Notes to financial statements
The Growth Fund of America, Inc. (the “fund”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund invests in a wide range of companies that appear to offer superior opportunities for growth of capital. In 2009, shareholders approved a proposal to reorganize the fund from a Maryland corporation to a Delaware statutory trust. The reorganization may be completed in 2011 or 2012; however, the fund reserves the right to delay the implementation.
The fund has 16 share classes consisting of five retail share classes, five 529 college savings plan share classes and six retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The six retirement plan share classes (R-1, R-2, R-3, R-4, R-5 and R-6) are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described below:
| 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 one year of purchase without an initial sales charge) | None |
| Classes B and 529-B* | None | Declines from 5% to 0% for redemptions within six years of purchase | Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years |
| Class C | None | 1% for redemptions within one year of purchase | Class C converts to Class F-1 after 10 years |
| Class 529-C | None | 1% for redemptions within one year of purchase | None |
| Class 529-E | None | None | None |
| Classes F-1, F-2 and 529-F-1 | None | None | None |
| Classes R-1, R-2, R-3, R-4, R-5 and R-6 | None | None | None |
*Class B and 529-B shares of the fund are not available for purchase.
Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. 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, administrative and shareholder 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 class.
| 2. | Significant accounting policies |
The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The fund follows the significant accounting policies described below, 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. 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, administrative and shareholder services, are charged directly to the respective share class.
Dividends and distributions to shareholders – Dividends and distributions paid to shareholders are recorded on the ex-dividend date.
Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect 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. On the accompanying financial statements, 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. 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.
The fund’s investments are reported at fair value as defined by accounting principles generally accepted in the United States of America. The fund generally determines the net asset value of each share class as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs – The fund uses the following methods and inputs to establish the fair value of its 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 purchased with more than 60 days left to maturity, 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 |
Where the investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income securities will be valued in good faith at the mean quoted bid and asked prices that are reasonably and timely available (or bid prices, if asked 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 above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates fair value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under guidelines adopted by authority of the fund's board of directors. Market quotations may be considered unreliable if events occur that materially affect the value of securities (particularly equity securities trading outside the U.S.) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange. Various inputs may be reviewed in order to make a good faith determination of a security’s fair value. These inputs include, but are not limited to, 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. 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.
Classifications - The fund classifies its 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 fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of August 31, 2011 (dollars in thousands):
| Investment securities: | | Level 1 | | | Level 2 | | | | | Level 3 | | | Total | |
| Common stocks: | | | | | | | | | | | | | | |
| Information technology | | $ | 25,283,446 | | | $ | - | | | | | $ | - | | | $ | 25,283,446 | |
| Consumer discretionary | | | 22,769,977 | | | | - | | | | | | - | | | | 22,769,977 | |
| Energy | | | 15,879,163 | | | | - | | | | | | 41,229 | | | | 15,920,392 | |
| Health care | | | 13,909,007 | | | | - | | | | | | - | | | | 13,909,007 | |
| Financials | | | 10,840,677 | | | | 491,309 | | (1 | ) | | | - | | | | 11,331,986 | |
| Industrials | | | 11,262,145 | | | | - | | | | | | - | | | | 11,262,145 | |
| Materials | | | 8,456,254 | | | | - | | | | | | 6,791 | | | | 8,463,045 | |
| Consumer staples | | | 7,682,445 | | | | - | | | | | | - | | | | 7,682,445 | |
| Other | | | 2,574,186 | | | | - | | | | | | - | | | | 2,574,186 | |
| Miscellaneous | | | 6,252,032 | | | | 539,848 | | (1 | ) | | | - | | | | 6,791,880 | |
| Preferred stocks | | | - | | | | - | | | | | | 66,658 | | | | 66,658 | |
| Warrants | | | 26,454 | | | | - | | | | | | - | | | | 26,454 | |
| Convertible securities | | | - | | | | 45,988 | | | | | | 192,466 | | | | 238,454 | |
| Bonds & notes | | | - | | | | 41,682 | | | | | | - | | | | 41,682 | |
| Short-term securities | | | - | | | | 10,809,012 | | | | | | - | | | | 10,809,012 | |
| Total | | $ | 124,935,786 | | | $ | 11,927,839 | | | | | $ | 307,144 | | | $ | 137,170,769 | |
| | | | | | | | | | | | | | | | | | | |
(1) Includes certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading; therefore, $1,031,157,000 of investment securities were classified as Level 2 instead of Level 1. |
| The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the year ended August 31, 2011 (dollars in thousands): |
| | | | | | | | | | | | | | | | | | | | |
| | | Beginning value at 9/1/2010 | | | Transfers into Level 3(2) | | | Purchases | | Sales | | Net realized loss(3) | | | Unrealized depreciation(3) | | | Ending value at 8/31/2011 | |
| Investment securities | | $ | 25 | | | $ | 196,930 | | | $ | 203,023 | | _ (4) | | $ | (1,256 | ) | | $ | (91,578 | ) | | $ | 307,144 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized depreciation during the period on Level 3 investment securities held at August 31, 2011 (dollars in thousands)(3): | | | $ | (92,811 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(2) Transfers into or out of Level 3 are based on the beginning market value of the quarter in which they occurred. | | | | | |
(3) Net realized loss and unrealized depreciation are included in the related amounts on investments in the statement of operations. | |
(4) Amount less than one thousand. | |
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 due to market conditions and other factors, including those directly involving the issuers of securities held by the fund.
Investing in growth-oriented stocks — Growth-oriented stocks may involve larger price swings and greater potential for loss than other types of investments.
Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations outside the U.S., may lose value because of political, social, economic or market developments in the countries or regions in which the issuer operates. 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. 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 settlement and accounting practices and different regulatory, legal and reporting standards, and may be more difficult to value, than those in the U.S.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.
| 5. | Taxation and distributions |
Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
As of and during the period ended August 31, 2011, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2007, by state tax authorities for tax years before 2006 and by tax authorities outside the U.S. for tax years before 2005.
Non-U.S. taxation – Dividend and interest income are recorded net of non-U.S. taxes paid. Gains realized by the fund on the sale of securities in certain countries are subject to non-U.S. taxes. The fund records a 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; unrealized appreciation of certain investments in securities outside the U.S.; cost of investments sold; net capital losses; and non-U.S. taxes on capital gains. 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.
During the year ended August 31, 2011, the fund reclassified $110,901,000 from accumulated net realized loss to undistributed net investment income and $211,000 from undistributed net investment income to capital paid in on shares of capital stock to align financial reporting with tax reporting.
As of August 31, 2011, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:
| (dollars in thousands) | |
Undistributed ordinary income | | $ | 620,256 | |
| Post-October currency loss deferrals (realized during the period November 1, 2010, through August 31, 2011) * | | | (1,882 | ) |
Capital loss carryforward expiring 2018† | | | (7,219,511 | ) |
| Gross unrealized appreciation on investment securities | | | 28,179,233 | |
| Gross unrealized depreciation on investment securities | | | (7,136,739 | ) |
| Net unrealized appreciation on investment securities | | | 21,042,494 | |
| Cost of investment securities | | | 116,128,275 | |
| | | | | |
| * These deferrals are considered incurred in the subsequent year. | | | | |
| † Reflects the utilization of capital loss carryforwards of $4,770,326,000. The capital loss carryforward will be used to offset any capital gains realized by the fund in future years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains. |
Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after August 31, 2011, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.
Tax-basis distributions paid to shareholders from ordinary income were as follows (dollars in thousands):
| | | Year ended August 31 | |
| Share class | | 2011 | | | 2010 | |
| | | | | | | | | |
| Class A | | $ | 531,599 | | | $ | 508,627 | |
| Class B | | | - | | | | 1,938 | |
| Class C | | | 6,580 | | | | 13,544 | |
| Class F-1 | | | 132,266 | | | | 140,687 | |
| Class F-2 | | | 49,446 | | | | 42,452 | |
| Class 529-A | | | 27,288 | | | | 22,127 | |
| Class 529-B | | | - | | | | 358 | |
| Class 529-C | | | 1,061 | | | | 1,150 | |
| Class 529-E | | | 933 | | | | 798 | |
| Class 529-F-1 | | | 1,099 | | | | 856 | |
| Class R-1 | | | 1,236 | | | | 1,358 | |
| Class R-2 | | | 4,448 | | | | 5,449 | |
| Class R-3 | | | 74,452 | | | | 75,896 | |
| Class R-4 | | | 159,063 | | | | 140,976 | |
| Class R-5 | | | 162,757 | | | | 163,718 | |
| Class R-6 | | | 91,702 | | | | 38,327 | |
| Total | | $ | 1,243,930 | | | $ | 1,158,261 | |
| 6. | Fees and transactions with related parties |
Capital Research and Management Company (“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.
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 0.500% on the first $1 billion of daily net assets and decreasing to 0.233% on such assets in excess of $210 billion. For the year ended August 31, 2011, the investment advisory services fee was $426,988,000, which was equivalent to an annualized rate of 0.271% 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 described below:
Distribution services – The fund has plans of distribution for all share classes, except Classes F-2, R-5 and R-6. Under the plans, the board of directors 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 below. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
For Classes A and 529-A, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of August 31, 2011, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.
| Share class | Currently approved limits | Plan limits |
| Class A | 0.25% | 0.25% |
| Class 529-A | 0.25 | 0.50 |
| Classes B and 529-B | 1.00 | 1.00 |
| Classes C, 529-C and R-1 | 1.00 | 1.00 |
| Class R-2 | 0.75 | 1.00 |
| Classes 529-E and R-3 | 0.50 | 0.75 |
| Classes F-1, 529-F-1 and R-4 | 0.25 | 0.50 |
Transfer agent services – The fund has a transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC as described below.
Administrative services – The fund has an administrative services agreement with CRMC for all share classes, except Classes A and B, to provide certain services, including transfer agent and recordkeeping services; coordinating, monitoring, assisting and overseeing third-party service providers; and educating advisers and shareholders about the impact of market-related events, tax laws affecting investments, retirement plan restrictions, exchange limitations and other related matters. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5 and 0.05% for Class R-6) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services.
Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.
Expenses under the agreements described above for the year ended August 31, 2011, were as follows (dollars in thousands):
| | | | | | | | | Administrative services | |
| Share class | | Distribution services | | | Transfer agent services | | | CRMC administrative services | | | Transfer agent services | | | Commonwealth of Virginia administrative services | |
| Class A | | $ | 152,598 | | | $ | 99,282 | | | Not applicable | | | Not applicable | | | Not applicable | |
| Class B | | | 28,806 | | | | 4,171 | | | Not applicable | | | Not applicable | | | Not applicable | |
| Class C | | | 76,031 | | | Included in administrative services | | | $ | 11,409 | | | $ | 1,909 | | | Not applicable | |
| Class F-1 | | | 38,472 | | | | | | | | 20,454 | | | | 1,045 | | | Not applicable | |
| Class F-2 | | Not applicable | | | | | 6,519 | | | | 165 | | | Not applicable | |
| Class 529-A | | | 7,226 | | | | | | | | 3,903 | | | | 670 | | | $ | 3,436 | |
| Class 529-B | | | 3,730 | | | | | | | | 423 | | | | 125 | | | | 373 | |
| Class 529-C | | | 9,730 | | | | | | | | 1,108 | | | | 282 | | | | 976 | |
| Class 529-E | | | 856 | | | | | | | | 183 | | | | 33 | | | | 171 | |
| Class 529-F-1 | | | - | | | | | | | | 126 | | | | 22 | | | | 111 | |
| Class R-1 | | | 6,280 | | | | | | | | 884 | | | | 78 | | | Not applicable | |
| Class R-2 | | | 19,698 | | | | | | | | 3,911 | | | | 5,517 | | | Not applicable | |
| Class R-3 | | | 63,358 | | | | | | | | 18,863 | | | | 4,761 | | | Not applicable | |
| Class R-4 | | | 45,410 | | | | | | | | 27,087 | | | | 172 | | | Not applicable | |
| Class R-5 | | Not applicable | | | | | 13,596 | | | | 79 | | | Not applicable | |
| Class R-6 | | Not applicable | | | | | 4,561 | | | | 33 | | | Not applicable | |
| Total | | $ | 452,195 | | | $ | 103,453 | | | $ | 113,027 | | | $ | 14,891 | | | $ | 5,067 | |
Directors’ deferred compensation – Directors 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. Directors’ compensation of $965,000, shown on the accompanying financial statements, includes $442,000 in current fees (either paid in cash or deferred) and a net increase of $523,000 in the value of the deferred amounts.
Affiliated officers and directors – Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.
| 7. | Capital share transactions |
Capital share transactions in the fund were as follows (dollars and shares in thousands):
| | | Sales(*) | | | Reinvestments of dividends and distributions | | | Repurchases(*) | | | Net (decrease) increase | |
| Share class | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
| Year ended August 31, 2011 | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 5,586,951 | | | | 183,617 | | | $ | 515,811 | | | | 17,001 | | | $ | (15,635,437 | ) | | | (514,982 | ) | | $ | (9,532,675 | ) | | | (314,364 | ) |
| Class B | | | 37,592 | | | | 1,275 | | | | - | | | | - | | | | (1,185,607 | ) | | | (40,449 | ) | | | (1,148,015 | ) | | | (39,174 | ) |
| Class C | | | 531,232 | | | | 18,161 | | | | 6,262 | | | | 214 | | | | (2,017,874 | ) | | | (69,163 | ) | | | (1,480,380 | ) | | | (50,788 | ) |
| Class F-1 | | | 2,252,172 | | | | 74,640 | | | | 124,534 | | | | 4,131 | | | | (6,331,610 | ) | | | (210,351 | ) | | | (3,954,904 | ) | | | (131,580 | ) |
| Class F-2 | | | 1,468,359 | | | | 48,857 | | | | 36,619 | | | | 1,208 | | | | (2,288,573 | ) | | | (75,023 | ) | | | (783,595 | ) | | | (24,958 | ) |
| Class 529-A | | | 501,640 | | | | 16,587 | | | | 27,283 | | | | 904 | | | | (359,443 | ) | | | (11,914 | ) | | | 169,480 | | | | 5,577 | |
| Class 529-B | | | 5,816 | | | | 197 | | | | - | | | | - | | | | (109,390 | ) | | | (3,733 | ) | | | (103,574 | ) | | | (3,536 | ) |
| Class 529-C | | | 134,290 | | | | 4,560 | | | | 1,061 | | | | 36 | | | | (126,834 | ) | | | (4,327 | ) | | | 8,517 | | | | 269 | |
| Class 529-E | | | 22,642 | | | | 756 | | | | 933 | | | | 31 | | | | (20,268 | ) | | | (676 | ) | | | 3,307 | | | | 111 | |
| Class 529-F-1 | | | 25,459 | | | | 839 | | | | 1,098 | | | | 37 | | | | (25,314 | ) | | | (833 | ) | | | 1,243 | | | | 43 | |
| Class R-1 | | | 123,487 | | | | 4,292 | | | | 1,231 | | | | 42 | | | | (185,045 | ) | | | (6,302 | ) | | | (60,327 | ) | | | (1,968 | ) |
| Class R-2 | | | 572,336 | | | | 19,332 | | | | 4,444 | | | | 150 | | | | (920,045 | ) | | | (30,935 | ) | | | (343,265 | ) | | | (11,453 | ) |
| Class R-3 | | | 2,046,839 | | | | 68,453 | | | | 74,281 | | | | 2,485 | | | | (4,542,701 | ) | | | (151,107 | ) | | | (2,421,581 | ) | | | (80,169 | ) |
| Class R-4 | | | 3,512,296 | | | | 117,286 | | | | 159,005 | | | | 5,283 | | | | (7,756,274 | ) | | | (256,407 | ) | | | (4,084,973 | ) | | | (133,838 | ) |
| Class R-5 | | | 2,901,025 | | | | 95,733 | | | | 162,270 | | | | 5,357 | | | | (6,643,137 | ) | | | (216,444 | ) | | | (3,579,842 | ) | | | (115,354 | ) |
| Class R-6 | | | 5,394,491 | | | | 175,598 | | | | 91,536 | | | | 3,016 | | | | (2,220,793 | ) | | | (72,157 | ) | | | 3,265,234 | | | | 106,457 | |
| Total net increase | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (decrease) | | $ | 25,116,627 | | | | 830,183 | | | $ | 1,206,368 | | | | 39,895 | | | $ | (50,368,345 | ) | | | (1,664,803 | ) | | $ | (24,045,350 | ) | | | (794,725 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year ended August 31, 2010 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 6,836,812 | | | | 252,892 | | | $ | 489,387 | | | | 18,025 | | | $ | (12,713,898 | ) | | | (473,621 | ) | | $ | (5,387,699 | ) | | | (202,704 | ) |
| Class B | | | 60,035 | | | | 2,295 | | | | 1,867 | | | | 71 | | | | (1,388,581 | ) | | | (53,012 | ) | | | (1,326,679 | ) | | | (50,646 | ) |
| Class C | | | 810,993 | | | | 31,212 | | | | 12,789 | | | | 489 | | | | (1,566,072 | ) | | | (60,658 | ) | | | (742,290 | ) | | | (28,957 | ) |
| Class F-1 | | | 3,324,276 | | | | 124,181 | | | | 127,954 | | | | 4,744 | | | | (5,761,581 | ) | | | (216,022 | ) | | | (2,309,351 | ) | | | (87,097 | ) |
| Class F-2 | | | 1,827,784 | | | | 68,025 | | | | 31,492 | | | | 1,161 | | | | (1,274,456 | ) | | | (47,239 | ) | | | 584,820 | | | | 21,947 | |
| Class 529-A | | | 462,475 | | | | 17,197 | | | | 22,122 | | | | 819 | | | | (280,904 | ) | | | (10,516 | ) | | | 203,693 | | | | 7,500 | |
| Class 529-B | | | 7,179 | | | | 275 | | | | 358 | | | | 14 | �� | | | (79,932 | ) | | | (3,032 | ) | | | (72,395 | ) | | | (2,743 | ) |
| Class 529-C | | | 135,913 | | | | 5,202 | | | | 1,147 | | | | 44 | | | | (108,622 | ) | | | (4,179 | ) | | | 28,438 | | | | 1,067 | |
| Class 529-E | | | 22,212 | | | | 834 | | | | 797 | | | | 29 | | | | (16,942 | ) | | | (636 | ) | | | 6,067 | | | | 227 | |
| Class 529-F-1 | | | 23,868 | | | | 892 | | | | 856 | | | | 32 | | | | (13,196 | ) | | | (495 | ) | | | 11,528 | | | | 429 | |
| Class R-1 | | | 169,513 | | | | 6,457 | | | | 1,351 | | | | 51 | | | | (113,137 | ) | | | (4,371 | ) | | | 57,727 | | | | 2,137 | |
| Class R-2 | | | 658,225 | | | | 25,038 | | | | 5,441 | | | | 205 | | | | (759,497 | ) | | | (28,984 | ) | | | (95,831 | ) | | | (3,741 | ) |
| Class R-3 | | | 3,007,381 | | | | 113,365 | | | | 75,727 | | | | 2,830 | | | | (3,416,526 | ) | | | (128,850 | ) | | | (333,418 | ) | | | (12,655 | ) |
| Class R-4 | | | 4,652,580 | | | | 173,924 | | | | 140,952 | | | | 5,234 | | | | (4,666,904 | ) | | | (175,870 | ) | | | 126,628 | | | | 3,288 | |
| Class R-5 | | | 4,196,132 | | | | 156,763 | | | | 162,119 | | | | 5,982 | | | | (5,930,673 | ) | | | (220,894 | ) | | | (1,572,422 | ) | | | (58,149 | ) |
| Class R-6 | | | 4,716,943 | | | | 175,060 | | | | 38,267 | | | | 1,409 | | | | (677,200 | ) | | | (25,136 | ) | | | 4,078,010 | | | | 151,333 | |
| Total net increase | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (decrease) | | $ | 30,912,321 | | | | 1,153,612 | | | $ | 1,112,626 | | | | 41,139 | | | $ | (38,768,121 | ) | | | (1,453,515 | ) | | $ | (6,743,174 | ) | | | (258,764 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* Includes exchanges between share classes of the fund. | | | | | | | | | | | | | | | | | | | | | |
| 8. | Investment transactions |
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $50,434,051,000 and $69,661,627,000, respectively, during the year ended August 31, 2011.
