American Funds Inflation Linked Bond Fund®
Investment portfolio
February 29, 2020
unaudited
Bonds, notes & other debt instruments 96.28% U.S. Treasury bonds & notes 89.84% U.S. Treasury inflation-protected securities 81.04% | Principal amount (000) | Value (000) |
U.S. Treasury Inflation-Protected Security 0.125% 20211,2 | $31,444 | $31,491 |
U.S. Treasury Inflation-Protected Security 0.625% 20211,2 | 222,339 | 225,516 |
U.S. Treasury Inflation-Protected Security 1.125% 20212 | 41,117 | 41,569 |
U.S. Treasury Inflation-Protected Security 0.125% 20222 | 270,935 | 272,781 |
U.S. Treasury Inflation-Protected Security 0.125% 20222 | 108,545 | 109,288 |
U.S. Treasury Inflation-Protected Security 0.125% 20222 | 17,768 | 18,007 |
U.S. Treasury Inflation-Protected Security 0.125% 20232 | 33,344 | 33,746 |
U.S. Treasury Inflation-Protected Security 0.375% 20232 | 29,815 | 30,616 |
U.S. Treasury Inflation-Protected Security 0.125% 20242 | 560,112 | 574,472 |
U.S. Treasury Inflation-Protected Security 0.125% 20242 | 649 | 665 |
U.S. Treasury Inflation-Protected Security 0.50% 20242 | 52,373 | 54,113 |
U.S. Treasury Inflation-Protected Security 0.625% 20242 | 105,731 | 109,643 |
U.S. Treasury Inflation-Protected Security 0.25% 20252 | 124,664 | 128,327 |
U.S. Treasury Inflation-Protected Security 0.375% 20251,2 | 478,219 | 498,667 |
U.S. Treasury Inflation-Protected Security 2.375% 20252 | 31,970 | 36,235 |
U.S. Treasury Inflation-Protected Security 0.125% 20262 | 135,083 | 139,325 |
U.S. Treasury Inflation-Protected Security 0.625% 20262 | 177,910 | 187,794 |
U.S. Treasury Inflation-Protected Security 2.00% 20262 | 134,656 | 152,860 |
U.S. Treasury Inflation-Protected Security 0.375% 20272 | 205,906 | 216,677 |
U.S. Treasury Inflation-Protected Security 0.375% 20272 | 105,959 | 110,821 |
U.S. Treasury Inflation-Protected Security 2.375% 20271,2 | 193,948 | 229,664 |
U.S. Treasury Inflation-Protected Security 0.50% 20282 | 238,994 | 253,477 |
U.S. Treasury Inflation-Protected Security 1.75% 20282 | 74,827 | 86,676 |
U.S. Treasury Inflation-Protected Security 0.25% 20291,2 | 221,224 | 232,375 |
U.S. Treasury Inflation-Protected Security 0.875% 20292 | 69,613 | 76,633 |
U.S. Treasury Inflation-Protected Security 2.50% 20292 | 2,394 | 2,982 |
U.S. Treasury Inflation-Protected Security 0.125% 20301,2 | 389,644 | 404,733 |
U.S. Treasury Inflation-Protected Security 2.125% 20401,2 | 53,503 | 75,375 |
U.S. Treasury Inflation-Protected Security 2.125% 20411,2 | 51,046 | 72,693 |
U.S. Treasury Inflation-Protected Security 0.75% 20421,2 | 56,865 | 64,738 |
U.S. Treasury Inflation-Protected Security 0.625% 20432 | 11,178 | 12,425 |
U.S. Treasury Inflation-Protected Security 1.375% 20442 | 71,783 | 92,749 |
U.S. Treasury Inflation-Protected Security 0.75% 20451,2 | 122,226 | 140,137 |
U.S. Treasury Inflation-Protected Security 1.00% 20461,2 | 105,035 | 127,623 |
U.S. Treasury Inflation-Protected Security 0.875% 20471,2 | 165,329 | 196,817 |
U.S. Treasury Inflation-Protected Security 1.00% 20481,2 | 201,233 | 247,768 |
