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)
6455 Irvine Center Drive
Irvine, California 92618
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (213) 486-9200
Date of fiscal year end: December 31
Date of reporting period: June 30, 2018
Michael W. Stockton
American Balanced Fund
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
ITEM 1 – Reports to Stockholders
 | American Balanced Fund® |
Semi-annual report
for the six months ended
June 30, 2018 |
Invest in a balanced
fund that has stood
the test of time.
American Balanced Fund seeks conservation of capital, current income and long-term growth of capital and income.
This fund is one of more than 40 offered by Capital Group, home of American Funds, one of the nation’s largest mutual fund families. For more than 85 years, Capital Group has invested with a long-term focus based on thorough research and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2018:
| Class A shares | | 1 year | | 5 years | | 10 years |
| | | | | | | |
| Reflecting 5.75% maximum sales charge | | 2.92% | | 8.04% | | 7.79% |
For other share class results, visit americanfunds.com and americanfundsretirement.com.
The total annual fund operating expense ratio was 0.57% for Class A shares as of the prospectus dated March 1, 2018. The expense ratio was restated to reflect current fees.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers, without which results would have been lower. Visit americanfunds.com for more information.
The fund’s 30-day yield for Class A shares as of July 31, 2018, calculated in accordance with the U.S. Securities and Exchange Commission (SEC) formula, was 2.00%. The fund’s 12-month distribution rate for Class A shares as of that date was 1.60%. 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.
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. Refer to the fund prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Fellow investors:
Over the first six months of 2018, the U.S. economy continued its slow but steady growth with positive developments in housing, employment and corporate earnings.
Meanwhile, the equity market rose in a mature market, though investors may have found the experience a little bumpy. After record highs at the beginning of the year, the market experienced a correction of more than 10% in the unmanaged Standard and Poor’s 500 Composite Index in late January through early February, likely due in part to investor anxiety over rising interest rates and inflation. The market quickly recovered, but even as U.S. stocks advanced over the second quarter and the S&P 500 gained 3.43%, volatility persisted amid concerns regarding global trade policy. This was exhibited in market results toward the end of June.
Fund results
American Balanced Fund (AMBAL) gained 0.87% during the six-month period ended June 30, 2018. In comparison, the Lipper Balanced Funds Index, a peer benchmark, returned 0.14%, while the 60%/40% S&P 500/Bloomberg Barclays U.S. Aggregate Index, a broad benchmark for balanced funds in general, returned 1.00%.
Results at a glance
For periods ended June 30, 2018, with all distributions reinvested
| | | Cumulative total returns | | Average annual total returns |
| | | | | | | | | | | Lifetime |
| | | 6 months | | 1 year | | 5 years | | 10 years | | (since 7/26/75)1 |
| | | | | | | | | | | | | | | |
| AMBAL (Class A shares) | | | 0.87 | % | | | 9.21 | % | | | 9.33 | % | | | 8.42 | % | | | 10.65 | % |
| 60%/40% S&P 500/Bloomberg Barclays U.S. Aggregate Index2,3 | | | 1.00 | | | | 8.34 | | | | 8.97 | | | | 7.84 | | | | 10.11 | |
| Lipper Balanced Funds Index4 | | | 0.14 | | | | 7.01 | | | | 7.60 | | | | 6.44 | | | | 9.71 | |
The market indexes shown in this report are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.
| 1 | Date Capital Research and Management Company began managing the fund. |
| 2 | Sources: Bloomberg Index Services Ltd. and S&P Dow Jones Indices LLC. Blends the S&P 500 Composite Index with the Bloomberg Barclays U.S. Aggregate Index by weighting their total returns at 60% and 40%, respectively. Results assume the blend is rebalanced monthly. |
| 3 | Source: Bloomberg Index Services Ltd. The Bloomberg Barclays U.S. Aggregate Index did not exist until December 31, 1975. For the period between July 31, 1975, and December 31, 1975, Bloomberg Barclays Government/Credit Bond Index results were used. The Bloomberg Barclays indexes are based on July 31, 1975, index value. |
| 4 | Source: Thompson Reuters Lipper. Lipper indexes track the largest mutual funds (no more than 30), represented by one share class per fund, in the corresponding Lipper category. |
While it’s good to check in on our investment results every six months, it’s also important for investors to stay focused on their long-term goals. For many, that might be saving for a better retirement. We are pleased to report that AMBAL’s five-, 10-year and lifetime results were 9.33%, 8.42% and 10.65%, respectively, and outpaced the long-term results of both indexes. (See “Results at a glance” chart.)
