American Funds American Balanced 529A (CLBAX) N-CSRS Certified semi-annual shareholder report (management investment company)

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: 811-00066

American Balanced Fund

(Exact Name of Registrant as Specified in Charter)

P.O. Box 7650, One Market, Steuart Tower

San Francisco, California 94120

(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (415) 421-9360

Date of fiscal year end: December 31

Date of reporting period: June 30, 2010

Patrick F. Quan

Capital Research and Management Company

P.O. Box 7650, One Market, Steuart Tower

San Francisco, California 94120

(Name and Address of Agent for Service)

Copies to:

Michael Glazer

Bingham McCutchen LLP

355 South Grand Avenue, Suite 4400

Los Angeles, California 90071

(Counsel for the Registrant)

ITEM 1 – Reports to Stockholders

           

American Balanced Fund

[photo of a field of flowers - trees in the background]

Semi-annual report for the six months ended June 30, 2010

American Balanced Fund® seeks conservation of capital, current income and long-term growth of both capital and income by investing in common stocks and fixed-income securities. The fund approaches the management of its investments as if they constituted the complete investment program of the prudent investor.

This fund is one of the 30 American Funds. American Funds is one of the nation’s largest mutual fund families. For nearly 80 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.

Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.

Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2010:
	1 year			5 years			10 years
Class A shares
Reflecting 5.75% maximum sales charge		6.53	%		0.16	%		4.43	%

The total annual fund operating expense ratio was 0.67% for Class A shares as of the most recent fiscal year-end.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 24 to 30 for details.

The fund’s 30-day yield for Class A shares as of July 31, 2010, calculated in accordance with the Securities and Exchange Commission formula, was 1.98%. The fund’s distribution rate for Class A shares as of that date was 2.13%. 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.

Results for other share classes can be found on pages 34 and 35.

Equity investments are subject to market fluctuations. The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. See the prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.

Fellow shareholders:

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Increasing concerns about the global economic outlook led to a decline in stocks in the first half of the year. In contrast, bonds posted solid gains.

Stocks, as measured by Standard & Poor’s 500 Composite Index, declined 6.6%* for the six months. Investment-grade bonds, as measured by Barclays Capital U.S. Aggregate Index, gained 5.3%. American Balanced Fund declined 2.9%, slightly behind the 2.7% loss posted by the Lipper Balanced Funds Index. The 60/40 S&P 500/Barclays Index declined 1.8%. The market indexes are unmanaged.

Stocks began the year with a continuation of the recovery that began early in 2009. However, in April, concerns about the sovereign debt of Greece began to attract increased attention. These fears spread throughout the euro zone as investors focused on countries with similar issues. In reaction, the dollar strengthened significantly against the euro and to a lesser extent against most other currencies. Simultaneously, some evidence has developed of a slowing in the economic recovery that began last summer. As these developments unfolded, U.S. stocks declined almost 15% from their highs in mid-April to June 30.

The Federal Reserve and other central banks reacted to these concerns by continuing to hold interest rates at very low levels. Short-term cash equivalents continue to yield virtually nothing. The benchmark 10-year Treasury, which yielded 3.9% at the beginning of the period, was at 3.0% on June 30. The combination of easy monetary policy with these economic concerns resulted in good returns from bonds, led by Treasuries.

The decline in stock prices, while moderate, was quite broad in scope. All 10 sectors of the S&P 500 showed negative returns. Information technology remains the fund’s largest equity sector at a little over 9%. This, however, is down from more than 11% at the beginning of the year and reflects reductions we made into the strength the stocks experienced earlier in the year. Some of this was reinvested in the consumer sector and some was held in cash and bonds. The fund continues to have significant positions in high-quality, large capitalization stocks. This area has lagged the market since the market bottom early last year, and we think excellent values exist in this broad category.

With exposure of only 7% to the non-U.S. area, our foreign exposure is not high. Nevertheless, that area was generally weak across the board, which was exacerbated by the strength in the dollar. Consequently, our positions in this area hurt overall results a bit especially in comparison to indexes that are U.S.-based. We are finding increasing attraction in some non-U.S. securities.

In the bond portion of the fund, returns were supported by the rally in Treasuries. Corporate bonds also contributed to results. Mortgage-backed securities held up even though the Federal Reserve ended its support program for mortgage-related securities in early April. At June 30, 2010, the fund’s bond portfolio consisted of 50% government obligations, 27% mortgage-backed bonds and 23% corporate bonds.

It is American Balanced Fund’s practice to have between 50% and 75% invested in common stocks at all times. The percentage will vary based on our judgment of the relative attractiveness of equities, bonds and cash. At June 30, the fund had 62% in stocks, 34% in bonds and 4% in cash.

We welcome our new shareholders and thank our long-term investors for their confidence in American Balanced Fund.

Cordially,

/s/ Robert G. O’Donnell

Robert G. O’Donnell

Vice Chairman of the Board

and Principal Executive Officer

/s/ Gregory D. Johnson

Gregory D. Johnson

President

August 6, 2010

*All data refer to total return.

For current information about the fund, visit americanfunds.com.

Summary investment portfolio, June 30, 2010

The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings.  See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

[begin pie chart]

Investment mix by security type	(percent of net assets)
Common stocks		62	%
Fixed-income securities		34
Short-term securities & other assets less liabilities		4

[end pie chart]

							Percent
				Value			of net
Common stocks - 62.25%	Shares				(000	)	assets
Information technology - 9.24%
Oracle Corp.		33,036,391		$	708,961			1.57	%
Microsoft Corp.		27,070,000			622,881			1.38
Cisco Systems, Inc. (1)		20,800,000			443,248			.98
International Business Machines Corp.		3,300,000			407,484			.90
Hewlett-Packard Co.		7,600,000			328,928			.73
Other securities					1,656,694			3.68
					4,168,196			9.24
Financials - 8.95%
Wells Fargo & Co.		36,000,000			921,600			2.04
Berkshire Hathaway Inc., Class A (1)		5,045			605,400			1.34
U.S. Bancorp		23,210,000			518,743			1.15
American Express Co.		7,000,000			277,900			.62
JPMorgan Chase & Co.		7,410,000			271,280			.60
Goldman Sachs Group, Inc.		2,000,000			262,540			.58
Other securities					1,181,337			2.62
					4,038,800			8.95
Industrials - 7.62%
Boeing Co.		7,860,000			493,215			1.09
Lockheed Martin Corp.		5,650,000			420,925			.93
Deere & Co.		5,640,000			314,035			.70
United Technologies Corp.		4,330,000			281,060			.62
Other securities					1,928,261			4.28
					3,437,496			7.62
Health care - 7.19%
Merck & Co., Inc.		14,877,200			520,256			1.15
Bristol-Myers Squibb Co.		17,000,000			423,980			.94
Pfizer Inc		25,159,500			358,774			.80
Eli Lilly and Co.		10,352,000			346,792			.77
Abbott Laboratories		7,350,000			343,833			.76
UnitedHealth Group Inc.		9,650,000			274,060			.61
Other securities					975,495			2.16
					3,243,190			7.19
Energy - 7.01%
Chevron Corp.		12,772,000			866,708			1.92
Royal Dutch Shell PLC, Class B (ADR)		11,933,000			576,125			1.28
Schlumberger Ltd.		7,484,200			414,176			.92
ConocoPhillips		7,300,000			358,357			.79
Exxon Mobil Corp.		5,700,000			325,299			.72
Other securities					620,789			1.38
					3,161,454			7.01
Consumer staples - 6.48%
Philip Morris International Inc.		16,400,000			751,776			1.67
Coca-Cola Co.		9,300,000			466,116			1.03
Procter & Gamble Co.		5,250,000			314,895			.70
Wal-Mart Stores, Inc.		6,087,800			292,641			.65
Costco Wholesale Corp.		5,300,000			290,599			.64
Other securities					807,220			1.79
					2,923,247			6.48
Consumer discretionary - 4.98%
Home Depot, Inc.		20,960,000			588,347			1.30
Time Warner Inc.		10,833,333			313,192			.70
McDonald's Corp.		4,120,000			271,384			.60
Other securities					1,072,790			2.38
					2,245,713			4.98
Materials - 4.60%
Potash Corp. of Saskatchewan Inc.		5,200,000			448,448			1.00
E.I. du Pont de Nemours and Co.		10,550,000			364,924			.81
Other securities					1,263,737			2.79
					2,077,109			4.60
Telecommunication services - 2.21%
AT&T Inc.		26,000,000			628,940			1.40
Verizon Communications Inc.		13,100,000			367,062			.81
					996,002			2.21
Utilities - 2.05%
PG&E Corp.		7,800,000			320,580			.71
Other securities					602,181			1.34
					922,761			2.05
Miscellaneous - 1.92%
Other common stocks in initial period of acquisition					865,651			1.92
Total common stocks (cost: $26,985,050,000)					28,079,619			62.25
Preferred stocks - 0.17%
Financials - 0.17%
Other securities					78,326			.17
Total preferred stocks (cost: $88,781,000)					78,326			.17
	Principal
	amount
Bonds & notes - 33.85%		(000	)
Bonds & notes of U.S. government & government agencies - 16.66%
U.S. Treasury:
4.625% 2011	$	684,000			726,750
2.75% 2013		296,500			312,102
3.375% 2013		583,750			626,002
3.50% 2013		463,000			497,600
4.25% 2013		245,335			269,648
3.50% 2018		1,007,500			1,077,239
3.625% 2019		407,000			430,403
6.25% 2023		691,500			896,737
4.50% 2036		346,300			382,717
3.50% 2039		302,000			280,624
1.625%-8.875% 2012-2040 (2)		1,533,869			1,713,728			15.99
Fannie Mae 6.25% 2029		20,000			24,765			.05
Other securities					279,645			.62
					7,517,960			16.66
Mortgage-backed obligations (3) - 8.54%
Fannie Mae 0%-11.791% 2011-2047 (4)		1,983,774			2,099,392			4.65
Freddie Mac 0%-7.50% 2023-2040 (4) (5)		514,929			551,800			1.22
Other securities					1,200,923			2.67
					3,852,115			8.54
Corporate bonds & notes - 7.62%
Financials - 2.15%
JPMorgan Chase & Co. 4.891% 2015 (4)		22,965			23,309			.05
Wells Fargo & Co. 4.375% 2013		6,920			7,320			.02
Other securities					937,599			2.08
					968,228			2.15
Telecommunication services - 1.07%
SBC Communications Inc. 5.10%-6.45% 2011-2034		114,300			126,644
BellSouth Capital Funding Corp. 7.875% 2030		51,500			63,297
AT&T Wireless Services, Inc. 7.875%-8.125% 2011-2012		17,400			18,583
AT&T Inc. 4.95%-8.00% 2013-2031 (4)		26,250			30,559			.53
Verizon Communications Inc. 3.75%-6.35% 2011-2037		117,265			126,858			.28
Other securities					115,487			.26
					481,428			1.07
Energy - 0.46%
Shell International Finance BV 1.30%-1.875% 2011-2013		32,750			33,002			.07
Other securities					176,445			.39
					209,447			.46
Information technology - 0.18%
Oracle Corp. 3.75% 2014		15,750			16,878			.04
Cisco Systems, Inc. 2.90% 2014		10,000			10,359			.02
Other securities					55,495			.12
					82,732			.18
Other corporate bonds & notes - 3.76%
Other securities					1,691,090			3.76
Total corporate bonds & notes					3,432,925			7.62
Other - 1.03%
Other securities					465,482			1.03
Total bonds & notes (cost: $14,487,691,000)					15,268,482			33.85
Short-term securities - 3.22%
Freddie Mac 0.14%-0.34% due 8/3-12/17/2010		575,132			574,819			1.27
Jupiter Securitization Co., LLC 0.37%-0.45% due 7/16-9/13/2010 (6)		200,000			199,903			.44
U.S. Treasury Bills 0.11%-0.335% due 7/29-8/26/2010		155,400			155,378			.34
Fannie Mae 0.15%-0.285% due 9/22-10/25/2010		92,750			92,695			.21
NetJets Inc. 0.27% due 8/19/2010 (6)		40,000			39,976			.09
Coca-Cola Co. 0.22% due 7/6/2010 (6)		32,200			32,199			.07
Merck & Co. Inc. 0.14% due 8/9/2010 (6)		3,700			3,699			.01
Other securities					355,954			.79
Total short-term securities (cost: $1,454,493,000)					1,454,623			3.22
Total investment securities (cost: $43,016,015,000)					44,881,050			99.49
Other assets less liabilities					229,862			.51
Net assets				$	45,110,912			100.00	%

"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.

