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, 2011

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 road with trees on both sides]


Semi-annual report for the six months ended June 30, 2011

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 33 American Funds. American Funds is one of the nation’s largest mutual fund families. For 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, 2011:
	1 year			5 years			10 years
Class A shares
Reflecting 5.75% maximum sales charge		15.45	%		3.27	%		4.71	%

The total annual fund operating expense ratio was 0.63% 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, 2011, calculated in accordance with the U.S. Securities and Exchange Commission formula, was 1.63%. The fund’s distribution rate for Class A shares as of that date was 1.93%. 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.

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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The U.S. stock market experienced a volatile first half of 2011 with most of the gain coming in the final week of June. The first six months of the year were marked by an unusual number of weather disruptions and other natural disasters as well as business and debt challenges around the world. They ranged from record floods in the U.S. to supply disruptions caused by the Japanese earthquake and tsunami. The debt crisis in Greece has affected other European nations such as Ireland, Portugal and Spain.

In the wake of the difficulties, U.S. stocks, as measured by Standard & Poor’s 500 Composite Index, rose 6.0% for the six months ended June 30, 2011. Investment-grade bonds, as measured by Barclays Capital U.S. Aggregate Index, gained 2.7%. American Balanced Fund (AMBAL) increased 5.2%, compared with a 4.7% return of the Lipper Balanced Funds Index, one of the fund’s two major benchmarks. The 60%/40% S&P/BC Index had a total return of 4.7%. The market indexes are unmanaged.

U.S. companies are thriving in the current environment. Corporate earnings are strong. Valuations for U.S. companies appear to be reasonable, with S&P 500 companies trading at about 13 times estimated earnings. In addition, companies have significantly improved their balance sheets and now hold record levels of cash. They have also begun to pay higher dividends, increase share buybacks and acquire other companies, which could benefit equity investors.

Looking forward, there are also a number of negatives. The U.S. economic recovery is proceeding at a slow pace. In the first quarter, the U.S. gross domestic product grew at an annual rate of just 0.4%. Unemployment remains high. The housing market is still weak. Many state and local governments are facing serious financial problems and have been laying off employees and reducing wages and benefits. Conflicts and uprisings in the Middle East, Africa and Asia have added to political and economic uncertainty and volatility in the energy markets.

We are pleased with the fund’s results in this difficult first half. Major integrated oil and gas companies, transportation companies and consumer-oriented companies helped AMBAL during the period. Significant contributors included Chevron, Boeing, Union Pacific, Amazon, Costco Wholesale, Phillip Morris and McDonald’s. Bank stocks detracted from results.

It is AMBAL’s practice to have between 50% and 75% of its portfolio invested in common stocks at all times. This percentage will vary based on our judgment of the relative attractiveness of equities, bonds and cash. As of June 30, 2011, the fund had 68% in stocks, 27% in bonds and 5% in cash, only slightly changed from its allocation at the start of the year. This continues to be the largest percentage of stocks relative to bonds that the fund has had in some time.

The fixed-income portion of the portfolio provided steady income to the fund during the past six months. It is conservatively structured to act as a partial offset if the equity portion is impacted by a stock market decline. As of June 30, 2011, the fixed-income portion of the fund had 36% in mortgage- and asset-backed bonds, 29% in corporate bonds and 35% in government obligations.

We still favor large-cap, globally oriented stocks. We believe their valuations are reasonable, and the outlook for corporate profit growth is good.

As has been true since its inception, the fund approaches the management of its investments as if they constituted the complete investment program of the prudent investor. We thank our shareholders for their confidence in us.

Cordially,

/s/ Gregory D. Johnson

Gregory D. Johnson

Vice Chairman of the Board and Principal Executive Officer

August 5, 2011

Robert G. O’Donnell, former Vice Chairman of the Board and Principal Executive Officer, retired on March 31. We thank him for his 25 years of service to American Balanced Fund. He is succeeded by Gregory D. Johnson, who has been president of the fund and adds the titles of Vice Chairman of the Board and Principal Executive Officer of AMBAL.

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

Summary investment portfolio  June 30, 2011

unaudited

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

[begin pie chart]

Investment mix by security type (percent of net assets)
Common stocks	68	%
Fixed-income securities	27
Short-term securities & other assets less liabilities	5

[end pie chart]

							Percent
				Value			of net
Common stocks - 68.05%	Shares				(000	)	assets
Financials - 10.16%
Wells Fargo & Co.		32,796,600		$	920,273			1.78	%
Goldman Sachs Group, Inc.		6,415,000			853,772			1.64
American Express Co.		16,200,000			837,540			1.61
Berkshire Hathaway Inc., Class A (1)		6,577			763,623			1.47
ACE Ltd.		4,470,000			294,215			.57
JPMorgan Chase & Co.		6,689,700			273,876			.53
Other securities					1,325,683			2.56
					5,268,982			10.16
Industrials - 9.85%
Union Pacific Corp.		9,160,000			956,304			1.84
Boeing Co.		9,660,000			714,164			1.38
Lockheed Martin Corp.		7,223,956			584,924			1.13
Deere & Co.		5,640,000			465,018			.90
United Technologies Corp.		3,750,000			331,912			.64
General Electric Co.		16,700,000			314,962			.61
Other securities					1,741,219			3.35
					5,108,503			9.85
Energy - 9.11%
Chevron Corp.		14,277,000			1,468,247			2.83
Royal Dutch Shell PLC, Class B (ADR)		13,617,360			977,046			1.88
Schlumberger Ltd.		6,270,600			541,780			1.05
ConocoPhillips		4,565,000			343,242			.66
Other securities					1,394,099			2.69
					4,724,414			9.11
Information technology - 8.77%
Oracle Corp.		20,131,391			662,524			1.28
Microsoft Corp.		22,705,700			590,348			1.14
Apple Inc. (1)		1,550,000			520,289			1.00
Texas Instruments Inc.		12,240,000			401,839			.77
Google Inc., Class A (1)		665,000			336,743			.65
International Business Machines Corp.		1,950,000			334,523			.65
TE Connectivity Ltd.		8,730,000			320,915			.62
Other securities					1,381,961			2.66
					4,549,142			8.77
Consumer discretionary - 8.15%
Home Depot, Inc.		23,655,000			856,784			1.65
Amazon.com, Inc. (1)		4,115,000			841,476			1.62
Comcast Corp., Class A		17,785,000			450,672			.87
McDonald's Corp.		4,030,000			339,810			.66
McGraw-Hill Companies, Inc.		7,000,000			293,370			.57
Other securities					1,441,007			2.78
					4,223,119			8.15
Health care - 7.01%
Merck & Co., Inc.		21,874,575			771,954			1.49
Bristol-Myers Squibb Co.		21,980,000			636,541			1.23
UnitedHealth Group Inc.		8,950,000			461,641			.89
Cardinal Health, Inc.		8,365,000			379,938			.73
Pfizer Inc		14,000,000			288,400			.56
Other securities					1,094,088			2.11
					3,632,562			7.01
Consumer staples - 6.83%
Philip Morris International Inc.		13,420,000			896,054			1.73
Costco Wholesale Corp.		9,035,000			734,003			1.42
Procter & Gamble Co.		9,580,000			609,001			1.17
Kraft Foods Inc., Class A		10,770,000			379,427			.73
Nestlé SA (2)		5,000,000			310,746			.60
Other securities					613,582			1.18
					3,542,813			6.83
Materials - 4.93%
Dow Chemical Co.		20,450,000			736,200			1.42
Potash Corp. of Saskatchewan Inc.		8,981,860			511,876			.99
E.I. du Pont de Nemours and Co.		8,250,000			445,913			.86
Other securities					863,748			1.66
					2,557,737			4.93
Telecommunication services - 1.68%
AT&T Inc.		12,302,500			386,421			.75
Verizon Communications Inc.		7,700,000			286,671			.55
Other securities					198,854			.38
					871,946			1.68
Utilities - 1.56%
PG&E Corp.		7,420,000			311,863			.60
Other securities					497,803			.96
					809,666			1.56
Total common stocks (cost: $26,437,398,000)					35,288,884			68.05
							Percent
				Value			of net
Preferred securities - 0.10%					(000	)	assets
Financials - 0.10%
Other securities					52,104			.10
Total preferred securities (cost: $51,165,000)					52,104			.10
	Principal						Percent
	amount			Value			of net
Bonds & notes - 27.11%		(000	)		(000	)	assets
Mortgage-backed obligations (3) - 9.60%
Fannie Mae 0%-11.614% 2011-2047 (4)		3,173,071			3,284,042			6.33
Freddie Mac 0%-7.054% 2023-2041 (4)		458,914			476,694			.92
Other securities					1,216,580			2.35
					4,977,316			9.60
Bonds & notes of U.S. government & government agencies - 9.21%
U.S. Treasury:
1.50% 2013		300,000			306,480
2.75% 2013		291,500			306,122
3.375% 2013		333,500			353,667
6.25% 2023		375,500			477,185
4.625% 2040		388,720			405,276
1.50%-7.50% 2011-2041 (5)		2,559,112			2,708,482			8.79
Fannie Mae 6.25% 2029		8,000			9,702			.02
Other securities					209,965			.40
					4,776,879			9.21
Corporate bonds & notes - 7.79%
Financials - 3.03%
Wells Fargo & Co. 3.676%-4.60% 2016-2021		66,250			67,299			.13
Goldman Sachs Group, Inc. 3.625% 2016		56,000			56,667			.11
JPMorgan Chase & Co. 2.60%-4.25% 2016-2020		54,750			54,626			.11
American Express Bank 5.50% 2013		21,300			22,796
American Express Co. 6.15% 2017		22,800			26,016			.09
Other securities					1,343,481			2.59
					1,570,885			3.03
Telecommunication services - 0.80%
SBC Communications Inc. 5.10%-6.45% 2014-2034		79,300			86,902
BellSouth Capital Funding Corp. 7.875% 2030		51,500			63,669
AT&T Inc. 4.95% 2013		16,250			17,232
AT&T Wireless Services, Inc. 8.125% 2012		5,230			5,546			.33
Other securities					242,531			.47
					415,880			.80
Consumer discretionary - 0.67%
Comcast Corp. 5.30%-6.95% 2014-2037		71,000			79,459			.15
Home Depot, Inc. 4.40%-5.95% 2021-2041		30,000			30,604			.06
Other securities					237,090			.46
					347,153			.67
Industrials - 0.63%
Union Pacific Corp. 5.70%-5.75% 2017-2018		33,475			38,215			.08
Other securities					286,867			.55
					325,082			.63
Health care - 0.59%
UnitedHealth Group Inc. 4.70%-6.00% 2017-2021		62,060			69,992			.13
Other securities					237,447			.46
					307,439			.59
Energy - 0.52%
Shell International Finance BV 1.30%-1.875% 2011-2013		32,750			33,150			.06
Other securities					238,709			.46
					271,859			.52
Materials - 0.37%
Dow Chemical Co. 7.60% 2014		18,250			21,177
Rohm and Haas Co. 6.00% 2017		17,445			19,861			.08
Other securities					148,484			.29
					189,522			.37
Other corporate bonds & notes - 1.18%
Other securities					611,035			1.18
Total corporate bonds & notes					4,038,855			7.79
Other - 0.51%
Other securities					265,804			.51
Total bonds & notes (cost: $13,506,219,000)					14,058,854			27.11
	Principal						Percent
	amount			Value			of net
Short-term securities - 5.03%		(000	)		(000	)	assets
Freddie Mac 0.105%-0.251% due 10/19/2011-3/6/2012		1,009,980			1,009,334			1.95
U.S. Treasury Bills 0.195%-0.289% due 7/28/2011-2/9/2012		443,950			443,788			.86
Fannie Mae 0.07%-0.23% due 9/13/2011-5/3/2012		261,000			260,719			.50
Jupiter Securitization Co., LLC 0.16%-0.28% due 7/6-8/1/2011 (6)		125,000			124,987
JPMorgan Chase & Co. 0.15% due 8/11/2011		62,400			62,384
Falcon Asset Securitization Co., LLC 0.17% due 9/26/2011 (6)		47,300			47,284			.45
NetJets Inc. 0.08% due 8/4/2011 (6)		73,700			73,694			.14
Other securities					584,383			1.13
Total short-term securities (cost: $2,605,978,000)					2,606,573			5.03
Total investment securities (cost: $42,600,760,000)					52,006,415			100.29
Other assets less liabilities					(149,030	)		(.29	)
Net assets				$	51,857,385			100.00	%

