UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
Certified Shareholder Report of
Registered Management Investment Companies
Investment Company Act File Number: 811-00032
American Funds Fundamental Investors
(Exact Name of Registrant as Specified in Charter)
6455 Irvine Center Drive
Irvine, California 92618
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (949) 975-5000
Date of fiscal year end: December 31
Date of reporting period: June 30, 2019
Brian D. Bullard
American Funds Fundamental Investors
6455 Irvine Center Drive
Irvine, California 92618
(Name and Address of Agent for Service)
ITEM 1 – Reports to Stockholders
| Fundamental Investors® |  |
| |
Semi-annual report
for the six months ended
June 30, 2019 |
We believe flexibility
can help uncover
value in any market
environment.
Beginning January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, we intend to no longer mail paper copies of the fund’s shareholder reports, unless specifically requested from American Funds or your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on the American Funds website (americanfunds.com); you will be notified by mail and provided with a website link to access the report each time a report is posted. If you have already elected to receive shareholder reports electronically, you will not be affected by this change and do not need to take any action. If you prefer to receive shareholder reports and other communications electronically, you may update your mailing preferences with your financial intermediary, or enroll in e-delivery at americanfunds.com (for accounts held directly with the fund).
You may elect to receive paper copies of all future reports free of charge. If you invest through a financial intermediary, you may contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the fund, you may inform American Funds that you wish to continue receiving paper copies of your shareholder reports by contacting us at (800) 421-4225. Your election to receive paper reports will apply to all funds held with American Funds or through your financial intermediary.
Fundamental Investors seeks long-term growth of capital and income.
This fund is one of more than 40 offered by Capital Group, home of American Funds, one of the nation’s largest mutual fund families. For more than 85 years, Capital Group 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. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2019:
| Class A shares | | 1 year | | 5 years | | 10 years |
| | | | | | | |
| Reflecting 5.75% maximum sales charge | | –0.67% | | 8.51% | | 12.80% |
For other share class results, visit americanfunds.com and americanfundsretirement.com.
The total annual fund operating expense ratio was 0.59% for Class A shares as of the prospectus dated March 1, 2019 (as supplemented to date).
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 July 31, 2019, calculated in accordance with the U.S. Securities and Exchange Commission (SEC) formula, was 1.25%. The fund’s 12-month distribution rate for Class A shares as of that date was 1.47%. Both reflect the 5.75% maximum sales charge.The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the fund’s SEC yield and distribution rate may differ.
Investing outside the United States may be subject to risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries. 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.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Fellow investors:
For the six months ended June 30, 2019, Fundamental Investors rose 15.10%. This return includes reinvested dividends and a capital gain distribution totaling $0.89 per share.
The fund’s results trailed its primary benchmark, the unmanaged S&P 500 Composite Index, a market capitalization-weighted index based on the results of approximately 500 widely held common stocks, which climbed 18.54%. However, Fundamental Investors’ return outpaced that of its growth-and-income peers, as measured by the Lipper Growth and Income Funds Index, which increased 14.81%.
The fund’s results have topped those of its Lipper peers in multiple periods since its inception. In addition, Fundamental Investors has outpaced the S&P 500 over its lifetime. Although the annual advantages may seem small, when compounded over longer time frames, it can translate into added wealth for long-term investors.
U.S. equity markets climbed despite heightened trade tensions.
U.S. stocks bounced back from their sharp decline in late 2018, supported by solid U.S. economic growth and more accommodative central bank policies. Corporate fundamentals remained strong, as companies continued to feel a tailwind from 2017’s corporate tax reform. Meanwhile, the U.S. Federal Reserve (the Fed) shifted its monetary policy approach from financial tightening to a more dovish outlook on rates. In recent months, Fed officials have signaled a higher likelihood of a rate cut should global economic growth continue to slow.
Results at a glance
For the six-month period ended June 30, 2019, with all distributions reinvested
| | | Cumulative
total returns | | Average annual total returns |
| | | 6 months | | 1 year | | 5 years | | 10 years | | Lifetime
(since 8/1/78)1 |
| | | | | | | | | | | |
| Fundamental Investors (Class A shares) | | | 15.10 | % | | | 5.39 | % | | | 9.80 | % | | | 13.47 | % | | | 12.33 | % |
| Standard & Poor’s 500 Composite Index2,3 | | | 18.54 | | | | 10.42 | | | | 10.71 | | | | 14.70 | | | | 11.65 | |
| Lipper Growth and Income Funds Index4 | | | 14.81 | | | | 6.66 | | | | 7.30 | | | | 11.73 | | | | 10.46 | |
| MSCI World Index3,5 | | | 16.98 | | | | 6.33 | | | | 6.60 | | | | 10.72 | | | | 9.49 | |
| 1 | The date Capital Research and Management Company began managing the fund. |
| 2 | Source: S&P Dow Jones Indices. |
| 3 | The market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. |
| 4 | Source: Thomson Reuters Lipper. Lipper indexes track the largest mutual funds (no more than 30), represented by one share class per fund, in the corresponding Lipper category. |
| 5 | Source: MSCI. Results reflect dividends net of withholding taxes. |
Trade tensions between the U.S. and China were elevated during the first half of the year, despite several brief periods where a broader agreement seemed likely. Talks between the two countries resulted in progress on some issues, but greater dissension on others. Swings in sentiment regarding a broader resolution had a significant impact on equity markets, producing periods of volatility, especially on trade-reliant companies in industries such as technology and agriculture.
Fed monetary policy decisions and the outcome of U.S.-China trade talks will continue to be important for financial markets moving forward.
Growth stocks fared better than value-oriented companies.
Growth-oriented U.S. companies strongly rebounded from the sharp selloff in late 2018; the Russell 1000 Growth Index climbed 21.49% on a total return basis during the first half of the year. Meanwhile, the Russell 1000 Value Index trailed, rising 16.24%. The divergence between growth and value returns likely underscored investors’ belief that companies with more potential for revenue growth were set to benefit from the near-term financial and economic environment.
Active investing is based on fundamental research.
The fund’s portfolio is carefully constructed using bottom-up, fundamental investment research that allows the fund to maintain high-conviction investments across a variety of industries. Of the fund’s 10 largest holdings, returns from nine companies contributed positively to the fund, including Facebook (+47.23%), Charter Communications (+38.67%), Microsoft (+31.89%), Amazon (+26.08%), Broadcom (+13.21%), Taiwan Semiconductor (+6.12%), Alphabet (+4.37%), Berkshire Hathaway (+4.04%) and Intel (+2.00%).
Communication services led contribution to relative returns; health care lagged.
Investments in the communication services, among other sectors, contributed to the fund’s strong results. Meanwhile, health care returns, while positive, were among the fund’s investments that lagged returns generated in the S&P 500 Index.
Earnings growth and acquisition-fueled market share gains fueled stocks in the communication services sector. Facebook, Charter Communications and Comcast (+24.17%) were among key contributors. While we maintain a sizeable investment in the communication services sector, we have been selective and our holdings have been concentrated to a handful of companies.
Modest returns for health care companies in the portfolio weighed on the fund’s relative results. Regeneron (–16.20%) and UnitedHealth (–2.05%) were two of the largest detractors. Shares of Regeneron retreated due to fears that its key product, Eylea, could be targeted for price cuts if certain of the various government proposals for reducing pharmaceutical prices are adopted. In April, companies in the health care sector, including UnitedHealth, saw increased scrutiny from politicians over drug prices, while several 2020 presidential candidates outlined proposals for a single-payer health care system.
| Fundamental Investors’ 10 largest holdings | | (as of June 30, 2019) |
| | | |
| Company | | Percent of net assets |
| Microsoft | | | 5.28 | % |
| Broadcom | | | 3.34 | |
| Facebook | | | 2.75 | |
| Intel | | | 2.46 | |
| Berkshire Hathaway | | | 2.42 | |
| Amazon | | | 2.40 | |
| UnitedHealth Group | | | 2.32 | |
| Charter Communications | | | 2.06 | |
| Alphabet | | | 1.80 | |
| Taiwan Semiconductor Manufacturing | | | 1.62 | |
We maintain our long-term perspective, while balancing opportunity with caution.
The bounce back in U.S. and global equity markets during the first half of the year reinforced the importance of a longer term investment perspective. Despite short-term market volatility, we have been able to generate healthy long-term investment results for Fundamental Investors’ shareholders. We believe that our approach will continue to help us pursue better investment outcomes.
While we are finding opportunities in global equity markets, we remain vigilant in our evaluation of companies and macroeconomic conditions, especially as global monetary policies have shifted to signal more caution. We have also continued to take advantage of periods of volatility to invest in companies that we believe can add long-term value for our shareholders. We believe that the fund’s flexibility, along with our long-term investment approach, should continue to help uncover new opportunities.
We welcome Julian Abdey, who became portfolio manager for the fund as of March 1, 2019. Julian has more than 22 years of experience, with the last 16 years at Capital Group. We look forward to Julian’s contributions to the fund.
Thank you for your support and investment in Fundamental Investors.
Sincerely,
 |  |
Brady L. Enright
Co-President | Mark L. Casey
Co-President |
August 8, 2019
For current information about the fund, visit americanfunds.com.
| Summary investment portfolio June 30, 2019 | unaudited |
| Industry sector diversification | Percent of net assets |
| Country diversification by domicile | | Percent of
net assets |
| United States | | | 79.19 | % |
| Eurozone* | | | 4.69 | |
| United Kingdom | | | 4.31 | |
| Canada | | | 2.07 | |
| Taiwan | | | 1.62 | |
| South Korea | | | 1.16 | |
| Japan | | | .53 | |
| Switzerland | | | .34 | |
| Hong Kong | | | .28 | |
| Other countries | | | .89 | |
| Short-term securities & other assets less liabilities | | | 4.92 | |
| * | Countries using the euro as a common currency; those represented in the fund’s portfolio are Belgium, France, Germany, Ireland, the Netherlands and Spain. |
| Common stocks 94.94% | | Shares | | | Value
(000) | |
| Information technology 21.54% | | | | | | | | |
| Microsoft Corp. | | | 39,752,600 | | | $ | 5,325,258 | |
| Broadcom Inc. | | | 11,709,700 | | | | 3,370,754 | |
| Intel Corp. | | | 51,821,000 | | | | 2,480,671 | |
| Taiwan Semiconductor Manufacturing Co., Ltd. | | | 184,012,000 | | | | 1,415,955 | |
| Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | | | 5,510,000 | | | | 215,827 | |
| ASML Holding NV | | | 3,537,671 | | | | 739,128 | |
| ASML Holding NV (New York registered) | | | 1,444,000 | | | | 300,251 | |
| Samsung Electronics Co., Ltd. | | | 21,885,000 | | | | 890,828 | |
| Texas Instruments Inc. | | | 7,741,000 | | | | 888,357 | |
| Mastercard Inc., Class A | | | 2,700,000 | | | | 714,231 | |
| Visa Inc., Class A | | | 3,779,200 | | | | 655,880 | |
| QUALCOMM Inc. | | | 7,668,300 | | | | 583,328 | |
| Other securities | | | | | | | 4,160,707 | |
| | | | | | | | 21,741,175 | |
| | | Shares | | | Value
(000) | |
| Health care 12.10% | | | | | | | | |
| UnitedHealth Group Inc. | | | 9,590,126 | | | $ | 2,340,087 | |
| Boston Scientific Corp.1 | | | 21,876,500 | | | | 940,252 | |
| Merck & Co., Inc. | | | 10,500,000 | | | | 880,425 | |
| Regeneron Pharmaceuticals, Inc.1 | | | 2,681,500 | | | | 839,309 | |
| Thermo Fisher Scientific Inc. | | | 2,414,500 | | | | 709,090 | |
| Centene Corp.1 | | | 11,617,764 | | | | 609,236 | |
| Cigna Corp. | | | 3,532,072 | | | | 556,478 | |
| Other securities | | | | | | | 5,341,419 | |
| | | | | | | | 12,216,296 | |
| | | | | | | | | |
| Financials 11.64% | | | | | | | | |
| Berkshire Hathaway Inc., Class A1 | | | 7,669 | | | | 2,441,426 | |
| JPMorgan Chase & Co. | | | 12,053,400 | | | | 1,347,570 | |
| Capital One Financial Corp. | | | 9,658,000 | | | | 876,367 | |
| Citigroup Inc. | | | 10,000,000 | | | | 700,300 | |
| CME Group Inc., Class A | | | 3,582,500 | | | | 695,399 | |
| Discover Financial Services | | | 8,255,000 | | | | 640,506 | |
| Other securities | | | | | | | 5,049,033 | |
| | | | | | | | 11,750,601 | |
| | | | | | | | | |
| Communication services 10.78% | | | | | | | | |
| Facebook, Inc., Class A1 | | | 14,361,100 | | | | 2,771,692 | |
| Charter Communications, Inc., Class A1 | | | 5,266,100 | | | | 2,081,057 | |
| Alphabet Inc., Class C1 | | | 1,275,701 | | | | 1,378,918 | |
| Alphabet Inc., Class A1 | | | 402,600 | | | | 435,935 | |
| Comcast Corp., Class A | | | 28,006,173 | | | | 1,184,101 | |
| Netflix, Inc.1 | | | 2,671,200 | | | | 981,185 | |
| Activision Blizzard, Inc. | | | 11,728,469 | | | | 553,584 | |
| Other securities | | | | | | | 1,496,079 | |
| | | | | | | | 10,882,551 | |
| | | | | | | | | |
| Industrials 10.20% | | | | | | | | |
| Airbus SE, non-registered shares | | | 8,904,418 | | | | 1,262,412 | |
| Boeing Co. | | | 2,965,000 | | | | 1,079,290 | |
| TransDigm Group Inc.1 | | | 2,104,800 | | | | 1,018,302 | |
| Parker-Hannifin Corp. | | | 4,650,000 | | | | 790,546 | |
| Union Pacific Corp. | | | 4,510,000 | | | | 762,686 | |
| Deere & Co. | | | 4,466,000 | | | | 740,061 | |
| CSX Corp. | | | 7,282,976 | | | | 563,484 | |
| Other securities | | | | | | | 4,078,020 | |
| | | | | | | | 10,294,801 | |
| | | | | | | | | |
| Consumer discretionary 8.58% | | | | | | | | |
| Amazon.com, Inc.1 | | | 1,277,300 | | | | 2,418,734 | |
| Home Depot, Inc. | | | 6,938,475 | | | | 1,442,995 | |
| NIKE, Inc., Class B | | | 12,045,000 | | | | 1,011,178 | |
| Marriott International, Inc., Class A | | | 5,254,251 | | | | 737,119 | |
| Other securities | | | | | | | 3,054,984 | |
| | | | | | | | 8,665,010 | |
| Common stocks (continued) | | Shares | | | Value
(000) | |
| Consumer staples 6.60% | | | | | | | | |
| Philip Morris International Inc. | | | 14,765,500 | | | $ | 1,159,535 | |
| British American Tobacco PLC | | | 28,592,800 | | | | 998,201 | |
| Altria Group, Inc. | | | 17,964,586 | | | | 850,623 | |
| Keurig Dr Pepper Inc. | | | 19,287,171 | | | | 557,399 | |
| Other securities | | | | | | | 3,099,167 | |
| | | | | | | | 6,664,925 | |
| | | | | | | | | |
| Energy 6.29% | | | | | | | | |
| Enbridge Inc. (CAD denominated) | | | 26,368,328 | | | | 952,405 | |
| Enbridge Inc. (CAD denominated)2 | | | 1,256,665 | | | | 45,390 | |
| Royal Dutch Shell PLC, Class B (ADR) | | | 7,082,734 | | | | 465,619 | |
| Royal Dutch Shell PLC, Class B | | | 10,872,720 | | | | 356,380 | |
| Concho Resources Inc. | | | 5,335,403 | | | | 550,507 | |
| Other securities | | | | | | | 3,982,044 | |
| | | | | | | | 6,352,345 | |
| | | | | | | | | |
| Materials 4.78% | | | | | | | | |
| DuPont de Nemours Inc. | | | 11,223,948 | | | | 842,582 | |
| Other securities | | | | | | | 3,980,940 | |
| | | | | | | | 4,823,522 | |
| | | | | | | | | |
| Real estate 1.98% | | | | | | | | |
| Simon Property Group, Inc. REIT | | | 6,145,000 | | | | 981,725 | |
| Other securities | | | | | | | 1,013,588 | |
| | | | | | | | 1,995,313 | |
| | | | | | | | | |
| Utilities 0.45% | | | | | | | | |
| Other securities | | | | | | | 453,101 | |
| | | | | | | | | |
| Total common stocks (cost: $63,916,190,000) | | | | | | | 95,839,640 | |
| | | | | | | | | |
| Preferred securities 0.14% | | | | | | | | |
| Other 0.14% | | | | | | | | |
| Other securities | | | | | | | 143,184 | |
| | | | | | | | | |
| Total preferred securities (cost: $118,002,000) | | | | | | | 143,184 | |
| | | | | | | | | |
| Short-term securities 5.15% | | | | | | | | |
| Money market investments 5.15% | | | | | | | | |
| Capital Group Central Cash Fund | | | 51,969,502 | | | | 5,196,430 | |
| | | | | | | | | |
| Total short-term securities (cost: $5,196,476,000) | | | | | | | 5,196,430 | |
| Total investment securities 100.23% (cost: $69,230,668,000) | | | | | | | 101,179,254 | |
| Other assets less liabilities (0.23)% | | | | | | | (230,235 | ) |
| | | | | | | | | |
| Net assets 100.00% | | | | | | $ | 100,949,019 | |
This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.
“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio.
Investments in affiliates
A company is an affiliate of the fund under the Investment Company Act of 1940 if the fund’s holdings represent 5% or more of the outstanding voting shares of that company. The value of the fund’s affiliated-company holding is included in “Other securities” under the respective industry sector in the summary investment portfolio. Further details on this holding and related transactions during the six months ended June 30, 2019, appear below.
| | | Beginning
shares | | | Additions | | | Reductions | | | Ending
shares | |
| Common stocks 0.29% | | | | | | | | | | | | | | | | |
| Financials 0.29% | | | | | | | | | | | | | | | | |
| CIT Group Inc. | | | 7,752,515 | | | | — | | | | 2,182,515 | | | | 5,570,000 | |
| Energy 0.00% | | | | | | | | | | | | | | | | |
| Concho Resources Inc.3 | | | 10,228,523 | | | | — | | | | 4,893,120 | | | | 5,335,403 | |
| Short-term securities 0.00% | | | | | | | | | | | | | | | | |
| Money market investments 0.00% | | | | | | | | | | | | | | | | |
| Capital Group Central Cash Fund3 | | | — | | | | 79,328,511 | | | | 27,359,009 | | | | 51,969,502 | |
| | | | | | | | | | | | | | | | | |
| | | Net
realized
gain (loss)
(000) | | | Net
unrealized
appreciation
(depreciation)
(000) | | | Dividend
income
(000) | | | Value of
affiliates at
6/30/2019
(000) | |
| Common stocks 0.29% | | | | | | | | | | | | | | | | |
| Financials 0.29% | | | | | | | | | | | | | | | | |
| CIT Group Inc. | | $ | 17,817 | | | $ | 73,830 | | | $ | 3,342 | | | $ | 292,648 | |
| Energy 0.00% | | | | | | | | | | | | | | | | |
| Concho Resources Inc.3 | | | (211,692 | ) | | | 238,511 | | | | 2,283 | | | | — | |
| Total common stocks | | | | | | | | | | | | | | | 292,648 | |
| Short-term securities 0.00% | | | | | | | | | | | | | | | | |
| Money market investments 0.00% | | | | | | | | | | | | | | | | |
| Capital Group Central Cash Fund3 | | | 48 | | | | (45 | ) | | | 35,763 | | | | — | |
| Total 0.29% | | $ | (193,827 | ) | | $ | 312,296 | | | $ | 41,388 | | | $ | 292,648 | |
| 1 | Security did not produce income during the last 12 months. |
| 2 | Acquired in a transaction exempt from registration under Section 4(2) 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 $45,390,000, which represented .04% of the net assets of the fund. |
| 3 | Unaffiliated issuer at 6/30/2019. |
Key to abbreviations
ADR = American Depositary Receipts
CAD = Canadian dollars
See notes to financial statements.
| Financial statements | | |
| | | |
| Statement of assets and liabilities | unaudited | |
| at June 30, 2019 | (dollars in thousands) | |
| Assets: | | | | | | | | |
| Investment securities, at value: | | | | | | | | |
| Unaffiliated issuers (cost: $69,044,067) | | $ | 100,886,606 | | | | | |
| Affiliated issuers (cost: $186,601) | | | 292,648 | | | $ | 101,179,254 | |
| Cash | | | | | | | 769 | |
| Cash denominated in currencies other than U.S. dollars (cost: $2,795) | | | | | | | 2,795 | |
| Receivables for: | | | | | | | | |
| Sales of investments | | | 88,938 | | | | | |
| Sales of fund’s shares | | | 86,652 | | | | | |
| Dividends | | | 208,580 | | | | | |
| Other | | | 106 | | | | 384,276 | |
| | | | | | | | 101,567,094 | |
| Liabilities: | | | | | | | | |
| Payables for: | | | | | | | | |
| Purchases of investments | | | 417,001 | | | | | |
| Repurchases of fund’s shares | | | 142,799 | | | | | |
| Investment advisory services | | | 19,633 | | | | | |
| Services provided by related parties | | | 19,621 | | | | | |
| Trustees’ deferred compensation | | | 4,267 | | | | | |
| Other | | | 14,754 | | | | 618,075 | |
| Net assets at June 30, 2019 | | | | | | $ | 100,949,019 | |
| | | | | | | | | |
| Net assets consist of: | | | | | | | | |
| Capital paid in on shares of beneficial interest | | | | | | $ | 66,010,181 | |
| Total distributable earnings | | | | | | | 34,938,838 | |
| Net assets at June 30, 2019 | | | | | | $ | 100,949,019 | |
| | | | | | | | | |
| See notes to financial statements. | | | | | | | | |
(dollars and shares in thousands, except per-share amounts)
Shares of beneficial interest issued and outstanding (no stated par value) —
unlimited shares authorized (1,703,792 total shares outstanding)
| | | Net assets | | | Shares
outstanding | | | Net asset
value per share | |
| Class A | | $ | 53,034,042 | | | | 894,765 | | | $ | 59.27 | |
| Class C | | | 2,097,410 | | | | 35,583 | | | | 58.94 | |
| Class T | | | 10 | | | | — | * | | | 59.26 | |
| Class F-1 | | | 2,634,433 | | | | 44,476 | | | | 59.23 | |
| Class F-2 | | | 10,022,014 | | | | 169,148 | | | | 59.25 | |
| Class F-3 | | | 6,718,835 | | | | 113,394 | | | | 59.25 | |
| Class 529-A | | | 2,626,371 | | | | 44,383 | | | | 59.17 | |
| Class 529-C | | | 352,890 | | | | 5,965 | | | | 59.16 | |
| Class 529-E | | | 88,781 | | | | 1,502 | | | | 59.12 | |
| Class 529-T | | | 12 | | | | — | * | | | 59.26 | |
| Class 529-F-1 | | | 174,100 | | | | 2,945 | | | | 59.12 | |
| Class R-1 | | | 135,086 | | | | 2,292 | | | | 58.94 | |
| Class R-2 | | | 715,413 | | | | 12,146 | | | | 58.90 | |
| Class R-2E | | | 80,020 | | | | 1,357 | | | | 58.96 | |
| Class R-3 | | | 1,993,856 | | | | 33,733 | | | | 59.11 | |
| Class R-4 | | | 2,020,744 | | | | 34,173 | | | | 59.13 | |
| Class R-5E | | | 317,303 | | | | 5,364 | | | | 59.16 | |
| Class R-5 | | | 1,405,655 | | | | 23,697 | | | | 59.32 | |
| Class R-6 | | | 16,532,044 | | | | 278,869 | | | | 59.28 | |
| * | Amount less than one thousand. |
See notes to financial statements.
| Statement of operations | unaudited | |
| for the six months ended June 30, 2019 | (dollars in thousands) | |
| Investment income: | | | | | | | | |
| Income: | | | | | | | | |
| Dividends (net of non-U.S. taxes of $38,875; also includes $41,388 from affiliates) | | $ | 1,096,071 | | | | | |
| Interest | | | 30,544 | | | $ | 1,126,615 | |
| Fees and expenses*: | | | | | | | | |
| Investment advisory services | | | 116,902 | | | | | |
| Distribution services | | | 93,320 | | | | | |
| Transfer agent services | | | 37,029 | | | | | |
| Administrative services | | | 13,936 | | | | | |
| Reports to shareholders | | | 1,053 | | | | | |
| Registration statement and prospectus | | | 2,062 | | | | | |
| Trustees’ compensation | | | 282 | | | | | |
| Auditing and legal | | | 137 | | | | | |
| Custodian | | | 1,636 | | | | | |
| Other | | | 1,316 | | | | | |
| Total fees and expenses before reimbursements | | | 267,673 | | | | | |
| Less transfer agent services reimbursements | | | 33 | | | | | |
| Total fees and expenses after reimbursements | | | | | | | 267,640 | |
| Net investment income | | | | | | | 858,975 | |
| | | | | | | | | |
| Net realized gain and unrealized appreciation: | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | |
| Investments: | | | | | | | | |
| Unaffiliated issuers | | | 2,374,434 | | | | | |
| Affiliated issuers | | | (193,827 | ) | | | | |
| Currency transactions | | | (4,201 | ) | | | 2,176,406 | |
| Net unrealized appreciation on: | | | | | | | | |
| Investments (net of non-U.S. taxes of $914): | | | | | | | | |
| Unaffiliated issuers | | | 10,009,416 | | | | | |
| Affiliated issuers | | | 312,296 | | | | | |
| Currency translations | | | 153 | | | | 10,321,865 | |
| Net realized gain and unrealized appreciation | | | | | | | 12,498,271 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | | | | | $ | 13,357,246 | |
| * | Additional information related to class-specific fees and expenses is included in the notes to financial statements. |
See notes to financial statements.
Statements of changes in net assets
(dollars in thousands)
| | | Six months ended
June 30, 2019* | | | Year ended
December 31, 2018 | |
| Operations: | | | | | | | | |
| Net investment income | | $ | 858,975 | | | $ | 1,607,728 | |
| Net realized gain | | | 2,176,406 | | | | 7,886,156 | |
| Net unrealized appreciation (depreciation) | | | 10,321,865 | | | | (15,746,574 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 13,357,246 | | | | (6,252,690 | ) |
| | | | | | | | | |
| Distributions paid to shareholders | | | (1,530,159 | ) | | | (8,948,530 | ) |
| | | | | | | | | |
| Net capital share transactions | | | 891,039 | | | | 6,966,542 | |
| | | | | | | | | |
| Total increase (decrease) in net assets | | | 12,718,126 | | | | (8,234,678 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 88,230,893 | | | | 96,465,571 | |
| End of period | | $ | 100,949,019 | | | $ | 88,230,893 | |
See notes to financial statements.
| Notes to financial statements | unaudited |
1. Organization
American Funds Fundamental Investors (the “trust”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company and has initially issued one series of shares, Fundamental Investors (the “fund”). The fund seeks long-term growth of capital and income.
The fund has 19 share classes consisting of six retail share classes (Classes A, C, T, F-1, F-2 and F-3), five 529 college savings plan share classes (Classes 529-A, 529-C, 529-E, 529-T 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:
| Share class | | Initial sales
charge | | Contingent deferred sales
charge upon redemption | | Conversion feature | |
| Classes A and 529-A | | Up to 5.75% | | None (except 1% for certain redemptions within 18 months of purchase without an initial sales charge) | | None | |
| 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 | | Class 529-C converts to Class 529-A after 10 years | |
| Class 529-E | | None | | None | | None | |
| Classes T and 529-T* | | Up to 2.50% | | None | | None | |
| Classes F-1, F-2, F-3 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 T and 529-T shares are not available for purchase. |
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.