The benefit of a balanced fund
The uneven ride thus far in 2018 underscores the role a balanced fund can play in an investor’s portfolio. AMBAL’s objectives are clear: conservation of capital, while providing current income and seeking long-term growth of capital and income.
Most investors understand that a well-diversified portfolio can help to reduce volatility, and that such a portfolio is likely to include both equities and fixed income securities. A critical part of the “balance” we seek in AMBAL is facilitated through the strategic selection of both equity and fixed income investments. AMBAL invests primarily in blue chip equities and investment-grade fixed income securities using a balanced approach and a U.S. emphasis.
While investment selection drives the fund’s results over most periods of time, we do have the ability to adjust AMBAL’s overall asset allocation strategically. The size of the equity portion of the portfolio can range from a maximum of 75% (as evidenced by our allocation in 2013) to a minimum of 50% based on where we believe investment opportunities lie.
Entering into the ninth year of the current bull market, we took a measured approach to asset allocation, decreasing equity positions from 62% at the end of 2017 to 57% at the end of March. Since then, AMBAL’s asset allocation has remained essentially steady, moving with the market. As of June 30, the fund’s mix was 59% equities, 37% fixed income and 4% cash and equivalents.
Inside the equity portfolio
On the equity side of the portfolio, larger investments in energy companies were additive to results as they outpaced the broader market during the first half of 2018. In fact, energy stocks, which generally tend to do well when interest rates are rising, experienced some of their best returns in years during the second quarter.
Beyond energy, Microsoft produced strong returns, boosted by positive sentiment surrounding its fast-growing cloud computing business, Azure. Revenue for Microsoft’s fiscal second quarter exceeded analysts’ forecasts for sales from its cloud segments by more than 15%. Another noteworthy contributor to results was Nike, whose stock ended the period at an all-time high, driven by new and improved product designs, increased demand around the globe and digital innovation for connecting with customers.
On the other hand, investment selection among consumer staples companies weighed on our results. AMBAL’s larger-than-index holdings in this sector also dampened results as they turned out to be among those with the weakest returns over the six-month period. In particular, our investments in Philip Morris International and British American Tobacco proved disappointing. And yet, tobacco stocks appear undervalued at this time with newer heat-not-burn technology and product lineups providing growth and income potential for shareholders.
Another investment that dragged on results was our much larger-than-index position in Comcast. Uncertainty pressured the stock as both Comcast and Walt Disney vied for 21st Century Fox’s entertainment assets. We will watch to see how Comcast fares in its hunt for new acquisitions that could boost content for its streaming and wireless services.
Balance from fixed income
AMBAL offers shareholders a well-diversified, high-quality U.S. fixed income portfolio that seeks to provide income with investments that tend to be more stable than equities and generally move in the opposite direction of equities during times of stress in the market. We witnessed this pattern again during the February correction when bonds outpaced stocks on a relative basis.
If you look at the first six months of 2018, interest rates were up, we had two Federal Reserve rate hikes, the rates for 10-year Treasuries were up and corporate spreads were notably wide — all of which could be considered challenges for the bond market. Nonetheless, fixed income returns for AMBAL were actually quite stable and provided diversification to equity returns.
Thank you
We welcome our many new shareholders and assure you that we will continue to follow our prudent, research-driven approach to investing that has characterized American Balanced Fund for more than four decades. We look forward to reporting to you again in six months’ time.