"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio.

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

(1) Security did not produce income during the last 12 months.

(2) Index-linked bond whose principal amount moves with a government retail price index.

(3) Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

(4) Coupon rate may change periodically.

(5) Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Other securities," was $482,185,000, which represented 1.07% of the net assets of the fund. This amount includes $426,123,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

(6) Acquired in a transaction exempt from registration under 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, including those in "Other securities," was $1,657,294,000, which represented 3.67% of the net assets of the fund.

Key to abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities			unaudited
at June 30, 2010	(dollars in thousands)
Assets:
Investment securities, at value (cost: $43,016,015)			$	44,881,050
Cash				156
Receivables for:
Sales of investments	$	375,943
Sales of fund's shares		41,017
Dividends and interest		195,669		612,629
				45,493,835
Liabilities:
Payables for:
Purchases of investments		251,505
Repurchases of fund's shares		98,160
Investment advisory services		9,269
Services provided by affiliates		21,121
Trustees' deferred compensation		2,269
Other		599		382,923
Net assets at June 30, 2010			$	45,110,912
Net assets consist of:
Capital paid in on shares of beneficial interest			$	48,970,389
Undistributed net investment income				24,706
Accumulated net realized loss				(5,749,218	)
Net unrealized appreciation				1,865,035
Net assets at June 30, 2010			$	45,110,912

	(dollars and shares in thousands, except per-share amounts)
Shares of beneficial interest issued and outstanding (no stated par value) - unlimited shares authorized (2,902,009 total shares outstanding)
	Net assets		Shares outstanding		Net asset value  per share
Class A	$	28,053,015		1,802,915	$	15.56
Class B		2,637,921		170,086		15.51
Class C		4,133,387		266,790		15.49
Class F-1		819,417		52,673		15.56
Class F-2		176,742		11,362		15.56
Class 529-A		1,323,311		85,139		15.54
Class 529-B		247,754		15,945		15.54
Class 529-C		506,777		32,614		15.54
Class 529-E		78,980		5,083		15.54
Class 529-F-1		46,281		2,979		15.53
Class R-1		120,811		7,805		15.48
Class R-2		1,009,776		65,192		15.49
Class R-3		2,131,005		137,465		15.50
Class R-4		1,800,115		115,828		15.54
Class R-5		1,317,109		84,603		15.57
Class R-6		708,511		45,530		15.56
See Notes to Financial Statements

Statement of operations				unaudited
for the six months ended June 30, 2010	(dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. taxes of $1,946)	$	374,524
Interest		307,462		$	681,986
Fees and expenses*:
Investment advisory services		57,574
Distribution services		91,754
Transfer agent services		21,643
Administrative services		13,686
Reports to shareholders		1,558
Registration statement and prospectus		749
Trustees' compensation		214
Auditing and legal		13
Custodian		168
Other		1,306			188,665
Net investment income					493,321
Net realized gain and unrealized depreciation
on investments and currency:
Net realized gain (loss) on:
Investments		198,147
Currency transactions		(1,050	)		197,097
Net unrealized (depreciation) appreciation on:
Investments		(2,086,523	)
Currency translations		38			(2,086,485	)
Net realized gain and unrealized depreciation
on investments and currency					(1,889,388	)
Net decrease in net assets resulting
from operations				$	(1,396,067	)
(*) 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, 2010*			Year ended December 31, 2009
Operations:
Net investment income	$	493,321		$	1,144,302
Net realized gain (loss) on investments and currency transactions		197,097			(4,284,312	)
Net unrealized (depreciation) appreciation on investments and currency translations		(2,086,485	)		11,456,276
Net (decrease) increase in net assets resulting from operations		(1,396,067	)		8,316,266
Dividends paid to shareholders from net investment income		(486,125	)		(1,166,741	)
Net capital share transactions		(827,295	)		(2,382,577	)
Total (decrease) increase in net assets		(2,709,487	)		4,766,948
Net assets:
Beginning of period		47,820,399			43,053,451
End of period (including undistributed
net investment income: $24,706 and $17,510, respectively)	$	45,110,912		$	47,820,399
*Unaudited.
See Notes to Financial Statements

Notes to financial statements    

                                                                                                   unaudited

1. Organization

American Balanced Fund (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks conservation of capital, current income and long-term growth of both capital and income by investing in common stocks and fixed-income securities. Effective March 1, 2010, the fund reorganized from a Maryland corporation to a Delaware statutory trust in accordance with a proposal approved by shareholders on November 24, 2009.

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. 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 recognizedon 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.

3. Valuation

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 its net asset value 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 in 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 as of approximately 3:00 p.m. New York time 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
Municipal securities	Standard inputs and, for certain distressed securities, cash flows or liquidation values using a net present value calculation based on inputs that include, but are not limited to, financial statements and debt contracts

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 or less remaining to maturity.

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 trustees. 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. 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 table on the following page presents the fund’s valuation levels as of June 30, 2010 (dollars in thousands):

Investment securities:	Level 1		Level 2			Level 3		Total
Common stocks:
Information technology	$	4,168,196	$	-		$	-	$	4,168,196
Financials		4,038,800		-			-		4,038,800
Industrials		3,325,267		112,229	(1)		-		3,437,496
Health care		3,243,190		-			-		3,243,190
Energy		3,161,454		-			-		3,161,454
Consumer staples		2,923,247		-			-		2,923,247
Consumer discretionary		2,245,713		-			-		2,245,713
Materials		1,859,410		217,699	(1)		-		2,077,109
Telecommunication services		996,002		-			-		996,002
Utilities		826,566		96,195	(1)		-		922,761
Miscellaneous		865,651		-			-		865,651
Preferred stocks		-		78,326			-		78,326
Bonds & notes:
Bonds & notes of U.S. government & government agencies		-		7,517,960			-		7,517,960
Mortgage-backed obligations		-		3,829,693			22,422		3,852,115
Corporate bonds & notes		-		3,432,925			-		3,432,925
Other		-		465,482			-		465,482
Short-term securities		-		1,454,623			-		1,454,623
Total	$	27,653,496	$	17,205,132		$	22,422	$	44,881,050
(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, $426,123,000 of investment securities were classified as Level 2 instead of Level 1.

	Beginning value  at 1/1/2010		Net  sales			Net unrealized appreciation(2)		Net transfers  into Level 3(3)		Ending value  at 6/30/2010
Investment securities	$	7,378	$	(7,345	)	$	2,439	$	19,950	$	22,422
Net unrealized appreciation during the period on Level 3 investment securities held at June 30, 2010 (dollars in thousands) (2):										$	2,472
(2) Net unrealized appreciation is included in the related amounts on investments in the statement of operations.
(3) Transfers into or out of Level 3 are based on the beginning market value of the quarter in which they occurred.

4. Risk factors

Investing in the fund may involve certain risks including, but not limited to, those described below.

The prices of, and the income generated by, the common stocks, bonds and other securities held by the fund may decline in response to certain events taking place around the world, including those directly involving the issuers whose securities are owned by the fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions; and currency, interest rate and commodity price fluctuations.

The prices of, and the income generated by, most debt securities held by the fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities. For example, the prices of debt securities in the fund's portfolio generally will decline when interest rates rise and increase when interest rates fall. In addition, falling interest rates may cause an issuer to redeem, "call" or refinance a security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities. Longer maturity debt securities generally have higher rates of interest and may be subject to greater price fluctuations than shorter maturity debt securities. Debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weak en and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. A security backed by the U.S. Treasury or the full faith and credit of the U.S. government is guaranteed only as to the timely payment of interest and principal when held to maturity. Accordingly, the current market values for these securities will fluctuate with changes in interest rates.

Investments in securities issued by entities based outside the U.S. may be subject to the risks described above to a greater extent. These investments may also be affected by currency fluctuations and controls; different accounting, auditing, financial reporting, disclosure, regulatory and legal standards and practices; expropriation; changes in tax policy; greater market volatility; different securities market structures; higher transaction costs; and various administrative difficulties, such as delays in clearing and settling portfolio transactions or in receiving payment of dividends. Investments in securities issued by entities domiciled in the U.S. may also be subject to many of these risks.

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, 2010, 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 2006 and by state tax authorities for tax years before 2006.

Non-U.S. taxation – Dividend and interest income is recorded net of non-U.S. taxes paid.

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 gainsfor 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; paydowns on fixed-income securities; and net capital losses.The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

The components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2009, the components of distributable earnings on a tax basis were as follows:

	(dollars in thousands)
Undistributed ordinary income				$	19,868
Post-October currency loss deferrals (realized during the period November 1, 2009, through December 31, 2009)*					(119	)
Capital loss carryforwards†:
Expiring 2016	$	(1,180,492	)
Expiring 2017		(4,681,347	)		(5,861,839	)
Post-October capital loss deferrals (realized during the period November 1, 2009, through December 31, 2009)*					(3,758	)
*These deferrals are considered incurred in the subsequent year.
†The capital loss carryforwards will be used to offset any capital gains realized by the fund in the current year or in subsequent years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.

As of June 30, 2010, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

(dollars in thousands)
Gross unrealized appreciation on investment securities	$	4,564,519
Gross unrealized depreciation on investment securities		(2,785,208	)
Net unrealized appreciation on investment securities		1,779,311
Cost of investment securities		43,101,739

Ordinary income distributions paid to shareholders from net investment income were as follows (dollars in thousands):

Share class	Six months ended June 30, 2010		Year ended December 31, 2009
Class A	$	324,838	$	770,289
Class B		21,607		68,568
Class C		30,921		84,863
Class F-1		9,585		24,945
Class F-2		2,088		2,935
Class 529-A		14,437		31,071
Class 529-B		1,849		5,161
Class 529-C		3,584		8,928
Class 529-E		766		1,746
Class 529-F-1		547		1,031
Class R-1		906		2,168
Class R-2		7,603		18,873
Class R-3		21,346		53,008
Class R-4		20,515		46,044
Class R-5		17,043		37,936
Class R-6*		8,490		9,175
Total	$	486,125	$	1,166,741
*Class R-6 was offered beginning May 1, 2009.

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 Investment Advisory and Service Agreement with CRMC providesfor monthly fees accrued daily. These fees are based on a series of decreasing annual rates beginning with 0.420% on the first $500 million of daily net assets and decreasing to 0.210% on such assets in excess of $71 billion. For the six months ended June 30, 2010, the investment advisory services fee was $57,574,000, which was equivalent to an annualized rate of 0.242% of average dailynet 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 adopted plans of distribution for all share classes, except Classes F-2, R-5 and R-6. 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 on the following page. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans.All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees , to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Classes A and 529-A, the board of trustees has also approved 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 June 30, 2010, 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 hasa 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 thi rd 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 part y

Expenses under the agreements described on the previous pages for the six months ended June 30, 2010, 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	$	35,403	$	19,672	Not applicable		Not applicable		Not applicable
Class B		15,202		1,971	Not applicable		Not applicable		Not applicable
Class C		21,910	Included in administrative services		$	3,290	$	513	Not applicable
Class F-1		1,085				490		35	Not applicable
Class F-2	Not applicable					128		5	Not applicable
Class 529-A		1,458				647		118	$	668
Class 529-B		1,374				133		40		138
Class 529-C		2,580				251		66		259
Class 529-E		203				39		7		41
Class 529-F-1		-				22		4		23
Class R-1		613				77		17	Not applicable
Class R-2		3,964				773		1,411	Not applicable
Class R-3		5,650				1,659		618	Not applicable
Class R-4		2,312				1,350		21	Not applicable
Class R-5	Not applicable					672		6	Not applicable
Class R-6	Not applicable					164		1	Not applicable
Total	$	91,754	$	21,643	$	9,695	$	2,862	$	1,129

Trustees’ deferred compensation – Since the adoption of the deferred compensation plan in 1993, trustees who are unaffiliated with CRMCmay 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 $214,000, shown on the accompanying financial statements, includes $215,000 in current fees (either paid in cash or deferred) and a net decrease of $1,000 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, AFS and AFD. No affiliated officers or trustees 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):

Share class	Sales(*)				Reinvestments of dividends				Repurchases(*)						Net (decrease) increase
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Six months ended June 30, 2010
Class A	$	2,296,735		139,336	$	312,786		19,377	$	(3,060,870	)		(186,214	)	$	(451,349	)		(27,501	)
Class B		38,321		2,332		20,856		1,294		(625,568	)		(38,077	)		(566,391	)		(34,451	)
Class C		289,530		17,646		29,281		1,820		(442,843	)		(27,075	)		(124,032	)		(7,609	)
Class F-1		110,701		6,732		8,943		554		(151,672	)		(9,242	)		(32,028	)		(1,956	)
Class F-2		47,509		2,899		1,732		108		(29,395	)		(1,789	)		19,846			1,218
Class 529-A		145,285		8,828		14,430		895		(70,640	)		(4,300	)		89,075			5,423
Class 529-B		4,688		285		1,848		115		(33,495	)		(2,030	)		(26,959	)		(1,630	)
Class 529-C		53,794		3,273		3,582		222		(36,173	)		(2,205	)		21,203			1,290
Class 529-E		7,926		481		765		48		(6,218	)		(379	)		2,473			150
Class 529-F-1		8,226		500		546		34		(2,850	)		(175	)		5,922			359
Class R-1		22,405		1,363		904		56		(16,960	)		(1,038	)		6,349			381
Class R-2		153,794		9,386		7,596		472		(162,645	)		(9,955	)		(1,255	)		(97	)
Class R-3		283,632		17,279		21,335		1,326		(411,279	)		(25,121	)		(106,312	)		(6,516	)
Class R-4		345,005		20,944		20,512		1,273		(223,341	)		(13,617	)		142,176			8,600
Class R-5		236,337		14,308		17,042		1,056		(210,020	)		(12,874	)		43,359			2,490
Class R-6		167,182		10,170		8,490		526		(25,044	)		(1,526	)		150,628			9,170
Total net increase
(decrease)	$	4,211,070		255,762	$	470,648		29,176	$	(5,509,013	)		(335,617	)	$	(827,295	)		(50,679	)
Year ended December 31, 2009
Class A	$	3,984,498		281,046	$	735,362		52,120	$	(6,442,246	)		(460,161	)	$	(1,722,386	)		(126,995	)
Class B		124,701		9,210		64,867		4,657		(859,714	)		(60,942	)		(670,146	)		(47,075	)
Class C		506,259		35,802		79,663		5,706		(943,549	)		(67,975	)		(357,627	)		(26,467	)
Class F-1		192,838		13,525		21,856		1,557		(407,438	)		(29,096	)		(192,744	)		(14,014	)
Class F-2		147,881		10,358		2,350		159		(45,603	)		(3,206	)		104,628			7,311
Class 529-A		199,325		13,873		31,054		2,197		(159,311	)		(11,192	)		71,068			4,878
Class 529-B		14,113		1,031		5,158		368		(29,191	)		(2,079	)		(9,920	)		(680	)
Class 529-C		92,432		6,472		8,920		635		(90,028	)		(6,314	)		11,324			793
Class 529-E		12,870		897		1,744		124		(11,301	)		(787	)		3,313			234
Class 529-F-1		12,991		885		1,031		73		(8,415	)		(580	)		5,607			378
Class R-1		47,011		3,344		2,158		154		(35,812	)		(2,572	)		13,357			926
Class R-2		302,257		21,389		18,856		1,344		(278,490	)		(19,760	)		42,623			2,973
Class R-3		520,157		36,705		52,991		3,768		(557,874	)		(39,164	)		15,274			1,309
Class R-4		951,360		67,344		46,023		3,248		(972,110	)		(64,726	)		25,273			5,866
Class R-5		780,790		51,914		37,866		2,716		(1,058,663	)		(75,345	)		(240,007	)		(20,715	)
Class R-6†		517,645		36,331		9,175		605		(9,034	)		(576	)		517,786			36,360
Total net increase
(decrease)	$	8,407,128		590,126	$	1,119,074		79,431	$	(11,908,779	)		(844,475	)	$	(2,382,577	)		(174,918	)
* Includes exchanges between share classes of the fund.
(†)Class R-6 was offered beginning May 1, 2009.

8. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $5,566,700,000 and $6,945,140,000, respectively, during the six months ended June 30, 2010.

Financial highlights(1)

				(Loss) income from investment operations(2)								Dividends and distributions
		Net asset value, beginning of period		Net investment income		Net (losses) gains on securities (both realized and unrealized)			Total from investment operations			Dividends (from net investment income)			Distributions (from capital gains)			Total dividends and distributions			Net asset value, end of period		Total return(3)(4)			Net assets, end of period (in millions)		Ratio of expenses to average net assets before reimbursements/ waivers			Ratio of expenses to average net assets after reimbursements/ waivers(4)			Ratio of net income to average net assets(4)
Class A:	Six months ended 6/30/2010(5)	$	16.21	$	.18	$	(.65	)	$	(.47	)	$	(.18	)	$	-		$	(.18	)	$	15.56		(2.94	%)	$	28,053		.63	%(6)		.63	%(6)		2.23	%(6)
	Year ended 12/31/2009		13.78		.40		2.44			2.84			(.41	)		-			(.41	)		16.21		21.08			29,675		.67			.67			2.80
	Year ended 12/31/2008		19.31		.50		(5.35	)		(4.85	)		(.54	)		(.14	)		(.68	)		13.78		(25.73	)		26,972		.61			.59			2.96
	Year ended 12/31/2007		19.02		.53		.72			1.25			(.52	)		(.44	)		(.96	)		19.31		6.60			37,999		.60			.58			2.68
	Year ended 12/31/2006		17.82		.47		1.61			2.08			(.47	)		(.41	)		(.88	)		19.02		11.80			35,431		.61			.58			2.57
	Year ended 12/31/2005		18.00		.41		.15			.56			(.40	)		(.34	)		(.74	)		17.82		3.12			33,009		.61			.59			2.31
Class B:	Six months ended 6/30/2010(5)		16.16		.13		(.66	)		(.53	)		(.12	)		-			(.12	)		15.51		(3.32	)		2,638		1.39	(6)		1.39	(6)		1.47	(6)
	Year ended 12/31/2009		13.73		.29		2.44			2.73			(.30	)		-			(.30	)		16.16		20.24			3,305		1.43			1.43			2.06
	Year ended 12/31/2008		19.25		.37		(5.34	)		(4.97	)		(.41	)		(.14	)		(.55	)		13.73		(26.33	)		3,455		1.38			1.35			2.18
	Year ended 12/31/2007		18.96		.38		.72			1.10			(.37	)		(.44	)		(.81	)		19.25		5.83			5,391		1.35			1.32			1.94
	Year ended 12/31/2006		17.77		.33		1.60			1.93			(.33	)		(.41	)		(.74	)		18.96		10.95			5,386		1.36			1.33			1.82
	Year ended 12/31/2005		17.95		.28		.15			.43			(.27	)		(.34	)		(.61	)		17.77		2.37			5,180		1.36			1.34			1.56
Class C:	Six months ended 6/30/2010(5)		16.14		.12		(.65	)		(.53	)		(.12	)		-			(.12	)		15.49		(3.34	)		4,133		1.43	(6)		1.43	(6)		1.43	(6)
	Year ended 12/31/2009		13.72		.29		2.43			2.72			(.30	)		-			(.30	)		16.14		20.16			4,429		1.45			1.45			2.02
	Year ended 12/31/2008		19.23		.36		(5.33	)		(4.97	)		(.40	)		(.14	)		(.54	)		13.72		(26.33	)		4,128		1.42			1.40			2.14
	Year ended 12/31/2007		18.95		.37		.72			1.09			(.37	)		(.44	)		(.81	)		19.23		5.73			6,078		1.40			1.37			1.89
	Year ended 12/31/2006		17.76		.32		1.60			1.92			(.32	)		(.41	)		(.73	)		18.95		10.90			5,743		1.41			1.38			1.77
	Year ended 12/31/2005		17.94		.27		.15			.42			(.26	)		(.34	)		(.60	)		17.76		2.30			5,582		1.42			1.40			1.51
Class F-1:	Six months ended 6/30/2010(5)		16.21		.18		(.65	)		(.47	)		(.18	)		-			(.18	)		15.56		(2.93	)		819		.62	(6)		.62	(6)		2.24	(6)
	Year ended 12/31/2009		13.78		.41		2.44			2.85			(.42	)		-			(.42	)		16.21		21.13			885		.64			.64			2.85
	Year ended 12/31/2008		19.31		.50		(5.35	)		(4.85	)		(.54	)		(.14	)		(.68	)		13.78		(25.73	)		946		.61			.58			2.96
	Year ended 12/31/2007		19.02		.53		.72			1.25			(.52	)		(.44	)		(.96	)		19.31		6.61			1,374		.59			.57			2.69
	Year ended 12/31/2006		17.82		.48		1.60			2.08			(.47	)		(.41	)		(.88	)		19.02		11.83			1,247		.59			.57			2.59
	Year ended 12/31/2005		18.00		.41		.15			.56			(.40	)		(.34	)		(.74	)		17.82		3.10			1,238		.63			.61			2.30
Class F-2:	Six months ended 6/30/2010(5)		16.21		.19		(.64	)		(.45	)		(.20	)		-			(.20	)		15.56		(2.83	)		177		.41	(6)		.41	(6)		2.46	(6)
	Year ended 12/31/2009		13.78		.43		2.45			2.88			(.45	)		-			(.45	)		16.21		21.41			164		.41			.41			2.87
	Period from 8/5/2008 to 12/31/2008		17.44		.21		(3.59	)		(3.38	)		(.28	)		-			(.28	)		13.78		(19.51	)		39		.17			.16			1.45
Class 529-A:	Six months ended 6/30/2010(5)		16.19		.17		(.64	)		(.47	)		(.18	)		-			(.18	)		15.54		(2.97	)		1,323		.69	(6)		.69	(6)		2.17	(6)
	Year ended 12/31/2009		13.77		.39		2.43			2.82			(.40	)		-			(.40	)		16.19		20.97			1,291		.73			.73			2.73
	Year ended 12/31/2008		19.29		.49		(5.34	)		(4.85	)		(.53	)		(.14	)		(.67	)		13.77		(25.76	)		1,030		.68			.65			2.90
	Year ended 12/31/2007		19.01		.51		.72			1.23			(.51	)		(.44	)		(.95	)		19.29		6.47			1,323		.68			.66			2.60
	Year ended 12/31/2006		17.81		.47		1.60			2.07			(.46	)		(.41	)		(.87	)		19.01		11.76			1,125		.66			.63			2.53
	Year ended 12/31/2005		17.99		.40		.15			.55			(.39	)		(.34	)		(.73	)		17.81		3.06			907		.67			.65			2.26
Class 529-B:	Six months ended 6/30/2010(5)		16.19		.12		(.66	)		(.54	)		(.11	)		-			(.11	)		15.54		(3.36	)		248		1.48	(6)		1.48	(6)		1.38	(6)
	Year ended 12/31/2009		13.76		.28		2.44			2.72			(.29	)		-			(.29	)		16.19		20.09			284		1.53			1.53			1.95
	Year ended 12/31/2008		19.28		.35		(5.34	)		(4.99	)		(.39	)		(.14	)		(.53	)		13.76		(26.36	)		251		1.48			1.46			2.09
	Year ended 12/31/2007		19.00		.36		.71			1.07			(.35	)		(.44	)		(.79	)		19.28		5.64			342		1.47			1.44			1.81
	Year ended 12/31/2006		17.80		.31		1.61			1.92			(.31	)		(.41	)		(.72	)		19.00		10.87			311		1.48			1.45			1.70
	Year ended 12/31/2005		17.99		.25		.14			.39			(.24	)		(.34	)		(.58	)		17.80		2.15			265		1.51			1.49			1.41
Class 529-C:	Six months ended 6/30/2010(5)		16.19		.11		(.65	)		(.54	)		(.11	)		-			(.11	)		15.54		(3.35	)		507		1.48	(6)		1.48	(6)		1.39	(6)
	Year ended 12/31/2009		13.76		.28		2.44			2.72			(.29	)		-			(.29	)		16.19		20.10			507		1.52			1.52			1.94
	Year ended 12/31/2008		19.29		.35		(5.35	)		(5.00	)		(.39	)		(.14	)		(.53	)		13.76		(26.40	)		420		1.48			1.45			2.09
	Year ended 12/31/2007		19.00		.36		.72			1.08			(.35	)		(.44	)		(.79	)		19.29		5.70			567		1.47			1.44			1.82
	Year ended 12/31/2006		17.81		.32		1.59			1.91			(.31	)		(.41	)		(.72	)		19.00		10.81			501		1.47			1.44			1.71
	Year ended 12/31/2005		17.99		.26		.14			.40			(.24	)		(.34	)		(.58	)		17.81		2.22			418		1.50			1.48			1.42
Class 529-E:	Six months ended 6/30/2010(5)	$	16.19	$	.15	$	(.65	)	$	(.50	)	$	(.15	)	$	-		$	(.15	)	$	15.54		(3.10	)		79		.97	(6)		.97	(6)		1.89	(6)
	Year ended 12/31/2009		13.76		.35		2.44			2.79			(.36	)		-			(.36	)		16.19		20.71			80		1.02			1.02			2.45
	Year ended 12/31/2008		19.28		.44		(5.34	)		(4.90	)		(.48	)		(.14	)		(.62	)		13.76		(25.99	)		65		.97			.95			2.60
	Year ended 12/31/2007		19.00		.46		.71			1.17			(.45	)		(.44	)		(.89	)		19.28		6.18			84		.96			.94			2.32
	Year ended 12/31/2006		17.80		.41		1.61			2.02			(.41	)		(.41	)		(.82	)		19.00		11.44			73		.96			.93			2.23
	Year ended 12/31/2005		17.98		.35		.14			.49			(.33	)		(.34	)		(.67	)		17.80		2.73			59		.99			.97			1.93
Class 529-F-1:	Six months ended 6/30/2010(5)		16.19		.18		(.65	)		(.47	)		(.19	)		-			(.19	)		15.53		(2.92	)		46		.47	%(6)		.47	%(6)		2.39	%(6)
	Year ended 12/31/2009		13.76		.42		2.44			2.86			(.43	)		-			(.43	)		16.19		21.31			42		.52			.52			2.93
	Year ended 12/31/2008		19.28		.52		(5.34	)		(4.82	)		(.56	)		(.14	)		(.70	)		13.76		(25.61	)		31		.47			.45			3.11
	Year ended 12/31/2007		19.00		.56		.71			1.27			(.55	)		(.44	)		(.99	)		19.28		6.71			36		.46			.44			2.82
	Year ended 12/31/2006		17.80		.50		1.61			2.11			(.50	)		(.41	)		(.91	)		19.00		11.99			28		.46			.43			2.73
	Year ended 12/31/2005		17.98		.42		.15			.57			(.41	)		(.34	)		(.75	)		17.80		3.15			19		.57			.55			2.35
Class R-1:	Six months ended 6/30/2010(5)		16.13		.12		(.65	)		(.53	)		(.12	)		-			(.12	)		15.48		(3.32	)		121		1.40	(6)		1.40	(6)		1.47	(6)
	Year ended 12/31/2009		13.71		.29		2.43			2.72			(.30	)		-			(.30	)		16.13		20.22			120		1.43			1.43			2.03
	Year ended 12/31/2008		19.22		.37		(5.33	)		(4.96	)		(.41	)		(.14	)		(.55	)		13.71		(26.30	)		89		1.38			1.35			2.21
	Year ended 12/31/2007		18.94		.37		.72			1.09			(.37	)		(.44	)		(.81	)		19.22		5.74			104		1.40			1.37			1.89
	Year ended 12/31/2006		17.75		.32		1.60			1.92			(.32	)		(.41	)		(.73	)		18.94		10.91			82		1.41			1.39			1.77
	Year ended 12/31/2005		17.94		.27		.13			.40			(.25	)		(.34	)		(.59	)		17.75		2.24			62		1.45			1.42			1.49
Class R-2:	Six months ended 6/30/2010(5)		16.14		.12		(.65	)		(.53	)		(.12	)		-			(.12	)		15.49		(3.33	)		1,010		1.41	(6)		1.41	(6)		1.45	(6)
	Year ended 12/31/2009		13.72		.29		2.43			2.72			(.30	)		-			(.30	)		16.14		20.14			1,054		1.47			1.47			1.99
	Year ended 12/31/2008		19.23		.36		(5.33	)		(4.97	)		(.40	)		(.14	)		(.54	)		13.72		(26.33	)		855		1.42			1.39			2.15
	Year ended 12/31/2007		18.95		.37		.71			1.08			(.36	)		(.44	)		(.80	)		19.23		5.71			1,168		1.41			1.39			1.87
	Year ended 12/31/2006		17.76		.32		1.60			1.92			(.32	)		(.41	)		(.73	)		18.95		10.90			1,079		1.45			1.39			1.77
	Year ended 12/31/2005		17.94		.27		.15			.42			(.26	)		(.34	)		(.60	)		17.76		2.31			902		1.48			1.40			1.51
Class R-3:	Six months ended 6/30/2010(5)		16.15		.16		(.66	)		(.50	)		(.15	)		-			(.15	)		15.50		(3.10	)		2,131		.95	(6)		.95	(6)		1.91	(6)
	Year ended 12/31/2009		13.73		.36		2.43			2.79			(.37	)		-			(.37	)		16.15		20.73			2,326		.97			.97			2.49
	Year ended 12/31/2008		19.24		.45		(5.33	)		(4.88	)		(.49	)		(.14	)		(.63	)		13.73		(25.94	)		1,959		.90			.87			2.65
	Year ended 12/31/2007		18.96		.46		.72			1.18			(.46	)		(.44	)		(.90	)		19.24		6.23			3,301		.92			.90			2.36
	Year ended 12/31/2006		17.77		.41		1.60			2.01			(.41	)		(.41	)		(.82	)		18.96		11.44			3,059		.92			.90			2.26
	Year ended 12/31/2005		17.95		.36		.15			.51			(.35	)		(.34	)		(.69	)		17.77		2.83			2,541		.91			.89			2.02
Class R-4:	Six months ended 6/30/2010(5)		16.19		.18		(.65	)		(.47	)		(.18	)		-			(.18	)		15.54		(2.95	)		1,800		.65	(6)		.65	(6)		2.21	(6)
	Year ended 12/31/2009		13.76		.40		2.44			2.84			(.41	)		-			(.41	)		16.19		21.09			1,736		.67			.67			2.75
	Year ended 12/31/2008		19.28		.49		(5.34	)		(4.85	)		(.53	)		(.14	)		(.67	)		13.76		(25.75	)		1,395		.65			.62			2.92
	Year ended 12/31/2007		19.00		.52		.71			1.23			(.51	)		(.44	)		(.95	)		19.28		6.50			1,865		.65			.62			2.64
	Year ended 12/31/2006		17.80		.47		1.60			2.07			(.46	)		(.41	)		(.87	)		19.00		11.78			1,724		.65			.62			2.53
	Year ended 12/31/2005		17.99		.41		.13			.54			(.39	)		(.34	)		(.73	)		17.80		3.03			1,441		.65			.63			2.28
Class R-5:	Six months ended 6/30/2010(5)		16.22		.20		(.65	)		(.45	)		(.20	)		-			(.20	)		15.57		(2.80	)		1,317		.35	(6)		.35	(6)		2.51	(6)
	Year ended 12/31/2009		13.79		.45		2.43			2.88			(.45	)		-			(.45	)		16.22		21.44			1,332		.37			.37			3.19
	Year ended 12/31/2008		19.32		.54		(5.35	)		(4.81	)		(.58	)		(.14	)		(.72	)		13.79		(25.52	)		1,418		.35			.33			3.28
	Year ended 12/31/2007		19.03		.58		.72			1.30			(.57	)		(.44	)		(1.01	)		19.32		6.86			957		.35			.33			2.94
	Year ended 12/31/2006		17.83		.52		1.61			2.13			(.52	)		(.41	)		(.93	)		19.03		12.08			411		.35			.33			2.82
	Year ended 12/31/2005		18.01		.46		.15			.61			(.45	)		(.34	)		(.79	)		17.83		3.38			324		.36			.34			2.57
Class R-6:	Six months ended 6/30/2010(5)		16.21		.19		(.63	)		(.44	)		(.21	)		-			(.21	)		15.56		(2.78	)		709		.30	(6)		.30	(6)		2.57	(6)
	Period from 5/1/2009 to 12/31/2009		13.64		.30		2.61			2.91			(.34	)		-			(.34	)		16.21		21.52			590		.33	(6)		.33	(6)		2.94	(6)

	Six months ended June 30,			Year ended December 31
	2010(5)			2009			2008			2007			2006			2005
Portfolio turnover rate for all classes of shares		16	%		46	%		41	%		35	%		34	%		35	%

(1)Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.

(2)Based on average shares outstanding.

(3)Total returns exclude any applicable sales charges, including contingent deferred sales charges.

(4)This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.

(5)Unaudited.

(6)Annualized.

See Notes to Financial Statements

Expense example

                                                                                                                                                     unaudited

As a shareholder of the fund, 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 period (January 1, 2010, through June 30, 2010).

Actual expenses:

The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes:

The second line of each share class in the table on the next 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:

There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually), that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.

Note that the expenses shown in the table 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 1/1/2010		Ending account value 6/30/2010		Expenses paid during period*		Annualized  expense ratio
Class A -- actual return	$	1,000.00	$	970.63	$	3.08		.63	%
Class A -- assumed 5% return		1,000.00		1,021.67		3.16		.63
Class B -- actual return		1,000.00		966.77		6.78		1.39
Class B -- assumed 5% return		1,000.00		1,017.90		6.95		1.39
Class C -- actual return		1,000.00		966.61		6.97		1.43
Class C -- assumed 5% return		1,000.00		1,017.70		7.15		1.43
Class F-1 -- actual return		1,000.00		970.66		3.03		.62
Class F-1 -- assumed 5% return		1,000.00		1,021.72		3.11		.62
Class F-2 -- actual return		1,000.00		971.74		2.00		.41
Class F-2 -- assumed 5% return		1,000.00		1,022.76		2.06		.41
Class 529-A -- actual return		1,000.00		970.32		3.37		.69
Class 529-A -- assumed 5% return		1,000.00		1,021.37		3.46		.69
Class 529-B -- actual return		1,000.00		966.42		7.22		1.48
Class 529-B -- assumed 5% return		1,000.00		1,017.46		7.40		1.48
Class 529-C -- actual return		1,000.00		966.54		7.22		1.48
Class 529-C -- assumed 5% return		1,000.00		1,017.46		7.40		1.48
Class 529-E -- actual return		1,000.00		968.97		4.74		.97
Class 529-E -- assumed 5% return		1,000.00		1,019.98		4.86		.97
Class 529-F-1 -- actual return		1,000.00		970.76		2.30		.47
Class 529-F-1 -- assumed 5% return		1,000.00		1,022.46		2.36		.47
Class R-1 -- actual return		1,000.00		966.80		6.83		1.40
Class R-1 -- assumed 5% return		1,000.00		1,017.85		7.00		1.40
Class R-2 -- actual return		1,000.00		966.72		6.88		1.41
Class R-2 -- assumed 5% return		1,000.00		1,017.80		7.05		1.41
Class R-3 -- actual return		1,000.00		968.97		4.64		.95
Class R-3 -- assumed 5% return		1,000.00		1,020.08		4.76		.95
Class R-4 -- actual return		1,000.00		970.54		3.18		.65
Class R-4 -- assumed 5% return		1,000.00		1,021.57		3.26		.65
Class R-5 -- actual return		1,000.00		972.00		1.71		.35
Class R-5 -- assumed 5% return		1,000.00		1,023.06		1.76		.35
Class R-6 -- actual return		1,000.00		972.24		1.47		.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).

Other share class results

unaudited

Classes B, C, F and 529

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.

Average annual total returns for periods ended							10 years1/
June 30, 2010:	1 year			5 years			Life of class
Class B shares2
Reflecting applicable contingent deferred sales
charge (CDSC), maximum of 5%, payable only
if shares are sold within six years of purchase		7.21	%		0.25	%		4.42	%
Not reflecting CDSC		12.21			0.60			4.42
Class C shares — first sold 3/15/01
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase		11.12			0.55			3.13
Not reflecting CDSC		12.12			0.55			3.13
Class F-1 shares3 — first sold 3/15/01
Not reflecting annual asset-based fee charged
by sponsoring firm		13.06			1.37			3.96
Class F-2 shares3 — first sold 8/5/08
Not reflecting annual asset-based fee charged
by sponsoring firm		13.39			—			–2.68
Class 529-A shares4 — first sold 2/15/02
Reflecting 5.75% maximum sales charge		6.48			0.10			2.84
Not reflecting maximum sales charge		12.99			1.29			3.57
Class 529-B shares2,4 — first sold 2/15/02
Reflecting applicable CDSC, maximum of 5%,
payable only if shares are sold within six years
of purchase		7.08			0.15			2.75
Not reflecting CDSC		12.08			0.49			2.75
Class 529-C shares4 — first sold 2/19/02
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase		11.10			0.50			2.89
Not reflecting CDSC		12.10			0.50			2.89
Class 529-E shares3,4 — first sold 3/5/02		12.67			1.01			2.92
Class 529-F-1 shares3,4 — first sold 9/17/02
Not reflecting annual asset-based fee charged
by sponsoring firm		13.16			1.50			5.12

1Applicable to Class B shares only. All other share classes reflect results for the life of the class.

2These shares are not available for purchase.

3These shares are sold without any initial or contingent deferred sales charge.

4Results shown do not reflect the $10 account setup fee and an annual $10 account maintenance fee.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 24 to 30 for details that include expense ratios for all share classes.

For information regarding the differences among the various share classes, refer to the fund’s prospectus.

Office of the fund

One Market

Steuart Tower, Suite 1800

Mailing address: P.O. Box 7650

San Francisco, CA 94120-7650

Investment adviser

Capital Research and Management Company

333 South Hope Street

Los Angeles, CA 90071-1406

6455 Irvine Center Drive

Irvine, CA 92618

Custodian of assets

JPMorgan Chase Bank

270 Park Avenue

New York, NY 10017-2070

Counsel

Bingham McCutchen LLP

355 South Grand Avenue, Suite 4400

Los Angeles, CA 90071-3106

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

Independent registered public accounting firm

Deloitte & Touche LLP

695 Town Center Drive

Suite 1200

Costa Mesa, CA 92626-7188

Principal underwriter

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, CA 90071-1406

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s summary prospectus and 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 800/421-0180 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, 2010, portfolio of American Balanced Fund’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).

American Balanced Fund files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at 800/SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.

This report is for the information of shareholders of American Balanced Fund, but it also may be used as sales literature when preceded or accompanied by the current summary prospectus or prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after September 30, 2010, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

           

What makes American Funds different?

For nearly 80 years, we have followed a consistent philosophy to benefit our investors. Our 30 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 million shareholder accounts.

Our unique combination of strengths includes these five factors:

•A long-term, value-oriented approach

We seek to buy securities at reasonable prices relative to their prospects and hold them for the long term.

•An extensive global research effort

Our investment professionals travel the world to find the best investment opportunities and gain a comprehensive understanding of companies and markets.

•The multiple portfolio counselor system

Our unique approach to portfolio management, developed more than 50 years ago, blends teamwork with individual accountability and has provided American Funds with a sustainable method of achieving fund objectives.

•Experienced investment professionals

American Funds portfolio counselors have an average of 26 years of investment experience, providing a depth of knowledge and broad perspective that few organizations have.

•A commitment to low management fees

The American Funds provide exceptional value for shareholders, with management fees that are among the lowest in the mutual fund industry.

American Funds span a range of investment objectives

•Growth funds

AMCAP Fund®

EuroPacific Growth Fund®

The Growth Fund of America®

The New Economy Fund®

New Perspective Fund®

New World Fund®

SMALLCAP World Fund®

•Growth-and-income funds

American Mutual Fund®

Capital World Growth and Income FundSM

Fundamental InvestorsSM

International Growth and Income FundSM

The Investment Company of America®

Washington Mutual Investors FundSM

•Equity-income funds

Capital Income Builder®

The Income Fund of America®

•Balanced fund

>American Balanced Fund®

•Bond funds

American High-Income TrustSM

The Bond Fund of AmericaSM

Capital World Bond Fund®

Intermediate Bond Fund of America®

Short-Term Bond Fund of AmericaSM

U.S. Government Securities FundSM

•Tax-exempt bond funds

American Funds Short-Term Tax-Exempt Bond FundSM

American High-Income Municipal Bond Fund®

Limited Term Tax-Exempt Bond Fund of AmericaSM

The Tax-Exempt Bond Fund of America®

State-specific tax-exempt funds

The Tax-Exempt Fund of California®

The Tax-Exempt Fund of Maryland®

The Tax-Exempt Fund of Virginia®

•Money market fund

American Funds Money Market Fund®

•American Funds Target Date Retirement Series®

The Capital Group Companies

American FundsCapital Research and ManagementCapital InternationalCapital GuardianCapital Bank and Trust