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.
Distributions paid to shareholders— Income dividends and capital gain distributions 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. The Capital Group Central Cash Fund (“CCF”) 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.
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.
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. At June 30, 2019, all of the fund’s investments were classified as Level 1.
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, governmental agency or central bank 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, major litigation against the issuer, changes in government regulations affecting the issuer or its competitive environment and strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives.
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 in income-oriented stocks— The value of the fund’s securities and 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 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 nationalization, currency blockage or the imposition of price controls or punitive taxes, each of which could adversely impact the value of these securities. 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, including models, tools and data, employed by the investment adviser in this process may be flawed or incorrect and 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 June 30, 2019, 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 significant interest or penalties.
The fund’s tax returns are not subject to examination by federal, state and, if applicable, non-U.S. tax authorities after the expiration of each jurisdiction’s statute of limitations, which is generally three years after the date of filing but can be extended in certain jurisdictions.
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. Gains realized by the fund on the sale of securities in certain countries, if any, may be subject to non-U.S. taxes. If applicable, the fund records an estimated deferred tax liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
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; capital losses related to sales of certain securities within 30 days of purchase; cost of investments sold 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 components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2018, the components of distributable earnings on a tax basis were as follows (dollars in thousands):
| Undistributed ordinary income | | $ | 275,665 | |
| Undistributed long-term capital gains | | | 948,499 | |
| Post-October capital loss deferral* | | | (195,319 | ) |
| * | This deferral is considered incurred in the subsequent year. |
As of June 30, 2019, the tax basis unrealized appreciation (depreciation) and cost of investments were as follows (dollars in thousands):
| Gross unrealized appreciation on investments | | $ | 34,806,228 | |
| Gross unrealized depreciation on investments | | | (2,553,947 | ) |
| Net unrealized appreciation on investments | | | 32,252,281 | |
| Cost of investments | | | 68,926,973 | |
Distributions paid were characterized for tax purposes as follows (dollars in thousands):
| | | Six months ended June 30, 2019 | | | Year ended December 31, 2018 | |
| Share class | | Ordinary
income | | | Long-term
capital gains | | | Total
distributions
paid | | | Ordinary
income | | | Long-term
capital gains | | | Total
distributions
paid | |
| Class A | | $ | 293,865 | | | $ | 498,264 | | | $ | 792,129 | | | $ | 830,699 | | | $ | 3,951,373 | | | $ | 4,782,072 | |
| Class C | | | 3,744 | | | | 19,835 | | | | 23,579 | | | | 17,208 | | | | 168,903 | | | | 186,111 | |
| Class T | | | — | * | | | — | * | | | — | * | | | — | * | | | 1 | | | | 1 | |
| Class F-1 | | | 13,795 | | | | 24,849 | | | | 38,644 | | | | 40,704 | | | | 200,615 | | | | 241,319 | |
| Class F-2 | | | 64,056 | | | | 94,046 | | | | 158,102 | | | | 160,244 | | | | 719,272 | | | | 879,516 | |
| Class F-3 | | | 45,688 | | | | 62,934 | | | | 108,622 | | | | 111,118 | | | | 455,724 | | | | 566,842 | |
| Class 529-A | | | 13,543 | | | | 24,694 | | | | 38,237 | | | | 37,972 | | | | 192,064 | | | | 230,036 | |
| Class 529-C | | | 548 | | | | 3,322 | | | | 3,870 | | | | 2,680 | | | | 28,625 | | | | 31,305 | |
| Class 529-E | | | 364 | | | | 836 | | | | 1,200 | | | | 1,148 | | | | 6,865 | | | | 8,013 | |
| Class 529-T | | | — | * | | | — | * | | | — | * | | | — | * | | | 1 | | | | 1 | |
| Class 529-F-1 | | | 1,082 | | | | 1,632 | | | | 2,714 | | | | 2,658 | | | | 12,264 | | | | 14,922 | |
| Class R-1 | | | 236 | | | | 1,278 | | | | 1,514 | | | | 1,056 | | | | 10,772 | | | | 11,828 | |
| Class R-2 | | | 1,308 | | | | 6,773 | | | | 8,081 | | | | 5,607 | | | | 55,443 | | | | 61,050 | |
| Class R-2E | | | 254 | | | | 761 | | | | 1,015 | | | | 756 | | | | 5,451 | | | | 6,207 | |
| Class R-3 | | | 7,927 | | | | 19,020 | | | | 26,947 | | | | 25,962 | | | | 159,946 | | | | 185,908 | |
| Class R-4 | | | 10,917 | | | | 19,164 | | | | 30,081 | | | | 33,517 | | | | 162,350 | | | | 195,867 | |
| Class R-5E | | | 1,943 | | | | 2,911 | | | | 4,854 | | | | 2,061 | | | | 11,500 | | | | 13,561 | |
| Class R-5 | | | 9,629 | | | | 13,269 | | | | 22,898 | | | | 30,949 | | | | 122,328 | | | | 153,277 | |
| Class R-6 | | | 112,659 | | | | 155,013 | | | | 267,672 | | | | 266,414 | | | | 1,114,280 | | | | 1,380,694 | |
| Total | | $ | 581,558 | | | $ | 948,601 | | | $ | 1,530,159 | | | $ | 1,570,753 | | | $ | 7,377,777 | | | $ | 8,948,530 | |
| * | Amount less than one thousand. |
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 0.229% on such assets in excess of $89 billion. For the six months ended June 30, 2019, the investment advisory services fee was $116,902,000, which was equivalent to an annualized rate of 0.242% of average daily net assets.
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, F-3, 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.
| | Share class | | Currently approved limits | | Plan limits |
| | Class A | | | 0.25 | % | | | 0.25 | % |
| | Class 529-A | | | 0.25 | | | | 0.50 | |
| | Classes C, 529-C and R-1 | | | 1.00 | | | | 1.00 | |
| | Class R-2 | | | 0.75 | | | | 1.00 | |
| | Class R-2E | | | 0.60 | | | | 0.85 | |
| | Classes 529-E and R-3 | | | 0.50 | | | | 0.75 | |
| | Classes T, F-1, 529-T, 529-F-1 and R-4 | | | 0.25 | | | | 0.50 | |
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 limits are not exceeded. As of June 30, 2019, unreimbursed expenses subject to reimbursement totaled $1,154,000 for Class A shares. There were no unreimbursed expenses subject to reimbursement for Class 529-A shares.
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 all share classes. Administrative services are provided by CRMC and its affiliates to help assist third parties providing non-distribution services to fund shareholders. These services include providing in depth information on the fund and market developments that impact fund investments. Administrative services also include, but are not limited to, coordinating, monitoring and overseeing third parties that provide services to fund shareholders. The agreement provides the fund the ability to charge an administrative services fee at the annual rate of 0.05% of the daily net assets attributable to each share class of the fund. Currently Class A shares pay an administrative services fee at the annual rate of 0.01% of daily net assets and all other share classes pay a fee at the annual rate of 0.05% of their respective daily net assets. The fund’s board of trustees authorized effective July 1, 2019, an administrative services fee at the annual rate of 0.03% of the daily net assets attributable to each share class of the fund (which could increase as noted above) for CRMC’s provision of administrative services.
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 CollegeAmerica 529 college savings plan. The fee is based on the combined net assets invested in Class 529 and ABLE shares of the American Funds. Class ABLE shares are offered on other American Funds by Virginia529 through ABLEAmerica®, a tax-advantaged savings program for individuals with disabilities. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $20 billion of the combined net assets invested in the American Funds and decreasing to 0.03% on such assets in excess of $100 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 and ABLE 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.
For the six months ended June 30, 2019, class-specific expenses under the agreements were as follows (dollars in thousands):
| | Share class | | Distribution
services | | | Transfer agent
services | | | Administrative
services | | | 529 plan
services | |
| | Class A | | | $63,960 | | | | $23,452 | | | | $2,558 | | | | Not applicable | |
| | Class C | | | 10,359 | | | | 953 | | | | 522 | | | | Not applicable | |
| | Class T | | | — | | | | — | * | | | — | * | | | Not applicable | |
| | Class F-1 | | | 3,186 | | | | 1,627 | | | | 639 | | | | Not applicable | |
| | Class F-2 | | | Not applicable | | | | 5,135 | | | | 2,384 | | | | Not applicable | |
| | Class F-3 | | | Not applicable | | | | 280 | | | | 1,560 | | | | Not applicable | |
| | Class 529-A | | | 2,911 | | | | 1,015 | | | | 629 | | | | $831 | |
| | Class 529-C | | | 1,727 | | | | 145 | | | | 88 | | | | 117 | |
| | Class 529-E | | | 214 | | | | 17 | | | | 22 | | | | 29 | |
| | Class 529-T | | | — | | | | — | * | | | — | * | | | — | * |
| | Class 529-F-1 | | | — | | | | 66 | | | | 41 | | | | 54 | |
| | Class R-1 | | | 672 | | | | 72 | | | | 34 | | | | Not applicable | |
| | Class R-2 | | | 2,613 | | | | 1,190 | | | | 174 | | | | Not applicable | |
| | Class R-2E | | | 226 | | | | 73 | | | | 19 | | | | Not applicable | |
| | Class R-3 | | | 4,964 | | | | 1,464 | | | | 496 | | | | Not applicable | |
| | Class R-4 | | | 2,488 | | | | 987 | | | | 498 | | | | Not applicable | |
| | Class R-5E | | | Not applicable | | | | 181 | | | | 73 | | | | Not applicable | |
| | Class R-5 | | | Not applicable | | | | 343 | | | | 349 | | | | Not applicable | |
| | Class R-6 | | | Not applicable | | | | 29 | | | | 3,850 | | | | Not applicable | |
| | Total class-specific expenses | | | $93,320 | | | | $37,029 | | | | $13,936 | | | | $1,031 | |
| | * | Amount less than one thousand. |
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 $282,000 in the fund’s statement of operations reflects $254,000 in current fees (either paid in cash or deferred) and a net increase of $28,000 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.
Investment in CCF— The fund holds shares of CCF, an institutional prime money market fund managed by CRMC. CCF invests in high-quality, short-term money market instruments. CCF is used as the primary investment vehicle for the fund’s short-term investments. CCF shares are only available for purchase by CRMC, its affiliates, and other funds managed by CRMC and are not available to the public. CRMC does not receive an investment advisory services fee from CCF.
Security transactions with related funds— The fund purchased securities from, and sold securities to, other funds managed by CRMC (or funds managed by certain affiliates of CRMC) under procedures adopted by the fund’s board of trustees. The funds involved in such transactions are considered related by virtue of having a common investment adviser (or affiliated investment advisers), common trustees and/or common officers. Each transaction was executed at the current market price of the security and no brokerage commissions or fees were paid in accordance with Rule 17a-7 of the 1940 Act. During the six months ended June 30, 2019, the fund engaged in such purchase and sale transactions with related funds in the amounts of $923,122,000 and $2,371,591,000, respectively, which generated $101,362,000 of net realized gains from such sales.
Interfund lending— Pursuant to an exemptive order issued by the SEC, the fund, along with other CRMC-managed funds (or funds managed by certain affiliates of CRMC), may participate in an interfund lending program. The program provides an alternate credit facility that permits the funds to lend or borrow cash for temporary purposes directly to or from one another, subject to the conditions of the exemptive order. The fund did not lend or borrow cash through the interfund lending program at any time during the six months ended June 30, 2019.
7. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
| | | Sales* | | | Reinvestments of
distributions | | | Repurchases* | | | Net (decrease)
increase | |
| Share class | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Six months ended June 30, 2019 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 1,638,904 | | | | 28,467 | | | $ | 779,129 | | | | 13,471 | | | $ | (2,706,349 | ) | | | (46,887 | ) | | $ | (288,316 | ) | | | (4,949 | ) |
| Class C | | | 122,617 | | | | 2,142 | | | | 23,421 | | | | 407 | | | | (306,926 | ) | | | (5,353 | ) | | | (160,888 | ) | | | (2,804 | ) |
| Class T | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Class F-1 | | | 225,405 | | | | 3,919 | | | | 38,042 | | | | 658 | | | | (294,311 | ) | | | (5,105 | ) | | | (30,864 | ) | | | (528 | ) |
| Class F-2 | | | 1,247,411 | | | | 21,697 | | | | 152,723 | | | | 2,642 | | | | (1,196,321 | ) | | | (20,752 | ) | | | 203,813 | | | | 3,587 | |
| Class F-3 | | | 974,551 | | | | 16,891 | | | | 106,978 | | | | 1,850 | | | | (553,198 | ) | | | (9,573 | ) | | | 528,331 | | | | 9,168 | |
| Class 529-A | | | 130,370 | | | | 2,264 | | | | 38,230 | | | | 662 | | | | (153,341 | ) | | | (2,676 | ) | | | 15,259 | | | | 250 | |
| Class 529-C | | | 18,633 | | | | 325 | | | | 3,869 | | | | 67 | | | | (54,491 | ) | | | (948 | ) | | | (31,989 | ) | | | (556 | ) |
| Class 529-E | | | 3,098 | | | | 54 | | | | 1,200 | | | | 21 | | | | (8,308 | ) | | | (145 | ) | | | (4,010 | ) | | | (70 | ) |
| Class 529-T | | | — | | | | — | | | | — | † | | | — | † | | | — | | | | — | | | | — | † | | | — | † |
| Class 529-F-1 | | | 17,863 | | | | 312 | | | | 2,715 | | | | 47 | | | | (15,240 | ) | | | (267 | ) | | | 5,338 | | | | 92 | |
| Class R-1 | | | 7,661 | | | | 134 | | | | 1,509 | | | | 26 | | | | (18,868 | ) | | | (329 | ) | | | (9,698 | ) | | | (169 | ) |
| Class R-2 | | | 64,594 | | | | 1,133 | | | | 8,078 | | | | 141 | | | | (100,901 | ) | | | (1,779 | ) | | | (28,229 | ) | | | (505 | ) |
| Class R-2E | | | 13,814 | | | | 244 | | | | 1,016 | | | | 18 | | | | (8,731 | ) | | | (154 | ) | | | 6,099 | | | | 108 | |
| Class R-3 | | | 133,761 | | | | 2,343 | | | | 26,916 | | | | 467 | | | | (294,575 | ) | | | (5,138 | ) | | | (133,898 | ) | | | (2,328 | ) |
| Class R-4 | | | 125,602 | | | | 2,201 | | | | 30,078 | | | | 521 | | | | (260,710 | ) | | | (4,574 | ) | | | (105,030 | ) | | | (1,852 | ) |
| Class R-5E | | | 50,673 | | | | 887 | | | | 4,854 | | | | 84 | | | | (28,157 | ) | | | (489 | ) | | | 27,370 | | | | 482 | |
| Class R-5 | | | 59,871 | | | | 1,044 | | | | 22,888 | | | | 395 | | | | (177,801 | ) | | | (3,081 | ) | | | (95,042 | ) | | | (1,642 | ) |
| Class R-6 | | | 1,385,149 | | | | 24,267 | | | | 267,658 | | | | 4,626 | | | | (660,014 | ) | | | (11,416 | ) | | | 992,793 | | | | 17,477 | |
| Total net increase (decrease) | | $ | 6,219,977 | | | | 108,324 | | | $ | 1,509,304 | | | | 26,103 | | | $ | (6,838,242 | ) | | | (118,666 | ) | | $ | 891,039 | | | | 15,761 | |
| | | Sales* | | | Reinvestments of
distributions | | | Repurchases* | | | Net increase
(decrease) | |
| Share class | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 3,562,813 | | | | 57,219 | | | $ | 4,700,041 | | | | 89,686 | | | $ | (7,003,945 | ) | | | (113,402 | ) | | $ | 1,258,909 | | | | 33,503 | |
| Class C | | | 321,999 | | | | 5,178 | | | | 184,713 | | | | 3,585 | | | | (705,519 | ) | | | (11,335 | ) | | | (198,807 | ) | | | (2,572 | ) |
| Class T | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Class F-1 | | | 560,229 | | | | 8,920 | | | | 237,990 | | | | 4,537 | | | | (1,015,729 | ) | | | (16,227 | ) | | | (217,510 | ) | | | (2,770 | ) |
| Class F-2 | | | 3,760,912 | | | | 60,095 | | | | 850,356 | | | | 16,266 | | | | (2,104,666 | ) | | | (34,418 | ) | | | 2,506,602 | | | | 41,943 | |
| Class F-3 | | | 1,664,915 | | | | 26,495 | | | | 557,704 | | | | 10,617 | | | | (1,368,293 | ) | | | (21,982 | ) | | | 854,326 | | | | 15,130 | |
| Class 529-A | | | 275,342 | | | | 4,404 | | | | 229,997 | | | | 4,402 | | | | (340,335 | ) | | | (5,443 | ) | | | 165,004 | | | | 3,363 | |
| Class 529-C | | | 41,092 | | | | 658 | | | | 31,295 | | | | 606 | | | | (104,970 | ) | | | (1,671 | ) | | | (32,583 | ) | | | (407 | ) |
| Class 529-E | | | 9,290 | | | | 148 | | | | 8,009 | | | | 154 | | | | (14,531 | ) | | | (231 | ) | | | 2,768 | | | | 71 | |
| Class 529-T | | | — | | | | — | | | | 1 | | | | — | † | | | — | | | | — | | | | 1 | | | | — | † |
| Class 529-F-1 | | | 48,208 | | | | 773 | | | | 14,916 | | | | 286 | | | | (25,721 | ) | | | (416 | ) | | | 37,403 | | | | 643 | |
| Class R-1 | | | 18,078 | | | | 290 | | | | 11,786 | | | | 229 | | | | (40,418 | ) | | | (645 | ) | | | (10,554 | ) | | | (126 | ) |
| Class R-2 | | | 159,549 | | | | 2,557 | | | | 60,991 | | | | 1,185 | | | | (247,425 | ) | | | (3,974 | ) | | | (26,885 | ) | | | (232 | ) |
| Class R-2E | | | 26,665 | | | | 428 | | | | 6,206 | | | | 120 | | | | (12,262 | ) | | | (201 | ) | | | 20,609 | | | | 347 | |
| Class R-3 | | | 358,924 | | | | 5,730 | | | | 185,697 | | | | 3,567 | | | | (703,387 | ) | | | (11,273 | ) | | | (158,766 | ) | | | (1,976 | ) |
| Class R-4 | | | 351,620 | | | | 5,599 | | | | 195,845 | | | | 3,740 | | | | (868,589 | ) | | | (13,952 | ) | | | (321,124 | ) | | | (4,613 | ) |
| Class R-5E | | | 297,119 | | | | 5,131 | | | | 13,556 | | | | 264 | | | | (45,615 | ) | | | (778 | ) | | | 265,060 | | | | 4,617 | |
| Class R-5 | | | 260,731 | | | | 4,121 | | | | 153,186 | | | | 2,900 | | | | (897,523 | ) | | | (14,477 | ) | | | (483,606 | ) | | | (7,456 | ) |
| Class R-6 | | | 3,206,812 | | | | 51,376 | | | | 1,380,608 | | | | 26,326 | | | | (1,281,725 | ) | | | (20,435 | ) | | | 3,305,695 | | | | 57,267 | |
| Total net increase (decrease) | | $ | 14,924,298 | | | | 239,122 | | | $ | 8,822,897 | | | | 168,470 | | | $ | (16,780,653 | ) | | | (270,860 | ) | | $ | 6,966,542 | | | | 136,732 | |
| * | Includes exchanges between share classes of the fund. |
| † | Amount less than one thousand. |
8. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $26,972,703,000 and $22,242,618,000, respectively, during the six months ended June 30, 2019.
Financial highlights
| | | | | | Income (loss) from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income2 | | | Net gains (losses)
on securities (both
realized and
unrealized) | | | Total from
investment
operations | |
| Class A: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | $ | 52.29 | | | $ | .49 | | | $ | 7.38 | | | $ | 7.87 | |
| 12/31/2018 | | | 62.21 | | | | 1.01 | | | | (5.19 | ) | | | (4.18 | ) |
| 12/31/2017 | | | 54.44 | | | | .93 | | | | 11.65 | | | | 12.58 | |
| 12/31/2016 | | | 50.71 | | | | .87 | | | | 5.43 | | | | 6.30 | |
| 12/31/2015 | | | 52.06 | | | | .77 | | | | .97 | | | | 1.74 | |
| 12/31/2014 | | | 51.97 | | | | .98 | | | | 3.63 | | | | 4.61 | |
| Class C: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.00 | | | | .27 | | | | 7.33 | | | | 7.60 | |
| 12/31/2018 | | | 61.88 | | | | .50 | | | | (5.15 | ) | | | (4.65 | ) |
| 12/31/2017 | | | 54.18 | | | | .45 | | | | 11.58 | | | | 12.03 | |
| 12/31/2016 | | | 50.48 | | | | .45 | | | | 5.40 | | | | 5.85 | |
| 12/31/2015 | | | 51.83 | | | | .35 | | | | .97 | | | | 1.32 | |
| 12/31/2014 | | | 51.77 | | | | .55 | | | | 3.60 | | | | 4.15 | |
| Class T: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.28 | | | | .56 | | | | 7.38 | | | | 7.94 | |
| 12/31/2018 | | | 62.20 | | | | 1.14 | | | | (5.19 | ) | | | (4.05 | ) |
| 12/31/20174,10 | | | 57.85 | | | | .81 | | | | 8.30 | | | | 9.11 | |
| Class F-1: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.26 | | | | .47 | | | | 7.37 | | | | 7.84 | |
| 12/31/2018 | | | 62.17 | | | | .96 | | | | (5.18 | ) | | | (4.22 | ) |
| 12/31/2017 | | | 54.41 | | | | .88 | | | | 11.65 | | | | 12.53 | |
| 12/31/2016 | | | 50.69 | | | | .83 | | | | 5.42 | | | | 6.25 | |
| 12/31/2015 | | | 52.03 | | | | .74 | | | | .97 | | | | 1.71 | |
| 12/31/2014 | | | 51.95 | | | | .96 | | | | 3.60 | | | | 4.56 | |
| Class F-2: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.27 | | | | .55 | | | | 7.37 | | | | 7.92 | |
| 12/31/2018 | | | 62.19 | | | | 1.13 | | | | (5.19 | ) | | | (4.06 | ) |
| 12/31/2017 | | | 54.43 | | | | 1.00 | | | | 11.68 | | | | 12.68 | |
| 12/31/2016 | | | 50.70 | | | | .99 | | | | 5.41 | | | | 6.40 | |
| 12/31/2015 | | | 52.04 | | | | .88 | | | | .97 | | | | 1.85 | |
| 12/31/2014 | | | 51.96 | | | | 1.06 | | | | 3.66 | | | | 4.72 | |
| Class F-3: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.27 | | | | .58 | | | | 7.37 | | | | 7.95 | |
| 12/31/2018 | | | 62.19 | | | | 1.19 | | | | (5.19 | ) | | | (4.00 | ) |
| 12/31/20174,11 | | | 56.55 | | | | 1.11 | | | | 9.52 | | | | 10.63 | |
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income) | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return3 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets2 | |
| | |
| $ | (.33 | ) | | $ | (.56 | ) | | $ | (.89 | ) | | $ | 59.27 | | | | 15.10 | %6 | | $ | 53,034 | | | | .60 | %7 | | | 1.72 | %7 |
| | (.99 | ) | | | (4.75 | ) | | | (5.74 | ) | | | 52.29 | | | | (6.60 | ) | | | 47,045 | | | | .59 | | | | 1.61 | |
| | (.91 | ) | | | (3.90 | ) | | | (4.81 | ) | | | 62.21 | | | | 23.37 | | | | 53,885 | | | | .60 | | | | 1.55 | |
| | (.87 | ) | | | (1.70 | ) | | | (2.57 | ) | | | 54.44 | | | | 12.54 | | | | 47,308 | | | | .61 | | | | 1.68 | |
| | (.77 | ) | | | (2.32 | ) | | | (3.09 | ) | | | 50.71 | | | | 3.38 | | | | 44,596 | | | | .60 | | | | 1.47 | |
| | (.96 | ) | | | (3.56 | ) | | | (4.52 | ) | | | 52.06 | | | | 8.96 | | | | 43,929 | | | | .61 | | | | 1.85 | |
| |
| | (.10 | ) | | | (.56 | ) | | | (.66 | ) | | | 58.94 | | | | 14.66 | 6 | | | 2,097 | | | | 1.39 | 7 | | | .94 | 7 |
| | (.48 | ) | | | (4.75 | ) | | | (5.23 | ) | | | 52.00 | | | | (7.35 | ) | | | 1,996 | | | | 1.39 | | | | .81 | |
| | (.43 | ) | | | (3.90 | ) | | | (4.33 | ) | | | 61.88 | | | | 22.37 | | | | 2,535 | | | | 1.40 | | | | .75 | |
| | (.45 | ) | | | (1.70 | ) | | | (2.15 | ) | | | 54.18 | | | | 11.64 | | | | 2,426 | | | | 1.41 | | | | .87 | |
| | (.35 | ) | | | (2.32 | ) | | | (2.67 | ) | | | 50.48 | | | | 2.56 | | | | 2,435 | | | | 1.40 | | | | .67 | |
| | (.53 | ) | | | (3.56 | ) | | | (4.09 | ) | | | 51.83 | | | | 8.08 | | | | 2,441 | | | | 1.41 | | | | 1.05 | |
| |
| | (.40 | ) | | | (.56 | ) | | | (.96 | ) | | | 59.26 | | | | 15.24 | 6,8 | | | — | 9 | | | .38 | 7,8 | | | 1.95 | 7,8 |
| | (1.12 | ) | | | (4.75 | ) | | | (5.87 | ) | | | 52.28 | | | | (6.41 | )8 | | | — | 9 | | | .38 | 8 | | | 1.82 | 8 |
| | (.86 | ) | | | (3.90 | ) | | | (4.76 | ) | | | 62.20 | | | | 15.96 | 6,8 | | | — | 9 | | | .39 | 7,8 | | | 1.80 | 7,8 |
| |
| | (.31 | ) | | | (.56 | ) | | | (.87 | ) | | | 59.23 | | | | 15.05 | 6 | | | 2,635 | | | | .68 | 7 | | | 1.65 | 7 |
| | (.94 | ) | | | (4.75 | ) | | | (5.69 | ) | | | 52.26 | | | | (6.67 | ) | | | 2,352 | | | | .67 | | | | 1.52 | |
| | (.87 | ) | | | (3.90 | ) | | | (4.77 | ) | | | 62.17 | | | | 23.27 | | | | 2,970 | | | | .67 | | | | 1.47 | |
| | (.83 | ) | | | (1.70 | ) | | | (2.53 | ) | | | 54.41 | | | | 12.45 | | | | 2,688 | | | | .68 | | | | 1.61 | |
| | (.73 | ) | | | (2.32 | ) | | | (3.05 | ) | | | 50.69 | | | | 3.33 | | | | 4,819 | | | | .67 | | | | 1.40 | |
| | (.92 | ) | | | (3.56 | ) | | | (4.48 | ) | | | 52.03 | | | | 8.87 | | | | 4,769 | | | | .66 | | | | 1.81 | |
| |
| | (.38 | ) | | | (.56 | ) | | | (.94 | ) | | | 59.25 | | | | 15.21 | 6 | | | 10,022 | | | | .41 | 7 | | | 1.92 | 7 |
| | (1.11 | ) | | | (4.75 | ) | | | (5.86 | ) | | | 52.27 | | | | (6.43 | ) | | | 8,654 | | | | .41 | | | | 1.80 | |
| | (1.02 | ) | | | (3.90 | ) | | | (4.92 | ) | | | 62.19 | | | | 23.57 | | | | 7,688 | | | | .42 | | | | 1.68 | |
| | (.97 | ) | | | (1.70 | ) | | | (2.67 | ) | | | 54.43 | | | | 12.77 | | | | 8,424 | | | | .41 | | | | 1.88 | |
| | (.87 | ) | | | (2.32 | ) | | | (3.19 | ) | | | 50.70 | | | | 3.61 | | | | 4,389 | | | | .41 | | | | 1.67 | |
| | (1.08 | ) | | | (3.56 | ) | | | (4.64 | ) | | | 52.04 | | | | 9.17 | | | | 3,921 | | | | .40 | | | | 1.99 | |
| |
| | (.41 | ) | | | (.56 | ) | | | (.97 | ) | | | 59.25 | | | | 15.27 | 6 | | | 6,719 | | | | .31 | 7 | | | 2.03 | 7 |
| | (1.17 | ) | | | (4.75 | ) | | | (5.92 | ) | | | 52.27 | | | | (6.34 | ) | | | 5,448 | | | | .31 | | | | 1.89 | |
| | (1.09 | ) | | | (3.90 | ) | | | (4.99 | ) | | | 62.19 | | | | 19.08 | 6 | | | 5,541 | | | | .31 | 7 | | | 1.96 | 7 |
See end of table for footnotes.
Financial highlights(continued)
| | | | | | Income (loss) from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income2 | | | Net gains (losses)
on securities (both
realized and
unrealized) | | | Total from
investment
operations | |
| Class 529-A: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | $ | 52.21 | | | $ | .47 | | | $ | 7.36 | | | $ | 7.83 | |
| 12/31/2018 | | | 62.12 | | | | .96 | | | | (5.18 | ) | | | (4.22 | ) |
| 12/31/2017 | | | 54.37 | | | | .88 | | | | 11.64 | | | | 12.52 | |
| 12/31/2016 | | | 50.65 | | | | .83 | | | | 5.42 | | | | 6.25 | |
| 12/31/2015 | | | 52.00 | | | | .72 | | | | .97 | | | | 1.69 | |
| 12/31/2014 | | | 51.92 | | | | .93 | | | | 3.62 | | | | 4.55 | |
| Class 529-C: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.19 | | | | .25 | | | | 7.37 | | | | 7.62 | |
| 12/31/2018 | | | 62.08 | | | | .48 | | | | (5.18 | ) | | | (4.70 | ) |
| 12/31/2017 | | | 54.31 | | | | .41 | | | | 11.62 | | | | 12.03 | |
| 12/31/2016 | | | 50.60 | | | | .42 | | | | 5.41 | | | | 5.83 | |
| 12/31/2015 | | | 51.95 | | | | .31 | | | | .97 | | | | 1.28 | |
| 12/31/2014 | | | 51.88 | | | | .51 | | | | 3.62 | | | | 4.13 | |
| Class 529-E: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.16 | | | | .41 | | | | 7.35 | | | | 7.76 | |
| 12/31/2018 | | | 62.06 | | | | .81 | | | | (5.17 | ) | | | (4.36 | ) |
| 12/31/2017 | | | 54.33 | | | | .74 | | | | 11.62 | | | | 12.36 | |
| 12/31/2016 | | | 50.61 | | | | .71 | | | | 5.41 | | | | 6.12 | |
| 12/31/2015 | | | 51.96 | | | | .59 | | | | .97 | | | | 1.56 | |
| 12/31/2014 | | | 51.89 | | | | .80 | | | | 3.61 | | | | 4.41 | |
| Class 529-T: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.28 | | | | .55 | | | | 7.37 | | | | 7.92 | |
| 12/31/2018 | | | 62.20 | | | | 1.10 | | | | (5.18 | ) | | | (4.08 | ) |
| 12/31/20174,10 | | | 57.85 | | | | .78 | | | | 8.30 | | | | 9.08 | |
| Class 529-F-1: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.15 | | | | .54 | | | | 7.36 | | | | 7.90 | |
| 12/31/2018 | | | 62.07 | | | | 1.10 | | | | (5.19 | ) | | | (4.09 | ) |
| 12/31/2017 | | | 54.34 | | | | 1.01 | | | | 11.62 | | | | 12.63 | |
| 12/31/2016 | | | 50.62 | | | | .94 | | | | 5.42 | | | | 6.36 | |
| 12/31/2015 | | | 51.97 | | | | .83 | | | | .97 | | | | 1.80 | |
| 12/31/2014 | | | 51.89 | | | | 1.04 | | | | 3.63 | | | | 4.67 | |
| Class R-1: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.00 | | | | .26 | | | | 7.34 | | | | 7.60 | |
| 12/31/2018 | | | 61.88 | | | | .49 | | | | (5.16 | ) | | | (4.67 | ) |
| 12/31/2017 | | | 54.18 | | | | .44 | | | | 11.59 | | | | 12.03 | |
| 12/31/2016 | | | 50.49 | | | | .45 | | | | 5.39 | | | | 5.84 | |
| 12/31/2015 | | | 51.83 | | | | .35 | | | | .97 | | | | 1.32 | |
| 12/31/2014 | | | 51.77 | | | | .56 | | | | 3.60 | | | | 4.16 | |
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income) | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return3 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets2 | |
| | |
| $ | (.31 | ) | | $ | (.56 | ) | | $ | (.87 | ) | | $ | 59.17 | | | | 15.04 | %6 | | $ | 2,626 | | | | .68 | %7 | | | 1.65 | %7 |
| | (.94 | ) | | | (4.75 | ) | | | (5.69 | ) | | | 52.21 | | | | (6.68 | ) | | | 2,304 | | | | .67 | | | | 1.53 | |
| | (.87 | ) | | | (3.90 | ) | | | (4.77 | ) | | | 62.12 | | | | 23.28 | | | | 2,533 | | | | .67 | | | | 1.47 | |
| | (.83 | ) | | | (1.70 | ) | | | (2.53 | ) | | | 54.37 | | | | 12.44 | | | | 1,995 | | | | .69 | | | | 1.60 | |
| | (.72 | ) | | | (2.32 | ) | | | (3.04 | ) | | | 50.65 | | | | 3.28 | | | | 1,795 | | | | .70 | | | | 1.37 | |
| | (.91 | ) | | | (3.56 | ) | | | (4.47 | ) | | | 52.00 | | | | 8.85 | | | | 1,742 | | | | .70 | | | | 1.75 | |
| |
| | (.09 | ) | | | (.56 | ) | | | (.65 | ) | | | 59.16 | | | | 14.64 | 6 | | | 353 | | | | 1.43 | 7 | | | .89 | 7 |
| | (.44 | ) | | | (4.75 | ) | | | (5.19 | ) | | | 52.19 | | | | (7.39 | ) | | | 340 | | | | 1.43 | | | | .76 | |
| | (.36 | ) | | | (3.90 | ) | | | (4.26 | ) | | | 62.08 | | | | 22.32 | | | | 430 | | | | 1.45 | | | | .69 | |
| | (.42 | ) | | | (1.70 | ) | | | (2.12 | ) | | | 54.31 | | | | 11.57 | | | | 479 | | | | 1.47 | | | | .82 | |
| | (.31 | ) | | | (2.32 | ) | | | (2.63 | ) | | | 50.60 | | | | 2.48 | | | | 451 | | | | 1.48 | | | | .59 | |
| | (.50 | ) | | | (3.56 | ) | | | (4.06 | ) | | | 51.95 | | | | 7.99 | | | | 445 | | | | 1.49 | | | | .97 | |
| |
| | (.24 | ) | | | (.56 | ) | | | (.80 | ) | | | 59.12 | | | | 14.92 | 6 | | | 89 | | | | .90 | 7 | | | 1.42 | 7 |
| | (.79 | ) | | | (4.75 | ) | | | (5.54 | ) | | | 52.16 | | | | (6.88 | ) | | | 82 | | | | .90 | | | | 1.29 | |
| | (.73 | ) | | | (3.90 | ) | | | (4.63 | ) | | | 62.06 | | | | 22.97 | | | | 93 | | | | .91 | | | | 1.24 | |
| | (.70 | ) | | | (1.70 | ) | | | (2.40 | ) | | | 54.33 | | | | 12.20 | | | | 80 | | | | .93 | | | | 1.36 | |
| | (.59 | ) | | | (2.32 | ) | | | (2.91 | ) | | | 50.61 | | | | 3.04 | | | | 73 | | | | .94 | | | | 1.13 | |
| | (.78 | ) | | | (3.56 | ) | | | (4.34 | ) | | | 51.96 | | | | 8.58 | | | | 72 | | | | .94 | | | | 1.51 | |
| |
| | (.38 | ) | | | (.56 | ) | | | (.94 | ) | | | 59.26 | | | | 15.20 | 6,8 | | | — | 9 | | | .43 | 7,8 | | | 1.91 | 7,8 |
| | (1.09 | ) | | | (4.75 | ) | | | (5.84 | ) | | | 52.28 | | | | (6.46 | )8 | | | — | 9 | | | .44 | 8 | | | 1.76 | 8 |
| | (.83 | ) | | | (3.90 | ) | | | (4.73 | ) | | | 62.20 | | | | 15.90 | 6,8 | | | — | 9 | | | .45 | 7,8 | | | 1.75 | 7,8 |
| |
| | (.37 | ) | | | (.56 | ) | | | (.93 | ) | | | 59.12 | | | | 15.21 | 6 | | | 174 | | | | .45 | 7 | | | 1.88 | 7 |
| | (1.08 | ) | | | (4.75 | ) | | | (5.83 | ) | | | 52.15 | | | | (6.48 | ) | | | 149 | | | | .44 | | | | 1.76 | |
| | (1.00 | ) | | | (3.90 | ) | | | (4.90 | ) | | | 62.07 | | | | 23.53 | | | | 137 | | | | .45 | | | | 1.69 | |
| | (.94 | ) | | | (1.70 | ) | | | (2.64 | ) | | | 54.34 | | | | 12.71 | | | | 98 | | | | .48 | | | | 1.82 | |
| | (.83 | ) | | | (2.32 | ) | | | (3.15 | ) | | | 50.62 | | | | 3.51 | | | | 83 | | | | .48 | | | | 1.59 | |
| | (1.03 | ) | | | (3.56 | ) | | | (4.59 | ) | | | 51.97 | | | | 9.10 | | | | 76 | | | | .48 | | | | 1.96 | |
| |
| | (.10 | ) | | | (.56 | ) | | | (.66 | ) | | | 58.94 | | | | 14.66 | 6 | | | 135 | | | | 1.41 | 7 | | | .91 | 7 |
| | (.46 | ) | | | (4.75 | ) | | | (5.21 | ) | | | 52.00 | | | | (7.38 | ) | | | 128 | | | | 1.41 | | | | .78 | |
| | (.43 | ) | | | (3.90 | ) | | | (4.33 | ) | | | 61.88 | | | | 22.37 | | | | 160 | | | | 1.41 | | | | .74 | |
| | (.45 | ) | | | (1.70 | ) | | | (2.15 | ) | | | 54.18 | | | | 11.65 | | | | 145 | | | | 1.41 | | | | .88 | |
| | (.34 | ) | | | (2.32 | ) | | | (2.66 | ) | | | 50.49 | | | | 2.55 | | | | 151 | | | | 1.40 | | | | .66 | |
| | (.54 | ) | | | (3.56 | ) | | | (4.10 | ) | | | 51.83 | | | | 8.08 | | | | 167 | | | | 1.41 | | | | 1.06 | |
See end of table for footnotes.
Financial highlights(continued)
| | | | | | Income (loss) from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income2 | | | Net gains (losses)
on securities (both
realized and
unrealized) | | | Total from
investment
operations | |
| Class R-2: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | $ | 51.97 | | | $ | .27 | | | $ | 7.33 | | | $ | 7.60 | |
| 12/31/2018 | | | 61.86 | | | | .49 | | | | (5.15 | ) | | | (4.66 | ) |
| 12/31/2017 | | | 54.16 | | | | .44 | | | | 11.59 | | | | 12.03 | |
| 12/31/2016 | | | 50.47 | | | | .46 | | | | 5.39 | | | | 5.85 | |
| 12/31/2015 | | | 51.82 | | | | .37 | | | | .97 | | | | 1.34 | |
| 12/31/2014 | | | 51.76 | | | | .57 | | | | 3.60 | | | | 4.17 | |
| Class R-2E: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.02 | | | | .35 | | | | 7.34 | | | | 7.69 | |
| 12/31/2018 | | | 61.92 | | | | .69 | | | | (5.16 | ) | | | (4.47 | ) |
| 12/31/2017 | | | 54.24 | | | | .64 | | | | 11.58 | | | | 12.22 | |
| 12/31/2016 | | | 50.56 | | | | .66 | | | | 5.38 | | | | 6.04 | |
| 12/31/2015 | | | 52.03 | | | | .69 | | | | .90 | | | | 1.59 | |
| 12/31/20144,12 | | | 55.04 | | | | .27 | | | | .52 | | | | .79 | |
| Class R-3: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.15 | | | | .39 | | | | 7.36 | | | | 7.75 | |
| 12/31/2018 | | | 62.05 | | | | .78 | | | | (5.18 | ) | | | (4.40 | ) |
| 12/31/2017 | | | 54.31 | | | | .71 | | | | 11.63 | | | | 12.34 | |
| 12/31/2016 | | | 50.60 | | | | .69 | | | | 5.41 | | | | 6.10 | |
| 12/31/2015 | | | 51.94 | | | | .59 | | | | .97 | | | | 1.56 | |
| 12/31/2014 | | | 51.87 | | | | .80 | | | | 3.60 | | | | 4.40 | |
| Class R-4: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.17 | | | | .48 | | | | 7.36 | | | | 7.84 | |
| 12/31/2018 | | | 62.07 | | | | .96 | | | | (5.17 | ) | | | (4.21 | ) |
| 12/31/2017 | | | 54.33 | | | | .89 | | | | 11.63 | | | | 12.52 | |
| 12/31/2016 | | | 50.62 | | | | .85 | | | | 5.40 | | | | 6.25 | |
| 12/31/2015 | | | 51.96 | | | | .75 | | | | .97 | | | | 1.72 | |
| 12/31/2014 | | | 51.88 | | | | .96 | | | | 3.61 | | | | 4.57 | |
| Class R-5E: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.19 | | | | .54 | | | | 7.37 | | | | 7.91 | |
| 12/31/2018 | | | 62.12 | | | | 1.14 | | | | (5.22 | ) | | | (4.08 | ) |
| 12/31/2017 | | | 54.38 | | | | 1.02 | | | | 11.64 | | | | 12.66 | |
| 12/31/2016 | | | 50.69 | | | | 1.03 | | | | 5.30 | | | | 6.33 | |
| 12/31/20154,13 | | | 53.80 | | | | .11 | | | | (1.16 | ) | | | (1.05 | ) |
| Class R-5: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | | 52.33 | | | | .56 | | | | 7.39 | | | | 7.95 | |
| 12/31/2018 | | | 62.25 | | | | 1.16 | | | | (5.19 | ) | | | (4.03 | ) |
| 12/31/2017 | | | 54.47 | | | | 1.07 | | | | 11.67 | | | | 12.74 | |
| 12/31/2016 | | | 50.74 | | | | 1.00 | | | | 5.43 | | | | 6.43 | |
| 12/31/2015 | | | 52.08 | | | | .90 | | | | .98 | | | | 1.88 | |
| 12/31/2014 | | | 51.99 | | | | 1.13 | | | | 3.62 | | | | 4.75 | |
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income) | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return3 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets2 | |
| | |
| $ | (.11 | ) | | $ | (.56 | ) | | $ | (.67 | ) | | $ | 58.90 | | | | 14.66 | %6 | | $ | 715 | | | | 1.39 | %7 | | | .93 | %7 |
| | (.48 | ) | | | (4.75 | ) | | | (5.23 | ) | | | 51.97 | | | | (7.37 | ) | | | 658 | | | | 1.41 | | | | .79 | |
| | (.43 | ) | | | (3.90 | ) | | | (4.33 | ) | | | 61.86 | | | | 22.39 | | | | 797 | | | | 1.40 | | | | .74 | |
| | (.46 | ) | | | (1.70 | ) | | | (2.16 | ) | | | 54.16 | | | | 11.65 | | | | 744 | | | | 1.39 | | | | .89 | |
| | (.37 | ) | | | (2.32 | ) | | | (2.69 | ) | | | 50.47 | | | | 2.61 | | | | 734 | | | | 1.35 | | | | .72 | |
| | (.55 | ) | | | (3.56 | ) | | | (4.11 | ) | | | 51.82 | | | | 8.11 | | | | 790 | | | | 1.38 | | | | 1.08 | |
| |
| | (.19 | ) | | | (.56 | ) | | | (.75 | ) | | | 58.96 | | | | 14.82 | 6 | | | 80 | | | | 1.10 | 7 | | | 1.24 | 7 |
| | (.68 | ) | | | (4.75 | ) | | | (5.43 | ) | | | 52.02 | | | | (7.08 | ) | | | 65 | | | | 1.11 | | | | 1.10 | |
| | (.64 | ) | | | (3.90 | ) | | | (4.54 | ) | | | 61.92 | | | | 22.74 | | | | 56 | | | | 1.10 | | | | 1.06 | |
| | (.66 | ) | | | (1.70 | ) | | | (2.36 | ) | | | 54.24 | | | | 12.04 | | | | 20 | | | | 1.10 | | | | 1.26 | |
| | (.74 | ) | | | (2.32 | ) | | | (3.06 | ) | | | 50.56 | | | | 3.09 | | | | 1 | | | | 1.13 | | | | 1.37 | |
| | (.74 | ) | | | (3.06 | ) | | | (3.80 | ) | | | 52.03 | | | | 1.40 | 6,8 | | | — | 9 | | | .17 | 6,8 | | | .50 | 6,8 |
| |
| | (.23 | ) | | | (.56 | ) | | | (.79 | ) | | | 59.11 | | | | 14.90 | 6 | | | 1,994 | | | | .95 | 7 | | | 1.37 | 7 |
| | (.75 | ) | | | (4.75 | ) | | | (5.50 | ) | | | 52.15 | | | | (6.95 | ) | | | 1,880 | | | | .96 | | | | 1.24 | |
| | (.70 | ) | | | (3.90 | ) | | | (4.60 | ) | | | 62.05 | | | | 22.93 | | | | 2,360 | | | | .95 | | | | 1.19 | |
| | (.69 | ) | | | (1.70 | ) | | | (2.39 | ) | | | 54.31 | | | | 12.15 | | | | 2,181 | | | | .96 | | | | 1.33 | |
| | (.58 | ) | | | (2.32 | ) | | | (2.90 | ) | | | 50.60 | | | | 3.03 | | | | 2,237 | | | | .95 | | | | 1.12 | |
| | (.77 | ) | | | (3.56 | ) | | | (4.33 | ) | | | 51.94 | | | | 8.56 | | | | 2,627 | | | | .96 | | | | 1.51 | |
| |
| | (.32 | ) | | | (.56 | ) | | | (.88 | ) | | | 59.13 | | | | 15.07 | 6 | | | 2,021 | | | | .65 | 7 | | | 1.67 | 7 |
| | (.94 | ) | | | (4.75 | ) | | | (5.69 | ) | | | 52.17 | | | | (6.65 | ) | | | 1,879 | | | | .65 | | | | 1.54 | |
| | (.88 | ) | | | (3.90 | ) | | | (4.78 | ) | | | 62.07 | | | | 23.30 | | | | 2,523 | | | | .65 | | | | 1.49 | |
| | (.84 | ) | | | (1.70 | ) | | | (2.54 | ) | | | 54.33 | | | | 12.47 | | | | 2,318 | | | | .66 | | | | 1.63 | |
| | (.74 | ) | | | (2.32 | ) | | | (3.06 | ) | | | 50.62 | | | | 3.36 | | | | 2,289 | | | | .65 | | | | 1.42 | |
| | (.93 | ) | | | (3.56 | ) | | | (4.49 | ) | | | 51.96 | | | | 8.90 | | | | 2,651 | | | | .66 | | | | 1.82 | |
| |
| | (.38 | ) | | | (.56 | ) | | | (.94 | ) | | | 59.16 | | | | 15.21 | 6 | | | 317 | | | | .43 | 7 | | | 1.91 | 7 |
| | (1.10 | ) | | | (4.75 | ) | | | (5.85 | ) | | | 52.19 | | | | (6.45 | ) | | | 255 | | | | .45 | | | | 1.86 | |
| | (1.02 | ) | | | (3.90 | ) | | | (4.92 | ) | | | 62.12 | | | | 23.54 | | | | 16 | | | | .44 | | | | 1.70 | |
| | (.94 | ) | | | (1.70 | ) | | | (2.64 | ) | | | 54.38 | | | | 12.62 | | | | 10 | | | | .57 | | | | 1.99 | |
| | (.35 | ) | | | (1.71 | ) | | | (2.06 | ) | | | 50.69 | | | | (1.95 | )6 | | | — | 9 | | | .05 | 6 | | | .21 | 6 |
| |
| | (.40 | ) | | | (.56 | ) | | | (.96 | ) | | | 59.32 | | | | 15.25 | 6 | | | 1,406 | | | | .35 | 7 | | | 1.97 | 7 |
| | (1.14 | ) | | | (4.75 | ) | | | (5.89 | ) | | | 52.33 | | | | (6.37 | ) | | | 1,326 | | | | .35 | | | | 1.84 | |
| | (1.06 | ) | | | (3.90 | ) | | | (4.96 | ) | | | 62.25 | | | | 23.68 | | | | 2,041 | | | | .35 | | | | 1.79 | |
| | (1.00 | ) | | | (1.70 | ) | | | (2.70 | ) | | | 54.47 | | | | 12.81 | | | | 1,800 | | | | .35 | | | | 1.93 | |
| | (.90 | ) | | | (2.32 | ) | | | (3.22 | ) | | | 50.74 | | | | 3.66 | | | | 1,914 | | | | .35 | | | | 1.72 | |
| | (1.10 | ) | | | (3.56 | ) | | | (4.66 | ) | | | 52.08 | | | | 9.23 | | | | 1,979 | | | | .35 | | | | 2.12 | |
See end of table for footnotes.
Financial highlights(continued)
| | | | | | Income (loss) from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income2 | | | Net gains (losses)
on securities (both
realized and
unrealized) | | | Total from
investment
operations | |
| Class R-6: | | | | | | | | | | | | | | | | |
| 6/30/20194,5 | | $ | 52.30 | | | $ | .58 | | | $ | 7.38 | | | $ | 7.96 | |
| 12/31/2018 | | | 62.22 | | | | 1.19 | | | | (5.19 | ) | | | (4.00 | ) |
| 12/31/2017 | | | 54.45 | | | | 1.10 | | | | 11.66 | | | | 12.76 | |
| 12/31/2016 | | | 50.72 | | | | 1.04 | | | | 5.42 | | | | 6.46 | |
| 12/31/2015 | | | 52.06 | | | | .93 | | | | .97 | | | | 1.90 | |
| 12/31/2014 | | | 51.98 | | | | 1.12 | | | | 3.64 | | | | 4.76 | |
| | | | | | | | | | | | | | | |
| | | Six months ended | | Year ended December 31 |
| | | June 30, 20194,5,6 | | 2018 | | 2017 | | 2016 | | 2015 | | 2014 |
| Portfolio turnover rate for all share classes | | | 24% | | | | 34% | | | | 29% | | | | 24% | | | | 27% | | | | 29% | |
See notes to financial statements.
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income) | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return3 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets2 | |
| | |
| $ | (.42 | ) | | $ | (.56 | ) | | $ | (.98 | ) | | $ | 59.28 | | | | 15.26 | %6 | | $ | 16,532 | | | | .30 | %7 | | | 2.03 | %7 |
| | (1.17 | ) | | | (4.75 | ) | | | (5.92 | ) | | | 52.30 | | | | (6.33 | ) | | | 13,670 | | | | .30 | | | | 1.90 | |
| | (1.09 | ) | | | (3.90 | ) | | | (4.99 | ) | | | 62.22 | | | | 23.72 | | | | 12,701 | | | | .30 | | | | 1.84 | |
| | (1.03 | ) | | | (1.70 | ) | | | (2.73 | ) | | | 54.45 | | | | 12.88 | | | | 8,948 | | | | .31 | | | | 1.99 | |
| | (.92 | ) | | | (2.32 | ) | | | (3.24 | ) | | | 50.72 | | | | 3.71 | | | | 6,590 | | | | .31 | | | | 1.77 | |
| | (1.12 | ) | | | (3.56 | ) | | | (4.68 | ) | | | 52.06 | | | | 9.27 | | | | 5,713 | | | | .31 | | | | 2.12 | |
| 1 | Based on average shares outstanding. |
| 2 | 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 $.27 and .51 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 a period that is less than a full year. |
| 5 | Unaudited. |
| 6 | Not annualized. |
| 7 | Annualized. |
| 8 | All or a significant portion of assets in this class consisted of seed capital invested by CRMC and/or its affiliates. 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. |
| 9 | Amount less than $1 million. |
| 10 | Class T and 529-T shares began investment operations on April 7, 2017. |
| 11 | Class F-3 shares began investment operations on January 27, 2017. |
| 12 | Class R-2E shares began investment operations on August 29, 2014. |
| 13 | Class R-5E shares began investment operations on November 20, 2015. |
| | |
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 (January 1, 2019, through June 30, 2019).
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 titled “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, F-3 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.
| | | Beginning
account value
1/1/2019 | | | Ending
account value
6/30/2019 | | | Expenses paid
during period* | | | Annualized
expense ratio | |
| Class A – actual return | | $ | 1,000.00 | | | $ | 1,151.02 | | | $ | 3.20 | | | | .60 | % |
| Class A – assumed 5% return | | | 1,000.00 | | | | 1,021.82 | | | | 3.01 | | | | .60 | |
| Class C – actual return | | | 1,000.00 | | | | 1,146.62 | | | | 7.40 | | | | 1.39 | |
| Class C – assumed 5% return | | | 1,000.00 | | | | 1,017.90 | | | | 6.95 | | | | 1.39 | |
| Class T – actual return | | | 1,000.00 | | | | 1,152.37 | | | | 2.03 | | | | .38 | |
| Class T – assumed 5% return | | | 1,000.00 | | | | 1,022.91 | | | | 1.91 | | | | .38 | |
| Class F-1 – actual return | | | 1,000.00 | | | | 1,150.48 | | | | 3.63 | | | | .68 | |
| Class F-1 – assumed 5% return | | | 1,000.00 | | | | 1,021.42 | | | | 3.41 | | | | .68 | |
| Class F-2 – actual return | | | 1,000.00 | | | | 1,152.12 | | | | 2.19 | | | | .41 | |
| Class F-2 – assumed 5% return | | | 1,000.00 | | | | 1,022.76 | | | | 2.06 | | | | .41 | |
| Class F-3 – actual return | | | 1,000.00 | | | | 1,152.71 | | | | 1.65 | | | | .31 | |
| Class F-3 – assumed 5% return | | | 1,000.00 | | | | 1,023.26 | | | | 1.56 | | | | .31 | |
| Class 529-A – actual return | | | 1,000.00 | | | | 1,150.38 | | | | 3.63 | | | | .68 | |
| Class 529-A – assumed 5% return | | | 1,000.00 | | | | 1,021.42 | | | | 3.41 | | | | .68 | |
| Class 529-C – actual return | | | 1,000.00 | | | | 1,146.40 | | | | 7.61 | | | | 1.43 | |
| Class 529-C – assumed 5% return | | | 1,000.00 | | | | 1,017.70 | | | | 7.15 | | | | 1.43 | |
| Class 529-E – actual return | | | 1,000.00 | | | | 1,149.23 | | | | 4.80 | | | | .90 | |
| Class 529-E – assumed 5% return | | | 1,000.00 | | | | 1,020.33 | | | | 4.51 | | | | .90 | |
| Class 529-T – actual return | | | 1,000.00 | | | | 1,152.01 | | | | 2.29 | | | | .43 | |
| Class 529-T – assumed 5% return | | | 1,000.00 | | | | 1,022.66 | | | | 2.16 | | | | .43 | |
| Class 529-F-1 – actual return | | | 1,000.00 | | | | 1,152.13 | | | | 2.40 | | | | .45 | |
| Class 529-F-1 – assumed 5% return | | | 1,000.00 | | | | 1,022.56 | | | | 2.26 | | | | .45 | |
| Class R-1 – actual return | | | 1,000.00 | | | | 1,146.56 | | | | 7.50 | | | | 1.41 | |
| Class R-1 – assumed 5% return | | | 1,000.00 | | | | 1,017.80 | | | | 7.05 | | | | 1.41 | |
| Class R-2 – actual return | | | 1,000.00 | | | | 1,146.61 | | | | 7.40 | | | | 1.39 | |
| Class R-2 – assumed 5% return | | | 1,000.00 | | | | 1,017.90 | | | | 6.95 | | | | 1.39 | |
| Class R-2E – actual return | | | 1,000.00 | | | | 1,148.19 | | | | 5.86 | | | | 1.10 | |
| Class R-2E – assumed 5% return | | | 1,000.00 | | | | 1,019.34 | | | | 5.51 | | | | 1.10 | |
| Class R-3 – actual return | | | 1,000.00 | | | | 1,149.04 | | | | 5.06 | | | | .95 | |
| Class R-3 – assumed 5% return | | | 1,000.00 | | | | 1,020.08 | | | | 4.76 | | | | .95 | |
| Class R-4 – actual return | | | 1,000.00 | | | | 1,150.73 | | | | 3.47 | | | | .65 | |
| Class R-4 – assumed 5% return | | | 1,000.00 | | | | 1,021.57 | | | | 3.26 | | | | .65 | |
| Class R-5E – actual return | | | 1,000.00 | | | | 1,152.14 | | | | 2.29 | | | | .43 | |
| Class R-5E – assumed 5% return | | | 1,000.00 | | | | 1,022.66 | | | | 2.16 | | | | .43 | |
| Class R-5 – actual return | | | 1,000.00 | | | | 1,152.47 | | | | 1.87 | | | | .35 | |
| Class R-5 – assumed 5% return | | | 1,000.00 | | | | 1,023.06 | | | | 1.76 | | | | .35 | |
| Class R-6 – actual return | | | 1,000.00 | | | | 1,152.64 | | | | 1.60 | | | | .30 | |
| Class R-6 – assumed 5% return | | | 1,000.00 | | | | 1,023.31 | | | | 1.51 | | | | .30 | |
| * | 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). |
Office of the fund
6455 Irvine Center Drive
Irvine, CA 92618-4518
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
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Counsel
Dechert LLP
One Bush Street, Suite 1600
San Francisco, CA 94104-4446
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1000
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
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 June 30, 2019, portfolio of Fundamental Investors’ investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
Fundamental Investors files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT-EX. This filing is available free of charge on the SEC website. Additionally, the list of portfolio holdings is available by calling AFS.
This report is for the information of shareholders of Fundamental Investors, 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 September 30, 2019, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
The Standard & Poor’s 500 Composite Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2019 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC.
MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.
American Funds Distributors, Inc., member FINRA.
The Capital Advantage®
Since 1931, Capital Group, home of American Funds, has helped investors pursue long-term investment success. Our consistent approach — in combination with The Capital SystemSM— has resulted in superior outcomes.
| | Aligned with investor success |
| | 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 20 years at our company, reflecting a career commitment to our long-term approach.1 |
| | |
| | The Capital System |
| | The Capital System combines individual accountability with teamwork. Funds using The Capital System are 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. |
| | |
| | American Funds’ superior outcomes |
| | Equity funds have beaten their Lipper peer indexes in 92% of 10-year periods and 99% of 20-year periods.2Fixed income funds have helped investors achieve diversification through attention to correlation between bonds and equities.3Fund management fees have been among the lowest in the industry.4 |
| | |
| | 1 | Portfolio manager experience as of December 31, 2018. |
| | 2 | Based on Class F-2 share results for rolling periods through December 31, 2018. 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). Expenses differ for each share class, so results will vary. |
| | 3 | Based on Class F-2 share results, as of December 31, 2018. Fourteen of our 15 American Funds fixed income funds that have been in existence for the three-year period showed a three-year correlation below 0.2. Standard & Poor’s 500 Composite Index was used as an equity market proxy. Correlation based on monthly total returns. Correlation is a statistical measure of how two securities move in relation to each other. A correlation ranges from –1 to 1. A positive correlation close to 1 implies that as one security moves, either up or down, the other security will move in “lockstep,” in the same direction. A negative correlation close to –1 indicates that the securities have moved in the opposite direction. |
| | 4 | On average, our management fees were in the lowest quintile 70% of the time, based on the 20-year period ended December 31, 2018, versus comparable Lipper categories, excluding funds of funds. |
Class F-2 shares were first offered on August 1, 2008. Class F-2 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Results for certain funds with an inception date after August 1, 2008, also include hypothetical returns because those funds’ Class F-2 shares sold after the funds’ date of first offering. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale.
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.
ITEM 2 – Code of Ethics
Not applicable for filing of semi-annual reports to shareholders.
ITEM 3 – Audit Committee Financial Expert
Not applicable for filing of semi-annual reports to shareholders.
ITEM 4 – Principal Accountant Fees and Services
Not applicable for filing of semi-annual reports to shareholders.
ITEM 5 – Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 – Schedule of Investments
Fundamental Investors®
Investment portfolio
June 30, 2019
unaudited
Common stocks 94.94%
Information technology 21.54% | Shares | Value
(000) |
| Microsoft Corp. | 39,752,600 | $5,325,258 |
| Broadcom Inc. | 11,709,700 | 3,370,754 |
| Intel Corp. | 51,821,000 | 2,480,671 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 184,012,000 | 1,415,955 |
| Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 5,510,000 | 215,827 |
| ASML Holding NV | 3,537,671 | 739,128 |
| ASML Holding NV (New York registered) | 1,444,000 | 300,251 |
| Samsung Electronics Co., Ltd. | 21,885,000 | 890,828 |
| Texas Instruments Inc. | 7,741,000 | 888,357 |
| Mastercard Inc., Class A | 2,700,000 | 714,231 |
| Visa Inc., Class A | 3,779,200 | 655,880 |
| QUALCOMM Inc. | 7,668,300 | 583,328 |
| ServiceNow, Inc.1 | 1,862,100 | 511,277 |
| SAP SE | 2,000,000 | 274,632 |
| Lam Research Corp. | 1,313,701 | 246,766 |
| Apple Inc. | 1,226,600 | 242,769 |
| Analog Devices, Inc. | 2,117,000 | 238,946 |
| FleetCor Technologies, Inc.1 | 771,000 | 216,535 |
| SK hynix, Inc. | 3,545,000 | 213,379 |
| Micron Technology, Inc.1 | 4,915,000 | 189,670 |
| Amphenol Corp., Class A | 1,800,000 | 172,692 |
| HP Inc. | 7,673,300 | 159,528 |
| Applied Materials, Inc. | 3,251,308 | 146,016 |
| Murata Manufacturing Co., Ltd. | 3,000,000 | 134,675 |
| Intuit Inc. | 500,000 | 130,665 |
| Dell Technologies Inc., Class C1 | 2,500,000 | 127,000 |
| HubSpot, Inc.1 | 722,300 | 123,167 |
| LiveRamp Holdings, Inc.1 | 2,480,700 | 120,264 |
| TE Connectivity Ltd. | 1,205,000 | 115,415 |
| Symantec Corp. | 4,950,000 | 107,712 |
| Global Payments Inc. | 590,000 | 94,477 |
| NetApp, Inc. | 1,360,000 | 83,912 |
| RingCentral, Inc., Class A1 | 727,000 | 83,547 |
| Autodesk, Inc.1 | 462,000 | 75,260 |
| Adobe Inc.1 | 248,000 | 73,073 |
| Paycom Software, Inc.1 | 300,000 | 68,016 |
| DocuSign, Inc.1 | 1,200,000 | 59,652 |
| ON Semiconductor Corp.1 | 2,540,000 | 51,333 |
| Jack Henry & Associates, Inc. | 294,000 | 39,373 |
| Micro Focus International PLC | 1,442,342 | 37,806 |
| GoDaddy Inc., Class A1 | 330,000 | 23,150 |
| | | 21,741,175 |
| Health care 12.10% | | |
| UnitedHealth Group Inc. | 9,590,126 | 2,340,087 |
| Boston Scientific Corp.1 | 21,876,500 | 940,252 |
| Merck & Co., Inc. | 10,500,000 | 880,425 |
Fundamental Investors — Page 1 of 7
unaudited
Common stocks (continued)
Health care (continued) | Shares | Value
(000) |
| Regeneron Pharmaceuticals, Inc.1 | 2,681,500 | $839,309 |
| Thermo Fisher Scientific Inc. | 2,414,500 | 709,090 |
| Centene Corp.1 | 11,617,764 | 609,236 |
| Cigna Corp. | 3,532,072 | 556,478 |
| Pfizer Inc. | 12,621,000 | 546,742 |
| Vertex Pharmaceuticals Inc.1 | 2,236,827 | 410,189 |
| Humana Inc. | 1,473,000 | 390,787 |
| Gilead Sciences, Inc. | 5,360,000 | 362,122 |
| AstraZeneca PLC | 3,946,100 | 322,631 |
| Molina Healthcare, Inc.1 | 2,253,000 | 322,494 |
| Johnson & Johnson | 2,291,500 | 319,160 |
| Anthem, Inc. | 944,200 | 266,463 |
| CVS Health Corp. | 4,253,481 | 231,772 |
| Danaher Corp. | 1,548,700 | 221,340 |
| Eli Lilly and Co. | 1,947,600 | 215,775 |
| Bristol-Myers Squibb Co. | 4,500,000 | 204,075 |
| Daiichi Sankyo Co., Ltd. | 3,415,000 | 178,487 |
| ResMed Inc. | 1,365,000 | 166,571 |
| Biogen Inc.1 | 635,000 | 148,507 |
| Bluebird Bio, Inc.1 | 1,113,500 | 141,637 |
| Abbott Laboratories | 1,440,100 | 121,112 |
| Seattle Genetics, Inc.1 | 1,607,600 | 111,262 |
| AbbVie Inc. | 1,254,900 | 91,256 |
| Sage Therapeutics, Inc.1 | 482,170 | 88,281 |
| Neurocrine Biosciences, Inc.1 | 1,009,400 | 85,224 |
| Illumina, Inc.1 | 215,974 | 79,511 |
| Edwards Lifesciences Corp.1 | 342,300 | 63,236 |
| Ultragenyx Pharmaceutical Inc.1 | 917,800 | 58,280 |
| Notre Dame Intermédica Participações S.A. | 5,490,000 | 57,646 |
| Incyte Corp.1 | 672,900 | 57,170 |
| WellCare Health Plans, Inc.1 | 140,000 | 39,910 |
| Teva Pharmaceutical Industries Ltd. (ADR)1 | 3,148,000 | 29,056 |
| BioMarin Pharmaceutical Inc.1 | 125,200 | 10,723 |
| | | 12,216,296 |
| Financials 11.64% | | |
| Berkshire Hathaway Inc., Class A1 | 7,669 | 2,441,426 |
| JPMorgan Chase & Co. | 12,053,400 | 1,347,570 |
| Capital One Financial Corp. | 9,658,000 | 876,367 |
| Citigroup Inc. | 10,000,000 | 700,300 |
| CME Group Inc., Class A | 3,582,500 | 695,399 |
| Discover Financial Services | 8,255,000 | 640,506 |
| Wells Fargo & Co. | 10,981,000 | 519,621 |
| PNC Financial Services Group, Inc. | 3,199,500 | 439,227 |
| The Blackstone Group Inc., Class A | 8,967,245 | 398,325 |
| Legal & General Group PLC | 109,784,921 | 375,741 |
| Chubb Ltd. | 2,525,000 | 371,907 |
| Intercontinental Exchange, Inc. | 4,316,800 | 370,986 |
| Goldman Sachs Group, Inc. | 1,770,000 | 362,142 |
| SunTrust Banks, Inc. | 5,262,600 | 330,754 |
| BlackRock, Inc. | 670,000 | 314,431 |
| CIT Group Inc.2 | 5,570,000 | 292,648 |
| T. Rowe Price Group, Inc. | 1,800,000 | 197,478 |
| BNP Paribas SA | 4,000,000 | 189,964 |
| Banco Santander, SA | 30,000,000 | 139,198 |
Fundamental Investors — Page 2 of 7
unaudited
Common stocks (continued)
Financials (continued) | Shares | Value
(000) |
| HDFC Bank Ltd. | 3,640,000 | $128,865 |
| Bank of New York Mellon Corp. | 2,581,500 | 113,973 |
| Hong Kong Exchanges and Clearing Ltd. | 3,077,600 | 108,658 |
| Aon PLC, Class A | 410,000 | 79,122 |
| Moody’s Corp. | 390,000 | 76,171 |
| Arch Capital Group Ltd.1 | 1,587,776 | 58,875 |
| First Republic Bank | 471,548 | 46,047 |
| SVB Financial Group1 | 180,000 | 40,426 |
| State Street Corp. | 590,000 | 33,075 |
| Ares Management Corp., Class A | 1,222,646 | 31,997 |
| CenterState Bank Corp. | 1,276,700 | 29,402 |
| | | 11,750,601 |
| Communication services 10.78% | | |
| Facebook, Inc., Class A1 | 14,361,100 | 2,771,692 |
| Charter Communications, Inc., Class A1 | 5,266,100 | 2,081,057 |
| Alphabet Inc., Class C1 | 1,275,701 | 1,378,918 |
| Alphabet Inc., Class A1 | 402,600 | 435,935 |
| Comcast Corp., Class A | 28,006,173 | 1,184,101 |
| Netflix, Inc.1 | 2,671,200 | 981,185 |
| Activision Blizzard, Inc. | 11,728,469 | 553,584 |
| Walt Disney Co. | 3,000,000 | 418,920 |
| CBS Corp., Class B | 5,590,000 | 278,941 |
| T-Mobile US, Inc.1 | 2,958,000 | 219,306 |
| WPP PLC | 11,500,000 | 144,613 |
| Yandex NV, Class A1 | 3,300,000 | 125,400 |
| Spark New Zealand Ltd. | 36,265,162 | 97,452 |
| Verizon Communications Inc. | 1,000,000 | 57,130 |
| Tencent Holdings Ltd. | 1,180,300 | 53,276 |
| SoftBank Group Corp. | 1,070,000 | 51,259 |
| HUYA, Inc. (ADR)1 | 1,590,000 | 39,289 |
| Adevinta ASA, Class B1 | 952,199 | 10,493 |
| | | 10,882,551 |
| Industrials 10.20% | | |
| Airbus SE, non-registered shares | 8,904,418 | 1,262,412 |
| Boeing Co. | 2,965,000 | 1,079,290 |
| TransDigm Group Inc.1 | 2,104,800 | 1,018,302 |
| Parker-Hannifin Corp. | 4,650,000 | 790,546 |
| Union Pacific Corp. | 4,510,000 | 762,686 |
| Deere & Co. | 4,466,000 | 740,061 |
| CSX Corp. | 7,282,976 | 563,484 |
| Johnson Controls International PLC | 8,172,000 | 337,585 |
| Emerson Electric Co. | 5,000,000 | 333,600 |
| United Parcel Service, Inc., Class B | 3,000,000 | 309,810 |
| MTU Aero Engines AG | 1,255,667 | 299,128 |
| Northrop Grumman Corp. | 922,400 | 298,037 |
| Rockwell Automation | 1,800,000 | 294,894 |
| Westinghouse Air Brake Technologies Corp. | 4,043,062 | 290,130 |
| Safran SA | 1,951,502 | 285,925 |
| Honeywell International Inc. | 1,418,000 | 247,569 |
| Armstrong World Industries, Inc. | 2,187,419 | 212,617 |
| American Airlines Group Inc. | 6,500,000 | 211,965 |
| Lockheed Martin Corp. | 502,000 | 182,497 |
| FedEx Corp. | 759,500 | 124,702 |
Fundamental Investors — Page 3 of 7
unaudited
Common stocks (continued)
Industrials (continued) | Shares | Value
(000) |
| Grafton Group PLC, units | 11,328,532 | $115,956 |
| Waste Management, Inc. | 939,000 | 108,332 |
| Norfolk Southern Corp. | 390,000 | 77,739 |
| United Technologies Corp. | 573,000 | 74,605 |
| Waste Connections, Inc. | 750,000 | 71,685 |
| Ryanair Holdings PLC (ADR)1 | 861,000 | 55,224 |
| RELX PLC | 1,970,000 | 47,772 |
| Alaska Air Group, Inc. | 555,900 | 35,528 |
| General Electric Co. | 2,841,600 | 29,837 |
| BWX Technologies, Inc. | 470,000 | 24,487 |
| Edenred SA | 164,595 | 8,396 |
| | | 10,294,801 |
| Consumer discretionary 8.58% | | |
| Amazon.com, Inc.1 | 1,277,300 | 2,418,734 |
| Home Depot, Inc. | 6,938,475 | 1,442,995 |
| NIKE, Inc., Class B | 12,045,000 | 1,011,178 |
| Marriott International, Inc., Class A | 5,254,251 | 737,119 |
| General Motors Co. | 11,856,000 | 456,812 |
| Target Corp. | 5,200,000 | 450,372 |
| LVMH Moët Hennessy-Louis Vuitton SE | 807,841 | 343,830 |
| Booking Holdings Inc.1 | 167,684 | 314,359 |
| Industria de Diseño Textil, SA | 8,500,000 | 255,648 |
| Wynn Resorts, Ltd. | 1,980,000 | 245,500 |
| MGM Resorts International | 8,500,000 | 242,845 |
| Galaxy Entertainment Group Ltd. | 25,490,000 | 171,800 |
| GVC Holdings PLC | 12,919,131 | 106,938 |
| EssilorLuxottica | 572,000 | 74,636 |
| Naspers Ltd., Class N | 297,000 | 72,105 |
| Ross Stores, Inc. | 660,000 | 65,419 |
| Royal Caribbean Cruises Ltd. | 415,400 | 50,351 |
| Las Vegas Sands Corp. | 850,000 | 50,226 |
| Wyndham Hotels & Resorts, Inc. | 745,100 | 41,532 |
| Meituan Dianping, Class B1 | 3,630,000 | 31,831 |
| Valeo SA, non-registered shares | 935,000 | 30,407 |
| Carnival Corp., units | 550,200 | 25,612 |
| Samsonite International SA | 10,794,000 | 24,761 |
| | | 8,665,010 |
| Consumer staples 6.60% | | |
| Philip Morris International Inc. | 14,765,500 | 1,159,535 |
| British American Tobacco PLC | 28,592,800 | 998,201 |
| Altria Group, Inc. | 17,964,586 | 850,623 |
| Keurig Dr Pepper Inc. | 19,287,171 | 557,399 |
| Sysco Corp. | 7,110,000 | 502,819 |
| Walmart Inc. | 3,700,000 | 408,813 |
| Costco Wholesale Corp. | 1,329,300 | 351,281 |
| Nestlé SA | 3,285,000 | 340,076 |
| Coca-Cola Co. | 6,125,000 | 311,885 |
| Estée Lauder Companies Inc., Class A | 1,600,000 | 292,976 |
| Procter & Gamble Co. | 2,400,000 | 263,160 |
| Mondelez International, Inc. | 4,500,000 | 242,550 |
| Coca-Cola European Partners PLC | 2,515,000 | 142,098 |
| Anheuser-Busch InBev SA/NV | 1,086,000 | 96,124 |
| Church & Dwight Co., Inc. | 978,100 | 71,460 |
Fundamental Investors — Page 4 of 7
unaudited
Common stocks (continued)
Consumer staples (continued) | Shares | Value
(000) |
| Constellation Brands, Inc., Class A | 197,000 | $38,797 |
| Conagra Brands, Inc. | 1,400,000 | 37,128 |
| | | 6,664,925 |
| Energy 6.29% | | |
| Enbridge Inc. (CAD denominated) | 26,368,328 | 952,405 |
| Enbridge Inc. (CAD denominated)3 | 1,256,665 | 45,390 |
| Royal Dutch Shell PLC, Class B (ADR) | 7,082,734 | 465,619 |
| Royal Dutch Shell PLC, Class B | 10,872,720 | 356,380 |
| Royal Dutch Shell PLC, Class A (ADR) | 275,518 | 17,928 |
| Royal Dutch Shell PLC, Class A (GBP denominated) | 165,244 | 5,398 |
| Concho Resources Inc. | 5,335,403 | 550,507 |
| BP PLC | 70,000,000 | 487,686 |
| Chevron Corp. | 3,826,137 | 476,124 |
| EOG Resources, Inc. | 4,784,384 | 445,713 |
| Baker Hughes, a GE Co., Class A | 16,000,000 | 394,080 |
| Suncor Energy Inc. | 10,493,740 | 327,341 |
| Diamondback Energy, Inc. | 2,886,000 | 314,487 |
| ConocoPhillips | 3,211,800 | 195,920 |
| Cabot Oil & Gas Corp. | 8,461,804 | 194,283 |
| Keyera Corp. | 6,937,000 | 178,517 |
| Murphy Oil Corp. | 6,781,900 | 167,174 |
| Exxon Mobil Corp. | 2,030,000 | 155,559 |
| Occidental Petroleum Corp. | 3,018,000 | 151,745 |
| Schlumberger Ltd. | 2,905,500 | 115,465 |
| Canadian Natural Resources, Ltd. (CAD denominated) | 3,980,000 | 107,315 |
| Pioneer Natural Resources Co. | 500,000 | 76,930 |
| Noble Energy, Inc. | 3,010,400 | 67,433 |
| Viper Energy Partners LP | 1,850,000 | 57,017 |
| Equitrans Midstream Corp. | 1,214,900 | 23,946 |
| Cenovus Energy Inc. | 2,492,500 | 21,983 |
| | | 6,352,345 |
| Materials 4.78% | | |
| DuPont de Nemours Inc. | 11,223,948 | 842,582 |
| BHP Group PLC | 20,000,000 | 511,790 |
| Corteva, Inc. | 17,189,376 | 508,290 |
| Linde PLC | 2,295,000 | 460,836 |
| Rio Tinto PLC | 5,743,000 | 355,951 |
| LyondellBasell Industries NV | 3,626,000 | 312,307 |
| Dow Inc. | 5,658,782 | 279,035 |
| Royal Gold, Inc. | 2,284,000 | 234,087 |
| LANXESS AG | 3,105,000 | 184,514 |
| Barrick Gold Corp. | 11,453,232 | 180,617 |
| Shin-Etsu Chemical Co., Ltd. | 1,883,700 | 175,327 |
| First Quantum Minerals Ltd. | 14,927,800 | 141,806 |
| Franco-Nevada Corp. | 1,540,000 | 130,710 |
| Alcoa Corp.1 | 5,395,000 | 126,297 |
| Norsk Hydro ASA | 34,987,339 | 125,095 |
| Sherwin-Williams Co. | 223,500 | 102,428 |
| Akzo Nobel NV | 749,000 | 70,383 |
| Vale SA, ordinary nominative | 4,100,000 | 55,329 |
Fundamental Investors — Page 5 of 7
unaudited
Common stocks (continued)
Materials (continued) | Shares | Value
(000) |
| Allegheny Technologies Inc.1 | 775,100 | $19,532 |
| Packaging Corp. of America | 69,300 | 6,606 |
| | | 4,823,522 |
| Real estate 1.98% | | |
| Simon Property Group, Inc. REIT | 6,145,000 | 981,725 |
| American Tower Corp. REIT | 1,353,700 | 276,764 |
| Equinix, Inc. REIT | 466,000 | 234,999 |
| Crown Castle International Corp. REIT | 1,625,357 | 211,865 |
| AGNC Investment Corp. REIT | 10,752,000 | 180,849 |
| CoreSite Realty Corp. REIT | 485,000 | 55,858 |
| Digital Realty Trust, Inc. REIT | 452,100 | 53,253 |
| | | 1,995,313 |
| Utilities 0.45% | | |
| DTE Energy Co. | 920,000 | 117,650 |
| Sempra Energy | 800,000 | 109,952 |
| Exelon Corp. | 1,925,000 | 92,284 |
| Public Service Enterprise Group Inc. | 1,498,000 | 88,112 |
| Edison International | 512,300 | 34,534 |
| CMS Energy Corp. | 182,500 | 10,569 |
| | | 453,101 |
| Total common stocks(cost: $63,916,190,000) | | 95,839,640 |
Preferred securities 0.14%
Financials 0.07% | | |
| Itaú Unibanco Holding SA, preferred nominative (ADR) | 7,815,000 | 73,617 |
| Information technology 0.07% | | |
| Samsung Electronics Co., Ltd., nonvoting preferred shares | 2,100,000 | 69,567 |
| Total preferred securities(cost: $118,002,000) | | 143,184 |
Short-term securities 5.15%
Money market investments 5.15% | | |
| Capital Group Central Cash Fund | 51,969,502 | 5,196,430 |
| Total short-term securities(cost: $5,196,476,000) | | 5,196,430 |
| Total investment securities 100.23%(cost: $69,230,668,000) | | 101,179,254 |
| Other assets less liabilities (0.23)% | | (230,235) |
| Net assets 100.00% | | $100,949,019 |
| 1 | Security did not produce income during the last 12 months. |
| 2 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
| 3 | Acquired in a transaction exempt from registration under Section 4(2) 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 $45,390,000, which represented .04% of the net assets of the fund. |
Fundamental Investors — Page 6 of 7
unaudited
| Key to abbreviations |
| ADR = American Depositary Receipts |
| CAD = Canadian dollars |
| GBP = British pounds |
Additional financial disclosures are included in the fund’s current shareholder report and should be read in conjunction with this report.
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 American Funds website at americanfunds.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.
© 2019 Capital Group. All rights reserved.
| MFGEFPX-010-0819O-S73137 | Fundamental Investors — Page 7 of 7 |
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 10 – Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating and governance committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating and governance committee.
ITEM 11 – Controls and Procedures
| (a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule. |
| | |
| (b) | There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s semi-annual period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
ITEM 12 – Exhibits
| (a)(1) | Not applicable for filing of semi-annual reports to shareholders. |
| | |
| (a)(2) | The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | AMERICAN FUNDS FUNDAMENTAL INVESTORS |
| | |
| | By__/s/ Paul F. Roye____________________ |
| | Paul F. Roye, Executive Vice President and Principal Executive Officer |
| | |
| | Date: August 30, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By__/s/ Paul F. Roye_________________ |
Paul F. Roye, Executive Vice President and Principal Executive Officer |
| |
| Date: August 30, 2019 |
| By ___/s/ Brian D. Bullard __________ |
Brian D. Bullard, Treasurer and Principal Financial Officer |
| |
| Date: August 30, 2019 |