U.S. Treasury Inflation-Protected Security 1.00% 20491,2 | 57,292 | 71,089 |
U.S. Treasury Inflation-Protected Security 0.25% 20502 | 43,381 | 44,702 |
5,405,269 | ||
U.S. Treasury 8.80% | ||
U.S. Treasury 1.25% 2024 | 2,000 | 2,028 |
U.S. Treasury 1.75% 2024 | 43,000 | 44,643 |
U.S. Treasury 1.375% 2025 | 85,000 | 86,788 |
U.S. Treasury 1.625% 2026 | 55,000 | 57,028 |
U.S. Treasury 1.625% 2026 | 10,000 | 10,366 |
American Funds Inflation Linked Bond Fund — Page 1 of 9
unaudited
Bonds, notes & other debt instruments (continued) U.S. Treasury bonds & notes (continued) U.S. Treasury (continued) | Principal amount (000) | Value (000) |
U.S. Treasury 1.75% 2029 | $309,000 | $325,788 |
U.S. Treasury 2.375% 20491 | 52,000 | 60,451 |
587,092 | ||
Total U.S. Treasury bonds & notes | 5,992,361 | |
Corporate bonds & notes 3.20% Energy 1.16% | ||
Energy Transfer Partners, LP 6.00% 2048 | 10,000 | 11,248 |
Equinor ASA 3.625% 2028 | 13,165 | 14,867 |
MPLX LP 4.00% 2028 | 2,430 | 2,570 |
MPLX LP 4.70% 2048 | 10,000 | 10,441 |
Occidental Petroleum Corp. 2.60% 2021 | 24,802 | 25,125 |
Occidental Petroleum Corp. 2.90% 2024 | 10,841 | 10,995 |
Petróleos Mexicanos 7.47% 2026 | MXN30 | 1 |
Sabine Pass Liquefaction, LLC 4.20% 2028 | $2,225 | 2,353 |
77,600 | ||
Utilities 0.88% | ||
Consumers Energy Co. 4.05% 2048 | 8,570 | 10,453 |
FirstEnergy Corp. 3.90% 2027 | 4,725 | 5,237 |
FirstEnergy Corp. 4.85% 2047 | 4,890 | 6,145 |
Mississippi Power Co. 4.25% 2042 | 1,660 | 1,915 |
Public Service Enterprise Group Inc. 3.20% 2049 | 8,250 | 9,251 |
Tampa Electric Co. 4.45% 2049 | 8,070 | 10,249 |
Virginia Electric and Power Co. 3.80% 2028 | 7,925 | 8,968 |
Virginia Electric and Power Co. 2.875% 2029 | 2,800 | 2,988 |
Wisconsin Electric Power Co. 4.30% 2048 | 2,600 | 3,235 |
58,441 | ||
Consumer staples 0.37% | ||
Conagra Brands, Inc. 4.85% 2028 | 6,400 | 7,441 |
Keurig Dr Pepper Inc. 4.057% 2023 | 10,650 | 11,438 |
Keurig Dr Pepper Inc. 5.085% 2048 | 4,291 | 5,477 |
24,356 | ||
Health care 0.26% | ||
Becton, Dickinson and Co. 3.70% 2027 | 7,700 | 8,511 |
Cigna Corp. 4.90% 2048 | 7,175 | 8,916 |
17,427 | ||
Industrials 0.20% | ||
General Dynamics Corp. 3.75% 2028 | 8,650 | 9,824 |
United Technologies Corp. 4.125% 2028 | 3,265 | 3,824 |
13,648 | ||
Consumer discretionary 0.20% | ||
Boston University 4.061% 2048 | 2,075 | 2,722 |
Home Depot, Inc. 2.95% 2029 | 8,408 | 9,097 |
Home Depot, Inc. 4.50% 2048 | 1,240 | 1,607 |
13,426 |
American Funds Inflation Linked Bond Fund — Page 2 of 9
unaudited
Bonds, notes & other debt instruments (continued) Corporate bonds & notes (continued) Communication services 0.13% | Principal amount (000) | Value (000) |
Verizon Communications Inc. 4.50% 2033 | $7,000 | $8,586 |
Total corporate bonds & notes | 213,484 | |
Bonds & notes of governments & government agencies outside the U.S. 3.09% | ||
Colombia (Republic of) 5.00% 2045 | 600 | 727 |
European Stability Mechanism 2.125% 20223 | 40,000 | 41,212 |
Italy (Republic of) 0.10% 20232 | €72,270 | 80,291 |
Japan, Series 18, 0.10% 20242 | ¥2,253,200 | 21,151 |
Japan, Series 20, 0.10% 20252 | 4,343,500 | 40,975 |
South Africa (Republic of), Series R-197, 5.50% 20232 | ZAR758 | 53 |
United Kingdom 0.125% 20412 | £8,379 | 17,632 |
Uruguay (Oriental Republic of) 8.50% 2028 | UYU172,200 | 3,910 |
205,951 | ||
Mortgage-backed obligations 0.15% Collateralized mortgage-backed obligations 0.15% | ||
Legacy Mortgage Asset Trust, Series 2019-GS5, Class A1, 3.20% 20593,4,5 | $9,923 | 10,061 |
Total mortgage-backed obligations | 10,061 | |
Total bonds, notes & other debt instruments (cost: $6,022,058,000) | 6,421,857 | |
Short-term securities 3.17% Money market investments 3.17% | Shares | |
Capital Group Central Cash Fund 1.63%6 | 2,112,932 | 211,293 |
Total short-term securities (cost: $209,180,000) | 211,293 | |
Total investment securities99.45% (cost: $6,231,238,000) | 6,633,150 | |
Other assets less liabilities0.55% | 36,551 | |
Net assets100.00% | $6,669,701 |
Futures contracts
Contracts | Type | Number of contracts | Expiration | Notional amount7 (000) | Value at 2/29/20208 (000) | Unrealized (depreciation) appreciation at 2/29/2020 (000) |
90 Day Euro Dollar Futures | Short | 15,973 | September 2020 | $(3,993,250) | $(3,956,712) | $(21,909) |
2 Year U.S. Treasury Note Futures | Long | 8,838 | July 2020 | 1,767,600 | 1,929,584 | 14,809 |
5 Year Euro-Bobl Futures | Long | 1,367 | March 2020 | €136,700 | 204,724 | 2,537 |
5 Year U.S. Treasury Note Futures | Long | 18,326 | July 2020 | $1,832,600 | 2,249,517 | 36,179 |
10 Year Euro-Bund Futures | Long | 285 | March 2020 | €28,500 | 55,833 | 1,699 |
10 Year U.S. Treasury Note Futures | Long | 815 | June 2020 | $81,500 | 109,821 | 1,549 |
10 Year Ultra U.S. Treasury Note Futures | Short | 2,332 | June 2020 | (233,200) | (350,310) | (7,913) |
20 Year U.S. Treasury Bond Futures | Short | 187 | June 2020 | (18,700) | (31,837) | (597) |
30 Year Euro-Buxl Futures | Long | 271 | March 2020 | €27,100 | 65,752 | 4,750 |
30 Year Ultra U.S. Treasury Bond Futures | Short | 4,613 | June 2020 | $(461,300) | (957,197) | (41,525) |
$(10,421) |
American Funds Inflation Linked Bond Fund — Page 3 of 9
unaudited
Forward currency contracts
Contract amount | Counterparty | Settlement date | Unrealized (depreciation) appreciation at 2/29/2020 (000) | |
Purchases (000) | Sales (000) | |||
EUR59,300 | USD65,956 | Citibank | 3/5/2020 | $(467) |
AUD23,900 | USD16,381 | Bank of America | 3/6/2020 | (808) |
USD27,468 | KRW32,489,550 | Citibank | 3/16/2020 | 711 |
COP38,740,000 | USD11,467 | Citibank | 3/17/2020 | (468) |
USD24,899 | MXN466,000 | UBS AG | 3/19/2020 | 1,300 |
CAD6,035 | USD4,535 | HSBC Bank | 3/23/2020 | (39) |
USD4,010 | EUR3,700 | Bank of New York Mellon | 3/23/2020 | (81) |
EUR22,521 | MXN460,000 | Morgan Stanley | 3/24/2020 | 1,626 |
AUD14,700 | USD9,749 | UBS AG | 3/24/2020 | (167) |
JPY5,569,000 | USD49,997 | JPMorgan Chase | 3/26/2020 | 1,714 |
CHF32,200 | USD32,854 | Morgan Stanley | 3/26/2020 | 588 |
JPY291,480 | USD2,636 | Standard Chartered Bank | 3/26/2020 | 71 |
USD32,814 | JPY3,669,000 | Morgan Stanley | 3/26/2020 | (1,254) |
USD79,185 | EUR73,250 | Bank of America | 3/26/2020 | (1,819) |
USD36,674 | MXN686,384 | Citibank | 4/3/2020 | 2,000 |
JPY1,466,000 | USD13,372 | JPMorgan Chase | 4/3/2020 | 247 |
USD4,551 | CAD6,035 | UBS AG | 4/3/2020 | 55 |
USD26,578 | THB840,000 | HSBC Bank | 4/3/2020 | (60) |
USD10,263 | SEK100,000 | Standard Chartered Bank | 4/3/2020 | (162) |
USD16,378 | GBP12,660 | Bank of New York Mellon | 4/7/2020 | 128 |
EUR8,919 | USD9,694 | Standard Chartered Bank | 4/8/2020 | 176 |
$3,291 |
Swap contracts
Interest rate swaps
Receive | Pay | Expiration date | Notional (000) | Value at 2/29/2020 (000) | Upfront payments/ receipts (000) | Unrealized appreciation (depreciation) at 2/29/2020 (000) |
1.5305% | U.S. EFFR | 3/18/2020 | $9,147,000 | $316 | $— | $316 |
1.531% | U.S. EFFR | 3/18/2020 | 3,613,900 | 126 | — | 126 |
SONIA | 0.6025% | 3/26/2020 | £2,793,200 | 192 | — | 192 |
SONIA | 0.595% | 3/26/2020 | 1,776,300 | 135 | — | 135 |
1.538% | U.S. EFFR | 4/29/2020 | $13,417,724 | 4,726 | — | 4,726 |
7.14% | 28-day MXN-TIIE | 4/29/2020 | MXN1,633,150 | (15) | — | (15) |
7.87% | 28-day MXN-TIIE | 5/8/2020 | 1,452,815 | 88 | — | 88 |
7.84% | 28-day MXN-TIIE | 5/8/2020 | 792,185 | 46 | — | 46 |
6.78% | 28-day MXN-TIIE | 7/6/2020 | 777,690 | (45) | — | (45) |
1.309% | U.S. EFFR | 12/16/2020 | $9,048,950 | 13,652 | — | 13,652 |
1.33075% | U.S. EFFR | 12/16/2020 | 6,961,000 | 10,882 | — | 10,882 |
EONIA | (0.558)% | 2/3/2021 | €3,003,100 | (118) | — | (118) |
EONIA | (0.545)% | 2/3/2021 | 3,003,000 | (177) | — | (177) |
EONIA | (0.5315)% | 2/3/2021 | 3,003,000 | (238) | — | (238) |
EONIA | (0.531)% | 2/3/2021 | 3,003,000 | (240) | — | (240) |
EONIA | (0.5145)% | 2/3/2021 | 6,006,000 | (630) | — | (630) |
3-month USD-LIBOR | 2.367% | 3/28/2021 | $68,800 | (925) | — | (925) |
1.665% | U.S. EFFR | 6/20/2021 | 737,000 | 7,912 | — | 7,912 |
1.3065% | U.S. EFFR | 10/25/2021 | 232,900 | 2,153 | — | 2,153 |
American Funds Inflation Linked Bond Fund — Page 4 of 9
unaudited
Swap contracts (continued)
Interest rate swaps (continued)
Receive | Pay | Expiration date | Notional (000) | Value at 2/29/2020 (000) | Upfront payments/ receipts (000) | Unrealized appreciation (depreciation) at 2/29/2020 (000) |
1.39% | U.S. EFFR | 10/31/2021 | $517,300 | $5,559 | $— | $5,559 |
1.3615% | U.S. EFFR | 11/1/2021 | 258,600 | 2,673 | — | 2,673 |
1.281% | U.S. EFFR | 11/4/2021 | 258,900 | 2,342 | — | 2,342 |
1.411% | U.S. EFFR | 11/7/2021 | 345,875 | 3,919 | — | 3,919 |
1.3925% | U.S. EFFR | 11/7/2021 | 345,875 | 3,810 | — | 3,810 |
3-month USD-LIBOR | 1.469% | 11/18/2021 | 1,479,200 | (11,742) | — | (11,742) |
3-month USD-LIBOR | 1.465% | 11/18/2021 | 1,498,000 | (11,789) | — | (11,789) |
8.54% | 28-day MXN-TIIE | 1/6/2022 | MXN813,614 | 1,448 | — | 1,448 |
8.44% | 28-day MXN-TIIE | 1/7/2022 | 916,386 | 1,551 | — | 1,551 |
1.395% | U.S. EFFR | 1/23/2022 | $113,000 | 1,439 | — | 1,439 |
0.681% | 6-month GBP-LIBOR | 1/30/2022 | £191,700 | 492 | — | 492 |
0.676% | 6-month GBP-LIBOR | 1/30/2022 | 194,600 | 476 | — | 475 |
0.71% | 6-month GBP-LIBOR | 2/18/2022 | 194,600 | 583 | 583 | — |
1.082% | U.S. EFFR | 2/26/2022 | $345,900 | 2,494 | — | 2,494 |
1.074% | U.S. EFFR | 2/26/2022 | 344,900 | 2,432 | — | 2,432 |
3-month USD-LIBOR | 1.265% | 2/26/2022 | 346,200 | (1,999) | — | (1,999) |
3-month USD-LIBOR | 1.271% | 2/26/2022 | 346,770 | (2,044) | — | (2,044) |
1.07625% | U.S. EFFR | 2/27/2022 | 341,410 | 2,423 | — | 2,423 |
1.0405% | U.S. EFFR | 2/27/2022 | 341,420 | 2,178 | — | 2,178 |
3-month USD-LIBOR | 1.23% | 2/27/2022 | 342,210 | (1,745) | — | (1,745) |
3-month USD-LIBOR | 1.262% | 2/27/2022 | 342,210 | (1,961) | — | (1,961) |
1.0465% | U.S. EFFR | 2/28/2022 | 351,370 | 2,284 | — | 2,284 |
3-month USD-LIBOR | 1.233% | 2/28/2022 | 352,610 | (1,850) | — | (1,850) |
0.91% | U.S. EFFR | 3/2/2022 | 771,830 | 2,946 | — | 2,946 |
3-month USD-LIBOR | 1.1225% | 3/2/2022 | 773,430 | (2,450) | — | (2,450) |
U.S. EFFR | 0.58625% | 3/3/2022 | 116,900 | (11) | — | (11) |
3-month USD-LIBOR | 0.878% | 3/3/2022 | 117,000 | (93) | — | (93) |
2.197% | U.S. EFFR | 4/18/2022 | 489,000 | 15,243 | — | 15,243 |
6.99% | 28-day MXN-TIIE | 6/17/2022 | MXN480,000 | 246 | — | 246 |
1.8475% | 3-month USD-LIBOR | 7/11/2022 | $193,600 | 4,063 | — | 4,063 |
2.80% | 3-month USD-LIBOR | 9/2/2022 | 280,000 | 10,810 | — | 10,810 |
2.75% | 3-month USD-LIBOR | 9/2/2022 | 280,000 | 10,534 | — | 10,534 |
1.5675% | 3-month USD-LIBOR | 8/17/2023 | 270,000 | 3,861 | — | 3,861 |
3-month USD-LIBOR | 2.18075% | 3/29/2024 | 29,400 | (1,495) | — | (1,495) |
3-month USD-LIBOR | 2.194% | 3/29/2024 | 29,600 | (1,520) | — | (1,520) |
3-month USD-LIBOR | 2.21875% | 3/29/2024 | 31,000 | (1,623) | — | (1,623) |
3-month USD-LIBOR | 2.221% | 4/1/2024 | 23,000 | (1,209) | — | (1,209) |
3-month USD-LIBOR | 2.365% | 5/2/2024 | 428,700 | (25,415) | — | (25,415) |
3-month USD-LIBOR | 1.7935% | 7/12/2024 | 46,000 | (1,710) | — | (1,710) |
3-month USD-LIBOR | 1.5965% | 1/23/2025 | 49,000 | (1,509) | — | (1,509) |
2.319% | 3-month USD-LIBOR | 6/15/2025 | 340,000 | 23,121 | — | 23,121 |
3-month USD-LIBOR | 1.867% | 7/11/2025 | 274,100 | (7,091) | — | (7,091) |
2.344% | 3-month USD-LIBOR | 9/25/2025 | 449,000 | 31,006 | — | 31,006 |
6-month JPY-LIBOR | 0.228% | 2/8/2026 | ¥4,250,000 | (921) | — | (921) |
28-day MXN-TIIE | 8.11% | 1/11/2027 | MXN800,000 | (3,442) | — | (3,442) |
28-day MXN-TIIE | 8.135% | 1/14/2027 | 453,000 | (1,984) | — | (1,984) |
1.236% | 3-month USD-LIBOR | 2/26/2027 | $379,000 | 5,981 | — | 5,981 |
28-day MXN-TIIE | 7.625% | 5/20/2027 | MXN385,000 | (1,142) | — | (1,142) |
U.S. EFFR | 2.045% | 11/2/2027 | $33,700 | (3,207) | — | (3,207) |
2.91% | 3-month USD-LIBOR | 2/1/2028 | 70,300 | 6,160 | — | 6,160 |
American Funds Inflation Linked Bond Fund — Page 5 of 9
unaudited
Swap contracts (continued)
Interest rate swaps (continued)
Receive | Pay | Expiration date | Notional (000) | Value at 2/29/2020 (000) | Upfront payments/ receipts (000) | Unrealized appreciation (depreciation) at 2/29/2020 (000) |
2.908% | 3-month USD-LIBOR | 2/1/2028 | $70,300 | $6,154 | $— | $6,154 |
2.925% | 3-month USD-LIBOR | 2/1/2028 | 56,200 | 4,965 | — | 4,965 |
2.92% | 3-month USD-LIBOR | 2/2/2028 | 53,200 | 4,687 | — | 4,687 |
6-month GBP-LIBOR | 1.6567% | 9/28/2028 | £44,000 | (4,973) | — | (4,973) |
28-day MXN-TIIE | 8.855% | 12/28/2028 | MXN511,419 | (3,853) | — | (3,853) |
3-month USD-LIBOR | 2.494% | 6/15/2030 | $180,000 | (24,209) | — | (24,209) |
3-month USD-LIBOR | 2.97125% | 9/2/2030 | 57,050 | (10,223) | — | (10,223) |
3-month USD-LIBOR | 3.005% | 9/2/2030 | 57,050 | (10,407) | — | (10,407) |
3-month USD-LIBOR | 2.507% | 9/25/2030 | 239,000 | (32,154) | — | (32,154) |
3-month USD-LIBOR | 1.83% | 8/17/2031 | 58,000 | (3,785) | — | (3,785) |
3-month USD-LIBOR | 2.986% | 2/1/2038 | 33,900 | (4,690) | — | (4,690) |
3-month USD-LIBOR | 2.9625% | 2/1/2038 | 42,100 | (5,737) | — | (5,737) |
3-month USD-LIBOR | 2.963% | 2/1/2038 | 42,200 | (5,752) | — | (5,752) |
3-month USD-LIBOR | 2.967% | 2/2/2038 | 32,800 | (4,482) | — | (4,482) |
6-month GBP-LIBOR | 1.5872% | 2/5/2039 | £3,600 | (721) | — | (721) |
6-month GBP-LIBOR | 1.5877% | 2/5/2039 | 6,100 | (1,222) | — | (1,222) |
3-month USD-LIBOR | 3.253% | 10/29/2048 | $4 | (2) | — | (2) |
$583 | $2,974 |
Credit default swaps
Centrally cleared credit default swaps on credit indices — buy protection
Receive | Pay/ Payment frequency | Expiration date | Notional (000) | Value at 2/29/2020 (000) | Upfront payments (000) | Unrealized appreciation at 2/29/2020 (000) |
CDX.NA.IG.33 | 1.00%/Quarterly | 12/20/2024 | $1,145,000 | $(17,788) | $(23,526) | $5,738 |
1 | All or a portion of this security was pledged as collateral. The total value of pledged collateral was $72,560,000, which represented 1.09% of the net assets of the fund. |
2 | Index-linked bond whose principal amount moves with a government price index. |
3 | Acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $51,273,000, which represented .77% of the net assets of the fund. |
4 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
5 | Coupon rate may change periodically. Reference rate and spread are as of the most recent information available. Some coupon rates are determined by the issuer or agent based on current market conditions; therefore, the reference rate and spread are not available. |
6 | Rate represents the seven-day yield at 2/29/2020. |
7 | Notional amount is calculated based on the number of contracts and notional contract size. |
8 | Value is calculated based on the notional amount and current market price. |
American Funds Inflation Linked Bond Fund — Page 6 of 9
unaudited
Valuation disclosures
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by accounting principles generally accepted in the United States of America. 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. Security transactions are recorded by the fund as of the date the trades are executed with brokers.
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.
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. The Capital Group Central Cash Fund (“CCF”), a fund within the Capital Group Central Fund Series (“Central Funds“), is valued based upon a floating net asset value, which fluctuates with changes in the value of CCF’s portfolio securities. The underlying securities are valued based on the policies and procedures in CCF’s statement of additional information.
Exchange-traded futures are generally valued at the official settlement price of the exchange or market on which such instruments are traded, as of the close of business on the day the futures are being valued. The average month-end notional amount of futures contracts while held was $7,697,571,000. Forward currency contracts are valued at the mean of representative quoted bid and ask prices, generally based on prices supplied by one or more pricing vendors. The average month-end notional amount of open forward currency contracts while held was $490,673,000. Interest rate swaps and credit default swaps are generally valued by pricing vendors based on market inputs that include the index and term of index, reset frequency, payer/receiver, currency and pay frequency. The average month-end notional amounts of interest rate swaps and credit default swaps while held were $52,197,065,000 and $1,145,000,000, respectively.
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 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.
American Funds Inflation Linked Bond Fund — Page 7 of 9
unaudited
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. 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 tables present the fund’s valuation levels as of February 29, 2020 (dollars in thousands):
Investment securities | ||||
Level 1 | Level 2 | Level 3 | Total | |
Assets: | ||||
Bonds, notes & other debt instruments: | ||||
U.S. Treasury bonds & notes | $— | $5,992,361 | $— | $5,992,361 |
Corporate bonds & notes | — | 213,484 | — | 213,484 |
Bonds & notes of governments & government agencies outside the U.S. | — | 205,951 | — | 205,951 |
Mortgage-backed obligations | — | 10,061 | — | 10,061 |
Short-term securities | 211,293 | — | — | 211,293 |
Total | $211,293 | $6,421,857 | $— | $6,633,150 |
Other investments* | ||||
Level 1 | Level 2 | Level 3 | Total | |
Assets: | ||||
Unrealized appreciation on futures contracts | $61,523 | $— | $— | $61,523 |
Unrealized appreciation on open forward currency contracts | — | 8,616 | — | 8,616 |
Unrealized appreciation on interest rate swaps | — | 205,524 | — | 205,524 |
Unrealized appreciation on credit default swaps | — | 5,738 | — | 5,738 |
Liabilities: | ||||
Unrealized depreciation on futures contracts | (71,944) | — | — | (71,944) |
Unrealized depreciation on open forward currency contracts | — | (5,325) | — | (5,325) |
Unrealized depreciation on interest rate swaps | — | (202,550) | — | (202,550) |
Total | $(10,421) | $12,003 | $— | $1,582 |
* | Futures contracts, forward currency contracts, interest rate swaps and credit default swaps are not included in the investment portfolio. |
American Funds Inflation Linked Bond Fund — Page 8 of 9
unaudited
Key to abbreviations and symbols | |
AUD = Australian dollars | |
CAD = Canadian dollars | |
CHF = Swiss francs | |
COP = Colombian pesos | |
EFFR = Effective Federal Funds Rate | |
EONIA = Euro Overnight Index Average | |
EUR/€ = Euros | |
GBP/£ = British pounds | |
JPY/¥ = Japanese yen | |
KRW = South Korean won | |
LIBOR = London Interbank Offered Rate | |
MXN = Mexican pesos | |
SEK = Swedish kronor | |
SONIA = Sterling Overnight Interbank Average Rate | |
THB = Thai baht | |
TIIE = Equilibrium Interbank Interest Rate | |
USD/$ = U.S. dollars | |
UYU = Uruguayan pesos | |
ZAR = South African rand |
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 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 Capital Group website at capitalgroup.com.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
American Funds Distributors, Inc., member FINRA.
© 2020 Capital Group. All rights reserved.
MFGEFPX-060-0420O-S73086 | American Funds Inflation Linked Bond Fund — Page 9 of 9 |