"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) 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 $1,101,605,000, which represented 2.12% of the net assets of the fund. This amount includes $1,080,797,000 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.

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

(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 $1,928,130,000, which represented 3.72% 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, 2011	(dollars in thousands)
Assets:
Investment securities, at value (cost: $42,600,760)			$	52,006,415
Receivables for:
Sales of investments	$	263,694
Sales of fund's shares		75,816
Dividends and interest		192,133		531,643
				52,538,058
Liabilities:
Payables for:
Purchases of investments		517,388
Repurchases of fund's shares		127,207
Investment advisory services		10,103
Services provided by related parties		21,780
Trustees' deferred compensation		2,898
Bank overdraft		597
Other		700		680,673
Net assets at June 30, 2011			$	51,857,385
Net assets consist of:
Capital paid in on shares of beneficial interest			$	46,891,369
Undistributed net investment income				112,638
Accumulated net realized loss				(4,552,384	)
Net unrealized appreciation				9,405,762
Net assets at June 30, 2011			$	51,857,385

	(dollars and shares in thousands, except per-share amounts)
Shares of beneficial interest issued and outstanding (no stated par value) -
unlimited shares authorized (2,781,966 total shares outstanding)
		Net assets		Shares outstanding		Net asset value per share
Class A		$	32,184,861		1,724,981	$	18.66
Class B			2,213,993		119,040		18.60
Class C			4,619,228		248,679		18.58
Class F-1			943,806		50,595		18.65
Class F-2			268,760		14,409		18.65
Class 529-A			1,747,427		93,767		18.64
Class 529-B			219,165		11,762		18.63
Class 529-C			626,991		33,656		18.63
Class 529-E			100,562		5,398		18.63
Class 529-F-1			59,460		3,192		18.63
Class R-1			135,068		7,278		18.56
Class R-2			1,149,368		61,893		18.57
Class R-3			2,456,659		132,174		18.59
Class R-4			2,149,446		115,343		18.64
Class R-5			1,563,686		83,760		18.67
Class R-6			1,418,905		76,039		18.66
See Notes to Financial Statements

Statement of operations					unaudited
for the six months ended June 30, 2011	(dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. taxes of $4,765)	$	397,606
Interest		279,380		��	$	676,986
Fees and expenses*:
Investment advisory services		61,792
Distribution services		94,743
Transfer agent services		21,622
Administrative services		15,089
Reports to shareholders		974
Registration statement and prospectus		607
Trustees' compensation		448
Auditing and legal		16
Custodian		123
Other		1,219				196,633
Net investment income						480,353
Net realized gain and unrealized appreciation
on investments and currency:
Net realized gain (loss) on:
Investments		501,232
Currency transactions		(366	)			500,866
Net unrealized appreciation on:
Investments		1,600,286
Currency translations		107				1,600,393
Net realized gain and unrealized appreciation
on investments and currency						2,101,259
Net increase in net assets resulting
from operations					$	2,581,612
(*) 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				Year ended
	ended June 30,				December 31,
		2011*				2010
Operations:
Net investment income	$	480,353			$	1,088,234
Net realized gain on investments and currency transactions		500,866				901,876
Net unrealized appreciation on investments and currency translations		1,600,393				3,853,849
Net increase in net assets resulting from operations		2,581,612				5,843,959
Dividends paid to shareholders from net investment income		(522,911	)			(959,212	)
Net capital share transactions		(732,833	)			(2,173,629	)
Total increase in net assets		1,325,868				2,711,118
Net assets:
Beginning of period		50,531,517				47,820,399
End of period (including undistributed
net investment income: $112,638 and $155,196, respectively)	$	51,857,385			$	50,531,517
*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.

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 the net asset value of each share class as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

Methods and inputs – The fund uses the following methods and inputs to establish the fair value of its assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market 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, or relevant local time for securities trading outside U.S. time zones,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.

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 following table presentsthe fund’s valuation levels as of June 30, 2011 (dollars in thousands):

Investment securities:	Level 1		Level 2			Level 3		Total
Common stocks:
Financials	$	5,268,982	$	-		$	-	$	5,268,982
Industrials		4,924,410		184,093	(1)		-		5,108,503
Energy		4,644,075		80,339	(1)		-		4,724,414
Information technology		4,440,329		108,813	(1)		-		4,549,142
Consumer discretionary		4,223,119		-			-		4,223,119
Health care		3,515,453		117,109	(1)		-		3,632,562
Consumer staples		3,232,067		310,746	(1)		-		3,542,813
Materials		2,481,195		76,542	(1)		-		2,557,737
Telecommunication services		871,946		-			-		871,946
Utilities		606,511		203,155	(1)		-		809,666
Preferred securities		-		52,104			-		52,104
Bonds & notes:
Mortgage-backed obligations		-		4,956,508			20,808		4,977,316
Bonds & notes of U.S. government & government agencies		-		4,776,879			-		4,776,879
Corporate bonds & notes		-		4,038,855			-		4,038,855
Other		-		265,804			-		265,804
Short-term securities		-		2,606,573			-		2,606,573
Total	$	34,208,087	$	17,777,520		$	20,808	$	52,006,415
(1) Includes certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading; therefore, $1,080,797,000 of investment securities were classified as Level 2 instead of Level 1.

The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the six months ended June 30, 2011 (dollars in thousands):
	Beginning value at 1/1/2011	Transfers into Level 3(2)	Sales	Net realized loss(3)	Unrealized depreciation(3)	Ending value at 6/30/2011
Investment securities	$          20,390	$          17,840	$         (16,731)	$              (281)	$              (410)	$          20,808
Net unrealized appreciation during the period on Level 3 investment securities held at June 30, 2011 (dollars in thousands) (3):						$               417
(2) Transfers into or out of Level 3 are based on the beginning market value of the quarter in which they occurred.
(3) Net realized loss and unrealized appreciation (depreciation) are included in the related amounts on investments in the statement of operations.

4.   Risk factors

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

Market conditions — The prices of, and the income generated by, the common stocks, bonds and other securities held by the fund may decline due to market conditions and other factors, including those directly involving the issuers of securities held by the fund.

Investing in growth-oriented stocks — Growth-oriented stocks may involve larger price swings and greater potential for loss than other types of investments.

Investing in income-oriented stocks — Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests.

Investing in bonds — Rising interest rates will generally cause the prices of bonds and other debt securities to 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 may be subject to greater price fluctuations than shorter maturity debt securities.

Bonds and other debt securities are subject to credit risk, which is the possibility that the credit strength of an issuer will weaken 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. Lower quality debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality debt securities.

Investing in securities backed by the U.S. government — Securities backed by the U.S. Treasury or the full faith and credit of the U.S. government are 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. Securities issued by government sponsored entities and federal agencies and instrumentalities are neither issued nor guaranteed by the U.S. government.

Investing in mortgage-backed and asset-backed securities — Many types of bonds and other debt securities, including mortgage-backed securities, are subject to prepayment risk, as well as the risks associated with investing in debt securities in general. If interest rates fall and the loans underlying these securities are prepaid faster than expected, the fund may have to reinvest the prepaid principal in lower yielding securities, thus reducing the fund’s income. Conversely, if interest rates increase and the loans underlying the securities are prepaid more slowly than expected, the expected duration of the securities may be extended. This reduces the potential for the fund to invest the principal in higher yielding securities.

Thinly traded securities — There may be little trading in the secondary market for particular bonds or other debt securities, which may make them more difficult to value or sell.

Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations outside the U.S., may lose value because of political, social or economic developments in the country or region in which the issuer operates. These securities may also lose value due to changes in the exchange rate of the country’s currency against the U.S. dollar. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different settlement and accounting practices and different regulatory, legal and reporting standards than those in the U.S. These risks may be heightened in connection with investments in developing countries.

Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.

5.   Taxation and distributions

Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.

As of and during the period ended June 30, 2011, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2007 and by state tax authorities for tax years before 2006.

Non-U.S. taxation – Dividend and interest income are 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; 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 components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2010, the components of distributable earnings on a tax basis were as follows:

	(dollars in thousands)
Undistributed ordinary income				$	157,689
Capital loss carryforwards*:
Expiring 2016	$	(283,970	)
Expiring 2017		(4,681,346	)		(4,965,316	)
*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.

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after December 31, 2010, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

As of June 30, 2011, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

(dollars in thousands)
Gross unrealized appreciation on investment securities	$	9,914,288
Gross unrealized depreciation on investment securities		(606,708	)
Net unrealized appreciation on investment securities		9,307,580
Cost of investment securities		42,698,835

Tax-basis distributions paid to shareholders from ordinary income were as follows (dollars in thousands):

Share class	Six months ended June 30, 2011		Year ended December 31, 2010
Class A	$	346,382	$	642,622
Class B		16,885		38,561
Class C		32,076		59,537
Class F-1		9,891		18,620
Class F-2		3,002		4,485
Class 529-A		17,778		29,590
Class 529-B		1,510		3,310
Class 529-C		4,095		7,021
Class 529-E		896		1,526
Class 529-F-1		681		1,146
Class R-1		959		1,783
Class R-2		8,237		14,920
Class R-3		22,759		42,027
Class R-4		22,845		41,065
Class R-5		18,291		34,233
Class R-6		16,624		18,766
Total	$	522,911	$	959,212

6.   Fees and transactions with related parties

Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares, and American Funds Service Company® ("AFS"), the fund’s transfer agent.