Sincerely,
Gregory D. Johnson
Vice Chairman of the Board
and President
August 8, 2018
For current information about the fund, visit americanfunds.com.
| Summary investment portfolio June 30, 2018 | unaudited |
| Investment mix by security type | Percent of net assets |
| Common stocks 59.10% | | Shares | | | Value
(000) | |
| Information technology 11.85% | | | | | | | | |
| Microsoft Corp. | | | 43,746,000 | | | $ | 4,313,793 | |
| Intel Corp. | | | 35,524,100 | | | | 1,765,903 | |
| Broadcom Inc. | | | 6,442,200 | | | | 1,563,135 | |
| ASML Holding NV (New York registered) | | | 4,573,458 | | | | 905,408 | |
| ASML Holding NV | | | 1,845,000 | | | | 365,634 | |
| Alphabet Inc., Class C1 | | | 846,200 | | | | 944,063 | |
| Intuit Inc. | | | 4,000,000 | | | | 817,220 | |
| Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | | | 19,350,000 | | | | 707,436 | |
| TE Connectivity Ltd. | | | 6,600,000 | | | | 594,396 | |
| Facebook, Inc., Class A1 | | | 3,058,600 | | | | 594,347 | |
| VeriSign, Inc.1 | | | 4,300,000 | | | | 590,906 | |
| Other securities | | | | | | | 2,141,805 | |
| | | | | | | | 15,304,046 | |
| | | | | | | | | |
| Financials 8.36% | | | | | | | | |
| Berkshire Hathaway Inc., Class A1 | | | 9,412 | | | | 2,654,561 | |
| Berkshire Hathaway Inc., Class B1 | | | 800,000 | | | | 149,320 | |
| Wells Fargo & Co. | | | 35,924,500 | | | | 1,991,654 | |
| SunTrust Banks, Inc. | | | 14,027,000 | | | | 926,063 | |
| JPMorgan Chase & Co. | | | 8,370,000 | | | | 872,154 | |
| Chubb Ltd. | | | 6,010,000 | | | | 763,390 | |
| BlackRock, Inc. | | | 1,507,000 | | | | 752,053 | |
| Other securities | | | | | | | 2,695,046 | |
| | | | | | | | 10,804,241 | |
| | | | | | | | | |
| Consumer discretionary 8.01% | | | | | | | | |
| Home Depot, Inc. | | | 13,857,000 | | | | 2,703,501 | |
| NIKE, Inc., Class B | | | 23,885,000 | | | | 1,903,157 | |
| Comcast Corp., Class A | | | 42,066,532 | | | | 1,380,203 | |
| Amazon.com, Inc.1 | | | 811,500 | | | | 1,379,388 | |
| Other securities | | | | | | | 2,977,210 | |
| | | | | | | | 10,343,459 | |
| | | Shares | | | Value
(000) | |
| Energy 7.01% | | | | | | | | |
| Royal Dutch Shell PLC, Class B (ADR) | | | 21,823,000 | | | $ | 1,585,441 | |
| Royal Dutch Shell PLC, Class B | | | 4,000,000 | | | | 143,246 | |
| Royal Dutch Shell PLC, Class A (ADR) | | | 497,977 | | | | 34,475 | |
| Royal Dutch Shell PLC, Class A | | | 130,129 | | | | 4,515 | |
| ConocoPhillips | | | 19,500,000 | | | | 1,357,590 | |
| EOG Resources, Inc. | | | 9,603,000 | | | | 1,194,901 | |
| Chevron Corp. | | | 7,094,755 | | | | 896,990 | |
| Noble Energy, Inc. | | | 18,490,000 | | | | 652,327 | |
| Suncor Energy Inc. | | | 14,451,346 | | | | 588,101 | |
| Other securities | | | | | | | 2,591,701 | |
| | | | | | | | 9,049,287 | |
| | | | | | | | | |
| Health care 6.88% | | | | | | | | |
| UnitedHealth Group Inc. | | | 13,158,500 | | | | 3,228,306 | |
| Merck & Co., Inc. | | | 17,600,000 | | | | 1,068,320 | |
| Aetna Inc. | | | 5,444,700 | | | | 999,103 | |
| Johnson & Johnson | | | 7,915,300 | | | | 960,443 | |
| Express Scripts Holding Co.1 | | | 10,865,755 | | | | 838,945 | |
| Other securities | | | | | | | 1,785,983 | |
| | | | | | | | 8,881,100 | |
| | | | | | | | | |
| Consumer staples 4.42% | | | | | | | | |
| Philip Morris International Inc. | | | 22,067,000 | | | | 1,781,689 | |
| Nestlé SA | | | 9,909,000 | | | | 769,466 | |
| Kraft Heinz Co. | | | 11,710,850 | | | | 735,676 | |
| Coca-Cola Co. | | | 15,695,019 | | | | 688,383 | |
| Other securities | | | | | | | 1,740,820 | |
| | | | | | | | 5,716,034 | |
| | | | | | | | | |
| Real estate 2.96% | | | | | | | | |
| Simon Property Group, Inc. REIT | | | 8,347,000 | | | | 1,420,576 | |
| Crown Castle International Corp. REIT | | | 5,595,800 | | | | 603,339 | |
| Other securities | | | | | | | 1,793,845 | |
| | | | | | | | 3,817,760 | |
| | | | | | | | | |
| Materials 2.73% | | | | | | | | |
| DowDuPont Inc. | | | 22,703,688 | | | | 1,496,627 | |
| LyondellBasell Industries NV | | | 5,329,100 | | | | 585,401 | |
| Other securities | | | | | | | 1,444,507 | |
| | | | | | | | 3,526,535 | |
| | | | | | | | | |
| Industrials 2.45% | | | | | | | | |
| Boeing Co. | | | 3,025,000 | | | | 1,014,918 | |
| Lockheed Martin Corp. | | | 3,380,000 | | | | 998,553 | |
| Other securities | | | | | | | 1,151,014 | |
| | | | | | | | 3,164,485 | |
| | | | | | | | | |
| Other 0.40% | | | | | | | | |
| Other securities | | | | | | | 518,530 | |
| Common stocks (continued) | | Shares | | | Value
(000) | |
| Miscellaneous 4.03% | | | | | | |
| Other common stocks in initial period of acquisition | | | | | | $ | 5,205,168 | |
| | | | | | | | | |
| Total common stocks (cost: $49,215,992,000) | | | | | | | 76,330,645 | |
| | | | | | | | | |
| Preferred securities 0.00% | | | | | | | | |
| Financials 0.00% | | | | | | | | |
| Other securities | | | | | | | 5,022 | |
| | | | | | | | | |
| Total preferred securities (cost: $5,208,000) | | | | | | | 5,022 | |
| | | | | | | | | |
| Convertible stocks 0.08% | | | | | | | | |
| Miscellaneous 0.08% | | | | | | | | |
| Other convertible stocks in initial period of acquisition | | | | | | | 99,900 | |
| | | | | | | | | |
| Total convertible stocks (cost: $105,498,000) | | | | | | | 99,900 | |
| Bonds, notes & other debt instruments 36.86% | | Principal amount
(000) | | | | |
| Corporate bonds & notes 13.57% | | | | | | | | |
| Financials 4.32% | | | | | | | | |
| Berkshire Hathaway Finance Corp. 1.30% 2019 | | $ | 15,320 | | | | 15,092 | |
| Berkshire Hathaway Inc. 2.00%–2.75% 2018–2023 | | | 21,340 | | | | 21,226 | |
| Wells Fargo & Co. 2.10%–4.60% 2020–20282 | | | 244,830 | | | | 237,660 | |
| Other securities | | | | | | | 5,299,081 | |
| | | | | | | | 5,573,059 | |
| | | | | | | | | |
| Health care 1.81% | | | | | | | | |
| UnitedHealth Group Inc. 2.125% 2021 | | | 26,195 | | | | 25,535 | |
| Other securities | | | | | | | 2,307,396 | |
| | | | | | | | 2,332,931 | |
| | | | | | | | | |
| Energy 1.53% | | | | | | | | |
| Shell International Finance BV 1.88%–2.25% 2020–2021 | | | 23,375 | | | | 22,790 | |
| Other securities | | | | | | | 1,958,304 | |
| | | | | | | | 1,981,094 | |
| | | | | | | | | |
| Consumer discretionary 1.38% | | | | | | | | |
| Amazon.com, Inc. 2.40%–3.80% 2023–2024 | | | 127,845 | | | | 124,727 | |
| Comcast Corp. 2.35%–6.45% 2026–2048 | | | 121,215 | | | | 114,461 | |
| Home Depot, Inc. 1.80%–5.95% 2020–2046 | | | 65,880 | | | | 67,844 | |
| NBC Universal Enterprise, Inc. 5.25% 20493 | | | 5,730 | | | | 5,802 | |
| Other securities | | | | | | | 1,473,515 | |
| | | | | | | | 1,786,349 | |
| | | | | | | | | |
| Consumer staples 1.30% | | | | | | | | |
| Philip Morris International Inc. 1.88%–4.25% 2020–2044 | | | 178,650 | | | | 173,181 | |
| Other securities | | | | | | | 1,501,280 | |
| | | | | | | | 1,674,461 | |
| | | | | | | | | |
| Utilities 1.16% | | | | | | | | |
| Berkshire Hathaway Energy Co. 2.40%–2.80% 2020–2023 | | | 20,355 | | | | 19,938 | |
| MidAmerican Energy Holdings Co. 2.40%–3.75% 2019–2027 | | | 46,835 | | | | 46,292 | |
| NV Energy, Inc 6.25% 2020 | | | 10,168 | | | | 10,864 | |
| PacifiCorp., First Mortgage Bonds 3.60%–5.65% 2018–2024 | | | 20,870 | | | | 21,036 | |
| | | Principal amount
(000) | | | Value
(000) | |
| Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series T, 3.375% 2023 | | $ | 14,000 | | | $ | 13,944 | |
| Other securities | | | | | | | 1,390,002 | |
| | | | | | | | 1,502,076 | |
| | | | | | | | | |
| Information technology 0.47% | | | | | | | | |
| Broadcom Ltd. 2.38%–3.88% 2020–2028 | | | 315,460 | | | | 301,762 | |
| Intel Corp. 3.70% 2025 | | | 22,000 | | | | 22,157 | |
| Microsoft Corp. 1.55%–4.20% 2021–2046 | | | 92,005 | | | | 91,179 | |
| Other securities | | | | | | | 191,794 | |
| | | | | | | | 606,892 | |
| | | | | | | | | |
| Other corporate bonds & notes 1.60% | | | | | | | | |
| Other securities | | | | | | | 2,070,779 | |
| | | | | | | | | |
| Total corporate bonds & notes | | | | | | | 17,527,641 | |
| | | | | | | | | |
| U.S. Treasury bonds & notes 13.42% | | | | | | | | |
| U.S. Treasury 11.41% | | | | | | | | |
| U.S. Treasury 2.375% 2020 | | | 660,867 | | | | 659,142 | |
| U.S. Treasury 2.50% 2020 | | | 760,000 | | | | 759,605 | |
| U.S. Treasury 2.25% 2024 | | | 670,750 | | | | 648,749 | |
| U.S. Treasury 2.50% 2025 | | | 1,109,800 | | | | 1,089,069 | |
| U.S. Treasury 2.875% 2025 | | | 724,229 | | | | 726,757 | |
| U.S. Treasury 3.00% 2048 | | | 717,093 | | | | 717,903 | |
| U.S. Treasury 1.13%–5.38% 2019–2048 | | | 10,343,882 | | | | 10,142,787 | |
| | | | | | | | 14,744,012 | |
| | | | | | | | | |
| U.S. Treasury inflation-protected securities 2.01% | | | | | | | | |
| U.S. Treasury Inflation-Protected Securities 0.13%–2.38% 2019–20484 | | | 2,700,347 | | | | 2,595,940 | |
| | | | | | | | | |
| Total U.S. Treasury bonds & notes | | | | | | | 17,339,952 | |
| | | | | | | | | |
| Mortgage-backed obligations 8.10% | | | | | | | | |
| Fannie Mae 0%–9.18% 2022–20485,6,7 | | | 5,001,190 | | | | 5,063,026 | |
| Freddie Mac 3.00%–6.50% 2027–20485,7 | | | 2,212,370 | | | | 2,235,090 | |
| Government National Mortgage Assn. 3.50%–6.00% 2038–20615,7 | | | 1,561,196 | | | | 1,597,503 | |
| Other securities | | | | | | | 1,567,953 | |
| | | | | | | | 10,463,572 | |
| | | | | | | | | |
| Asset-backed obligations 0.79% | | | | | | | | |
| Other securities | | | | | | | 1,020,675 | |
| | | | | | | | | |
| Bonds & notes of governments & government agencies outside the U.S. 0.45% | | | | | | | | |
| Other securities | | | | | | | 584,480 | |
| | | | | | | | | |
| Municipals 0.27% | | | | | | | | |
| Other securities | | | | | | | 342,166 | |
| | | | | | | | | |
| Federal agency bonds & notes 0.24% | | | | | | | | |
| Fannie Mae 2.00%–6.25% 2022–2029 | | | 79,510 | | | | 77,156 | |
| Other securities | | | | | | | 226,933 | |
| | | | | | | | 304,089 | |
| | | | | | | | | |
| Miscellaneous 0.02% | | | | | | | | |
| Other bonds & notes in initial period of acquisition | | | | | | | 29,206 | |
| | | | | | | | | |
| Total bonds, notes & other debt instruments (cost: $48,216,449,000) | | | | | | | 47,611,781 | |
| Short-term securities 4.61% | | Principal amount
(000) | | | Value
(000) | |
| Fannie Mae 1.32%–1.81% due 7/2/2018–7/24/2018 | | $ | 170,000 | | | $ | 169,909 | |
| Federal Home Loan Bank 1.55%–1.93% due 7/2/2018–9/28/2018 | | | 675,700 | | | | 674,476 | |
| U.S. Treasury Bills 1.53%–2.24% due 7/5/2018–6/20/2019 | | | 4,103,300 | | | | 4,068,659 | |
| Other securities | | | | | | | 1,046,693 | |
| | | | | | | | | |
| Total short-term securities (cost: $5,961,425,000) | | | | | | | 5,959,737 | |
| Total investment securities 100.65% (cost: $103,504,572,000) | | | | | | | 130,007,085 | |
| Other assets less liabilities (0.65)% | | | | | | | (838,902 | ) |
| | | | | | | | | |
| Net assets 100.00% | | | | | | $ | 129,168,183 | |
This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.
As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.
“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $149,629,000, which represented .12% of the net assets of the fund.
Investments in affiliates
A company is an affiliate of the fund under the Investment Company Act of 1940 if the fund’s holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund’s affiliated-company holdings is either shown in the summary investment portfolio or included in the value of “Other securities” under the respective industry sectors. Further details on such holdings and related transactions during the six months ended June 30, 2018, appear below.
| | | Beginning
shares | | | Additions | | | Reductions | | | Ending
shares | |
| Common stocks 0.31% | | | | | | | | | | | | | | | | |
| Information technology 0.00% | | | | | | | | | | | | | | | | |
| VeriSign, Inc.1,8 | | | 5,300,000 | | | | — | | | | 1,000,000 | | | | 4,300,000 | |
| Symantec Corp.8 | | | 32,026,000 | | | | — | | | | 5,014,194 | | | | 27,011,806 | |
| Materials 0.31% | | | | | | | | | | | | | | | | |
| Royal Gold, Inc. | | | 4,175,000 | | | | 79,500 | | | | — | | | | 4,254,500 | |
| | | | | | | | | | | | | | | | | |
| | | Net
realized
gain (loss)
(000) | | | Net
unrealized
appreciation
(depreciation)
(000) | | | Dividend
income
(000) | | | Value of
affiliates at
6/30/2018
(000) | |
| Common stocks 0.31% | | | | | | | | | | | | | | | | |
| Information technology 0.00% | | | | | | | | | | | | | | | | |
| VeriSign, Inc.1,8 | | $ | 54,849 | | | $ | 44,439 | | | $ | — | | | $ | — | |
| Symantec Corp.8 | | | (32,457 | ) | | | (211,060 | ) | | | 4,428 | | | | — | |
| | | | | | | | | | | | | | | | — | |
| | | Net
realized
gain (loss)
(000) | | | Net
unrealized
appreciation
(depreciation)
(000) | | | