755
820
854
697
761
.35
.35
.35
.35
.35
2.02
2.50
2.02
2.28
2.31
37.07
36.69
30.15
27.08
28.15
.76
.95
.71
.69
.66
(1.24)
3.61
9.08
3.62
(1.06)
(.48)
4.56
9.79
4.31
(.40)
(.72)
(.84)
(.74)
(.82)
(.67)
(2.51)
(3.34)
(2.51)
(.42)
—
(3.23)
(4.18)
(3.25)
(1.24)
(.67)
33.36
37.07
36.69
30.15
27.08
(1.15)
12.41
32.84
15.98
(1.45)
4,875
4,160
3,005
2,995
2,456
.30
.30
.30
.30
.30
2.08
2.45
2.07
2.34
2.37
Net asset
value,
beginning
of period
Net assets,
end of period
(in millions)
Ratio of
expenses to
average
net assets
Ratio of
net income
to average
net assets2
Class R-4:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class R-5E:
Period from 11/20/2015
to 12/31/20154,9
—8
Class R-5:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Class R-6:
Year ended 12/31/2015
Year ended 12/31/2014
Year ended 12/31/2013
Year ended 12/31/2012
Year ended 12/31/2011
Year ended December 31
Portfolio turnover rate for all share classes
2015
2014
2013
2012
2011
30%
29%
24%
21%
28%
1
Based on average shares outstanding.
For the year ended December 31, 2014, this column reflects the impact of a corporate action event that resulted in a one-time increase to net investment income.
If the corporate action event had not occurred, the Class A net investment income per share and ratio of net income to average net assets would have been lower
by $.20 and .52 percentage points, respectively. The impact to the other share classes would have been similar.
3
Total returns exclude any applicable sales charges, including contingent deferred sales charges.
4
Based on operations for the period shown and, accordingly, is not representative of a full year.
5
Class R-2E shares were offered beginning August 29, 2014.
6
All or a significant portion of assets in this class consisted of seed capital invested by CRMC and/or its affiliates. Certain fees (including, where applicable, fees for
distribution services) are not charged or accrued on these seed capital assets. If such fees were paid by the fund on seed capital assets, fund expenses would have
been higher and net income and total return would have been lower.
7
Not annualized.
8
Amount less than $1 million.
9
Class R-5E shares were offered beginning November 20, 2015.
2
See Notes to Financial Statements
The
InvestmentCompany
CompanyofofAmerica
America
The
Investment
29
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of The Investment Company of America:
We have audited the accompanying statement of assets and liabilities of The Investment Company of America (the “Fund”), including the
summary investment portfolio, as of December 31, 2015, and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented.
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included
confirmation of securities owned as of December 31, 2015, by correspondence with the custodian and brokers; where replies were not
received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial
position of The Investment Company of America as of December 31, 2015, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented,
in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Costa Mesa, California
February 8, 2016
30
The
Company
of of
America
TheInvestment
Investment
Company
America
Expense example
As a fund shareholder, you incur two types
of costs: (1) transaction costs, such as initial
sales charges on purchase payments and
contingent deferred sales charges on
redemptions (loads), and (2) ongoing costs,
including management fees, distribution
and service (12b-1) fees, and other
expenses. This example is intended to help
you understand your ongoing costs (in
dollars) of investing in the fund so you can
compare these costs with the ongoing
costs of investing in other mutual funds.
The example is based on an investment of
$1,000 invested at the beginning of the
period and held for the entire six-month
period (July 1, 2015, through
December 31, 2015).
unaudited
Actual expenses:
The first line of each share class in the table on the following page provides information
about actual account values and actual expenses. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first line under the
heading entitled “Expenses paid during period” to estimate the expenses you paid on
your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the following page provides
information about hypothetical account values and hypothetical expenses based on the
actual expense ratio for the share class and an assumed rate of return of 5.00% per year
before expenses, which is not the actual return of the share class. The hypothetical account
values and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the ongoing
costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical
example with the 5.00% hypothetical examples that appear in the shareholder reports of
the other funds.
Notes:
Retirement plan participants may be subject to certain fees charged by the plan sponsor,
and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial
intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on
services offered. You can estimate the impact of these fees by adding the amount of the
fees to the total estimated expenses you paid on your account during the period as
calculated above. In addition, your ending account value would be lower by the amount of
these fees.
Note that the expenses shown in the table on the following page are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as sales charges
(loads). Therefore, the second line of each share class in the table is useful in comparing
ongoing costs only and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your costs would
have been higher.
The
InvestmentCompany
CompanyofofAmerica
America
The
Investment
31
Beginning
account value
7/1/2015
Ending
account value
12/31/2015
Class A - actual return
Class A - assumed 5% return
$1,000.00
1,000.00
$ 977.61
1,022.28
$2.89
2.96
Class B - actual return
Class B - assumed 5% return
1,000.00
1,000.00
973.50
1,018.40
6.72
6.87
1.35
1.35
Class C - actual return
Class C - assumed 5% return
1,000.00
1,000.00
973.51
1,018.20
6.91
7.07
1.39
1.39
Class F-1 - actual return
Class F-1 - assumed 5% return
1,000.00
1,000.00
977.06
1,021.78
3.39
3.47
.68
.68
Class F-2 - actual return
Class F-2 - assumed 5% return
1,000.00
1,000.00
978.45
1,023.14
2.04
2.09
.41
.41
Class 529-A - actual return
Class 529-A - assumed 5% return
1,000.00
1,000.00
976.96
1,021.68
3.49
3.57
.70
.70
Class 529-B - actual return
Class 529-B - assumed 5% return
1,000.00
1,000.00
972.94
1,017.69
7.41
7.58
1.49
1.49
Class 529-C - actual return
Class 529-C - assumed 5% return
1,000.00
1,000.00
973.19
1,017.80
7.31
7.48
1.47
1.47
Class 529-E - actual return
Class 529-E - assumed 5% return
1,000.00
1,000.00
975.71
1,020.52
4.63
4.74
.93
.93
Class 529-F-1 - actual return
Class 529-F-1 - assumed 5% return
1,000.00
1,000.00
978.10
1,022.84
2.34
2.40
.47
.47
Class R-1 - actual return
Class R-1 - assumed 5% return
1,000.00
1,000.00
973.52
1,018.15
6.96
7.12
1.40
1.40
Class R-2 - actual return
Class R-2 - assumed 5% return
1,000.00
1,000.00
973.37
1,018.20
6.91
7.07
1.39
1.39
Class R-2E - actual return
Class R-2E - assumed 5% return
1,000.00
1,000.00
975.30
1,019.66
5.48
5.60
1.10
1.10
Class R-3 - actual return
Class R-3 - assumed 5% return
1,000.00
1,000.00
975.58
1,020.32
4.83
4.94
.97
.97
Class R-4 - actual return
Class R-4 - assumed 5% return
1,000.00
1,000.00
976.93
1,021.93
3.24
3.31
.65
.65
Class R-5E - actual return†
Class R-5E - assumed 5% return†
1,000.00
1,000.00
973.62
1,022.89
.51
2.35
.46
.46
Class R-5 - actual return
Class R-5 - assumed 5% return
1,000.00
1,000.00
978.78
1,023.44
1.75
1.79
.35
.35
Class R-6 - actual return
Class R-6 - assumed 5% return
1,000.00
1,000.00
978.78
1,023.69
1.50
1.53
.30
.30
Expenses paid
during period*
Annualized
expense ratio
.58%
.58
*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the
number of days in the period, and divided by 365 (to reflect the one-half year period).
†
The period for the ”annualized expense ratio” and ”actual return” line is based on the number of days since the initial sale of the share class on November 20,
2015. The ”assumed 5% return” line is based on 184 days.
32
The
Company
of of
America
TheInvestment
Investment
Company
America
Tax information
unaudited
We are required to advise you of the federal tax status of certain distributions received by shareholders during the fiscal year. The fund
hereby designates the following amounts for the fund’s fiscal year ended December 31, 2015:
Long-term capital gains
Qualified dividend income
Corporate dividends received deduction
U.S. government income that may be exempt from state taxation
$5,212,499,000
100%
$1,054,472,000
$1,781,000
Individual shareholders should refer to their Form 1099 or other tax information, which was mailed in January 2016, to determine the
calendar year amounts to be included on their 2015 tax returns. Shareholders should consult their tax advisors.
The
InvestmentCompany
CompanyofofAmerica
America
The
Investment
33
Board of trustees and other officers
Independent trustees
1
Name and year of birth
Yearfirst
elected
a trustee
of the fund2
Louise H. Bryson, 1944
1999
Chair Emerita of the Board of Trustees, J. Paul Getty Trust;
former President, Distribution, Lifetime Entertainment Network
(retired 2008); former Executive Vice President and General
Manager, Lifetime Movie Network (retired 2008)
7
None
Mary Anne Dolan, 1947
2000
Founder and President, MAD Ink (communications company)
10
None
James G. Ellis, 1947
2008
Dean and Professor of Marketing, Marshall School of Business,
University of Southern California
81
Mercury General
Corporation
Leonard R. Fuller, 1946
2002
Private investor; former President and CEO, Fuller Consulting
(financial management consulting firm)
81
None
Pablo R. González Guajardo,
2015
CEO, Kimberly-Clark de México, S.A.B. de C.V.
7
Kimberly-Clark de México,
S.A.B. de C.V.;
América Móvil, S.A.B. de C.V.;
Grupo Sanborns, S.A.B. de C.V.;
Grupo Lala, S.A.B. de C.V.
William D. Jones, 1955
Chairman of the Board
(Independent and Non-Executive)
2010
Real estate developer/owner, President and CEO, CityLink
Investment Corporation (acquires, develops and manages
real estate ventures in urban communities) and City Scene
Management Company (provides commercial asset and
property management services)
8
Sempra Energy
William H. Kling, 1942
2010
President Emeritus and former CEO, American Public Media
10
None
John C. Mazziotta, MD, PhD,
2011
Physician; Professor of Neurology, University of California,
Los Angeles; Vice Chancellor, UCLA Health Sciences; CEO,
UCLA Health System; former Dean, David Geffen School of
Medicine at UCLA; former Chair, Department of Neurology,
UCLA; former Associate Director, Semel Institute, UCLA;
former Director, Brain Mapping Center, UCLA
4
None
William R. McLaughlin, 1956
2015
President, The Orvis Company; former President and CEO,
Select Comfort
4
None
Bailey Morris-Eck, 1944
1993
Director and Programming Chair, WYPR Baltimore/Washington
(public radio station); Senior Adviser, Financial News (London)
4
None
Principaloccupation(s)duringpastfiveyears
Numberof
portfolios in fund
complex overseen
bytrustee
1967
1949
Other directorships3
heldbytrustee
L. Daniel Jorndt, a trustee of the fund since 2006, retired on December 31, 2015. The trustees thank Mr. Jorndt for his dedication and service to the fund.
Interested trustees
Name,yearofbirthand
position with fund
4,5
Yearfirst
elected
atrustee
orofficer
of the fund2
Principaloccupation(s)duringpastfiveyears
andpositionsheldwithaffiliatedentitiesor
the principal underwriter of the fund
Number of
portfoliosinfund
complexoverseen
by trustee
Otherdirectorships3
held by trustee
James B. Lovelace, 1956
Vice Chairman of the Board
1994
Partner — Capital Research Global Investors,
Capital Research and Management Company;
Director, Capital Research and Management Company
2
None
Donald D. O’Neal, 1960
1994
Partner — Capital Research Global Investors,
Capital Research and Management Company;
Director, Capital Research and Management Company
31
None
President
The fund’s statement of additional information includes further details about fund trustees and is available without charge upon request by calling
American Funds Service Company at (800) 421-4225 or by visiting the American Funds website at americanfunds.com. The address for all trustees
and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Secretary.
34
The Investment Company of America
Other officers
5
Yearfirst
elected
anofficer
of the fund2
Principaloccupation(s)duringpastfiveyearsandpositionsheldwithaffiliatedentities
or the principal underwriter of the fund
Christopher D. Buchbinder, 1971
2010
Partner — Capital Research Global Investors, Capital Research and Management Company
Joyce E. Gordon, 1956
Senior Vice President
1998
Partner — Capital Research Global Investors, Capital Research and Management Company;
Director, Capital Research and Management Company
Paul F. Roye, 1953
2008
Director, Capital Research and Management Company;
Senior Vice President — Fund Business Management Group, Capital Research and Management Company
Herbert Y. Poon, 1973
2012
Vice President and Senior Counsel — Fund Business Management Group,
Capital Research and Management Company
Jessica Chase Spaly, 1977
2010
Partner — Capital Research Global Investors, Capital Research and Management Company;
Director, The Capital Group Companies, Inc.6
Michael W. Stockton, 1967
2013
Vice President — Fund Business Management Group, Capital Research and Management Company
Brian D. Bullard, 1969
2008
Senior Vice President — Investment Operations, Capital Research and Management Company
Raymond F. Sullivan, Jr., 1957
2008
Vice President — Fund Business Management Group, Capital Research and Management Company
Dori Laskin, 1951
2011
Vice President — Investment Operations, Capital Research and Management Company
Name,yearofbirthand
position with fund
Senior Vice President
Senior Vice President
Vice President
Vice President
Secretary
Treasurer
Assistant Secretary
Assistant Treasurer
1
The term independent trustee refers to a trustee who is not an “interested person” of the fund within the meaning of the Investment Company Act of 1940.
Trustees and officers of the fund serve until their resignation, removal or retirement.
3
This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research and Management Company
or its affiliates) that are held by each trustee as a trustee or director of a public company or a registered investment company.
4
The term interested trustee refers to a trustee who is an “interested person” within the meaning of the Investment Company Act of 1940, 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).
5
All of the directors/trustees and/or officers listed 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.
6
Company affiliated with Capital Research and Management Company.
2
The Investment Company of America
35
Offices of the fund and of the investment adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
6455 Irvine Center Drive
Irvine, CA 92618-4518
Transfer agent for shareholder accounts
American Funds Service Company
(Write to the address near you.)
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Counsel
O’Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071-2899
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
36
The Investment Company of America
Investors should carefully consider investment objectives, risks, charges and
expenses. This and other important information is contained in the fund prospectus
and summary prospectus, which can be obtained from your financial professional
and should be read carefully before investing. You may also call American Funds
Service Company (AFS) at (800) 421-4225 or visit the American Funds website at
americanfunds.com.
“American Funds Proxy Voting Procedures and Principles” — which describes how
we vote proxies relating to portfolio securities — is available on the American Funds
website or upon request by calling AFS. The fund files its proxy voting record with the
U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by
August 31. The proxy voting record is available free of charge on the SEC website at
sec.gov and on the American Funds website.
A complete December 31, 2015, portfolio of The Investment Company of America’s
investments is available free of charge by calling AFS or visiting the SEC website
(where it is part of Form N-CSR).
The Investment Company of America files a complete list of its portfolio holdings with
the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is
available free of charge on the SEC website. You may also review or, for a fee, copy this
filing at the SEC’s Public Reference Room in Washington, D.C. Additional information
regarding the operation of the Public Reference Room may be obtained by calling the
SEC’s Office of Investor Education and Advocacy at (800) SEC-0330. Additionally, the
list of portfolio holdings is available by calling AFS.
This report is for the information of shareholders of The Investment Company of
America, but it also may be used as sales literature when preceded or accompanied
by the current prospectus or summary prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as sales
material after March 31, 2016, this report must be accompanied by an American Funds
statistical update for the most recently completed calendar quarter.
The American Funds Advantage
Since 1931, American Funds, part of Capital Group, has helped
investors pursue long-term investment success. Our consistent
approach — in combination with The Capital SystemSM — has
resulted in a superior long-term track record.
Aligned with
investor success
The Capital
SystemSM
Superior long-term
track record
We base our decisions on
a long-term perspective,
which we believe aligns
our goals with the
interests of our clients.
Our portfolio managers
average 27 years of
investment experience,
including 22 years at our
company, reflecting a
career commitment to our
long-term approach.1
Our investment process,
The Capital System,
combines individual
accountability with
teamwork. Each fund is
divided into portions that
are managed independently by investment
professionals with diverse
backgrounds, ages and
investment approaches.
An extensive global
research effort is the
backbone of our system.
Our equity funds have
beaten their Lipper peer
indexes in 91% of 10-year
periods and 95% of
20-year periods. Our
fixed-income funds have
beaten their Lipper
indexes in 58% of 10-year
periods and 58% of
20-year periods.2 Our
fund management fees
have been among the
lowest in the industry.3
1
Portfolio manager experience as of December 31, 2015.
2
Based on Class A share results for rolling periods through December 31, 2015. Periods covered
are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except
Capital Income Builder and SMALLCAP World Fund, for which the Lipper average was used).
3
On average, our management fees were in the lowest quintile 68% of the time, based on the
20-year period ended December 31, 2015, versus comparable Lipper categories, excluding
funds of funds.
Printed on paper containing 10% post-consumer waste Printed with inks containing soy and/or vegetable oil
Lit. No. MFGEARX-004-0216P Litho in USA BBC/Q/8060-S48518
Quarterly Statistical Update
June 30, 2016
This update must be used (until superseded)
with any American Funds and CollegeAmerica®
sales materials that include investment results
for periods ended before the date shown. As a
practical matter, financial advisors should
consider including this update with all
American Funds and CollegeAmerica sales
literature. This material may be photocopied.
Investment results updated monthly, and daily
share price information, are available at
americanfunds.com.
Exchange privileges generally allow
shareholders to transfer some or all of their
holdings among American Funds in the same
share class without a sales charge.
CollegeAmerica allows exchanges twice per
calendar year and when the beneficiary is
changed. Class A, C and F-1 shares generally
may be exchanged into the corresponding 529
share class without a sales charge, but such
exchanges from UGMA or UTMA custodial
accounts may create significant legal and tax
consequences. Exchange privileges are
subject to change or termination.
American Funds
American Funds Class A shares are subject to a
5.75% maximum up-front sales charge for
equity funds, Retirement Income Portfolio
Series funds and most Portfolio Series funds,
3.75% for most bond and tax-exempt bond
funds and American Funds Tax-Advantaged
Income Portfolio, and 2.50% for shorter term
bond funds, American Funds Preservation
Portfolio and American Funds Tax-Exempt
Preservation Portfolio. There is no sales charge
for the Class A money market fund. Share
classes without an up-front sales charge are
also available. Class C shares have a 1%
contingent deferred sales charge on shares
sold within the first year of purchase and
convert to Class F-1 shares after 10 years. Class
F-1 and F-2 shares have an annual asset-based
fee charged by the sponsoring firm. New
investments in Class B shares are no longer
allowed. For more information and investment
results, please see americanfunds.com.
Class C shares are limited to a maximum
purchase of $500,000, and are not available to
certain employer-sponsored retirement plans.
Class F-1 and F-2 shares are available only
through certain fee-based programs offered
by registered investment advisors. Your
financial advisor can help you decide which
share class is best for you.
Class F-2 shares were introduced on August 1,
2008. Fund results prior to the date of first sale
are hypothetical, based on Class A share
returns without a sales charge and adjusted for
typical additional expenses as described on
page 18. Individual fund expenses are shown
on pages 8 and 9.
American Funds in CollegeAmerica
CollegeAmerica, a 529 college savings plan
sponsored by Virginia529SM, is available
nationwide and allows federal-tax-free
earnings and withdrawals for a beneficiary’s
qualified higher education expenses.
(Qualified withdrawals from 529 plans are
exempt from federal income tax. Qualified
withdrawals may also be exempt from state
income tax. Check with a tax advisor. If
withdrawals are used for purposes other than
higher education, the earnings will be subject
to a 10% federal tax penalty in addition to
federal and, if applicable, state income tax.)
Interests in CollegeAmerica are sold through
unaffiliated intermediaries. Depending on your
state of residence, there may be an in-state
plan that provides tax and other benefits not
available through CollegeAmerica. Before
investing in any state’s 529 plan, you should
consult your tax advisor.
CollegeAmerica features four share classes.
Class 529-A, 529-C and 529-F-1 shares are
structured similarly to American Funds Class A,
C and F-1 shares, respectively. Unless
otherwise indicated, 529 share class details
(including sales charges and share conversion)
are generally the same as the corresponding
American Funds share class. Class 529-E
shares are structured similarly to Class 529-F-1
shares but are available only through eligible
employer-sponsored plans. Unless otherwise
indicated, Class 529-E share details are
generally the same as Class 529-F-1 shares.
New investments in Class 529-B shares are no
longer allowed. More information and
investment results for Class 529-B and 529-E
shares can be found on americanfunds.com.
Class 529-C shares do not convert to Class 529F-1 shares after 10 years. Class 529-F-1 shares
are available only through certain fee-based
programs offered by broker-dealer firms and
registered investment advisors.
CollegeAmerica investors can contribute up to
$14,000 a year per beneficiary ($28,000 for
married couples) without gift-tax
consequences. With a special gift-tax election,
five years’ worth of investments can be
accelerated, so investors can contribute up to
$70,000 at one time ($140,000 for married
couples). Each beneficiary is limited to
$350,000 in combined account values
(including investments and earnings) of all 529
plans administered by Virginia529.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the
fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and
should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors, Inc. and sold through unaffiliated
intermediaries.
The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the
same interest rate, inflation and credit risks associated with the underlying bond holdings. The value of fixed-income securities may be affected by
changing interest rates and changes in credit ratings of the securities. Lower rated bonds are subject to greater fluctuations in value and risk of loss
of income and principal than higher rated bonds. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as
more fully described in the prospectus. While not directly correlated to changes in interest rates, the values of inflation linked bonds generally
fluctuate in response to changes in real interest rates and may experience greater losses than other debt securities with similar durations.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those
shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
Returns shown at net asset value (NAV) have all distributions reinvested. If a sales charge had been deducted, the results would have been lower.
Returns shown at maximum offering price (MOP) for Class A shares reflect deduction of the maximum sales charge of 5.75% for equity funds,
Target Date funds, Retirement Income funds and most Portfolio Series funds, 3.75% for most fixed income funds and American Funds TaxAdvantaged Income Portfolio and 2.50% for American Funds Inflation Linked Bond Fund, Intermediate Bond Fund of America, Limited Term TaxExempt Bond Fund of America, Short-Term Bond Fund of America, American Funds Short-Term Tax-Exempt Bond Fund, American Funds
Preservation Portfolio and American Funds Tax-Exempt Preservation Portfolio.
For money market funds, the annualized 7-day SEC yield more accurately reflects the fund's current earnings than does the fund's return.
For current expense ratios and month-end results, visit americanfunds.com.
You could lose money by investing in the American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and
you should not expect that the sponsor will provide financial support to the fund at any time.
Class A Shares1,2,4
Average Annual Total Returns (%)
Without Sales Charge (NAV)
Returns as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Tax-Exempt Bond
American Funds Short-Term Tax-Exempt Bond Fund®
American Funds Tax-Exempt Fund of New York®
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of America®
The Tax-Exempt Bond Fund of America®
The Tax-Exempt Fund of California®
Money Market
American Funds U.S. Government Money
Market FundSM
With Maximum Sales Charge (MOP)
Annualized
30-day SEC
Yield at
MOP (%)*
Expense
Ratio (%)
(Net/Gross)
10 Year
Fund
Lifetime
1 Year
5 Year
10 Year
11.54
2.14
11.12
10.25
7.70
0.54
6.53
7.72
3.62
6.92
7.74
6.68
5.08
6.18
11.35
10.51
13.36
10.79
12.04
7.26
9.24
-7.01
-15.07
-5.00
-14.16
-7.54
-11.80
-13.83
10.22
0.94
9.81
8.95
6.43
-0.64
5.27
7.09
3.01
6.29
7.10
6.05
4.46
5.55
11.22
10.31
13.20
10.59
11.89
6.88
9.00
5.75
5.75
5.75
5.75
5.75
5.75
5.75
0.43
1.03
0.53
0.33
0.88
0.75
0.00
0.67
0.83
0.65
0.78
0.75
1.04
1.07
-8.39
—
—
-2.29
-13.67
—
—
-4.66
5.75
1.92
1.32
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
6.57
-3.39
4.35
-10.62
4.73
6.22
10.91
6.19
10.76
1.56
11.37
11.44
7.33
5.35
7.28
—
6.64
6.94
11.60
10.28
12.29
5.79
12.09
11.78
0.45
-8.95
-1.64
-15.76
-1.30
0.12
9.61
4.93
9.45
0.37
10.06
10.13
6.70
4.73
6.64
—
6.02
6.31
11.50
10.00
12.12
4.98
12.01
11.68
5.75
5.75
5.75
5.75
5.75
5.75
2.00
2.10
1.45
2.36
1.75
1.82
0.58
0.77
0.60
0.91
0.58
0.58
7/30/87
12/1/73
3.89
5.42
6.77
8.44
5.45
6.31
9.35
11.07
-2.09
-0.63
5.52
7.16
4.82
5.69
9.13
10.91
5.75
5.75
3.06
2.90
0.59
0.55
7/26/75
2/1/11
6.29
2.46
9.77
5.86
7.10
—
10.69
6.12
0.17
-3.42
8.47
4.61
6.47
—
10.53
4.96
5.75
5.75
1.55
1.88
0.58
0.85
12/14/12
11/1/10
3/18/16
2/19/88
5/28/74
8/4/87
2/19/88
10/2/06
10/17/85
3.49
4.12
—
-1.31
5.41
6.28
2.79
1.10
4.67
—
2.88
—
3.72
3.63
1.68
1.75
0.62
2.88
—
—
—
5.50
3.77
4.33
2.88
—
4.29
0.12
2.65
3.25
7.81
7.81
6.38
4.87
1.69
5.87
0.85
0.18
—
-4.97
1.49
2.29
0.19
-1.46
0.72
—
2.09
—
2.94
2.84
0.91
1.23
0.11
2.09
—
—
—
5.10
3.37
3.93
2.62
—
3.89
-0.61
1.96
-0.63
7.67
7.71
6.24
4.78
1.42
5.74
2.50
3.75
3.75
3.75
3.75
3.75
2.50
2.50
3.75
4.64
0.80
1.90
0.70
4.04 1.08/1.16
6.36
0.67
1.78
0.60
1.61
0.93
1.28
0.61
1.10
0.60
1.43
0.65
8/7/09
11/1/10
9/26/94
10/6/93
10/3/79
10/28/86
1.51
7.76
9.97
3.33
7.36
7.52
1.15
5.37
8.03
2.89
5.75
6.47
—
—
5.16
3.58
4.79
5.06
1.44
4.90
5.83
4.13
6.69
5.78
-1.02
3.75
5.84
0.73
3.36
3.51
0.64
4.56
7.21
2.37
4.94
5.66
—
—
4.76
3.31
4.38
4.66
1.06
4.20
5.64
4.01
6.58
5.65
2.50
3.75
3.75
2.50
3.75
3.75
0.67
0.58
1.41 0.67/0.72
2.33
0.68
0.66
0.57
1.40
0.54
1.28
0.62
5/1/09
0.00
0.00
—
0.00
0.00
0.00
—
0.00
Inception
Date
1 Year
5 Year
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
-1.35
-9.89
0.80
-8.93
-1.88
-6.42
-8.57
2/3/14
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
2
Max Sales
Fund
Charge
Lifetime
(%)
— 0.00/-0.16 0.08/0.38
Class A Shares1,2,4
Average Annual Total Returns (%)
Without Sales Charge (NAV)
Returns as of 6/30/16
Portfolio Series
American Funds Balanced PortfolioSM
American Funds Global Growth PortfolioSM
American Funds Growth and Income PortfolioSM
American Funds Growth PortfolioSM
American Funds Income PortfolioSM
American Funds Preservation PortfolioSM
American Funds Tax-Advantaged Income PortfolioSM
American Funds Tax-Exempt Preservation PortfolioSM
Retirement Income Portfolio Series
American Funds Retirement Income Portfolio
- ConservativeSM
American Funds Retirement Income Portfolio
- EnhancedSM
American Funds Retirement Income Portfolio
- ModerateSM
Retirement Target Date
American Funds 2010 Target Date Retirement Fund®
American Funds 2015 Target Date Retirement Fund®
American Funds 2020 Target Date Retirement Fund®
American Funds 2025 Target Date Retirement Fund®
American Funds 2030 Target Date Retirement Fund®
American Funds 2035 Target Date Retirement Fund®
American Funds 2040 Target Date Retirement Fund®
American Funds 2045 Target Date Retirement Fund®
American Funds 2050 Target Date Retirement Fund®
American Funds 2055 Target Date Retirement Fund®
American Funds 2060 Target Date
Retirement FundSM
Inception
Date
1 Year
5 Year
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
2.75
-4.62
2.42
-2.98
4.26
2.48
4.99
4.37
8/28/15
With Maximum Sales Charge (MOP)
Max Sales
Charge
Fund
(%)
Lifetime
Annualized
30-day SEC
Yield at
MOP (%)*
Expense
Ratio (%)
(Net/Gross)
0.70
0.84
0.69
0.75
0.64
0.71
0.79
0.76
10 Year
Fund
Lifetime
1 Year
5 Year
10 Year
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9.56
10.32
10.43
12.29
7.63
1.24
8.84
2.56
-3.19
-10.09
-3.45
-8.59
-1.71
-0.03
1.06
1.78
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7.99
8.74
8.86
10.68
6.09
0.61
7.84
1.92
5.75
5.75
5.75
5.75
5.75
2.50
3.75
2.50
1.37
1.03
1.75
0.62
2.98
1.08
2.67
2.33
—
—
—
6.54
—
—
—
0.42
5.75
2.25 0.72/0.80
8/28/15
—
—
—
7.98
—
—
—
1.77
5.75
2.66 0.75/0.83
8/28/15
—
—
—
7.25
—
—
—
1.08
5.75
2.50 0.73/0.81
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/10
3/27/15
3.98
3.83
3.12
2.39
0.95
0.29
0.17
0.01
0.00
0.02
0.06
6.29
6.76
7.29
8.07
8.38
8.32
8.40
8.41
8.40
8.39
—
—
—
—
—
—
—
—
—
—
—
—
4.29
4.52
4.65
5.09
5.37
5.34
5.38
5.38
5.38
9.78
0.68
-1.99
-2.10
-2.80
-3.52
-4.83
-5.48
-5.59
-5.71
-5.77
-5.74
-5.65
5.04
5.50
6.03
6.79
7.10
7.04
7.12
7.13
7.12
7.11
—
—
—
—
—
—
—
—
—
—
—
—
3.64
3.87
3.99
4.44
4.71
4.68
4.72
4.72
4.72
8.77
-3.94
5.75
5.75
5.75
5.75
5.75
5.75
5.75
5.75
5.75
5.75
5.75
1.93
0.69
1.84
0.71
1.55
0.71
1.35
0.73
1.28
0.73
1.24
0.74
1.19
0.74
1.16
0.75
1.15
0.76
0.78
1.18
1.03 0.88/1.12
* Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
3
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those
shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
Returns shown at net asset value (NAV) have all distributions reinvested. If a sales charge had been deducted, the results would have been lower.
Class C shares reflect the deduction of a contingent deferred sales charge (1%) on shares sold within the first year of purchase.
For money market funds, the annualized 7-day SEC yield more accurately reflects the fund's current earnings than does the fund's return.
For current expense ratios and month-end results, visit americanfunds.com.
You could lose money by investing in the American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and
you should not expect that the sponsor will provide financial support to the fund at any time.
Class C Shares1,3,4
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
1 Year
Annualized
30-day
SEC Yield
at NAV (%)*
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
-2.13
-10.59
0.00
-9.64
-2.68
-7.16
-9.31
10.65
1.35
10.24
9.37
6.85
-0.26
5.68
6.87
2.81
6.08
6.89
5.82
4.25
5.35
11.12
10.20
13.11
10.48
11.79
6.74
8.90
-3.04
-11.47
-0.92
-10.50
-3.61
-8.09
-10.15
-0.34
0.32
-0.20
-0.46
0.16
0.04
-0.78
1.48
1.62
1.45
1.59
1.55
1.84
1.87
2/3/14
-9.12
—
—
-2.99
-10.01
1.28
2.07
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
5.71
-4.18
3.54
-11.35
3.88
5.33
10.02
5.34
9.87
0.75
10.47
10.55
6.46
4.51
6.42
—
5.78
6.09
11.40
9.87
12.02
4.95
11.91
11.59
4.71
-5.11
2.55
-12.22
2.92
4.34
1.34
1.46
0.75
1.68
1.09
1.17
1.38
1.57
1.40
1.69
1.39
1.38
7/30/87
12/1/73
3.06
4.64
5.93
7.58
4.60
5.46
8.99
10.80
2.06
3.64
2.47
2.29
1.38
1.35
7/26/75
2/1/11
5.46
1.65
8.90
5.01
6.26
—
10.44
5.28
4.46
0.66
0.85
1.19
1.38
1.65
12/14/12
11/1/10
3/18/16
2/19/88
5/28/74
8/4/87
2/19/88
10/2/06
10/17/85
2.80
3.31
—
-2.09
4.58
5.41
1.99
0.25
3.90
—
2.04
—
2.90
2.82
0.88
0.96
-0.22
2.07
—
—
—
4.66
2.95
3.50
2.08
—
3.48
-0.85
1.84
3.00
7.45
7.56
6.06
4.54
0.86
5.58
1.80
2.31
—
-3.01
3.58
4.41
0.99
-0.75
2.90
3.70
1.16
2.73
5.81
1.07
0.90
0.53
0.28
0.72
1.55
1.50
1.86/1.94
1.47
1.40
1.73
1.39
1.44
1.42
11/1/10
9/26/94
10/6/93
10/3/79
10/28/86
6.92
9.14
2.55
6.52
6.68
4.47
7.20
2.12
4.92
5.64
—
4.35
2.81
3.96
4.23
4.02
5.39
3.72
6.38
5.41
5.92
8.14
1.55
5.52
5.68
0.55
1.56
-0.11
0.75
0.48
1.50/1.56
1.44
1.33
1.33
1.40
5/1/09
0.00
0.00
—
0.00
-1.00
0.00/-0.16
0.08/0.42
Average Annual Total Returns (%)
Returns as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Tax-Exempt Bond
American Funds Tax-Exempt Fund of New York®
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of America®
The Tax-Exempt Bond Fund of America®
The Tax-Exempt Fund of California®
Money Market
American Funds U.S. Government Money
Market FundSM
Without CDSC
With CDSC
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
4
Expense
Ratio (%)
(Net/Gross)
Class C Shares1,3,4
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
1 Year
Annualized
30-day
SEC Yield
at NAV (%)*
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
2.04
-5.45
1.53
-3.69
3.51
1.85
4.33
3.55
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8.73
9.45
9.57
11.41
6.82
0.52
8.08
1.83
1.04
-6.36
0.55
-4.62
2.51
0.85
3.33
2.55
0.69
0.28
1.06
-0.15
2.36
0.35
1.90
1.62
1.49
1.61
1.48
1.54
1.41
1.43
1.49
1.46
8/28/15
—
—
—
5.91
—
1.44
1.42/1.50
8/28/15
—
—
—
7.39
—
1.83
1.45/1.53
8/28/15
—
—
—
6.61
—
1.67
1.43/1.51
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/10
3/27/15
3.15
3.02
2.28
1.60
0.24
-0.44
-0.68
-0.77
-0.77
-0.76
-0.74
5.46
5.92
6.44
7.21
7.53
7.48
7.53
7.52
7.53
7.55
—
—
—
—
—
—
—
—
—
—
—
—
3.47
3.69
3.81
4.25
4.53
4.50
4.53
4.52
4.53
8.92
-0.04
2.16
2.04
1.29
0.63
-0.71
-1.39
-1.63
-1.72
-1.72
-1.72
-1.73
1.26
1.17
0.81
0.64
0.56
0.51
0.47
0.41
0.40
0.39
0.34
1.45
1.45
1.46
1.48
1.49
1.51
1.51
1.52
1.53
1.56
1.57/1.81
Average Annual Total Returns (%)
Returns as of 6/30/16
Portfolio Series
American Funds Balanced PortfolioSM
American Funds Global Growth PortfolioSM
American Funds Growth and Income PortfolioSM
American Funds Growth PortfolioSM
American Funds Income PortfolioSM
American Funds Preservation PortfolioSM
American Funds Tax-Advantaged Income PortfolioSM
American Funds Tax-Exempt Preservation PortfolioSM
Retirement Income Portfolio Series
American Funds Retirement Income Portfolio
- ConservativeSM
American Funds Retirement Income Portfolio
- EnhancedSM
American Funds Retirement Income Portfolio
- ModerateSM
Retirement Target Date
American Funds 2010 Target Date Retirement Fund®
American Funds 2015 Target Date Retirement Fund®
American Funds 2020 Target Date Retirement Fund®
American Funds 2025 Target Date Retirement Fund®
American Funds 2030 Target Date Retirement Fund®
American Funds 2035 Target Date Retirement Fund®
American Funds 2040 Target Date Retirement Fund®
American Funds 2045 Target Date Retirement Fund®
American Funds 2050 Target Date Retirement Fund®
American Funds 2055 Target Date Retirement Fund®
American Funds 2060 Target Date
Retirement FundSM
Without CDSC
With CDSC
Expense
Ratio (%)
(Net/Gross)
* Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
5
Figures shown are past results at net asset value and are not predictive of results in future periods. Current and future results may be lower or
higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
For money market funds, the annualized 7-day SEC yield more accurately reflects the fund's current earnings than does the fund's return.
For current expense ratios and month-end results, visit americanfunds.com.
You could lose money by investing in the American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and
you should not expect that the sponsor will provide financial support to the fund at any time.
Class F-1 Shares1,3,4
Returns as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Tax-Exempt Bond
American Funds Short-Term Tax-Exempt Bond Fund®
American Funds Tax-Exempt Fund of New York®
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of America®
The Tax-Exempt Bond Fund of America®
The Tax-Exempt Fund of California®
Money Market
American Funds U.S. Government Money
Market FundSM
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
Annualized
30-day
SEC Yield
at NAV (%)*
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
-1.43
-9.90
0.75
-8.96
-1.98
-6.37
-8.58
11.50
2.12
11.09
10.22
7.66
0.57
6.54
7.71
3.60
6.92
7.73
6.64
5.10
6.20
11.30
10.46
13.32
10.74
11.98
7.23
9.21
0.40
1.10
0.54
0.29
0.85
0.90
-0.01
0.73
0.86
0.70
0.83
0.81
1.02
1.07
2/3/14
-8.33
—
—
-2.23
2.16
1.26
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
6.46
-3.45
4.29
-10.68
4.60
6.10
10.84
6.15
10.70
1.52
11.28
11.38
7.28
5.33
7.24
—
6.59
6.90
11.53
10.23
12.24
5.75
12.02
11.71
2.01
2.20
1.54
2.50
1.77
1.84
0.66
0.81
0.67
0.95
0.67
0.66
7/30/87
12/1/73
3.80
5.33
6.72
8.34
5.40
6.25
9.28
11.00
3.16
2.95
0.65
0.64
7/26/75
2/1/11
6.22
2.40
9.73
5.82
7.09
—
10.64
6.09
1.54
1.90
0.65
0.91
12/14/12
11/1/10
3/18/16
2/19/88
5/28/74
8/4/87
2/19/88
10/2/06
10/17/85
3.47
4.12
—
-1.34
5.38
6.20
2.74
0.99
4.67
—
2.85
—
3.68
3.61
1.68
1.70
0.50
2.88
—
—
—
5.46
3.75
4.33
2.85
—
4.30
-0.14
2.62
3.15
7.74
7.76
6.34
4.83
1.60
5.84
4.55
1.98
3.38
6.60
1.86
1.85
1.26
0.95
1.44
0.82
0.71
1.09/1.17
0.70
0.63
0.91
0.66
0.73
0.62
8/7/09
11/1/10
9/26/94
10/6/93
10/3/79
10/28/86
1.29
7.83
9.89
3.24
7.19
7.39
0.92
5.29
7.93
2.81
5.61
6.34
—
—
5.07
3.53
4.67
4.96
1.23
4.82
5.74
4.05
6.60
5.69
0.39
1.71
2.20
0.51
1.80
1.10
0.80
0.74/0.80
0.75
0.67
0.67
0.74
5/1/09
0.00
0.00
—
0.00
0.00/-0.68
0.08/0.70
Average Annual Total Returns (%)
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
6
Expense
Ratio (%)
(Net/Gross)
Class F-1 Shares1,3,4
Returns as of 6/30/16
Portfolio Series
American Funds Balanced PortfolioSM
American Funds Global Growth PortfolioSM
American Funds Growth and Income PortfolioSM
American Funds Growth PortfolioSM
American Funds Income PortfolioSM
American Funds Preservation PortfolioSM
American Funds Tax-Advantaged Income PortfolioSM
American Funds Tax-Exempt Preservation PortfolioSM
Retirement Income Portfolio Series
American Funds Retirement Income Portfolio
- ConservativeSM
American Funds Retirement Income Portfolio
- EnhancedSM
American Funds Retirement Income Portfolio
- ModerateSM
Retirement Target Date
American Funds 2010 Target Date Retirement Fund®
American Funds 2015 Target Date Retirement Fund®
American Funds 2020 Target Date Retirement Fund®
American Funds 2025 Target Date Retirement Fund®
American Funds 2030 Target Date Retirement Fund®
American Funds 2035 Target Date Retirement Fund®
American Funds 2040 Target Date Retirement Fund®
American Funds 2045 Target Date Retirement Fund®
American Funds 2050 Target Date Retirement Fund®
American Funds 2055 Target Date Retirement Fund®
American Funds 2060 Target Date
Retirement FundSM
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
Annualized
30-day
SEC Yield
at NAV (%)*
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
2.73
-4.70
2.38
-3.07
4.31
2.48
5.02
4.30
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9.53
10.28
10.39
12.23
7.62
1.26
8.88
2.59
1.40
1.00
1.77
0.55
3.07
1.08
2.61
2.37
0.76
0.89
0.75
0.82
0.68
0.70
0.76
0.73
8/28/15
—
—
—
6.55
2.10
0.73/0.81
8/28/15
—
—
—
7.99
2.44
0.76/0.84
8/28/15
—
—
—
7.26
2.30
0.74/0.82
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/10
3/27/15
3.99
3.81
3.13
2.30
0.99
0.32
0.07
-0.07
-0.06
-0.04
0.14
6.27
6.70
7.26
8.02
8.35
8.29
8.35
8.34
8.35
8.37
—
—
—
—
—
—
—
—
—
—
—
—
4.26
4.46
4.60
5.04
5.32
5.29
5.33
5.32
5.33
9.75
0.83
1.97
1.89
1.52
1.35
1.34
1.22
1.26
1.13
1.13
1.10
1.76
0.71
0.72
0.73
0.76
0.77
0.77
0.78
0.80
0.79
0.82
0.85/1.09
Average Annual Total Returns (%)
Expense
Ratio (%)
(Net/Gross)
* Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
7
Figures shown are past results at net asset value and are not predictive of results in future periods. Current and future results may be lower or
higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
For money market funds, the annualized 7-day SEC yield more accurately reflects the fund's current earnings than does the fund's return.
For current expense ratios and month-end results, visit americanfunds.com.
You could lose money by investing in the American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and
you should not expect that the sponsor will provide financial support to the fund at any time.
Class F-2 Shares1,3,4
Returns as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Tax-Exempt Bond
American Funds Short-Term Tax-Exempt Bond Fund®
American Funds Tax-Exempt Fund of New York®
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of America®
The Tax-Exempt Bond Fund of America®
The Tax-Exempt Fund of California®
Money Market
American Funds U.S. Government Money
Market FundSM
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
Annualized
30-day
SEC Yield
at NAV (%)*
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
-1.16
-9.67
1.03
-8.72
-1.68
-6.12
-8.32
11.78
2.40
11.39
10.53
7.96
0.84
6.83
7.97
3.87
7.18
8.01
6.92
5.37
6.48
11.58
10.74
13.61
11.04
12.26
7.53
9.51
0.65
1.29
0.79
0.58
1.13
1.13
0.28
0.47
0.60
0.43
0.57
0.55
0.76
0.82
2/3/14
-8.17
—
—
-1.99
2.35
1.00
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
6.77
-3.19
4.56
-10.43
4.92
6.39
11.11
6.45
10.99
1.78
11.60
11.66
7.53
5.60
7.51
—
6.86
7.16
11.77
10.51
12.51
6.02
12.27
11.98
2.26
2.42
1.70
2.71
1.99
2.09
0.41
0.54
0.41
0.69
0.41
0.41
7/30/87
12/1/73
4.10
5.65
6.99
8.62
5.65
6.50
9.54
11.25
3.44
3.22
0.40
0.38
7/26/75
2/1/11
6.51
2.66
10.00
6.08
7.33
—
10.92
6.35
1.82
2.18
0.39
0.65
12/14/12
11/1/10
3/18/16
2/19/88
5/28/74
8/4/87
2/19/88
10/2/06
10/17/85
3.81
4.50
—
-1.07
5.67
6.62
3.03
1.25
4.94
—
3.13
—
3.95
3.89
1.97
1.99
0.78
3.13
—
—
—
5.72
4.01
4.61
3.14
—
4.55
0.13
2.90
3.27
8.04
8.05
6.67
5.13
1.87
6.17
4.68
2.23
3.57
6.84
2.08
1.80
1.49
1.19
1.71
0.55
0.42
0.79/0.87
0.45
0.37
0.65
0.39
0.45
0.38
8/7/09
11/1/10
9/26/94
10/6/93
10/3/79
10/28/86
1.54
7.91
10.17
3.50
7.50
7.66
1.19
5.46
8.21
3.07
5.89
6.61
—
—
5.34
3.77
4.94
5.21
1.49
5.00
6.02
4.32
6.83
5.92
0.64
1.42
2.49
0.77
1.47/1.46
1.35
0.55
0.56/0.61
0.49
0.41
0.41
0.49
5/1/09
0.00
0.00
—
0.00
0.00/-0.37
0.08/0.44
Average Annual Total Returns (%)
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
8
Expense
Ratio (%)
(Net/Gross)
Class F-2 Shares1,3,4
Returns as of 6/30/16
Portfolio Series
American Funds Balanced PortfolioSM
American Funds Global Growth PortfolioSM
American Funds Growth and Income PortfolioSM
American Funds Growth PortfolioSM
American Funds Income PortfolioSM
American Funds Preservation PortfolioSM
American Funds Tax-Advantaged Income PortfolioSM
American Funds Tax-Exempt Preservation PortfolioSM
Retirement Income Portfolio Series
American Funds Retirement Income Portfolio
- ConservativeSM
American Funds Retirement Income Portfolio
- EnhancedSM
American Funds Retirement Income Portfolio
- ModerateSM
Retirement Target Date
American Funds 2010 Target Date Retirement Fund®
American Funds 2015 Target Date Retirement Fund®
American Funds 2020 Target Date Retirement Fund®
American Funds 2025 Target Date Retirement Fund®
American Funds 2030 Target Date Retirement Fund®
American Funds 2035 Target Date Retirement Fund®
American Funds 2040 Target Date Retirement Fund®
American Funds 2045 Target Date Retirement Fund®
American Funds 2050 Target Date Retirement Fund®
American Funds 2055 Target Date Retirement Fund®
American Funds 2060 Target Date
Retirement FundSM
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
Annualized
30-day
SEC Yield
at NAV (%)*
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
3.05
-4.49
2.62
-2.80
4.58
2.74
5.36
4.67
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9.81
10.55
10.68
12.52
7.89
1.50
9.16
2.85
1.67
1.27
2.04
0.83
3.37
1.32
2.89
2.61
0.51
0.63
0.50
0.56
0.44
0.45
0.51
0.48
8/28/15
—
—
—
6.79
2.31
0.48/0.56
8/28/15
—
—
—
8.22
2.78
0.51/0.59
8/28/15
—
—
—
7.47
2.53
0.49/0.57
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/07
2/1/10
3/27/15
4.18
4.14
3.42
2.64
1.28
0.58
0.35
0.23
0.27
0.21
0.30
6.53
6.99
7.53
8.30
8.62
8.56
8.62
8.61
8.62
8.62
—
—
—
—
—
—
—
—
—
—
—
—
4.52
4.74
4.87
5.30
5.59
5.56
5.59
5.58
5.59
10.01
0.95
2.32
2.17
1.82
1.64
1.55
1.52
1.45
1.40
1.38
1.35
1.44
0.46
0.46
0.47
0.49
0.51
0.52
0.52
0.55
0.53
0.58
0.61/0.85
Average Annual Total Returns (%)
Expense
Ratio (%)
(Net/Gross)
* Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
9
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those
shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
Returns shown at net asset value (NAV) have all distributions reinvested. If a sales charge had been deducted, the results would have been lower.
Returns shown at maximum offering price (MOP) for Class 529-A shares reflect deduction of the maximum sales charge of 5.75% for equity funds
and most Portfolio Series funds, 4.25% for most College Target Date funds, 3.75% for most fixed income funds and 2.50% for American Funds
Inflation Linked Bond Fund, Intermediate Bond Fund of America, Short-Term Bond Fund of America, American Funds Preservation Portfolio and
College Enrollment Fund.
For money market funds, the annualized 7-day SEC yield more accurately reflects the fund's current earnings than does the fund's return.
For current expense ratios and month-end results, visit americanfunds.com.
You could lose money by investing in the American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and
you should not expect that the sponsor will provide financial support to the fund at any time.
CollegeAmerica Class 529-A Shares1,2,3,4
Average Annual Total Returns (%)
Without Sales Charge (NAV)
Returns as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Money Market
American Funds U.S. Government Money
Market FundSM
Inception
Date
1 Year
5 Year
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
-1.44
-9.94
0.70
-9.00
-1.99
-6.48
-8.65
2/3/14
With Maximum Sales Charge (MOP)
Annualized
30-day SEC
Yield at
MOP (%)*
Expense
Ratio (%)
(Net/Gross)
10 Year
Fund
Lifetime
1 Year
5 Year
10 Year
11.43
2.09
11.02
10.17
7.61
0.48
6.45
7.65
3.57
6.86
7.68
6.59
5.03
6.13
11.25
10.42
13.26
10.70
11.94
7.20
9.17
-7.10
-15.10
-5.10
-14.22
-7.62
-11.85
-13.90
10.12
0.89
9.72
8.87
6.34
-0.70
5.20
7.01
2.96
6.22
7.05
5.96
4.41
5.50
11.11
10.22
13.10
10.50
11.78
6.83
8.92
5.75
5.75
5.75
5.75
5.75
5.75
5.75
0.33
0.95
0.44
0.24
0.78
0.69
-0.09
0.77
0.90
0.73
0.86
0.84
1.11
1.15
-8.35
—
—
-2.27
-13.64
—
—
-4.65
5.75
1.90
1.38
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
6.46
-3.49
4.27
-10.71
4.59
6.10
10.80
6.10
10.65
1.49
11.25
11.34
7.24
5.28
7.20
—
6.54
6.85
11.49
10.19
12.19
5.72
11.97
11.67
0.32
-9.04
-1.73
-15.84
-1.42
0.00
9.50
4.84
9.35
0.29
9.94
10.03
6.60
4.66
6.57
—
5.92
6.22
11.39
9.91
12.01
4.91
11.89
11.56
5.75
5.75
5.75
5.75
5.75
5.75
1.90
2.01
1.35
2.27
1.65
1.73
0.68
0.86
0.70
0.97
0.69
0.68
7/30/87
12/1/73
3.79
5.32
6.68
8.33
5.36
6.22
9.24
10.95
-2.18
-0.73
5.42
7.05
4.74
5.59
9.02
10.80
5.75
5.75
2.97
2.80
0.68
0.65
7/26/75
2/1/11
6.20
2.42
9.67
5.79
7.03
—
10.59
6.05
0.08
-3.47
8.38
4.54
6.39
—
10.43
4.89
5.75
5.75
1.44
1.77
0.68
0.93
12/14/12
11/1/10
3/18/16
2/19/88
5/28/74
8/4/87
2/19/88
10/2/06
10/17/85
3.65
4.15
—
-1.40
5.31
6.21
2.69
1.04
4.58
—
2.79
—
3.63
3.54
1.60
1.66
0.56
2.79
—
—
—
5.42
3.69
4.26
2.80
—
4.22
-0.16
2.57
3.13
7.71
7.71
6.30
4.78
1.62
5.78
1.06
0.21
—
-5.06
1.39
2.24
0.10
-1.48
0.64
—
2.00
—
2.85
2.75
0.83
1.14
0.05
2.01
—
—
—
5.02
3.29
3.86
2.54
—
3.82
-0.87
1.88
-0.74
7.56
7.61
6.16
4.68
1.35
5.65
2.50
3.75
3.75
3.75
3.75
3.75
2.50
2.50
3.75
4.36
0.93
1.77
0.79
3.16 1.23/1.31
6.26
0.76
1.67
0.70
1.51
1.02
1.16
0.70
1.01
0.66
1.35
0.72
5/1/09
0.00
0.00
—
0.00
0.00
0.00
—
0.00
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
10
Max Sales
Fund
Charge
Lifetime
(%)
— 0.00/-0.25 0.08/0.50
CollegeAmerica Class 529-A Shares1,2,3,4
Average Annual Total Returns (%)
Without Sales Charge (NAV)
Returns as of 6/30/16
Portfolio Series
American Funds Balanced PortfolioSM
American Funds Global Growth PortfolioSM
American Funds Growth and Income PortfolioSM
American Funds Growth PortfolioSM
American Funds Income PortfolioSM
American Funds Preservation PortfolioSM
College Target Date
American Funds College 2018 Fund®
American Funds College 2021 Fund®
American Funds College 2024 Fund®
American Funds College 2027 Fund®
American Funds College 2030 Fund®
American Funds College 2033 FundSM
American Funds College Enrollment Fund®
Inception
Date
1 Year
5 Year
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
2.68
-4.75
2.34
-2.98
4.15
2.52
9/14/12
9/14/12
9/14/12
9/14/12
9/14/12
3/27/15
9/14/12
3.36
4.26
3.78
2.51
1.14
-0.93
2.44
With Maximum Sales Charge (MOP)
Max Sales
Charge
Fund
(%)
Lifetime
Annualized
30-day SEC
Yield at
MOP (%)*
Expense
Ratio (%)
(Net/Gross)
0.80
0.90
0.78
0.82
0.75
0.77
10 Year
Fund
Lifetime
1 Year
5 Year
10 Year
—
—
—
—
—
—
—
—
—
—
—
—
9.48
10.26
10.35
12.23
7.55
1.20
-3.26
-10.22
-3.53
-8.53
-1.81
0.01
—
—
—
—
—
—
—
—
—
—
—
—
7.92
8.69
8.78
10.63
6.01
0.57
5.75
5.75
5.75
5.75
5.75
2.50
1.31
0.95
1.65
0.52
2.88
1.05
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4.56
5.74
6.77
7.60
8.26
-0.58
1.03
-1.04
-0.14
-0.61
-1.81
-3.18
-5.10
-0.17
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3.38
4.55
5.57
6.38
7.04
-3.92
0.34
4.25
4.25
4.25
4.25
4.25
4.25
2.50
1.19
0.74
1.55
0.71
1.62
0.76
1.48
0.78
1.37
0.79
1.40 0.85/0.88
0.94
0.78
* Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
11
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those
shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
Returns shown at net asset value (NAV) have all distributions reinvested. If a sales charge had been deducted, the results would have been lower.
Class 529-C shares reflect the deduction of a contingent deferred sales charge (1%) on shares sold within the first year of purchase.
For money market funds, the annualized 7-day SEC yield more accurately reflects the fund's current earnings than does the fund's return.
For current expense ratios and month-end results, visit americanfunds.com.
You could lose money by investing in the American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and
you should not expect that the sponsor will provide financial support to the fund at any time.
CollegeAmerica Class 529-C Shares1,3,4
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
1 Year
Annualized
30-day
SEC Yield
at NAV (%)*
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
-2.20
-10.66
-0.07
-9.74
-2.77
-7.23
-9.34
10.57
1.28
10.16
9.29
6.77
-0.32
5.61
6.79
2.74
6.01
6.80
5.76
4.18
5.28
10.35
9.53
12.35
9.80
11.04
6.32
8.28
-3.10
-11.53
-0.99
-10.59
-3.69
-8.15
-10.19
-0.36
0.30
-0.23
-0.48
0.14
0.03
-0.79
1.55
1.68
1.51
1.66
1.62
1.90
1.93
2/3/14
-9.15
—
—
-3.03
-10.05
1.21
2.14
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
5.63
-4.23
3.45
-11.44
3.79
5.29
9.94
5.27
9.79
0.67
10.39
10.48
6.39
4.44
6.34
—
5.71
6.02
10.61
9.31
11.30
4.87
11.09
10.79
4.63
-5.16
2.46
-12.31
2.83
4.29
1.31
1.42
0.72
1.65
1.07
1.14
1.46
1.64
1.48
1.77
1.46
1.45
7/30/87
12/1/73
2.98
4.52
5.85
7.50
4.53
5.39
8.37
10.08
1.98
3.52
2.43
2.25
1.46
1.42
7/26/75
2/1/11
5.39
1.58
8.83
4.93
6.19
—
9.72
5.20
4.39
0.59
0.81
1.13
1.45
1.73
12/14/12
11/1/10
3/18/16
2/19/88
5/28/74
8/4/87
2/19/88
10/2/06
10/17/85
2.63
3.24
—
-2.15
4.51
5.38
1.93
0.14
3.79
—
1.97
—
2.83
2.75
0.81
0.89
-0.30
2.01
—
—
—
4.59
2.89
3.43
2.01
—
3.41
-0.94
1.77
3.02
6.84
6.85
5.45
3.95
0.78
4.93
1.63
2.24
—
-3.08
3.51
4.38
0.93
-0.86
2.79
3.62
1.09
2.67
5.82
1.06
0.88
0.55
0.26
0.74
1.64
1.57
1.93/2.01
1.53
1.46
1.79
1.46
1.52
1.47
5/1/09
0.00
0.00
—
0.00
-1.00
0.00/-0.25
0.08/0.50
Average Annual Total Returns (%)
Returns as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Money Market
American Funds U.S. Government Money
Market FundSM
Without CDSC
With CDSC
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
12
Expense
Ratio (%)
(Net/Gross)
CollegeAmerica Class 529-C Shares1,3,4
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
1 Year
Annualized
30-day
SEC Yield
at NAV (%)*
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
1.91
-5.52
1.57
-3.84
3.39
1.64
—
—
—
—
—
—
—
—
—
—
—
—
8.62
9.36
9.49
11.30
6.73
0.42
0.92
-6.43
0.59
-4.77
2.39
0.64
0.60
0.19
0.97
-0.24
2.32
0.29
1.58
1.70
1.57
1.64
1.50
1.52
9/14/12
9/14/12
9/14/12
9/14/12
9/14/12
3/27/15
9/14/12
2.61
3.45
2.94
1.67
0.28
-1.73
1.67
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3.77
4.92
5.95
6.75
7.39
-1.30
0.27
1.62
2.45
1.96
0.69
-0.69
-2.71
0.67
0.50
0.86
0.93
0.78
0.67
0.73
0.19
1.51
1.50
1.55
1.58
1.61
1.64/1.67
1.53
Average Annual Total Returns (%)
Returns as of 6/30/16
Portfolio Series
American Funds Balanced PortfolioSM
American Funds Global Growth PortfolioSM
American Funds Growth and Income PortfolioSM
American Funds Growth PortfolioSM
American Funds Income PortfolioSM
American Funds Preservation PortfolioSM
College Target Date
American Funds College 2018 Fund®
American Funds College 2021 Fund®
American Funds College 2024 Fund®
American Funds College 2027 Fund®
American Funds College 2030 Fund®
American Funds College 2033 FundSM
American Funds College Enrollment Fund®
Without CDSC
With CDSC
Expense
Ratio (%)
(Net/Gross)
* Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
13
Figures shown are past results at net asset value and are not predictive of results in future periods. Current and future results may be lower or
higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
For money market funds, the annualized 7-day SEC yield more accurately reflects the fund's current earnings than does the fund's return.
For current expense ratios and month-end results, visit americanfunds.com.
You could lose money by investing in the American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and
you should not expect that the sponsor will provide financial support to the fund at any time.
CollegeAmerica Class 529-F-1 Shares1,3,4
Returns as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Money Market
American Funds U.S. Government Money
Market FundSM
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
Annualized
30-day
SEC Yield
at NAV (%)*
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
-1.28
-9.77
0.91
-8.81
-1.79
-6.29
-8.46
11.67
2.30
11.26
10.38
7.84
0.68
6.68
7.86
3.78
7.08
7.89
6.82
5.23
6.34
11.26
10.46
13.28
10.73
11.96
7.31
9.22
0.57
1.23
0.69
0.45
1.05
0.93
0.12
0.56
0.69
0.51
0.66
0.63
0.90
0.93
2/3/14
-8.22
—
—
-2.10
2.16
1.12
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
6.71
-3.28
4.49
-10.55
4.83
6.33
11.04
6.33
10.89
1.69
11.50
11.59
7.46
5.50
7.42
—
6.78
7.09
11.48
10.27
12.22
5.93
11.96
11.67
2.23
2.35
1.65
2.61
1.97
2.05
0.46
0.64
0.48
0.77
0.47
0.46
7/30/87
12/1/73
4.01
5.56
6.91
8.57
5.59
6.45
9.30
10.98
3.37
3.19
0.46
0.42
7/26/75
2/1/11
6.45
2.59
9.91
5.99
7.26
—
10.61
6.26
1.75
2.10
0.46
0.72
12/14/12
11/1/10
3/18/16
2/19/88
5/28/74
8/4/87
2/19/88
10/2/06
10/17/85
3.64
4.24
—
-1.18
5.55
6.43
2.93
1.18
4.82
—
2.99
—
3.85
3.77
1.82
1.89
0.70
3.02
—
—
—
5.64
3.92
4.48
3.03
—
4.44
0.04
2.76
3.16
7.77
7.73
6.34
4.84
1.79
5.83
4.59
2.09
3.65
6.72
1.96
1.79
1.42
1.16
1.61
0.64
0.57
0.94/1.02
0.54
0.47
0.79
0.47
0.53
0.49
5/1/09
0.00
0.00
—
0.00
0.00/-0.25
0.08/0.50
Average Annual Total Returns (%)
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
14
Expense
Ratio (%)
(Net/Gross)
CollegeAmerica Class 529-F-1 Shares1,3,4
Returns as of 6/30/16
Portfolio Series
American Funds Balanced PortfolioSM
American Funds Global Growth PortfolioSM
American Funds Growth and Income PortfolioSM
American Funds Growth PortfolioSM
American Funds Income PortfolioSM
American Funds Preservation PortfolioSM
College Target Date
American Funds College 2018 Fund®
American Funds College 2021 Fund®
American Funds College 2024 Fund®
American Funds College 2027 Fund®
American Funds College 2030 Fund®
American Funds College 2033 FundSM
American Funds College Enrollment Fund®
Inception
Date
1 Year
5 Year
10 Year
Fund Lifetime
Annualized
30-day
SEC Yield
at NAV (%)*
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
5/18/12
2.89
-4.50
2.54
-2.85
4.50
2.76
—
—
—
—
—
—
—
—
—
—
—
—
9.71
10.46
10.58
12.42
7.80
1.43
1.58
1.17
1.94
0.74
3.26
1.25
0.58
0.70
0.57
0.63
0.50
0.52
9/14/12
9/14/12
9/14/12
9/14/12
9/14/12
3/27/15
9/14/12
3.58
4.56
3.97
2.76
1.27
-0.64
2.71
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4.80
5.97
7.00
7.82
8.45
-0.27
1.28
1.47
1.83
1.90
1.76
1.65
1.71
1.16
0.51
0.50
0.55
0.58
0.61
0.64/0.67
0.53
Average Annual Total Returns (%)
Expense
Ratio (%)
(Net/Gross)
* Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not.
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
15
Rankings shown are based on total returns for Class A shares at net asset value. Rankings do not reflect the effects of sales charges.
American Funds Lipper Rankings as of 6/30/16
Lipper Category
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Tax-Exempt Bond
American Funds Short-Term Tax-Exempt Bond Fund®
American Funds Tax-Exempt Fund of New York®
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of America®
The Tax-Exempt Bond Fund of America®
The Tax-Exempt Fund of California®
1 Year
5 Year
10 Year
1258 of 2921
719 of 1484
186 of 679
2661 of 2921
302 of 962
149 of 821
72 of 126
295 of 2193
318 of 1064
170 of 548
806 of 2193
74 of 592
28 of 408
28 of 85
295 of 1401
94 of 627
254 of 395
288 of 1401
16 of 317
26 of 167
10 of 57
Emerging Markets
250 of 821
—
—
Growth & Income
Global
Growth & Income
International
Growth & Income
Growth & Income
51 of 2447
433 of 962
173 of 2447
866 of 1484
142 of 2447
65 of 2447
200 of 1551
216 of 592
229 of 1551
452 of 1064
138 of 1551
128 of 1551
101 of 830
78 of 317
109 of 830
—
207 of 830
152 of 830
40 of 163
30 of 590
13 of 84
8 of 461
3 of 37
10 of 279
9 of 635
195 of 1248
5 of 535
286 of 773
17 of 393
—
Inflation Protected Bond
Intermediate U.S. Government
Multi-Sector Income
High Yield
Core Bond
Global Income
Short-Intermediate Investment-Grade
Debt
Short U.S. Government
General U.S. Government
79 of 245
37 of 65
—
482 of 667
179 of 503
54 of 210
66 of 188
—
17 of 61
—
361 of 441
194 of 399
82 of 141
79 of 112
—
—
—
217 of 295
246 of 293
44 of 78
69 of 87
27 of 82
37 of 101
35 of 74
28 of 93
—
27 of 74
Short Municipal Debt
New York Municipal Debt
High-Yield Municipal Debt
Short-Intermediate Municipal Debt
General & Insured Municipal Debt
California Municipal Debt
36 of 108
62 of 97
78 of 155
27 of 65
152 of 266
101 of 126
40 of 84
35 of 85
28 of 111
13 of 54
93 of 211
55 of 108
—
—
16 of 67
5 of 39
58 of 158
37 of 86
Growth
International
Large-Cap Growth
Growth
Global
Emerging Markets
Global Small-/Mid-Cap
Global Equity Income Funds
Income (Mixed Equity)
Balanced
Flexible Portfolio
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
16
Rankings shown are based on Class A share results at net asset value. Morningstar rankings do not reflect the effects of sales charges, account fees
or taxes.
American Funds Morningstar Rankings5
1 Year
Rankings as of 6/30/16
Growth
AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World Fund®
SMALLCAP World Fund®
Growth and Income
American Funds Developing World Growth
and Income FundSM
American Mutual Fund®
Capital World Growth and Income Fund®
Fundamental Investors®
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM
Equity Income
Capital Income Builder®
The Income Fund of America®
Balanced
American Balanced Fund®
American Funds Global Balanced FundSM
Bond
American Funds Inflation Linked Bond Fund®
American Funds Mortgage Fund®
American Funds Strategic Bond FundSM
American High-Income Trust®
The Bond Fund of America®
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of America®
U.S. Government Securities Fund®
Tax-Exempt Bond
American Funds Short-Term Tax-Exempt Bond Fund®
American Funds Tax-Exempt Fund of New York®
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of America®
The Tax-Exempt Bond Fund of America®
The Tax-Exempt Fund of California®
5 Year
Peer
Funds in
Group
Category Percentile
10 Year
Peer
Funds in
Group
Category Percentile
Peer
Funds in
Group
Category Percentile
Morningstar Category
Inception
Date
Rank
Large Growth
Foreign Large Growth
Large Growth
Large Growth
World Stock
Diversified Emerging Mkts
World Stock
5/1/67
4/16/84
12/1/73
12/1/83
3/13/73
6/17/99
4/30/90
661
237
343
1522
317
156
876
1627
355
1627
1627
1131
856
1131
41
67
21
93
28
18
77
236
151
333
609
87
20
211
1289
275
1289
1289
731
416
731
19
55
26
47
12
5
29
344
59
545
336
18
24
42
931
189
931
931
409
186
409
37
31
58
36
5
13
10
Diversified Emerging Mkts
2/3/14
273
856
32
—
—
—
—
—
—
Large Value
World Stock
Large Blend
Foreign Large Blend
Large Blend
Large Value
2/21/50
3/26/93
8/1/78
10/1/08
1/1/34
7/31/52
156
443
189
468
162
173
1368
1131
1523
823
1523
1368
12
39
13
57
11
13
177
250
515
234
311
109
1030
731
1206
631
1206
1030
17
34
43
37
26
11
87
106
198
—
417
138
756
409
895
—
895
756
12
26
22
—
47
18
World Allocation
Allocation--70% to 85%
Equity
7/30/87
12/1/73
23
23
552
451
4
5
11
25
362
310
3
8
37
10
176
234
21
4
Allocation--50% to 70%
Equity
World Allocation
7/26/75
26
895
3
13
704
2
30
479
7
2/1/11
55
552
10
43
362
12
—
—
—
Inflation-Protected Bond
12/14/12
Intermediate Government 11/1/10
Multisector Bond
3/18/16
High Yield Bond
2/19/88
Intermediate-Term Bond
5/28/74
World Bond
8/4/87
Short-Term Bond
2/19/88
Short-Term Bond
10/2/06
Intermediate Government 10/17/85
84
118
—
551
297
131
51
403
58
249
309
—
775
1061
364
571
571
309
34
38
—
71
28
36
9
70
19
—
80
—
437
439
118
154
362
78
—
285
—
529
836
253
405
405
285
—
28
—
82
52
47
38
89
27
—
—
—
273
519
79
147
—
109
—
—
—
371
603
152
284
—
218
—
—
—
73
86
52
52
—
50
Muni National Short
Muni New York Long
High Yield Muni
Muni National Short
Muni National Interm
Muni California
Intermediate
128
57
101
40
80
17
214
91
200
214
333
78
60
62
50
19
24
21
120
34
40
12
36
11
175
79
146
175
266
72
68
42
27
7
14
14
—
—
22
8
22
3
—
—
95
115
177
57
—
—
23
7
12
4
8/7/09
11/1/10
9/26/94
10/6/93
10/3/79
10/28/86
Rank
Rank
Please see important information about risks, fee waivers and expense reimbursements, beginning on page 18.
17
State-specific tax-exempt funds are more susceptible to factors adversely affecting issuers of their states' tax-exempt securities than more widely
diversified municipal bond funds. Income from municipal bonds may be subject to state or local income taxes and/or the federal alternative
minimum tax (except for The Tax-Exempt Bond Fund of America). Certain other income, as well as capital gain distributions, may be taxable.
Investment allocations for funds of funds may not achieve fund objectives. There are expenses associated with the underlying funds in addition to
fund-of-funds expenses. The funds' risks are directly related to the risks of the underlying funds, as described herein. Each target date fund is
composed of a mix of American Funds and is subject to the risks and returns of the underlying funds. Underlying funds may be added or removed
during the year. Although the target date funds are managed for investors on a projected retirement date time frame, the fund's allocation strategy
does not guarantee that investors' retirement goals will be met. The target date is the year in which an investor is assumed to retire and begin taking
withdrawals. American Funds investment professionals actively manage the target date fund's portfolio, moving it from a more growth-oriented
strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for 30
years after it reaches its target date. The target allocations are as of January 1, 2016 and are subject to the Portfolio Oversight Committee's
discretion. The funds’ investment adviser anticipates that the funds will invest their assets within a range that deviates no more than 10% above or
below these allocations. Investment professionals gradually adjust the portfolio over time so that it becomes more preservation-oriented. The funds'
allocation strategy does not guarantee that investors' education savings goals will be met. The target date is the year in which the beneficiary is
expected to begin taking withdrawals. Investors and their advisors should periodically evaluate their investment to determine whether it continues to
meet their needs. The Retirement Income Portfolio Series investment allocations may not achieve fund objectives and adequate income through
retirement is not guaranteed. There are expenses associated with the underlying funds in addition to fund-of-funds expenses. The funds’ risks are
directly related to the risks of the underlying funds. Payments consisting of return of capital will result in a decrease in an investor’s fund share
balance. Higher rates of withdrawal and withdrawals during declining markets may result in a more rapid decrease in an investor’s fund share
balance. Persistent returns of capital could ultimately result in a zero account balance.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in
the prospectus. These risks may be heightened in connection with investments in developing countries. Diversification does not eliminate the risks
of investing; losses are possible in diversified portfolios. Small-company stocks entail additional risks, and they can fluctuate in price more than
larger company stocks.
The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional cash
securities, such as stocks and bonds. American Funds Strategic Bond Fund may engage in frequent and active trading of its portfolio securities,
which may involve correspondingly greater transaction costs, adversely affecting the fund's results.
Fund shares of U.S. Government Securities Fund are not guaranteed by the U.S. government.
Although American Funds U.S. Government Money Market Fund has 12b-1 plans for some share classes, the fund is currently suspending certain 12
b-1 payments in this low interest rate environment. Should payments commence, the fund’s investment results will be lower and expenses will be
higher. American Funds U.S. Government Money Market Fund Class A is the only share class in the American Funds offering check-writing
privileges. It is also the only share class that can be exchanged into certain other share classes of other American Funds.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Lifetime returns for less than one year are not
annualized, but calculated as cumulative total returns.
For the following funds, the investment adviser is currently reimbursing a portion of the funds' fees or expenses, without which the results would
have been lower and net expense ratios higher.
- American Funds U.S. Government Money Market Fund is currently reimbursing a portion of the fund's fees and expenses. Please see the Financial
Highlights table in the fund's most recent prospectus for details.
- American Funds Tax-Exempt Fund of New York is currently reimbursing a portion of its expenses through at least September 30, 2016.
- American Funds Strategic Bond Fund is currently reimbursing a portion of other expenses through at least March 1, 2017.
- American Funds Retirement Income Portfolio Series funds are currently reimbursing a portion of other expenses for each share class through at
least January 1, 2017.
- American Funds 2060 Target Date Retirement Fund is currently reimbursing a portion of other expenses for each share class through at least
January 1, 2017.
- American Funds College 2033 Fund is currently reimbursing a portion of other expenses through at least January 1, 2017.
Per the terms for each specific fund and subject to fund board approval, the investment adviser may elect to extend, modify or terminate the waiver
and/or reimbursement. Please see each fund's most recent prospectus for details. When applicable, investment results reflect fee waivers and/or
expense reimbursements, without which results would have been lower. For more information on fee waivers and expense reimbursements, visit
americanfunds.com.
1 The Tax-Exempt Money Fund of America (inception date: October 24, 1989) converted to American Funds Short-Term Tax-Exempt Bond Fund on
August 7, 2009. Investment results shown do not include the fund's results for the period it operated as The Tax-Exempt Money Fund of America.
Results that reflect the operation of the fund as a money market fund prior to its conversion can be found in American Funds Short-Term TaxExempt Bond Fund's prospectus.
2 For Intermediate Bond Fund of America and Limited Term Tax-Exempt Bond Fund of America, the maximum initial sales charge was 3.75% from 1
/10/2000 to 10/31/2006. For bond funds, the maximum initial sales charge was 4.75% prior to 1/10/2000.
3 Class C and F-1 shares were first offered on March 15, 2001; Class F-2 shares were first offered on August 1, 2008; Class 529-A and 529-C shares
were first offered on February 15, 2002; Class 529 F-1 shares were first offered on September 9, 2002. Class C, F-1, F-2, 529-A, 529-C and 529-F-1
share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, with Class C, F-1, 529-A, 529-C
and 529-F-1 results adjusted for estimated additional annual expenses and Class F-2 results adjusted for typical estimated expenses. Results for
certain funds with an inception date after March 15, 2001 for Class C and F-1; after August 1, 2008 for Class F-2; after February 15, 2002 for Class
529-A and 529-C; and after September 9, 2002 for 529-F-1 also include hypothetical returns because those funds' Class C, F-1, F2, 529-A, 529-C
and 529-F-1 shares sold after the funds' date of first offering. Class C shares convert to Class F-1 shares after 10 years. Please see
americanfunds.com for more information on specific expense adjustments and the actual dates of first sale.
4 Expense ratios are as of the most recent prospectus available at the time of publication. Expense ratios are estimated for Inflation Linked Bond
Fund (529 share classes), Strategic Bond Fund, American Funds 2060 Target Date Retirement Fund, American Funds Retirement Income Portfolio
— Conservative, American Funds Retirement Income Portfolio — Moderate and American Funds Retirement Income Portfolio — Enhanced. Expense
ratios for funds of funds include the weighted average expenses of the underlying funds.
5 Rankings are based on the funds' average annual total returns (Class A shares at net asset value) within the applicable Morningstar categories. The
Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods.
When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see
americanfunds.com for more information.
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Lit.No.MFGEQS-005-0716P Litho in USA MOD/RRD/6296 © 2016 American Funds Distributors, Inc.
R Printed on recycled paper
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