Investment advisory services – The fund has an investment advisory and service agreement with CRMC that 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, 2011, the investment advisory services fee was $61,792,000, which was equivalent to an annualized rate of 0.240% 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 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, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25%is not exceeded. As of June 30, 2011, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.

Share class	Currently approved limits	Plan limits
Class A	0.25%	0.25%
Class 529-A	0.25	0.50
Classes B and 529-B	1.00	1.00
Classes C, 529-C and R-1	1.00	1.00
Class R-2	0.75	1.00
Classes 529-E and R-3	0.50	0.75
Classes F-1, 529-F-1 and R-4	0.25	0.50

Transfer agent services –The fund 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 third parties for performing these services.

Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan.The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described above for the six months ended June 30, 2011, were as follows (dollars in thousands):

					Administrative services
Share class	Distribution services		Transfer agent services		CRMC administrative services		Transfer agent services		Commonwealth of Virginia administrative services
Class A	$	38,415	$	20,159	Not applicable		Not applicable		Not applicable
Class B		12,010		1,463	Not applicable		Not applicable		Not applicable
Class C		23,145	Included in administrative services		$	3,450	$	524	Not applicable
Class F-1		1,141				571		26	Not applicable
Class F-2	Not applicable					185		5	Not applicable
Class 529-A		1,857				856		149	$	837
Class 529-B		1,153				118		33		115
Class 529-C		3,025				310		74		303
Class 529-E		242				48		9		49
Class 529-F-1		-				30		5		29
Class R-1		683				87		15	Not applicable
Class R-2		4,308				842		1,344	Not applicable
Class R-3		6,123				1,807		619	Not applicable
Class R-4		2,641				1,561		19	Not applicable
Class R-5	Not applicable					736		5	Not applicable
Class R-6	Not applicable					326		2	Not applicable
Total	$	94,743	$	21,622	$	10,927	$	2,829	$	1,333

Trustees’ deferred compensation – 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 $448,000, shown on the accompanying financial statements, includes $177,000 in current fees (either paid in cash or deferred) and a net increase of $271,000 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):

	Sales(*)				Reinvestments of dividends				Repurchases(*)						Net (decrease) increase
Share class	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Six months ended June 30, 2011
Class A	$	2,329,130		125,988	$	335,114		18,189	$	(3,168,677	)		(171,138	)	$	(504,433	)		(26,961	)
Class B		28,703		1,558		16,375		891		(504,362	)		(27,380	)		(459,284	)		(24,931	)
Class C		295,879		16,073		30,615		1,668		(468,059	)		(25,413	)		(141,565	)		(7,672	)
Class F-1		136,384		7,366		9,446		513		(133,833	)		(7,234	)		11,997			645
Class F-2		63,378		3,418		2,515		137		(34,399	)		(1,857	)		31,494			1,698
Class 529-A		169,786		9,198		17,771		966		(94,483	)		(5,118	)		93,074			5,046
Class 529-B		4,463		242		1,508		82		(40,349	)		(2,191	)		(34,378	)		(1,867	)
Class 529-C		57,055		3,092		4,094		222		(40,740	)		(2,209	)		20,409			1,105
Class 529-E		9,040		490		896		49		(5,681	)		(308	)		4,255			231
Class 529-F-1		8,303		448		680		37		(9,272	)		(503	)		(289	)		(18	)
Class R-1		14,809		807		957		52		(21,459	)		(1,167	)		(5,693	)		(308	)
Class R-2		149,497		8,120		8,232		449		(181,888	)		(9,874	)		(24,159	)		(1,305	)
Class R-3		280,470		15,224		22,743		1,239		(352,926	)		(19,088	)		(49,713	)		(2,625	)
Class R-4		334,186		18,129		22,842		1,241		(298,282	)		(16,120	)		58,746			3,250
Class R-5		214,873		11,566		18,289		992		(274,076	)		(14,927	)		(40,914	)		(2,369	)
Class R-6		360,314		19,612		16,620		902		(69,314	)		(3,733	)		307,620			16,781
Total net increase												��
(decrease)	$	4,456,270		241,331	$	508,697		27,629	$	(5,697,800	)		(308,260	)	$	(732,833	)		(39,300	)
Year ended December 31, 2010
Class A	$	4,166,008		249,273	$	619,160		37,146	$	(6,092,729	)		(364,893	)	$	(1,307,561	)		(78,474	)
Class B		65,367		3,927		37,144		2,243		(1,107,951	)		(66,736	)		(1,005,440	)		(60,566	)
Class C		516,589		31,043		56,464		3,405		(870,586	)		(52,496	)		(297,533	)		(18,048	)
Class F-1		198,682		11,915		17,458		1,048		(293,849	)		(17,642	)		(77,709	)		(4,679	)
Class F-2		101,541		6,079		3,737		224		(62,044	)		(3,736	)		43,234			2,567
Class 529-A		294,964		17,634		29,578		1,774		(173,539	)		(10,403	)		151,003			9,005
Class 529-B		8,942		538		3,309		199		(78,240	)		(4,683	)		(65,989	)		(3,946	)
Class 529-C		104,832		6,282		7,018		422		(91,127	)		(5,477	)		20,723			1,227
Class 529-E		15,354		917		1,526		92		(12,903	)		(775	)		3,977			234
Class 529-F-1		15,751		941		1,145		69		(7,015	)		(420	)		9,881			590
Class R-1		37,708		2,271		1,779		107		(36,988	)		(2,216	)		2,499			162
Class R-2		286,839		17,281		14,908		899		(336,868	)		(20,271	)		(35,121	)		(2,091	)
Class R-3		519,370		31,278		42,007		2,530		(712,888	)		(42,990	)		(151,511	)		(9,182	)
Class R-4		590,296		35,449		41,059		2,466		(557,696	)		(33,050	)		73,659			4,865
Class R-5		378,814		22,620		34,230		2,052		(341,409	)		(20,656	)		71,635			4,016
Class R-6		524,170		31,091		18,756		1,121		(152,302	)		(9,314	)		390,624			22,898
Total net increase
(decrease)	$	7,825,227		468,539	$	929,278		55,797	$	(10,928,134	)		(655,758	)	$	(2,173,629	)		(131,422	)
* Includes exchanges between share classes of the fund.

8.   Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $11,400,862,000 and $11,490,942,000, respectively, during the six months ended June 30, 2011.

Financial highlights(1)

				Income (loss) from investment operations(2)								Dividends and distributions
		Net asset value, beginning of period		Net investment income(3)		Net gains (losses) 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(4)(5)			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(5)			Ratio of net income to average net assets(3)(5)
Class A:	Six months ended 6/30/2011(6)	$	17.93	$	.18	$	.75		$	.93		$	(.20	)	$	-		$	(.20	)	$	18.66		5.20	%	$	32,185		.62	%(7)		.62	%(7)		2.01	%(7)
	Year ended 12/31/2010		16.21		.40		1.68			2.08			(.36	)		-			(.36	)		17.93		13.02			31,409		.63			.63			2.42
	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
Class B:	Six months ended 6/30/2011(6)		17.87		.11		.75			.86			(.13	)		-			(.13	)		18.60		4.83			2,214		1.38	(7)		1.38	(7)		1.24	(7)
	Year ended 12/31/2010		16.16		.28		1.66			1.94			(.23	)		-			(.23	)		17.87		12.12			2,573		1.38			1.38			1.66
	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
Class C:	Six months ended 6/30/2011(6)		17.85		.11		.75			.86			(.13	)		-			(.13	)		18.58		4.81			4,619		1.43	(7)		1.43	(7)		1.20	(7)
	Year ended 12/31/2010		16.14		.27		1.67			1.94			(.23	)		-			(.23	)		17.85		12.11			4,576		1.43			1.43			1.61
	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
Class F-1:	Six months ended 6/30/2011(6)		17.92		.18		.75			.93			(.20	)		-			(.20	)		18.65		5.20			944		.63	(7)		.63	(7)		2.00	(7)
	Year ended 12/31/2010		16.21		.40		1.67			2.07			(.36	)		-			(.36	)		17.92		12.95			895		.63			.63			2.41
	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
Class F-2:	Six months ended 6/30/2011(6)		17.92		.21		.74			.95			(.22	)		-			(.22	)		18.65		5.33			269		.40	(7)		.40	(7)		2.24	(7)
	Year ended 12/31/2010		16.21		.44		1.67			2.11			(.40	)		-			(.40	)		17.92		13.21			228		.40			.40			2.63
	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 6/30/2011(6)		17.91		.18		.74			.92			(.19	)		-			(.19	)		18.64		5.18			1,747		.70	(7)		.70	(7)		1.94	(7)
	Year ended 12/31/2010		16.19		.39		1.68			2.07			(.35	)		-			(.35	)		17.91		12.97			1,589		.69			.69			2.35
	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
Class 529-B:	Six months ended 6/30/2011(6)		17.90		.10		.75			.85			(.12	)		-			(.12	)		18.63		4.76			219		1.48	(7)		1.48	(7)		1.14	(7)
	Year ended 12/31/2010		16.19		.26		1.66			1.92			(.21	)		-			(.21	)		17.90		11.99			244		1.48			1.48			1.56
	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
Class 529-C:	Six months ended 6/30/2011(6)		17.90		.11		.74			.85			(.12	)		-			(.12	)		18.63		4.78			627		1.48	(7)		1.48	(7)		1.16	(7)
	Year ended 12/31/2010		16.19		.26		1.67			1.93			(.22	)		-			(.22	)		17.90		12.03			583		1.48			1.48			1.57
	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
Class 529-E:	Six months ended 6/30/2011(6)	$	17.90	$	.15	$	.75		$	.90		$	(.17	)	$	-		$	(.17	)	$	18.63		5.03	%	$	101		.97	%(7)		.97	%(7)		1.66	%(7)
	Year ended 12/31/2010		16.19		.35		1.66			2.01			(.30	)		-			(.30	)		17.90		12.59			92		.97			.97			2.07
	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
Class 529-F-1:	Six months ended 6/30/2011(6)		17.90		.20		.74			.94			(.21	)		-			(.21	)		18.63		5.29			59		.47	(7)		.47	(7)		2.16	(7)
	Year ended 12/31/2010		16.19		.43		1.67			2.10			(.39	)		-			(.39	)		17.90		13.15			57		.47			.47			2.57
	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
Class R-1:	Six months ended 6/30/2011(6)		17.83		.11		.75			.86			(.13	)		-			(.13	)		18.56		4.83			135		1.40	(7)		1.40	(7)		1.23	(7)
	Year ended 12/31/2010		16.13		.27		1.66			1.93			(.23	)		-			(.23	)		17.83		12.10			135		1.40			1.40			1.65
	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
Class R-2:	Six months ended 6/30/2011(6)		17.85		.11		.74			.85			(.13	)		-			(.13	)		18.57		4.78			1,149		1.38	(7)		1.38	(7)		1.25	(7)
	Year ended 12/31/2010		16.14		.27		1.67			1.94			(.23	)		-			(.23	)		17.85		12.14			1,128		1.40			1.40			1.64
	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
Class R-3:	Six months ended 6/30/2011(6)		17.86		.15		.75			.90			(.17	)		-			(.17	)		18.59		5.06			2,457		.95	(7)		.95	(7)		1.68	(7)
	Year ended 12/31/2010		16.15		.35		1.67			2.02			(.31	)		-			(.31	)		17.86		12.64			2,408		.94			.94			2.10
	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
Class R-4:	Six months ended 6/30/2011(6)		17.91		.18		.75			.93			(.20	)		-			(.20	)		18.64		5.20			2,149		.65	(7)		.65	(7)		1.98	(7)
	Year ended 12/31/2010		16.19		.40		1.68			2.08			(.36	)		-			(.36	)		17.91		13.01			2,007		.65			.65			2.39
	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
Class R-5:	Six months ended 6/30/2011(6)		17.94		.21		.75			.96			(.23	)		-			(.23	)		18.67		5.34			1,564		.35	(7)		.35	(7)		2.28	(7)
	Year ended 12/31/2010		16.22		.45		1.68			2.13			(.41	)		-			(.41	)		17.94		13.32			1,545		.35			.35			2.69
	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
Class R-6:	Six months ended 6/30/2011(6)		17.93		.22		.74			.96			(.23	)		-			(.23	)		18.66		5.37			1,419		.30	(7)		.30	(7)		2.35	(7)
	Year ended 12/31/2010		16.21		.46		1.67			2.13			(.41	)		-			(.41	)		17.93		13.38			1,063		.30			.30			2.75
	Period from 5/1/2009 to 12/31/2009		13.64		.30		2.61			2.91			(.34	)		-			(.34	)		16.21		21.52			590		.33	(7)		.33	(7)		2.94	(7)

	Six months ended June 30,			Year ended December 31
	2011(6)			2010			2009			2008			2007			2006
Portfolio turnover rate for all share classes		26	%		37	%		46	%		41	%		35	%		34	%

(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)For the year ended December 31, 2010, this column reflects the impact of a corporate action event that resulted in a one-time increase to net investment income.  If the corporate action event had not occurred, the Class A net investment income per share and ratio of net income to average net assets would have been lower by $.04 and .25 percentage points, respectively.  The impact to the other share classes would have been similar.

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

(5)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.

(6)Unaudited.

(7)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 six-month period (January 1, 2011, through June 30, 2011).

Actual expenses:

The first line of each share class in the table on page 33 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 page 33 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 1/1/2011		Ending account value 6/30/2011		Expenses paid during period*		Annualized expense ratio
Class A -- actual return	$	1,000.00	$	1,052.03	$	3.15		.62	%
Class A -- assumed 5% return		1,000.00		1,021.72		3.11		.62
Class B -- actual return		1,000.00		1,048.26		7.01		1.38
Class B -- assumed 5% return		1,000.00		1,017.95		6.90		1.38
Class C -- actual return		1,000.00		1,048.10		7.26		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		1,052.03		3.21		.63
Class F-1 -- assumed 5% return		1,000.00		1,021.67		3.16		.63
Class F-2 -- actual return		1,000.00		1,053.26		2.04		.40
Class F-2 -- assumed 5% return		1,000.00		1,022.81		2.01		.40
Class 529-A -- actual return		1,000.00		1,051.78		3.56		.70
Class 529-A -- assumed 5% return		1,000.00		1,021.32		3.51		.70
Class 529-B -- actual return		1,000.00		1,047.62		7.51		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		1,047.77		7.51		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		1,050.34		4.93		.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		1,052.93		2.39		.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		1,048.29		7.11		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		1,047.79		7.01		1.38
Class R-2 -- assumed 5% return		1,000.00		1,017.95		6.90		1.38
Class R-3 -- actual return		1,000.00		1,050.58		4.83		.95
Class R-3 -- assumed 5% return		1,000.00		1,020.08		4.76		.95
Class R-4 -- actual return		1,000.00		1,051.97		3.31		.65
Class R-4 -- assumed 5% return		1,000.00		1,021.57		3.26		.65
Class R-5 -- actual return		1,000.00		1,053.44		1.78		.35
Class R-5 -- assumed 5% return		1,000.00		1,023.06		1.76		.35
Class R-6 -- actual return		1,000.00		1,053.71		1.53		.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 June 30, 2011:
							10 years1/
	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		16.57	%		3.38	%		4.70	%
Not reflecting CDSC		21.57			3.73			4.70
Class C shares
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase		20.56			3.68			4.49
Not reflecting CDSC		21.56			3.68			4.49
Class F-1 shares3
Not reflecting annual asset-based fee charged
by sponsoring firm		22.42			4.52			5.32
Class F-2 shares3 — first sold 8/5/08
Not reflecting annual asset-based fee charged
by sponsoring firm		22.70			—			5.41
Class 529-A shares4 — first sold 2/15/02
Reflecting 5.75% maximum sales charge		15.40			3.21			4.77
Not reflecting maximum sales charge		22.45			4.45			5.44
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		16.40			3.25			4.69
Not reflecting CDSC		21.40			3.60			4.69
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		20.44			3.61			4.73
Not reflecting CDSC		21.44			3.61			4.73
Class 529-E shares3,4 — first sold 3/5/02		22.04			4.15			4.82
Class 529-F-1 shares3,4 — first sold 9/17/02
Not reflecting annual asset-based fee charged
by sponsoring firm		22.73			4.67			6.99

1Applicable to Classes B, C and F-1 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 2000

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 prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 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, 2011, 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 prospectus or summary prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after September 30, 2011, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

   

What makes American Funds different?

For 80 years, we have followed a consistent philosophy to benefit our investors. Our 33 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 27 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 funds