Lit. No. MFGESR-911-0810P

Litho in USA AGD/B/8077-S26172

Printed on paper containing 10% post-consumer waste

Printed with inks containing soy and/or vegetable oil

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

American Balanced Fund®

Investment portfolio

June 30, 2010

unaudited

Common stocks — 62.25%	Shares			Value (000)
INFORMATION TECHNOLOGY — 9.24%
Oracle Corp.		33,036,391		$	708,961
Microsoft Corp.		27,070,000			622,881
Cisco Systems, Inc.1		20,800,000			443,248
International Business Machines Corp.		3,300,000			407,484
Hewlett-Packard Co.		7,600,000			328,928
Texas Instruments Inc.		10,500,000			244,440
Google Inc., Class A1		410,000			182,429
Corning Inc.		10,465,000			169,010
Apple Inc.1		655,000			164,752
Maxim Integrated Products, Inc.		9,670,000			161,779
EMC Corp.1		7,700,000			140,910
Automatic Data Processing, Inc.		3,200,000			128,832
Intel Corp.		6,500,000			126,425
Yahoo! Inc.1		8,906,000			123,170
Tyco Electronics Ltd.		4,360,000			110,657
Paychex, Inc.		2,500,000			64,925
Applied Materials, Inc.		3,275,000			39,365
					4,168,196
FINANCIALS — 8.95%
Wells Fargo & Co.		36,000,000			921,600
Berkshire Hathaway Inc., Class A1		5,045			605,400
U.S. Bancorp		23,210,000			518,743
American Express Co.		7,000,000			277,900
JPMorgan Chase & Co.		7,410,000			271,280
Goldman Sachs Group, Inc.		2,000,000			262,540
ACE Ltd.		4,400,000			226,512
Allstate Corp.		7,200,000			206,856
SunTrust Banks, Inc.		7,479,100			174,263
Citigroup Inc.1		45,000,000			169,200
Chubb Corp.		2,400,000			120,024
Bank of America Corp.		7,150,000			102,746
Aon Corp.		2,736,500			101,579
Lincoln National Corp.		3,300,000			80,157
					4,038,800
INDUSTRIALS — 7.62%
Boeing Co.		7,860,000			493,215
Lockheed Martin Corp.		5,650,000			420,925
Deere & Co.		5,640,000			314,035
United Technologies Corp.		4,330,000			281,060
Emerson Electric Co.		5,350,000			233,741
Tyco International Ltd.		6,260,000			220,540
General Electric Co.		14,500,000			209,090
Union Pacific Corp.		3,000,000			208,530
Honeywell International Inc.		5,150,000			201,005
Northrop Grumman Corp.		3,265,000			177,747
Parker Hannifin Corp.		3,000,000			166,380
United Parcel Service, Inc., Class B		2,500,000			142,225
European Aeronautic Defence and Space Co. EADS NV1,2		5,500,000			112,229
Illinois Tool Works Inc.		2,500,000			103,200
General Dynamics Corp.		1,545,000			90,475
FedEx Corp.		900,000			63,099
					3,437,496
HEALTH CARE — 7.19%
Merck & Co., Inc.		14,877,200			520,256
Bristol-Myers Squibb Co.		17,000,000			423,980
Pfizer Inc		25,159,500			358,774
Eli Lilly and Co.		10,352,000			346,792
Abbott Laboratories		7,350,000			343,833
UnitedHealth Group Inc.		9,650,000			274,060
Medtronic, Inc.		7,000,000			253,890
Johnson & Johnson		3,650,000			215,569
Cardinal Health, Inc.		6,315,000			212,247
Aetna Inc.		4,550,000			120,029
Stryker Corp.		2,000,000			100,120
Amgen Inc.1		1,400,000			73,640
					3,243,190
ENERGY — 7.01%
Chevron Corp.		12,772,000			866,708
Royal Dutch Shell PLC, Class B (ADR)		11,933,000			576,125
Schlumberger Ltd.		7,484,200			414,176
ConocoPhillips		7,300,000			358,357
Exxon Mobil Corp.		5,700,000			325,299
Petróleo Brasileiro SA — Petrobras, ordinary nominative (ADR)		5,825,000			199,914
Baker Hughes Inc.		4,300,000			178,751
TOTAL SA (ADR)		3,350,000			149,544
Occidental Petroleum Corp.		1,200,000			92,580
					3,161,454
CONSUMER STAPLES — 6.48%
Philip Morris International Inc.		16,400,000			751,776
Coca-Cola Co.		9,300,000			466,116
Procter & Gamble Co.		5,250,000			314,895
Wal-Mart Stores, Inc.		6,087,800			292,641
Costco Wholesale Corp.		5,300,000			290,599
Kraft Foods Inc., Class A		6,270,000			175,560
Estée Lauder Companies Inc., Class A		2,300,000			128,179
H.J. Heinz Co.		2,950,000			127,499
Unilever NV (New York registered)		4,500,000			122,940
Avon Products, Inc.		3,825,000			101,363
PepsiCo, Inc.		1,400,000			85,330
Hershey Co.		1,384,300			66,349
					2,923,247
CONSUMER DISCRETIONARY — 4.98%
Home Depot, Inc.		20,960,000			588,347
Time Warner Inc.		10,833,333			313,192
McDonald’s Corp.		4,120,000			271,384
McGraw-Hill Companies, Inc.		8,000,000			225,120
Walt Disney Co.		7,000,000			220,500
Comcast Corp., Class A		11,295,000			196,194
Lowe’s Companies, Inc.		8,000,000			163,360
Best Buy Co., Inc.		4,800,000			162,528
Macy’s, Inc.		4,000,000			71,600
News Corp., Class A		2,800,000			33,488
					2,245,713
MATERIALS — 4.60%
Potash Corp. of Saskatchewan Inc.		5,200,000			448,448
E.I. du Pont de Nemours and Co.		10,550,000			364,924
Monsanto Co.		5,500,000			254,210
Dow Chemical Co.		10,500,000			249,060
BHP Billiton Ltd.2		7,000,000			217,699
Weyerhaeuser Co.		4,590,000			161,568
Praxair, Inc.		1,800,000			136,782
Alcoa Inc.		12,500,000			125,750
Nucor Corp.		3,100,000			118,668
					2,077,109
TELECOMMUNICATION SERVICES — 2.21%
AT&T Inc.		26,000,000			628,940
Verizon Communications Inc.		13,100,000			367,062
					996,002
UTILITIES — 2.05%
PG&E Corp.		7,800,000			320,580
Exelon Corp.		5,850,000			222,125
Southern Co.		5,300,000			176,384
GDF SUEZ2		3,400,000			96,195
Edison International		2,000,000			63,440
FirstEnergy Corp.		1,250,000			44,037
					922,761
MISCELLANEOUS — 1.92%
Other common stocks in initial period of acquisition					865,651
Total common stocks (cost: $26,985,050,000)					28,079,619
Preferred stocks — 0.17%
FINANCIALS — 0.17%
QBE Capital Funding II LP 6.797%3,4		24,470,000			20,039
BNP Paribas 7.195%3,4		22,300,000			19,624
AXA SA, Series B, 6.379%3,4		20,680,000			16,415
Catlin Insurance Ltd. 7.249%3,4		16,135,000			13,029
XL Capital Ltd., Series E, 6.50%4		13,170,000			9,219
Total preferred stocks (cost: $88,781,000)					78,326
	Principal amount			Value
Bonds & notes — 33.85%		(000	)		(000	)
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 16.66%
U.S. Treasury 4.625% 2011	$	684,000		$	726,750
U.S. Treasury 4.25% 2012		211,600			228,826
U.S. Treasury 1.875% 20135		132,936			140,895
U.S. Treasury 2.75% 2013		296,500			312,102
U.S. Treasury 3.375% 2013		583,750			626,002
U.S. Treasury 3.50% 2013		463,000			497,600
U.S. Treasury 3.625% 2013		20,000			21,547
U.S. Treasury 4.25% 2013		245,335			269,648
U.S. Treasury 1.875% 2014		234,000			238,259
U.S. Treasury 4.25% 2014		42,500			47,339
U.S. Treasury 1.875% 20155		122,722			131,710
U.S. Treasury 4.125% 2015		70,000			77,790
U.S. Treasury 2.625% 2016		40,250			41,365
U.S. Treasury 2.625% 2016		7,000			7,204
U.S. Treasury 5.125% 2016		3,375			3,939
U.S. Treasury 4.50% 2017		59,500			67,702
U.S. Treasury 4.75% 2017		44,750			51,749
U.S. Treasury 8.875% 2017		40,625			57,878
U.S. Treasury 1.625% 20185		22,893			24,188
U.S. Treasury 3.50% 2018		1,007,500			1,077,239
U.S. Treasury 2.125% 20195		50,768			55,562
U.S. Treasury 3.625% 2019		407,000			430,403
U.S. Treasury 7.875% 2021		38,750			55,485
U.S. Treasury 6.25% 2023		691,500			896,737
U.S. Treasury 2.375% 20255		57,825			64,283
U.S. Treasury 6.875% 2025		79,500			110,356
U.S. Treasury 5.50% 2028		17,125			21,179
U.S. Treasury 5.25% 2029		15,000			18,059
U.S. Treasury 4.50% 2036		346,300			382,717
U.S. Treasury 4.375% 2038		48,000			51,915
U.S. Treasury 3.50% 2039		302,000			280,624
U.S. Treasury 4.625% 2040		174,750			196,498
Federal Agricultural Mortgage Corp. 4.875% 20113		40,000			40,975
Federal Agricultural Mortgage Corp. 5.50% 20113		7,000			7,353
CoBank ACB 7.875% 20183		20,000			21,869
CoBank ACB 1.137% 20223,4		23,425			18,515
United States Government Agency-Guaranteed (FDIC insured), Regions Bank 3.25% 2011		33,000			33,956
United States Government Agency-Guaranteed (FDIC insured), Bank of America Corp., Series L, 3.125% 2012		30,000			31,356
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 2.875% 2011		30,000			30,958
Federal Home Loan Bank, Series 467, 5.25% 2014		25,875			29,432
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.20% 2012		27,500			28,086
Fannie Mae 6.25% 2029		20,000			24,765
United States Government Agency-Guaranteed (FDIC insured), Sovereign Bancorp, Inc. 2.75% 2012		22,000			22,708
United States Government Agency-Guaranteed (FDIC insured), PNC Funding Corp. 2.30% 2012		14,000			14,437
					7,517,960
MORTGAGE-BACKED OBLIGATIONS6 — 8.54%
Fannie Mae, Series 2001-T11, Class B, 5.503% 2011		45,000			47,275
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012		16,000			17,186
Fannie Mae 4.89% 2012		30,000			30,983
Fannie Mae 4.00% 2015		10,641			11,110
Fannie Mae 5.00% 2018		2,108			2,263
Fannie Mae 5.00% 2018		1,055			1,133
Fannie Mae 11.00% 2018		298			346
Fannie Mae 5.50% 2019		1,883			2,040
Fannie Mae 5.50% 2020		28,650			31,108
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022		8,496			8,892
Fannie Mae 4.50% 2023		31,088			32,899
Fannie Mae 4.00% 2024		143,031			149,018
Fannie Mae 4.00% 2024		120,205			125,333
Fannie Mae 4.00% 2024		40,250			41,935
Fannie Mae 4.00% 2024		27,953			29,123
Fannie Mae 4.00% 2024		25,515			26,583
Fannie Mae 4.00% 2024		22,808			23,762
Fannie Mae 4.00% 2024		21,150			22,035
Fannie Mae 4.00% 2024		20,992			21,871
Fannie Mae 4.00% 2024		10,068			10,489
Fannie Mae 4.00% 2024		7,584			7,901
Fannie Mae 4.00% 2024		5,244			5,464
Fannie Mae 4.50% 2024		50,447			53,338
Fannie Mae 4.50% 2024		37,257			39,391
Fannie Mae 4.50% 2024		10,892			11,516
Fannie Mae 4.50% 2024		7,641			8,079
Fannie Mae 4.00% 2025		17,394			18,106
Fannie Mae 4.50% 2025		149,947			158,468
Fannie Mae 4.50% 2025		63,219			66,812
Fannie Mae 4.50% 2025		24,958			26,376
Fannie Mae 4.50% 2025		24,560			25,955
Fannie Mae 4.50% 2025		23,712			25,060
Fannie Mae, Series 2001-4, Class NA, 11.791% 20254		199			225
Fannie Mae 6.00% 2027		10,820			11,844
Fannie Mae, Series 2001-20, Class D, 11.043% 20314		65			75
Fannie Mae 5.50% 2033		22,537			24,268
Fannie Mae 5.50% 2033		17,523			18,869
Fannie Mae 5.50% 2033		2,520			2,714
Fannie Mae 5.50% 2035		9,900			10,652
Fannie Mae 5.50% 2035		6,431			6,916
Fannie Mae 6.50% 2035		11,728			13,023
Fannie Mae, Series 2006-43, Class JO, principal only, 0% 2036		5,322			4,562
Fannie Mae 5.50% 2036		2,577			2,768
Fannie Mae 5.50% 2036		2,274			2,443
Fannie Mae, Series 2006-49, Class PA, 6.00% 2036		13,268			14,802
Fannie Mae 6.00% 2036		4,743			5,160
Fannie Mae 5.537% 20374		15,916			16,678
Fannie Mae 6.00% 2037		76,143			83,055
Fannie Mae 6.00% 2037		34,081			36,994
Fannie Mae 6.00% 2037		16,179			17,552
Fannie Mae 6.00% 2037		12,700			13,778
Fannie Mae 6.00% 2037		9,898			10,755
Fannie Mae 6.00% 2037		3,139			3,407
Fannie Mae 6.50% 2037		26,953			29,509
Fannie Mae 6.50% 2037		20,948			22,934
Fannie Mae 6.50% 2037		20,904			22,664
Fannie Mae 6.50% 2037		11,053			11,984
Fannie Mae 7.00% 2037		5,455			5,946
Fannie Mae 7.00% 2037		4,418			4,816
Fannie Mae 7.00% 2037		2,698			2,941
Fannie Mae 4.50% 2038		26,333			27,377
Fannie Mae 4.50% 2038		8,179			8,498
Fannie Mae 5.50% 2038		50,464			54,249
Fannie Mae 5.50% 2038		7,690			8,267
Fannie Mae 6.00% 2038		30,385			32,953
Fannie Mae 6.00% 2038		15,033			16,335
Fannie Mae 6.00% 2038		8,248			8,945
Fannie Mae 6.50% 2038		27,061			29,643
Fannie Mae 4.50% 2039		154,039			159,988
Fannie Mae 4.50% 2039		60,956			63,311
Fannie Mae 4.50% 2039		45,912			47,668
Fannie Mae 4.50% 2039		35,777			37,159
Fannie Mae 4.50% 2039		7,681			7,975
Fannie Mae 6.00% 2039		16,394			17,780
Fannie Mae 6.00% 2039		14,548			15,782
Fannie Mae 5.00% 2040		32,000			33,911
Fannie Mae 6.00% 2040		16,000			17,348
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041		579			648
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041		525			578
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2041		768			876
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042		724			834
Fannie Mae 6.50% 2047		4,149			4,483
Fannie Mae 6.50% 2047		2,385			2,576
Fannie Mae 6.50% 2047		1,654			1,787
Fannie Mae 6.50% 2047		1,444			1,560
Fannie Mae 6.50% 2047		1,443			1,559
Fannie Mae 6.50% 2047		792			856
Fannie Mae 6.50% 2047		659			712
Fannie Mae 7.00% 2047		2,329			2,538
Fannie Mae 7.00% 2047		2,133			2,325
Fannie Mae 7.00% 2047		2,054			2,239
Fannie Mae 7.00% 2047		1,750			1,908
Fannie Mae 7.00% 2047		974			1,062
Fannie Mae 7.00% 2047		937			1,022
Fannie Mae 7.00% 2047		817			890
Fannie Mae 7.00% 2047		273			297
Fannie Mae 7.00% 2047		128			139
Fannie Mae 7.00% 2047		119			130
Freddie Mac 5.00% 2023		28,301			30,196
Freddie Mac 5.00% 2023		20,110			21,456
Freddie Mac 5.00% 2023		17,370			18,533
Freddie Mac 5.00% 2023		6,571			7,011
Freddie Mac 5.00% 2023		6,045			6,450
Freddie Mac 5.00% 2023		4,823			5,146
Freddie Mac 5.00% 2023		4,139			4,416
Freddie Mac 5.50% 2023		11,148			12,035
Freddie Mac 5.00% 2024		39,865			42,572
Freddie Mac 5.50% 2024		20,551			22,242
Freddie Mac 6.00% 2026		12,505			13,696
Freddie Mac 6.00% 2026		9,080			9,945
Freddie Mac 6.00% 2026		7,502			8,217
Freddie Mac 6.50% 2027		2,710			2,973
Freddie Mac 6.50% 2027		1,009			1,107
Freddie Mac 6.50% 2027		516			567
Freddie Mac 6.50% 2028		2,095			2,298
Freddie Mac, Series T-041, Class 3-A, 7.50% 2032		2,926			3,346
Freddie Mac, Series 3061, Class PN, 5.50% 2035		12,158			13,396
Freddie Mac, Series 3156, Class PO, principal only, 0% 2036		15,432			13,738
Freddie Mac, Series 3146, Class PO, principal only, 0% 2036		11,170			9,583
Freddie Mac, Series 3233, Class PA, 6.00% 2036		26,730			29,447
Freddie Mac 5.447% 20374		563			593
Freddie Mac, Series 3318, Class JT, 5.50% 2037		27,618			29,633
Freddie Mac, Series 3312, Class PA, 5.50% 2037		20,384			21,888
Freddie Mac, Series 3272, Class PA, 6.00% 2037		20,540			22,301
Freddie Mac 6.00% 2038		137,596			149,550
Freddie Mac 6.00% 2038		2,925			3,173
Freddie Mac 6.50% 2038		11,547			12,652
Freddie Mac 6.00% 20402		31,000			33,640
CS First Boston Mortgage Securities Corp., Series 2002-34, Class I-A-1, 7.50% 2032		1,156			1,166
CS First Boston Mortgage Securities Corp., Series 2002-30, Class I-A-1, 7.50% 2032		864			848
CS First Boston Mortgage Securities Corp., Series 2003-21, Class V-A-1, 6.50% 2033		1,121			1,148
CS First Boston Mortgage Securities Corp., Series 2003-29, Class V-A-1, 7.00% 2033		1,961			2,002
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034		17,832			18,242
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034		6,016			5,919
CS First Boston Mortgage Securities Corp., Series 2001-CP4, Class A-4, 6.18% 2035		30,182			30,993
CS First Boston Mortgage Securities Corp., Series 2005-5, Class IV-A-1, 6.25% 2035		13,397			11,710
CS First Boston Mortgage Securities Corp., Series 2001-CK1, Class A-3, 6.38% 2035		15,523			15,687
CS First Boston Mortgage Securities Corp., Series 2003-CK2, Class A-4, 4.801% 2036		17,585			18,548
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036		18,170			18,854
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037		16,045			16,952
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20404		30,875			32,472
Government National Mortgage Assn. 10.00% 2021		393			462
Government National Mortgage Assn. 6.00% 2038		70,655			77,083
Government National Mortgage Assn. 6.50% 2038		32,251			35,445
Government National Mortgage Assn. 4.50% 2040		34,595			36,046
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-CIBC5, Class A-1, 4.372% 2037		3,352			3,416
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-2, 4.739% 2037		1,649			1,648
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C1, Class A-3, 5.376% 2037		10,680			11,163
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-3B, 5.495% 20374		63,000			64,790
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039		5,416			5,556
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-SB, 4.824% 2042		24,662			25,770
GMAC Commercial Mortgage Securities, Inc., Series 2001-C1, Class A-2, 6.465% 2034		77,799			79,187
GMAC Commercial Mortgage Securities, Inc., Series 2002-C2, Class A-2, 5.389% 2038		1,640			1,668
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20373		18,300			19,028
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20373		20,000			20,795
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20373		32,200			33,399
Residential Accredit Loans, Inc., Series 2004-QS6, Class A-1, 5.00% 2019		10,154			10,385
Residential Accredit Loans, Inc., Series 2004-QS16, Class 1-A-1, 5.50% 2034		15,424			15,150
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034		25,707			24,820
Bank of America 5.50% 20123		44,500			47,623
Commercial Mortgage Trust, Series 2000-C1, Class E, 8.132% 2033		4,000			3,992
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038		39,825			41,152
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-3, 6.428% 2035		40,894			41,879
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048		35,550			36,984
Banc of America Commercial Mortgage Inc., Series 2002-PB2, Class A-4, 6.186% 2035		4,308			4,498
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036		31,390			32,025
Nationwide Building Society, Series 2007-2, 5.50% 20123		32,500			34,691
Wachovia Bank Commercial Mortgage Trust, Series 2005-C16, Class A-PB, 4.692% 2041		29,538			30,721
GS Mortgage Securities Corp. II, Series 2001-ROCK, Class D, 6.878% 20183		15,000			15,584
GS Mortgage Securities Corp. II, Series 2006-GG8, Class A-4, 5.56% 2039		11,880			12,096
GE Commercial Mortgage Corp., Series 2004-C1, Class A-2, 3.915% 2038		1,089			1,091
GE Commercial Mortgage Corp., Series 2005-C4, Class A-3A, 5.514% 20454		25,000			26,381
Countrywide Alternative Loan Trust, Series 2005-6CB, Class 2-A-1, 5.00% 2020		2,347			2,096
Countrywide Alternative Loan Trust, Series 2004-5CB, Class 1-A-1, 6.00% 2034		8,206			7,348
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035		16,755			16,522
Wells Fargo Mortgage-backed Securities Trust, Series 2005-AR10, Class II-A-6, 2.926% 20354		26,105			25,043
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20262,3		21,114			22,422
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035		1,444			1,466
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class A-2, 6.48% 2035		1,509			1,542
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PW10, Class AM, 5.449% 20404		20,000			19,141
GE Capital Commercial Mortgage Corp., Series 2002-2, Class A-3, 5.349% 2036		10,000			10,481
GE Capital Commercial Mortgage Corp., Series 2002-3, Class A-1, 4.229% 2037		9,930			10,051
Bank of Montreal 2.85% 20153		17,000			17,298
Washington Mutual Mortgage, WMALT Series 2005-1, Class 5-A-1, 6.00% 2035		15,205			14,334
Prudential Mortgage Capital Funding, LLC, Series ROCK 2001-C1, Class A-2, 6.605% 2034		13,909			14,233
LB-UBS Commercial Mortgage Trust, Series 2002-C1, Class A-4, 6.462% 2031		13,185			13,845
American General Mortgage Loan Trust, Series 2010-1A, Class A-1, 5.15% 20583,4		9,476			9,491
GSR Mortgage Loan Trust, Series 2004-2F, Class XIIIA-1, 5.00% 2019		4,378			4,225
GSR Mortgage Loan Trust, Series 2004-15F, Class 5A-1, 5.50% 2020		4,997			4,955
First Union National Bank Commercial Mortgage Trust, Series 2002-C1, Class A-2, 6.141% 2034		8,377			8,765
Banc of America Alternative Loan Trust, Series 2005-2, Class 3-A-1, 5.00% 2020		7,308			6,941
Merrill Lynch Mortgage Trust, Series 2005-LC1, Class A-2, 5.202% 20444		4,967			5,005
CHL Mortgage Pass-Through Trust, Series 2003-56, Class 6-A-1, 3.476% 20334		4,815			4,187
Residential Funding Corp., Series 2003-RM2, Class A-II, 5.00% 2018		3,947			4,009
Structured Asset Securities Corp., Series 2004-3, Class 3-A-1, 5.50% 2019		3,667			3,679
MASTR Alternative Loan Trust, Series 2005-3, Class 1-A-1, 5.50% 2035		3,051			2,866
Morgan Stanley Dean Witter Capital I Trust, Series 2003-TOP9, Class A-1, 3.98% 2036		962			966
Hilton Hotel Pool Trust, Series 2000-HLTA, Class A-1, 7.055% 20153		932			943
					3,852,115
CORPORATE BONDS & NOTES — 7.62%
FINANCIALS — 2.15%
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20143		4,445			4,657
Westfield Group 5.75% 20153		16,250			17,586
Westfield Group 5.70% 20163		30,520			32,541
Westfield Group 7.125% 20183		21,280			24,047
ProLogis 5.50% 2012		15,000			15,527
ProLogis 5.625% 2015		10,425			10,009
ProLogis 6.625% 2018		15,500			14,790
ProLogis 7.375% 2019		27,000			26,487
Liberty Mutual Group Inc. 6.50% 20353		17,435			15,601
Liberty Mutual Group Inc. 7.50% 20363		20,625			20,424
Liberty Mutual Group Inc. 7.697% 20973		22,180			19,211
Kimco Realty Corp. 6.00% 2012		2,750			2,971
Kimco Realty Corp., Series C, 4.82% 2014		13,000			13,568
Kimco Realty Corp., Series C, 5.783% 2016		14,000			15,003
Kimco Realty Corp. 5.70% 2017		21,180			22,180
American Express Bank 5.50% 2013		21,300			23,030
American Express Co. 6.15% 2017		22,800			25,018
CNA Financial Corp. 5.85% 2014		25,000			25,925
CNA Financial Corp. 6.50% 2016		16,000			16,785
Monumental Global Funding 5.50% 20133		12,000			12,843
Monumental Global Funding III 0.503% 20143,4		29,000			27,700
HBOS PLC 6.75% 20183		41,050			38,480
Simon Property Group, LP 6.75% 2014		8,495			9,556
Simon Property Group, LP 5.875% 2017		15,165			16,419
Simon Property Group, LP 6.125% 2018		8,160			9,021
UBS AG 5.875% 2017		32,125			34,055
Abbey National Treasury Services PLC 3.875% 20143		13,500			13,343
Sovereign Bancorp, Inc. 8.75% 2018		4,000			4,502
Santander Issuances, SA Unipersonal 6.50% 20193,4		11,500			11,760
Hospitality Properties Trust 6.75% 2013		7,215			7,658
Hospitality Properties Trust 6.70% 2018		21,025			21,400
Prudential Financial, Inc., Series D, 5.50% 2016		14,000			14,765
Prudential Holdings, LLC, Series C, 8.695% 20233,6		11,500			13,764
Household Finance Corp. 6.375% 2012		13,000			14,047
HSBC Bank PLC 3.50% 20153		13,250			13,393
ERP Operating LP 5.375% 2016		25,000			26,880
Barclays Bank PLC 2.50% 2013		8,500			8,471
Barclays Bank PLC 5.125% 2020		18,000			17,938
UniCredito Italiano SpA 5.584% 20173,4		14,600			14,473
UniCredito Italiano SpA 6.00% 20173		10,000			9,995
Bank of America Corp. 5.75% 2017		13,650			14,177
Bank of America Corp. 5.625% 2020		10,000			10,099
JPMorgan Chase & Co. 4.891% 20154		22,965			23,309
ACE INA Holdings Inc. 5.875% 2014		20,000			22,144
Morgan Stanley 6.00% 2014		20,000			21,210
American Honda Finance Corp. 5.125% 20103		20,500			20,869
Royal Bank of Scotland PLC 4.875% 2015		20,000			19,920
Boston Properties, Inc. 5.875% 2019		16,500			17,685
Principal Life Insurance Co. 5.30% 2013		15,500			16,772
New York Life Global Funding 5.25% 20123		15,000			16,263
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		13,000			14,264
Metropolitan Life Global Funding I, 5.125% 20133		12,000			12,987
Nationwide Financial Services, Inc. 6.75% 20674		16,950			12,785
Standard Chartered PLC 3.85% 20153		12,500			12,625
Lincoln National Corp. 5.65% 2012		10,250			10,847
Developers Diversified Realty Corp. 4.625% 2010		10,755			10,759
Wells Fargo & Co. 4.375% 2013		6,920			7,320
Nationwide Mutual Insurance Co. 5.81% 20243,4		8,150			6,936
UDR, Inc. 5.00% 2012		6,000			6,146
Assurant, Inc. 5.625% 2014		5,000			5,288
					968,228
TELECOMMUNICATION SERVICES — 1.07%
SBC Communications Inc. 6.25% 2011		10,000			10,363
AT&T Wireless Services, Inc. 7.875% 2011		12,170			12,728
AT&T Wireless Services, Inc. 8.125% 2012		5,230			5,855
AT&T Inc. 4.95% 2013		16,250			17,650
SBC Communications Inc. 5.10% 2014		15,000			16,656
SBC Communications Inc. 5.625% 2016		49,300			55,950
BellSouth Capital Funding Corp. 7.875% 2030		51,500			63,297
AT&T Inc. 8.00% 20314		10,000			12,909
SBC Communications Inc. 6.45% 2034		40,000			43,675
Verizon Communications Inc. 3.75% 2011		29,250			29,965
Verizon Communications Inc. 5.55% 2014		12,440			13,958
Verizon Communications Inc. 5.50% 2017		13,975			15,525
Verizon Communications Inc. 6.35% 2019		15,600			18,082
Verizon Communications Inc. 5.85% 2035		6,000			6,210
Verizon Communications Inc. 6.25% 2037		40,000			43,118
Telecom Italia Capital SA 5.25% 2015		47,425			47,918
Deutsche Telekom International Finance BV 5.875% 2013		12,500			13,695
Deutsche Telekom International Finance BV 4.875% 2014		15,500			16,625
Telefónica Emisiones, SAU 3.729% 2015		4,175			4,167
Telefónica Emisiones, SAU 5.134% 2020		11,825			11,875
France Télécom 4.375% 2014		10,000			10,794
American Tower Corp. 4.625% 2015		10,000			10,413
					481,428
CONSUMER DISCRETIONARY — 0.79%
Comcast Corp. 5.30% 2014		15,000			16,478
Comcast Corp. 6.30% 2017		16,750			19,152
Comcast Corp. 6.45% 2037		15,000			16,273
Comcast Corp. 6.95% 2037		24,250			27,675
Time Warner Cable Inc. 6.75% 2018		45,370			52,161
Time Warner Cable Inc. 5.00% 2020		25,000			25,614
AOL Time Warner Inc. 6.875% 2012		40,000			43,597
Time Warner Inc. 5.875% 2016		14,210			16,041
AOL Time Warner Inc. 7.625% 2031		13,565			16,364
Thomson Reuters Corp. 5.95% 2013		8,140			9,106
Thomson Reuters Corp. 6.50% 2018		20,815			24,626
Cox Communications, Inc. 7.75% 2010		15,000			15,306
Cox Communications, Inc. 5.45% 2014		15,500			17,126
Toll Brothers, Inc. 4.95% 2014		20,000			19,820
News America Inc. 5.30% 2014		4,750			5,283
News America Inc. 6.90% 2019		3,250			3,856
News America Inc. 6.15% 2037		5,000			5,232
Nordstrom, Inc. 6.75% 2014		10,000			11,631
Seminole Tribe of Florida 5.798% 20133,6		9,320			9,281
					354,622
HEALTH CARE — 0.72%
Cardinal Health, Inc. 4.00% 2015		44,100			45,864
Cardinal Health, Inc. 5.80% 2016		17,500			19,623
UnitedHealth Group Inc. 6.00% 2017		22,170			24,379
UnitedHealth Group Inc. 6.00% 2018		35,000			39,086
GlaxoSmithKline Capital Inc. 4.85% 2013		33,700			36,869
Novartis Capital Corp. 2.90% 2015		30,000			30,896
AstraZeneca PLC 5.90% 2017		25,000			29,290
Pfizer Inc. 4.45% 2012		25,000			26,385
Abbott Laboratories 2.70% 2015		12,000			12,285
Abbott Laboratories 5.125% 2019		8,600			9,613
Roche Holdings Inc. 4.50% 20123		20,000			21,122
Biogen Idec Inc. 6.00% 2013		13,500			14,858
Coventry Health Care, Inc. 6.30% 2014		11,955			12,632
					322,902
UTILITIES — 0.69%
National Rural Utilities Cooperative Finance Corp. 5.50% 2013		55,500			61,405
National Rural Utilities Cooperative Finance Corp. 10.375% 2018		8,450			11,735
MidAmerican Energy Holdings Co., Series D, 5.00% 2014		18,000			19,433
MidAmerican Energy Holdings Co. 5.75% 2018		25,925			29,048
MidAmerican Energy Holdings Co. 6.50% 2037		5,000			5,764
PG&E Corp. 5.75% 2014		5,750			6,376
Pacific Gas and Electric Co., First Mortgage Bonds, 6.05% 2034		20,000			22,388
E.ON International Finance BV 5.80% 20183		24,450			27,626
Alabama Power Co., Series FF, 5.20% 2016		16,000			17,763
Alabama Power Co. 6.00% 2039		7,500			8,524
San Diego Gas & Electric Co., Series CCC, 5.30% 2015		15,000			17,158
Virginia Electric and Power Co., Series 2003-B, 4.50% 2010		3,500			3,556
Virginia Electric and Power Co., Series B, 5.95% 2017		10,000			11,526
Electricité de France SA 6.95% 20393		12,000			14,513
Iberdrola Finance Ireland 3.80% 20143		11,000			10,949
Niagara Mohawk Power 3.553% 20143		10,000			10,270
Public Service Electric and Gas Co., Series E, 5.30% 2018		8,500			9,338
Appalachian Power Co., Series M, 5.55% 2011		7,800			8,034
Veolia Environnement 5.25% 2013		6,500			7,020
Kern River Funding Corp. 4.893% 20183,6		4,466			4,641
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20183,6		3,700			4,024
					311,091
INDUSTRIALS — 0.68%
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20166		15,024			15,019
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20196		8,418			8,402
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20196		4,602			4,625
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20206		7,763			7,870
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20226		7,263			7,354
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20226		8,966			8,406
Burlington Northern Santa Fe Corp. 7.00% 2014		31,850			37,149
BNSF Funding Trust I 6.613% 20554		5,575			5,323
Union Pacific Corp. 5.75% 2017		4,325			4,891
Union Pacific Corp. 5.70% 2018		29,150			32,707
Koninklijke Philips Electronics NV 5.75% 2018		23,500			26,613
General Electric Co. 5.25% 2017		24,250			26,410
Volvo Treasury AB 5.95% 20153		22,500			23,544
BAE Systems 2001 Asset Trust, Series 2001, Class B, 7.156% 20113,6		7,405			7,739
BAE Systems 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 20133,6		12,571			13,467
United Technologies Corp. 5.70% 2040		14,000			15,688
CSX Corp. 5.75% 2013		7,670			8,388
CSX Corp. 6.25% 2015		5,990			6,896
Atlas Copco AB 5.60% 20173		14,000			15,179
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20136		13,650			13,940
Norfolk Southern Corp. 5.75% 2016		7,615			8,650
Norfolk Southern Corp. 5.75% 2018		2,510			2,842
Canadian National Railway Co. 4.95% 2014		6,000			6,580
					307,682
CONSUMER STAPLES — 0.61%
Anheuser-Busch InBev NV 3.625% 20153		36,500			37,400
Anheuser-Busch InBev NV 4.125% 2015		16,500			17,290
Anheuser-Busch InBev NV 7.75% 20193		20,000			24,315
Kraft Foods Inc. 2.625% 2013		12,000			12,236
Kraft Foods Inc. 6.75% 2014		16,180			18,617
Kraft Foods Inc. 6.50% 2040		20,000			22,444
PepsiCo, Inc. 3.10% 2015		17,000			17,719
PepsiCo, Inc. 7.90% 2018		15,000			19,425
Altria Group, Inc. 9.25% 2019		15,000			18,752
Altria Group, Inc. 9.95% 2038		13,500			17,786
CVS Caremark Corp. 6.036% 20286		7,166			7,350
CVS Caremark Corp. 6.943% 20306		12,344			13,652
British American Tobacco International Finance PLC 9.50% 20183		13,580			17,823
Kroger Co. 3.90% 2015		16,250			17,162
Wal-Mart Stores, Inc. 2.875% 2015		11,700			12,148
					274,119
ENERGY — 0.46%
Kinder Morgan Energy Partners LP 6.00% 2017		41,610			45,389
Shell International Finance BV 1.30% 2011		16,250			16,352
Shell International Finance BV 1.875% 2013		16,500			16,650
Enbridge Energy Partners, LP, Series B, 6.50% 2018		12,250			13,732
Enbridge Energy Partners, LP, Series B, 7.50% 2038		12,250			14,421
Total Capital SA 3.00% 2015		17,000			17,188
Rockies Express Pipeline LLC 6.85% 20183		14,750			15,563
Sunoco, Inc. 4.875% 2014		15,000			15,353
StatoilHydro ASA 2.90% 2014		13,285			13,597
Canadian Natural Resources Ltd. 5.70% 2017		11,925			13,367
Enbridge Inc. 5.60% 2017		10,000			11,143
Husky Energy Inc. 6.80% 2037		9,375			10,721
BP Capital Markets PLC 3.875% 2015		7,000			5,971
					209,447
MATERIALS — 0.27%
Rio Tinto Finance (USA) Ltd. 5.875% 2013		28,500			31,248
Rio Tinto Finance (USA) Ltd. 8.95% 2014		9,180			11,144
Dow Chemical Co. 7.60% 2014		18,250			21,094
Rohm and Haas Co. 6.00% 2017		17,445			19,054
International Paper Co. 7.40% 2014		23,250			26,518
International Paper Co. 7.30% 2039		10,500			11,616
					120,674
INFORMATION TECHNOLOGY — 0.18%
KLA-Tencor Corp. 6.90% 2018		30,250			33,893
Hewlett-Packard Co. 4.50% 2013		20,000			21,602
Oracle Corp. 3.75% 2014		15,750			16,878
Cisco Systems, Inc. 2.90% 2014		10,000			10,359
					82,732
Total corporate bonds & notes					3,432,925
ASSET-BACKED OBLIGATIONS6 — 0.69%
AmeriCredit Automobile Receivables Trust, Series 2006-B-G, Class A-4, FGIC insured, 5.21% 2013		13,972			14,444
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-A, MBIA insured, 5.55% 2014		14,225			14,956
AmeriCredit Automobile Receivables Trust, Series 2007-D-F, Class A-4-A, FSA insured, 5.56% 2014		15,000			15,647
World Omni Auto Receivables Trust, Series 2006-B, Class A-4, 5.12% 2012		25,753			26,088
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-1, Class A-5, MBIA insured, 5.08% 20113		13,667			13,785
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2009-2A, Class A-1, 4.26% 20143		9,000			9,385
USAA Auto Owner Trust, Series 2007-1, Class A-4, 5.55% 2013		22,399			22,846
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015		17,000			18,430
PG&E Energy Recovery Funding LLC, Series 2005-2, Class A-3, 5.12% 2014		16,076			17,382
Ameriquest Mortgage Securities Inc., Series 2004-R4, Class M-1, 0.897% 20344		20,054			16,562
Nissan Auto Lease Trust, Series 2008-A, Class A-3a, 5.14% 2011		14,289			14,364
Chase Credit Card Owner Trust, Series 2003-4, Class B, 1.00% 20164		14,000			13,879
Citibank Credit Card Issuance Trust, Series 2008, Class A5, 4.85% 2015		12,000			13,077
Prestige Auto Receivables Trust, Series 2007-1, Class A-3, FSA insured, 5.58% 20143		12,260			12,861
RAMP Trust, Series 2003-RZ4, Class A-7, 4.79% 20334		5,577			5,148
RAMP Trust, Series 2003-RS11, Class A-I-7, 4.828% 2033		6,619			5,840
UPFC Auto Receivables Trust, Series 2007-B, Class A-3, AMBAC insured, 6.15% 2014		9,587			9,921
Residential Asset Securities Corp. Trust, Series 2001-KS3, Class A-I-6, 5.96% 2031		4,446			4,200
Residential Asset Securities Corp. Trust, Series 2003-KS6, Class A-2, 0.947% 20334		92			69
Residential Asset Securities Corp. Trust, Series 2003-KS8, Class A-I-6, 4.83% 2033		5,995			5,224
Morgan Stanley ABS Capital I Inc., Series 2004-NC3, Class M-1, 1.142% 20344		14,117			9,460
Drive Auto Receivables Trust, Series 2006-2, Class A-3, MBIA insured, 5.33% 20143		8,270			8,452
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20123		3,029			3,049
CPS Auto Receivables Trust, Series 2007-TFC, Class A-2, XLCA insured, 5.25% 20133		4,801			4,926
GE SeaCo Finance SRL, Series 2004-1, Class A, AMBAC insured, 0.65% 20193,4		8,299			7,898
Home Equity Asset Trust, Series 2004-2, Class M-1, 1.142% 20344		7,984			5,699
Cendant Timeshare Receivables Funding, LLC, Series 2005-1, Class A-1, FGIC insured, 4.67% 20173		4,824			4,804
CWABS, Inc., Series 2004-BC1, Class M-1, 1.097% 20344		4,888			4,460
Long Beach Acceptance Auto Receivables Trust, Series 2005-B, Class A-4, FSA insured, 4.522% 2012		2,919			2,960
CarMax Auto Owner Trust, Series 2007-2, Class A-3, 5.23% 2011		2,213			2,226
Impac CMB Grantor Trust, Series 2004-6, Class 1-A-1, 1.147% 20344		1,205			903
Impac CMB Grantor Trust, Series 2004-6, Class M-2, 1.247% 20344		1,203			671
					309,616
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S. — 0.19%
Croatian Government 6.75% 20193		17,000			17,827
Province of Ontario, Series 1, 1.875% 2012		16,750			16,956
Polish Government 6.375% 2019		14,350			15,946
Australia and New Zealand Government Agency-Guaranteed, Australia and
New Zealand Banking Group Ltd. 3.25% 20123		13,000			13,505
Hungarian Government 6.25% 2020		12,250			12,100
France Government Agency-Guaranteed, Société Finance 2.875% 20143		10,460			10,711
					87,045
MUNICIPALS — 0.15%
State of California, Bay Area Toll Authority, San Francisco Bay Area Toll Bridge Revenue Bonds
(Federally Taxable Build America Bonds), Series 2010-S-1, 6.918% 2040		16,750			16,930
State of Maryland, Howard Hughes Medical Institute, Taxable Bonds, 3.45% 2014		15,475			16,406
State of Illinois, City of Chicago, O’Hare International Airport (Build America Bonds-Direct Payment),
General Airport Revenue Bonds, Taxable Series 2010-B, 6.845% 2038		13,500			14,367
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds,
Series 2002-A, Class A, 6.72% 2025		12,319			10,997
State of California, Various Purpose General Obligation Bonds (Federally Taxable), 7.95% 2036		9,500			10,121
					68,821
Total bonds & notes (cost: $14,487,691,000)					15,268,482
Short-term securities — 3.22%
Freddie Mac 0.14%–0.34% due 8/3–12/17/2010		575,132			574,819
Jupiter Securitization Co., LLC 0.37%–0.45% due 7/16–9/13/20103		200,000			199,903
U.S. Treasury Bills 0.11%–0.335% due 7/29–8/26/2010		155,400			155,378
Private Export Funding Corp. 0.30%–0.31% due 8/17–10/18/20103		100,000			99,898
Procter & Gamble International Funding S.C.A. 0.17% due 7/15–7/21/20103		95,000			94,992
Fannie Mae 0.15%–0.285% due 9/22–10/25/2010		92,750			92,695
Federal Home Loan Bank 0.15%–0.19% due 7/9–10/1/2010		77,700			77,687
NetJets Inc. 0.27% due 8/19/20103		40,000			39,976
Coca-Cola Co. 0.22% due 7/6/20103		32,200			32,199
Straight-A Funding LLC 0.25%–0.38% due 7/8–9/8/20103		23,800			23,794
Wal-Mart Stores Inc. 0.17% due 7/9/20103		21,700			21,699
Johnson & Johnson 0.18% due 9/30/20103		20,000			19,987
PepsiCo Inc. 0.16% due 8/11/20103		17,900			17,897
Merck & Co. Inc. 0.14% due 8/9/20103		3,700			3,699
Total short-term securities (cost: $1,454,493,000)					1,454,623
Total investment securities (cost: $43,016,015,000)					44,881,050
Other assets less liabilities					229,862
Net assets				$	45,110,912

“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.

1Security did not produce income during the last 12 months.

2Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities was $482,185,000, which represented 1.07% of the net assets of the fund. This amount includes $426,123,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

3Acquired in a transaction exempt from registration under 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 $1,657,294,000, which represented 3.67% of the net assets of the fund.

4Coupon rate may change periodically.

5Index-linked bond whose principal amount moves with a government retail price index.

6Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

Key to abbreviation

ADR = American Depositary Receipts

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 the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s summary prospectus and 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 800/421-0180 or visit the American Funds website at americanfunds.com.

MFGEFP-911-0810O-S25514

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 c onsider 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 second fiscal quarter of the 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 BALANCED FUND

By /s/ Robert G. O'Donnell

Robert G. O'Donnell, Vice Chairman and

Principal Executive Officer

Date: August 31, 2010

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/ Robert G. O'Donnell

Robert G. O'Donnell, Vice Chairman and

Principal Executive Officer

Date: August 31, 2010

By /s/ Jennifer M. Buchheim

Jennifer M. Buchheim, Treasurer and

Principal Financial Officer

Date: August 31, 2010