>American Balanced Fund®

American Funds Global Balanced FundSM

• Bond funds

American Funds Mortgage FundSM

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

American Funds Tax-Exempt Fund of New YorkSM

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-911-0811P

Litho in USA AGD/ALD/8077-S28715

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, 2011

unaudited

Common stocks — 68.05%	Shares			Value (000)
FINANCIALS — 10.16%
Wells Fargo & Co.		32,796,600		$	920,273
Goldman Sachs Group, Inc.		6,415,000			853,772
American Express Co.		16,200,000			837,540
Berkshire Hathaway Inc., Class A1		6,577			763,623
ACE Ltd.		4,470,000			294,215
JPMorgan Chase & Co.		6,689,700			273,876
Weyerhaeuser Co.		11,215,242			245,165
SunTrust Banks, Inc.		7,479,100			192,961
Citigroup Inc.		4,000,000			166,560
U.S. Bancorp		5,210,000			132,907
Bank of America Corp.		10,000,000			109,600
Moody’s Corp.		2,400,000			92,040
Chubb Corp.		1,300,000			81,393
BlackRock, Inc.		400,000			76,724
Allstate Corp.		2,000,000			61,060
HDFC Bank Ltd. (ADR)		345,819			60,999
Progressive Corp.		2,600,000			55,588
T. Rowe Price Group, Inc.		840,000			50,686
					5,268,982
INDUSTRIALS — 9.85%
Union Pacific Corp.		9,160,000			956,304
Boeing Co.		9,660,000			714,164
Lockheed Martin Corp.		7,223,956			584,924
Deere & Co.		5,640,000			465,018
United Technologies Corp.		3,750,000			331,912
General Electric Co.		16,700,000			314,962
Parker Hannifin Corp.		3,000,000			269,220
Northrop Grumman Corp.		2,765,000			191,753
European Aeronautic Defence and Space Co. EADS NV2		5,500,000			184,093
Emerson Electric Co.		3,260,000			183,375
Cummins Inc.		1,375,000			142,299
Tyco International Ltd.		2,500,000			123,575
General Dynamics Corp.		1,545,000			115,133
Honeywell International Inc.		1,800,000			107,262
FedEx Corp.		900,000			85,365
Expeditors International of Washington, Inc.		1,480,000			75,761
United Parcel Service, Inc., Class B		1,000,000			72,930
ITT Corp.		1,022,971			60,284
IDEX Corp.		1,260,000			57,771
CSX Corp.		2,100,000			55,062
Huntington Ingalls Industries, Inc.1		502,500			17,336
					5,108,503
ENERGY — 9.11%
Chevron Corp.		14,277,000			1,468,247
Royal Dutch Shell PLC, Class B (ADR)		13,617,360			977,046
Schlumberger Ltd.		6,270,600			541,780
ConocoPhillips		4,565,000			343,242
Newfield Exploration Co.1		3,000,000			204,060
Concho Resources Inc.1		1,935,000			177,730
Baker Hughes Inc.		2,400,000			174,144
Apache Corp.		1,095,000			135,112
Occidental Petroleum Corp.		1,200,000			124,848
Kinder Morgan, Inc.		3,666,600			105,341
Petróleo Brasileiro SA — Petrobras, ordinary nominative (ADR)		2,825,000			95,655
Tenaris SA (ADR)		2,050,000			93,746
Technip SA2		750,000			80,339
Cimarex Energy Co.		860,000			77,331
Suncor Energy Inc.		1,660,000			65,061
TOTAL SA (ADR)		1,050,000			60,732
					4,724,414
INFORMATION TECHNOLOGY — 8.77%
Oracle Corp.		20,131,391			662,524
Microsoft Corp.		22,705,700			590,348
Apple Inc.1		1,550,000			520,289
Texas Instruments Inc.		12,240,000			401,839
Google Inc., Class A1		665,000			336,743
International Business Machines Corp.		1,950,000			334,523
TE Connectivity Ltd.		8,730,000			320,915
Corning Inc.		14,685,000			266,533
Maxim Integrated Products, Inc.		9,670,000			247,165
Automatic Data Processing, Inc.		3,200,000			168,576
EMC Corp.1		6,000,000			165,300
Yahoo! Inc.1		8,906,000			133,946
Samsung Electronics Co. Ltd.2		140,000			108,813
ASML Holding NV (New York registered)		2,500,000			92,400
Paychex, Inc.		2,727,000			83,773
Analog Devices, Inc.		1,500,000			58,710
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)		4,500,000			56,745
					4,549,142
CONSUMER DISCRETIONARY — 8.15%
Home Depot, Inc.		23,655,000			856,784
Amazon.com, Inc.1		4,115,000			841,476
Comcast Corp., Class A		17,785,000			450,672
McDonald’s Corp.		4,030,000			339,810
McGraw-Hill Companies, Inc.		7,000,000			293,370
VF Corp.		2,300,000			249,688
Walt Disney Co.		5,500,000			214,720
DIRECTV, Class A1		4,175,000			212,173
Time Warner Inc.		5,000,000			181,850
Macy’s, Inc.		4,000,000			116,960
Las Vegas Sands Corp.1		2,500,000			105,525
Gap, Inc.		4,500,000			81,450
Starbucks Corp.		2,000,000			78,980
Johnson Controls, Inc.		1,780,000			74,155
NIKE, Inc., Class B		720,000			64,786
General Motors Co.1		2,000,000			60,720
					4,223,119
HEALTH CARE — 7.01%
Merck & Co., Inc.		21,874,575			771,954
Bristol-Myers Squibb Co.		21,980,000			636,541
UnitedHealth Group Inc.		8,950,000			461,641
Cardinal Health, Inc.		8,365,000			379,938
Pfizer Inc		14,000,000			288,400
Johnson & Johnson		3,895,000			259,095
Amgen Inc.1		3,041,500			177,472
Baxter International Inc.		2,800,000			167,132
Aetna Inc.		3,000,000			132,270
Roche Holding AG2		700,000			117,109
Gilead Sciences, Inc.1		2,500,000			103,525
Eli Lilly and Co.		2,250,000			84,443
Teva Pharmaceutical Industries Ltd. (ADR)		1,100,000			53,042
					3,632,562
CONSUMER STAPLES — 6.83%
Philip Morris International Inc.		13,420,000			896,054
Costco Wholesale Corp.		9,035,000			734,003
Procter & Gamble Co.		9,580,000			609,001
Kraft Foods Inc., Class A		10,770,000			379,427
Nestlé SA2		5,000,000			310,746
Estée Lauder Companies Inc., Class A		1,700,000			178,823
Kellogg Co.		2,000,000			110,640
PepsiCo, Inc.		1,400,000			98,602
Coca-Cola Co.		1,290,000			86,804
Unilever NV (New York registered)		2,360,000			77,526
Colgate-Palmolive Co.		700,000			61,187
					3,542,813
MATERIALS — 4.93%
Dow Chemical Co.		20,450,000			736,200
Potash Corp. of Saskatchewan Inc.		8,981,860			511,876
E.I. du Pont de Nemours and Co.		8,250,000			445,913
Alcoa Inc.		12,000,000			190,320
Nucor Corp.		4,250,000			175,185
Cliffs Natural Resources Inc.		1,800,000			166,410
Monsanto Co.		1,300,000			94,302
Rio Tinto PLC2		1,060,000			76,542
Steel Dynamics, Inc.		4,000,000			65,000
Barrick Gold Corp.		1,060,000			48,007
Martin Marietta Materials, Inc.		600,000			47,982
					2,557,737
TELECOMMUNICATION SERVICES — 1.68%
AT&T Inc.		12,302,500			386,421
Verizon Communications Inc.		7,700,000			286,671
American Tower Corp., Class A1		3,800,000			198,854
					871,946
UTILITIES — 1.56%
PG&E Corp.		7,420,000			311,863
GDF SUEZ2		3,400,000			124,429
Duke Energy Corp.		5,080,000			95,656
Exelon Corp.		2,000,000			85,680
National Grid PLC2		8,000,000			78,726
Edison International		1,500,000			58,125
FirstEnergy Corp.		1,250,000			55,187
					809,666
Total common stocks (cost: $26,437,398,000)					35,288,884
	Principal amount			Value
Preferred securities — 0.10%		(000	)		(000	)
FINANCIALS — 0.10%
QBE Capital Funding II LP 6.797%3,4	$	24,470		$	22,515
AXA SA, Series B, 6.379%3,4		20,680			18,302
XL Capital Ltd., Series E, 6.50%4		12,170			11,287
					52,104
Total preferred securities (cost: $51,165,000)					52,104
Bonds & notes — 27.11%
MORTGAGE-BACKED OBLIGATIONS5 — 9.60%
Fannie Mae, Series 2001-T11, Class B, 5.503% 2011		45,000			45,342
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012		16,000			16,781
Fannie Mae 4.89% 2012		30,000			30,189
Fannie Mae 5.00% 2018		1,328			1,425
Fannie Mae 5.00% 2018		777			834
Fannie Mae 11.00% 2018		237			274
Fannie Mae 5.50% 2019		1,358			1,472
Fannie Mae 5.50% 2020		22,339			24,264
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022		4,568			4,729
Fannie Mae 3.50% 2024		1,779			1,814
Fannie Mae 4.00% 2024		90,872			94,926
Fannie Mae 4.00% 2024		30,472			31,826
Fannie Mae 4.00% 2024		19,302			20,160
Fannie Mae 4.00% 2024		18,559			19,383
Fannie Mae 4.00% 2024		16,295			17,019
Fannie Mae 4.00% 2024		7,310			7,635
Fannie Mae 4.00% 2024		4,114			4,297
Fannie Mae 3.00% 2025		2,585			2,572
Fannie Mae 3.00% 2025		1,418			1,411
Fannie Mae 3.00% 2025		737			733
Fannie Mae 3.00% 2025		317			315
Fannie Mae 3.00% 2025		40			40
Fannie Mae 3.50% 2025		65,324			66,634
Fannie Mae 3.50% 2025		54,977			56,080
Fannie Mae 3.50% 2025		33,995			34,677
Fannie Mae 3.50% 2025		30,420			31,019
Fannie Mae 3.50% 2025		22,175			22,620
Fannie Mae 3.50% 2025		15,125			15,428
Fannie Mae 3.50% 2025		11,167			11,391
Fannie Mae 3.50% 2025		9,429			9,618
Fannie Mae 3.50% 2025		7,417			7,566
Fannie Mae 3.50% 2025		6,795			6,932
Fannie Mae 3.50% 2025		6,725			6,860
Fannie Mae 3.50% 2025		6,405			6,534
Fannie Mae 3.50% 2025		1,807			1,843
Fannie Mae 3.50% 2025		961			981
Fannie Mae 3.50% 2025		629			641
Fannie Mae 3.50% 2025		325			332
Fannie Mae 4.00% 2025		13,550			14,148
Fannie Mae 4.50% 2025		41,873			44,479
Fannie Mae 4.50% 2025		20,472			21,746
Fannie Mae 4.50% 2025		19,765			20,995
Fannie Mae, Series 2001-4, Class NA, 11.614% 20254		133			149
Fannie Mae 3.00% 2026		57,942			57,628
Fannie Mae 3.50% 2026		28,935			29,505
Fannie Mae 4.50% 2026		70,600			74,858
Fannie Mae, Series 2001-20, Class D, 11.034% 20314		52			59
Fannie Mae 5.50% 2033		16,271			17,698
Fannie Mae 5.50% 2033		13,153			14,305
Fannie Mae 5.50% 2033		1,620			1,762
Fannie Mae 5.50% 2035		7,174			7,800
Fannie Mae 5.50% 2035		4,565			4,963
Fannie Mae 6.50% 2035		9,289			10,512
Fannie Mae, Series 2006-43, Class JO, principal only, 0% 2036		4,576			3,949
Fannie Mae 5.50% 2036		1,899			2,063
Fannie Mae 5.50% 2036		1,605			1,742
Fannie Mae, Series 2006-49, Class PA, 6.00% 2036		11,274			12,589
Fannie Mae 6.00% 2036		3,729			4,112
Fannie Mae 5.497% 20374		11,567			12,225
Fannie Mae 6.00% 2037		69,348			76,309
Fannie Mae 6.00% 2037		59,771			66,010
Fannie Mae 6.00% 2037		22,759			25,028
Fannie Mae 6.00% 2037		13,439			14,779
Fannie Mae 6.00% 2037		9,120			10,025
Fannie Mae 6.00% 2037		2,315			2,546
Fannie Mae 6.50% 2037		19,278			21,794
Fannie Mae 6.50% 2037		15,298			17,294
Fannie Mae 6.50% 2037		14,516			16,229
Fannie Mae 6.50% 2037		8,645			9,665
Fannie Mae 7.00% 2037		3,798			4,231
Fannie Mae 7.00% 2037		3,120			3,475
Fannie Mae 7.00% 2037		1,741			1,939
Fannie Mae 5.50% 2038		5,272			5,712
Fannie Mae 6.00% 2038		40,309			44,355
Fannie Mae 6.00% 2038		22,715			24,958
Fannie Mae 6.00% 2038		9,869			10,859
Fannie Mae 6.00% 2038		6,408			7,041
Fannie Mae 6.50% 2038		19,717			22,290
Fannie Mae 4.50% 2039		127,650			132,336
Fannie Mae 4.50% 2039		53,376			55,335
Fannie Mae 4.50% 2039		31,192			32,337
Fannie Mae 6.00% 2039		49,656			54,641
Fannie Mae 6.00% 2039		21,460			23,611
Fannie Mae 6.00% 2039		11,440			12,570
Fannie Mae 6.00% 2039		10,225			11,244
Fannie Mae 3.50% 2040		48,629			46,579
Fannie Mae 3.50% 2040		47,349			45,352
Fannie Mae 3.50% 2040		39,423			37,760
Fannie Mae 3.50% 2040		33,971			32,538
Fannie Mae 3.50% 2040		22,995			22,025
Fannie Mae 3.50% 2040		19,234			18,423
Fannie Mae 3.50% 2040		17,681			16,936
Fannie Mae 4.00% 2040		165,477			165,763
Fannie Mae 4.00% 2040		48,942			49,072
Fannie Mae 4.00% 2040		30,000			30,052
Fannie Mae 4.00% 2040		28,137			28,182
Fannie Mae 4.00% 2040		22,280			22,318
Fannie Mae 4.00% 2040		11,750			11,770
Fannie Mae 4.50% 2040		67,056			69,496
Fannie Mae 4.50% 2040		59,590			61,766
Fannie Mae 4.50% 2040		46,249			47,933
Fannie Mae 4.50% 2040		40,769			42,252
Fannie Mae 4.50% 2040		21,414			22,193
Fannie Mae 5.00% 2040		55,116			58,681
Fannie Mae 5.00% 2040		28,437			30,277
Fannie Mae 5.00% 2040		5,872			6,252
Fannie Mae 6.00% 2040		11,139			12,232
Fannie Mae 3.50% 2041		48,623			46,573
Fannie Mae 3.50% 2041		34,887			33,416
Fannie Mae 3.50% 2041		31,489			30,161
Fannie Mae 3.50% 2041		25,753			24,667
Fannie Mae 4.00% 2041		75,000			75,129
Fannie Mae 4.00% 2041		67,414			67,531
Fannie Mae 4.00% 2041		38,530			38,596
Fannie Mae 4.00% 2041		23,000			23,040
Fannie Mae 4.50% 2041		91,561			94,901
Fannie Mae 4.50% 2041		27,000			27,985
Fannie Mae 4.50% 2041		23,174			24,019
Fannie Mae 4.50% 2041		20,396			21,140
Fannie Mae 5.00% 2041		140,000			148,772
Fannie Mae 5.50% 2041		56,000			60,559
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041		532			591
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041		404			449
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2041		705			826
Fannie Mae, Series 2002-W1, Class 2A, 7.172% 20424		653			757
Fannie Mae 6.50% 2047		3,096			3,455
Fannie Mae 6.50% 2047		1,145			1,278
Fannie Mae 6.50% 2047		818			913
Fannie Mae 6.50% 2047		513			573
Fannie Mae 7.00% 2047		1,976			2,201
Fannie Mae 7.00% 2047		1,847			2,057
Fannie Mae 7.00% 2047		1,510			1,682
Fannie Mae 7.00% 2047		1,289			1,435
Fannie Mae 7.00% 2047		812			904
Fannie Mae 7.00% 2047		751			836
Fannie Mae 7.00% 2047		647			721
Fannie Mae 7.00% 2047		271			302
Fannie Mae 7.00% 2047		128			142
Fannie Mae 7.00% 2047		73			82
Freddie Mac 5.00% 2023		18,071			19,369
Freddie Mac 5.00% 2023		12,618			13,525
Freddie Mac 5.00% 2023		10,030			10,751
Freddie Mac 5.00% 2023		4,419			4,736
Freddie Mac 5.00% 2023		3,964			4,249
Freddie Mac 5.00% 2023		3,527			3,780
Freddie Mac 5.50% 2023		7,592			8,212
Freddie Mac 5.00% 2024		24,892			26,751
Freddie Mac 6.00% 2026		8,325			9,171
Freddie Mac 6.00% 2026		6,275			6,913
Freddie Mac 6.00% 2026		5,458			6,012
Freddie Mac 6.50% 2027		2,479			2,798
Freddie Mac 6.50% 2027		832			939
Freddie Mac 6.50% 2027		502			566
Freddie Mac 6.50% 2028		1,761			1,987
Freddie Mac, Series T-041, Class 3-A, 7.054% 20324		2,762			3,165
Freddie Mac, Series 3061, Class PN, 5.50% 2035		10,343			11,427
Freddie Mac, Series 3156, Class PO, principal only, 0% 2036		13,347			11,410
Freddie Mac, Series 3146, Class PO, principal only, 0% 2036		9,809			8,158
Freddie Mac, Series 3233, Class PA, 6.00% 2036		22,728			25,303
Freddie Mac 5.345% 20374		288			302
Freddie Mac, Series 3318, Class JT, 5.50% 2037		23,087			25,209
Freddie Mac, Series 3312, Class PA, 5.50% 2037		17,800			19,471
Freddie Mac, Series 3272, Class PA, 6.00% 2037		17,229			19,053
Freddie Mac 6.00% 2038		12,583			13,838
Freddie Mac 6.00% 2038		2,015			2,213
Freddie Mac 6.50% 2038		8,196			9,211
Freddie Mac 4.00% 2041		168,294			168,450
Freddie Mac 4.00% 2041		25,785			25,809
Freddie Mac 4.00% 2041		13,903			13,916
Government National Mortgage Assn. 10.00% 2021		339			405
Government National Mortgage Assn. 6.00% 2038		49,550			54,828
Government National Mortgage Assn. 6.50% 2038		22,373			25,209
Government National Mortgage Assn. 4.00% 2039		5,831			5,954
Government National Mortgage Assn. 4.00% 2039		4,873			4,975
Government National Mortgage Assn. 4.00% 2039		3,877			3,958
Government National Mortgage Assn. 4.00% 2040		23,565			24,067
Government National Mortgage Assn. 4.00% 2040		19,857			20,274
Government National Mortgage Assn. 4.00% 2040		14,812			15,123
Government National Mortgage Assn. 4.00% 2040		9,828			10,035
Government National Mortgage Assn. 4.00% 2040		8,833			9,019
Government National Mortgage Assn. 4.00% 2040		6,741			6,882
Government National Mortgage Assn. 4.00% 2040		5,951			6,076
Government National Mortgage Assn. 4.00% 2040		5,889			6,015
Government National Mortgage Assn. 4.00% 2040		4,946			5,050
Government National Mortgage Assn. 4.00% 2040		2,977			3,039
Government National Mortgage Assn. 4.00% 2040		556			567
Government National Mortgage Assn. 4.00% 2041		59,309			60,554
Government National Mortgage Assn. 4.00% 2041		20,793			21,229
Government National Mortgage Assn. 4.00% 2041		12,587			12,852
Government National Mortgage Assn. 4.00% 2041		1,964			2,005
Government National Mortgage Assn. 4.00% 2041		985			1,006
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-CIBC5, Class A-1, 4.372% 2037		1,467			1,480
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C1, Class A-3, 5.376% 2037		10,643			10,910
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-3B, 5.476% 20374		44,053			45,172
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039		4,463			4,524
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-SB, 4.824% 2042		19,242			20,161
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2011-C4, Class A-2, 3.341% 20463		15,005			15,022
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2011-C3A, Class A-2, 3.673% 20463		40,900			41,603
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2007-CB19, Class A-4, 5.932% 20494		16,075			17,471
CS First Boston Mortgage Securities Corp., Series 2002-34, Class I-A-1, 7.50% 2032		1,048			1,073
CS First Boston Mortgage Securities Corp., Series 2002-30, Class I-A-1, 7.50% 2032		736			745
CS First Boston Mortgage Securities Corp., Series 2003-21, Class V-A-1, 6.50% 2033		1,028			1,040
CS First Boston Mortgage Securities Corp., Series 2003-29, Class V-A-1, 7.00% 2033		1,787			1,909
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034		4,864			4,862
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034		5,483			5,535
CS First Boston Mortgage Securities Corp., Series 2003-CK2, Class A-4, 4.801% 2036		17,585			18,288
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036		10,360			10,441
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037		15,312			15,610
CS First Boston Mortgage Securities Corp., Series 2007-C4, Class A-4, 5.995% 20394		14,490			15,361
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20404		22,301			23,247
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20373		18,300			19,597
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20373		20,000			21,663
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20373		32,200			34,657
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2005-CD1, Class A-4, 5.394% 20444		9,250			10,068
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048		37,965			41,152
Fannie Mae 4.50% 2041		49,000			50,554
Bank of America 5.50% 20123		44,500			46,186
Greenwich Capital Commercial Funding Corp., Series 2006-GG7, Class A-4, 6.078% 20384		22,761			25,299
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A-4, 5.444% 2039		18,753			20,143
Commercial Mortgage Trust, Series 2000-C1, Class E, 8.132% 20334		1,317			1,323
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038		39,825			41,414
Nationwide Building Society, Series 2007-2, 5.50% 20123		32,500			33,907
Banc of America Commercial Mortgage Inc., Series 2002-PB2, Class A-4, 6.186% 2035		3,546			3,598
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-4, 5.115% 20454		6,788			7,356
Banc of America Commercial Mortgage Inc., Series 2006-4, Class A-4, 5.634% 2046		2,000			2,191
Banc of America Commercial Mortgage Inc., Series 2007-3, Class A-4, 5.802% (undated)4		13,569			14,621
GE Commercial Mortgage Corp., Series 2004-C1, Class A-2, 3.915% 2038		163			163
GE Commercial Mortgage Corp., Series 2005-C4, Class A-3A, 5.492% 20454		25,000			25,829
DBUBS Mortgage Trust, Series 2011-LC1A, Class A1, 3.742% 20463		14,720			15,090
DBUBS Mortgage Trust, Series 2011-LC1A, Class A3, 5.002% 20463		9,500			9,861
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP8, Class A-4, 5.399% 2045		22,860			24,735
Wachovia Bank Commercial Mortgage Trust, Series 2005-C16, Class A-PB, 4.692% 2041		22,353			23,307
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034		22,783			23,234
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20262,3		19,692			20,808
Wells Fargo Mortgage-backed Securities Trust, Series 2005-AR10, Class II-A-6, 2.782% 20354		21,832			20,462
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035		324			324
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PW10, Class AM, 5.449% 20404		20,000			20,104
Bank of Montreal 2.85% 20153		17,000			17,630
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035		15,286			14,821
Washington Mutual Mortgage, WMALT Series 2005-1, Class 5-A-1, 6.00% 2035		14,312			13,701
GS Mortgage Securities Corp. II, Series 2006-GG8, Class A-4, 5.56% 2039		11,880			12,879
LB-UBS Commercial Mortgage Trust, Series 2002-C1, Class A-4, 6.462% 2031		11,663			11,919
GE Capital Commercial Mortgage Corp., Series 2002-2, Class A-3, 5.349% 2036		10,000			10,306
American General Mortgage Loan Trust, Series 2010-1A, Class A-1, 5.15% 20583,4		7,132			7,356
First Union National Bank Commercial Mortgage Trust, Series 2002-C1, Class A-2, 6.141% 2034		7,165			7,271
CHL Mortgage Pass-Through Trust, Series 2003-56, Class 6-A-1, 3.025% 20334		4,596			4,076
GSR Mortgage Loan Trust, Series 2004-15F, Class 5A-1, 5.50% 2020		3,658			3,742
Merrill Lynch Mortgage Trust, Series 2005-LC1, Class A-2, 5.202% 20444		1,657			1,657
					4,977,316
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 9.21%
U.S. Treasury 4.625% 2011		251,000			256,632
U.S. Treasury 4.25% 2012		211,600			222,072
U.S. Treasury 4.875% 2012		123,000			126,632
U.S. Treasury 1.50% 2013		300,000			306,480
U.S. Treasury 1.875% 20136		85,700			91,215
U.S. Treasury 2.75% 2013		291,500			306,122
U.S. Treasury 3.375% 2013		333,500			353,667
U.S. Treasury 4.25% 2013		245,335			264,846
U.S. Treasury 1.875% 2014		116,100			119,747
U.S. Treasury 4.75% 2014		158,500			176,498
U.S. Treasury 1.875% 20156		104,042			114,767
U.S. Treasury 1.50% 2016		50,000			49,392
U.S. Treasury 4.50% 2016		140,250			158,647
U.S. Treasury 7.50% 2016		49,000			63,237
U.S. Treasury 2.125% 20196		73,312			83,402
U.S. Treasury 6.25% 2023		375,500			477,185
U.S. Treasury 2.375% 20256		59,645			68,592
U.S. Treasury 6.875% 2025		123,750			166,567
U.S. Treasury 6.75% 2026		6,746			9,009
U.S. Treasury 5.25% 2029		15,000			17,303
U.S. Treasury 4.50% 2036		255,132			263,926
U.S. Treasury 3.50% 2039		315,000			270,676
U.S. Treasury 4.375% 2039		28,000			28,016
U.S. Treasury 4.625% 2040		388,720			405,276
U.S. Treasury 4.75% 2041		148,000			157,306
CoBank ACB 7.875% 20183		20,000			22,810
CoBank ACB 0.847% 20223,4		23,425			21,002
United States Government Agency-Guaranteed (FDIC insured), Regions Bank 3.25% 2011		33,000			33,437
United States Government Agency-Guaranteed (FDIC insured), Bank of America Corp., Series L, 3.125% 2012		30,000			30,795
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 2.875% 2011		30,000			30,357
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.20% 2012		27,500			27,990
United States Government Agency-Guaranteed (FDIC insured), Sovereign Bancorp, Inc. 2.75% 2012		22,000			22,296
United States Government Agency-Guaranteed (FDIC insured), PNC Funding Corp. 2.30% 2012		14,000			14,264
Fannie Mae 6.25% 2029		8,000			9,702
Federal Agricultural Mortgage Corp. 5.50% 20113		7,000			7,014
					4,776,879
CORPORATE BONDS & NOTES — 7.79%
FINANCIALS — 3.03%
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20143		4,445			4,846
Westfield Group 5.75% 20153		16,250			18,069
Westfield Group 5.70% 20163		30,520			33,810
Westfield Group 7.125% 20183		21,280			24,870
WEA Finance LLC 4.625% 20213		25,000			24,309
Citigroup Inc. 1.111% 20134		61,000			60,791
Citigroup Inc. 4.587% 2015		7,000			7,369
Citigroup Inc. 4.75% 2015		16,500			17,465
Société Générale 1.326% 20143,4		20,000			19,827
Société Générale 3.10% 20153		16,000			15,831
Société Générale 3.50% 20163		17,000			16,830
Société Générale 5.20% 20213		21,000			20,662
Wells Fargo & Co. 3.676% 2016		26,250			26,998
Wells Fargo & Co. 4.60% 2021		40,000			40,301
Prologis, Inc. 5.50% 2012		15,000			15,259
Prologis, Inc. 5.625% 2015		10,425			11,033
Prologis, Inc. 6.625% 2018		15,500			17,161
Prologis, Inc. 7.375% 2019		19,835			22,654
Morgan Stanley, Series F, 2.875% 2014		18,000			18,226
Morgan Stanley 3.80% 2016		17,000			16,821
Morgan Stanley, Series F, 5.75% 2021		24,000			24,328
Goldman Sachs Group, Inc. 3.625% 2016		56,000			56,667
Kimco Realty Corp. 6.00% 2012		2,750			2,911
Kimco Realty Corp., Series C, 4.82% 2014		13,000			13,894
Kimco Realty Corp., Series C, 5.783% 2016		14,000			15,479
Kimco Realty Corp. 5.70% 2017		21,180			23,505
JPMorgan Chase & Co. 2.60% 2016		29,500			29,125
JPMorgan Chase & Co. 3.45% 2016		19,000			19,375
JPMorgan Chase & Co. 4.25% 2020		6,250			6,126
Royal Bank of Scotland PLC 3.40% 2013		16,500			16,892
Royal Bank of Scotland PLC 3.95% 2015		16,000			16,091
Royal Bank of Scotland PLC 4.875% 2015		20,000			20,774
BNP Paribas 1.19% 20144		17,000			16,887
BNP Paribas 3.60% 2016		19,000			19,233
BNP Paribas 5.00% 2021		12,750			12,843
American Express Bank 5.50% 2013		21,300			22,796
American Express Co. 6.15% 2017		22,800			26,016
Barclays Bank PLC 2.50% 2013		8,500			8,660
Barclays Bank PLC 2.375% 2014		20,000			20,250
Barclays Bank PLC 5.125% 2020		18,000			18,300
CNA Financial Corp. 5.85% 2014		25,000			27,104
CNA Financial Corp. 6.50% 2016		16,000			17,876
Household Finance Corp. 6.375% 2012		13,000			13,912
HSBC Bank PLC 2.00% 20143		17,000			17,102
HSBC Bank PLC 3.50% 20153		13,250			13,609
UBS AG 2.25% 2014		18,500			18,705
UBS AG 5.875% 2017		22,125			24,303
Monumental Global Funding 5.50% 20133		12,000			12,871
Monumental Global Funding III 0.478% 20143,4		29,000			28,058
ERP Operating LP 5.375% 2016		25,000			27,462
ERP Operating LP 4.75% 2020		12,000			12,191
HBOS PLC 6.75% 20183		41,050			39,557
Bank of America Corp., Series L, 3.625% 2016		16,500			16,565
Bank of America Corp. 5.75% 2017		13,650			14,533
Bank of America Corp. 5.00% 2021		7,750			7,671
Simon Property Group, LP 6.75% 2014		8,495			9,633
Simon Property Group, LP 5.875% 2017		15,165			17,195
Simon Property Group, LP 6.125% 2018		8,160			9,163
ACE INA Holdings Inc. 5.875% 2014		20,000			22,377
ACE INA Holdings Inc. 2.60% 2015		12,665			12,732
Liberty Mutual Group Inc. 6.50% 20353		14,285			13,316
Liberty Mutual Group Inc. 7.697% 20973		22,180			20,556
Standard Chartered PLC 3.85% 20153		12,500			12,951
Standard Chartered PLC 3.20% 20163		21,000			20,821
Hospitality Properties Trust 6.75% 2013		7,215			7,699
Hospitality Properties Trust 6.70% 2018		21,025			22,565
MetLife Global Funding I 5.125% 20133		12,000			12,774
MetLife Global Funding I 2.50% 20153		16,000			15,998
Credit Suisse Group AG 2.20% 2014		17,000			17,232
Bank of New York Mellon Corp., Series G, 2.50% 2016		17,000			17,173
Nordea Bank 2.125% 20143		17,000			17,129
Westpac Banking Corp. 3.00% 2015		17,000			17,125
Principal Life Insurance Co. 5.30% 2013		15,500			16,676
ANZ National (International) Ltd. 3.125% 20153		16,500			16,636
Toyota Motor Credit Corp. 1.375% 2013		16,500			16,622
Bank of Tokyo-Mitsubishi, Ltd. 2.45% 20153		16,000			16,017
New York Life Global Funding 5.25% 20123		15,000			15,848
HCP, Inc. 5.375% 2021		15,000			15,500
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		13,000			14,016
Prudential Holdings, LLC, Series C, 8.695% 20233,5		11,500			13,968
Intesa Sanpaolo SpA 6.50% 20213		11,260			11,764
Santander Issuances, SA Unipersonal 6.50% 20193,4		11,500			11,558
Boston Properties, Inc. 5.875% 2019		10,000			10,975
Lincoln National Corp. 5.65% 2012		10,000			10,482
Nationwide Mutual Insurance Co. 5.81% 20243,4		8,150			7,987
UDR, Inc. 5.00% 2012		6,000			6,101
Nationwide Financial Services, Inc. 6.75% 20674		5,830			5,493
					1,570,885
TELECOMMUNICATION SERVICES — 0.80%
AT&T Wireless Services, Inc. 8.125% 2012		5,230			5,546
AT&T Inc. 4.95% 2013		16,250			17,232
SBC Communications Inc. 5.10% 2014		15,000			16,496
SBC Communications Inc. 5.625% 2016		24,300			27,577
BellSouth Capital Funding Corp. 7.875% 2030		51,500			63,669
SBC Communications Inc. 6.45% 2034		40,000			42,829
Verizon Communications Inc. 5.55% 2014		12,440			13,720
Verizon Communications Inc. 3.00% 2016		34,000			34,766
Verizon Communications Inc. 5.50% 2017		13,975			15,715
Verizon Communications Inc. 6.25% 2037		40,000			42,587
Verizon Communications Inc. 6.00% 2041		8,000			8,384
Telecom Italia Capital SA 5.25% 2015		30,500			31,739
Telecom Italia Capital SA 6.999% 2018		12,000			13,142
Telecom Italia Capital SA 7.175% 2019		9,000			9,952
Telefónica Emisiones, SAU 3.729% 2015		4,175			4,255
Telefónica Emisiones, SAU 3.992% 2016		18,000			18,226
Telefónica Emisiones, SAU 5.134% 2020		11,825			11,742
Deutsche Telekom International Finance BV 4.875% 2014		15,500			16,929
France Télécom 4.375% 2014		10,000			10,837
American Tower Corp. 4.625% 2015		10,000			10,537
					415,880
CONSUMER DISCRETIONARY — 0.67%
Comcast Corp. 5.30% 2014		15,000			16,460
Comcast Corp. 6.30% 2017		16,750			19,441
Comcast Corp. 6.45% 2037		15,000			16,095
Comcast Corp. 6.95% 2037		24,250			27,463
Time Warner Cable Inc. 6.75% 2018		37,620			43,690
Time Warner Cable Inc. 5.00% 2020		25,000			26,019
Thomson Reuters Corp. 5.95% 2013		8,140			8,908
Thomson Reuters Corp. 6.50% 2018		20,815			24,387
Volkswagen International Finance NV 1.625% 20133		16,000			16,117
Volkswagen International Finance NV 0.917% 20143,4		17,000			17,072
Time Warner Inc. 5.875% 2016		14,210			16,261
Time Warner Inc. 6.25% 2041		15,000			15,635
Home Depot, Inc. 4.40% 2021		15,000			15,102
Home Depot, Inc. 5.95% 2041		15,000			15,502
Cox Communications, Inc. 5.45% 2014		15,500			17,289
News America Inc. 6.15% 2037		5,000			5,081
News America Inc. 6.15% 20413		12,000			11,928
NBC Universal, Inc. 2.875% 20163		16,000			16,043
Nordstrom, Inc. 6.75% 2014		10,000			11,452
Seminole Tribe of Florida 5.798% 20133,5		7,175			7,208
					347,153
INDUSTRIALS — 0.63%
General Electric Capital Corp. 0.924% 20144		50,000			49,973
General Electric Capital Corp., Series A, 2.25% 2015		21,500			21,156
General Electric Co. 5.25% 2017		14,250			15,808
Burlington Northern Santa Fe LLC 7.00% 2014		31,850			36,279
Burlington Northern Santa Fe LLC 4.10% 2021		7,000			6,959
Union Pacific Corp. 5.75% 2017		4,325			4,976
Union Pacific Corp. 5.70% 2018		29,150			33,239
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20165		9,432			9,521
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20195		7,775			8,222
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20195		4,226			4,482
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20205		7,429			7,809
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20225		6,541			6,868
Koninklijke Philips Electronics NV 5.75% 2018		15,500			17,381
Danaher Corp. 2.30% 2016		16,795			16,801
Atlas Copco AB 5.60% 20173		14,000			15,595
Waste Management, Inc. 4.60% 2021		15,000			15,335
CSX Corp. 5.75% 2013		7,670			8,256
CSX Corp. 6.25% 2015		5,990			6,864
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20135		13,650			13,863
Volvo Treasury AB 5.95% 20153		9,460			10,473
Norfolk Southern Corp. 5.75% 2016		7,615			8,669
Canadian National Railway Co. 4.95% 2014		6,000			6,553
					325,082
HEALTH CARE — 0.59%
Cardinal Health, Inc. 4.00% 2015		44,100			46,667
Cardinal Health, Inc. 5.80% 2016		17,500			19,835
Cardinal Health, Inc. 4.625% 2020		20,000			20,339
UnitedHealth Group Inc. 6.00% 2017		22,170			25,143
UnitedHealth Group Inc. 6.00% 2018		35,000			39,741
UnitedHealth Group Inc. 4.70% 2021		4,890			5,108
GlaxoSmithKline Capital Inc. 4.85% 2013		33,700			36,252
Novartis Capital Corp. 2.90% 2015		30,000			31,238
Abbott Laboratories 2.70% 2015		12,000			12,487
Abbott Laboratories 5.125% 2019		8,600			9,476
Biogen Idec Inc. 6.00% 2013		13,500			14,449
Medco Health Solutions, Inc. 2.75% 2015		13,335			13,465
Coventry Health Care, Inc. 6.30% 2014		11,955			12,879
Pfizer Inc 4.45% 2012		10,000			10,287
Express Scripts Inc. 3.125% 2016		10,000			10,073
					307,439
CONSUMER STAPLES — 0.59%
Anheuser-Busch InBev NV 3.625% 2015		36,500			38,650
Anheuser-Busch InBev NV 4.125% 2015		16,500			17,760
Anheuser-Busch InBev NV 7.75% 2019		20,000			25,198
PepsiCo, Inc. 3.10% 2015		17,000			17,860
PepsiCo, Inc. 2.50% 2016		15,000			15,176
PepsiCo, Inc. 7.90% 2018		15,000			19,359
Kraft Foods Inc. 6.75% 2014		16,180			18,338
Kraft Foods Inc. 6.50% 2040		20,000			22,292
Altria Group, Inc. 9.25% 2019		15,000			19,589
Altria Group, Inc. 9.95% 2038		13,500			19,024
Wal-Mart Stores, Inc. 2.875% 2015		11,700			12,200
Wal-Mart Stores, Inc. 2.80% 2016		25,000			25,616
Coca-Cola Co. 1.50% 2015		18,970			18,644
British American Tobacco International Finance PLC 9.50% 20183		13,580			18,193
Kroger Co. 3.90% 2015		16,250			17,203
					305,102
ENERGY — 0.52%
Kinder Morgan Energy Partners LP 6.00% 2017		29,610			33,432
Shell International Finance BV 1.30% 2011		16,250			16,288
Shell International Finance BV 1.875% 2013		16,500			16,862
StatoilHydro ASA 2.90% 2014		13,285			13,949
Statoil ASA 3.125% 2017		16,500			16,668
Enbridge Energy Partners, LP, Series B, 6.50% 2018		12,250			14,064
Enbridge Energy Partners, LP, Series B, 7.50% 2038		12,250			14,693
Anadarko Petroleum Corp. 5.95% 2016		20,500			23,101
Total Capital SA 3.00% 2015		17,000			17,703
Woodside Finance Ltd. 4.60% 20213		16,975			16,693
Cenovus Energy Inc. 4.50% 2014		15,000			16,292
Enterprise Products Operating LLC 5.20% 2020		13,000			13,733
Canadian Natural Resources Ltd. 5.70% 2017		11,925			13,586
Williams Partners L.P. 4.125% 2020		13,500			12,983
Enbridge Inc. 5.60% 2017		10,000			11,235
Husky Energy Inc. 6.80% 2037		9,375			10,609
BG Energy Capital PLC 2.50% 20153		7,200			7,211
Rockies Express Pipeline LLC 6.85% 20183		2,455			2,757
					271,859
UTILITIES — 0.43%
National Rural Utilities Cooperative Finance Corp. 5.50% 2013		55,500			60,491
National Rural Utilities Cooperative Finance Corp. 10.375% 2018		8,450			11,719
MidAmerican Energy Holdings Co., Series D, 5.00% 2014		18,000			19,526
PacifiCorp., First Mortgage Bonds, 5.65% 2018		2,465			2,812
MidAmerican Energy Holdings Co. 5.75% 2018		23,360			26,305
MidAmerican Energy Holdings Co. 5.95% 2037		6,125			6,464
E.ON International Finance BV 5.80% 20183		24,450			27,185
CenterPoint Energy Resources Corp. 4.50% 20213		18,751			18,920
Electricité de France SA 6.95% 20393		12,000			14,083
Virginia Electric and Power Co., Series B, 5.95% 2017		10,000			11,691
Iberdrola Finance Ireland 3.80% 20143		11,000			11,243
Niagara Mohawk Power 3.553% 20143		10,000			10,479
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20183,5		3,286			3,521
					224,439
MATERIALS — 0.37%
ArcelorMittal 3.75% 2015		16,500			16,887
ArcelorMittal 5.25% 2020		20,000			19,810
ArcelorMittal 7.00% 2039		25,000			25,356
Dow Chemical Co. 7.60% 2014		18,250			21,177
Rohm and Haas Co. 6.00% 2017		17,445			19,861
International Paper Co. 7.40% 2014		23,250			26,474
International Paper Co. 7.30% 2039		8,425			9,194
E.I. du Pont de Nemours and Co. 0.667% 20144		25,000			25,180
Anglo American Capital PLC 2.15% 20133		14,355			14,552
Rio Tinto Finance (USA) Ltd. 8.95% 2014		9,180			11,031
					189,522
INFORMATION TECHNOLOGY — 0.16%
Cisco Systems, Inc. 0.499% 20144		19,000			19,069
Cisco Systems, Inc. 2.90% 2014		10,000			10,527
KLA-Tencor Corp. 6.90% 2018		19,000			21,492
International Business Machines Corp. 2.00% 2016		17,000			16,919
Hewlett-Packard Co. 2.65% 2016		13,415			13,487
					81,494
Total corporate bonds & notes					4,038,855
ASSET-BACKED OBLIGATIONS5 — 0.25%
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015		17,000			18,127
PG&E Energy Recovery Funding LLC, Series 2005-2, Class A-3, 5.12% 2014		16,076			16,881
Chase Credit Card Owner Trust, Series 2003-4, Class B, 0.837% 20164		14,000			14,011
Citibank Credit Card Issuance Trust, Series 2008, Class A5, 4.85% 2015		12,000			12,871
RAMP Trust, Series 2003-RZ4, Class A-7, 4.79% 20334		4,386			4,418
RAMP Trust, Series 2003-RS11, Class A-I-7, 4.828% 2033		5,391			5,211
Morgan Stanley ABS Capital I Inc., Series 2004-NC3, Class M-1, 0.981% 20344		13,337			9,546
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2009-2A, Class A-1, 4.26% 20143		9,000			9,408
AmeriCredit Automobile Receivables Trust, Series 2007-D-F, Class A-4-A, FSA insured, 5.56% 2014		9,030			9,357
Prestige Auto Receivables Trust, Series 2007-1, Class A-3, FSA insured, 5.58% 20143		6,366			6,438
Home Equity Asset Trust, Series 2004-2, Class M-1, 0.981% 20344		7,984			6,244
GE SeaCo Finance SRL, Series 2004-1, Class A, AMBAC insured, 0.485% 20193,4		6,134			5,945
Residential Asset Securities Corp. Trust, Series 2003-KS6, Class A-2, 0.786% 20334		92			75
Residential Asset Securities Corp. Trust, Series 2003-KS8, Class A-I-6, 4.83% 2033		4,727			4,465
CWABS, Inc., Series 2004-BC1, Class M-1, 0.936% 20344		3,956			3,376
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20123		876			877
CPS Auto Receivables Trust, Series 2007-TFC, Class A-2, XLCA insured, 5.25% 20133		2,113			2,114
Impac CMB Grantor Trust, Series 2004-6, Class 1-A-1, 0.986% 20344		1,101			858
Impac CMB Grantor Trust, Series 2004-6, Class M-2, 1.086% 20344		1,072			614
					130,836
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S. — 0.18%
Polish Government 5.25% 2014		2,500			2,706
Polish Government 6.375% 2019		14,350			16,431
Croatian Government 6.75% 20193		17,000			18,390
Province of Ontario, Series 1, 1.875% 2012		16,750			17,059
Australia Government Agency-Guaranteed, Australia and New Zealand Banking Group Ltd. 3.25% 20123		13,000			13,250
Hungarian Government 6.25% 2020		12,250			12,997
France Government Agency-Guaranteed, Société Finance 2.875% 20143		10,460			10,951
					91,784
MUNICIPALS — 0.08%
State of California, Los Angeles Community College District (County of Los Angeles),
General Obligation Build America Bonds, 2008 Election, Taxable Series 2010-E, 6.60% 2042		15,000			16,789
State of Maryland, Howard Hughes Medical Institute, Taxable Bonds, 3.45% 2014		15,475			16,478
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds,
Series 2002-A, Class A, 6.72% 2025		10,627			9,917
					43,184
Total bonds & notes (cost: $13,506,219,000)					14,058,854
Short-term securities — 5.03%
Freddie Mac 0.105%–0.251% due 10/19/2011–3/6/2012		1,009,980			1,009,334
U.S. Treasury Bills 0.195%–0.289% due 7/28/2011–2/9/2012		443,950			443,788
Fannie Mae 0.07%–0.23% due 9/13/2011–5/3/2012		261,000			260,719
Jupiter Securitization Co., LLC 0.16%–0.28% due 7/6–8/1/20113		125,000			124,987
JPMorgan Chase & Co. 0.15% due 8/11/2011		62,400			62,384
Falcon Asset Securitization Co., LLC 0.17% due 9/26/20113		47,300			47,284
Coca-Cola Co. 0.17%–0.22% due 7/1–10/6/20113		187,750			187,715
Johnson & Johnson 0.20%–0.23% due 8/10–10/4/20113		115,600			115,584
Straight-A Funding LLC 0.17% due 8/5/20113		95,251			95,236
Medtronic Inc. 0.17%–0.19% due 7/19–8/16/20113		82,000			81,989
NetJets Inc. 0.08% due 8/4/20113		73,700			73,694
Federal Home Loan Bank 0.32% due 2/10–2/13/2012		54,530			54,473
Federal Farm Credit Banks 0.25% due 7/8–11/30/2011		27,000			26,988
Abbott Laboratories 0.11% due 8/1/20113		22,400			22,398
Total short-term securities (cost: $2,605,978,000)					2,606,573
Total investment securities (cost: $42,600,760,000)					52,006,415
Other assets less liabilities					(149,030	)
Net assets				$	51,857,385

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 $1,101,605,000, which represented 2.12% of the net assets of the fund. This amount includes $1,080,797,000 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 $1,928,130,000, which represented 3.72% of the net assets of the fund.

4Coupon rate may change periodically.

5Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

6Index-linked bond whose principal amount moves with a government price index.

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 prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.

MFGEFP-911-0811O-S29474

ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 10 – Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees since the Registrant last submitted a proxy statement to its shareholders.  The procedures are as follows.  The Registrant has a nominating and governance committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating and governance committee.

ITEM 11 – Controls and Procedures

(a)	The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.
(b)	There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s 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/ Gregory D. Johnson

Gregory D. Johnson, Vice Chairman, President and

Principal Executive Officer

Date: August 31, 2011

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/ Gregory D. Johnson

Gregory D. Johnson, Vice Chairman, President and

Principal Executive Officer

Date: August 31, 2011

By /s/ M. Susan Gupton

M. Susan Gupton, Treasurer and

Principal Financial Officer

Date: August 31, 2011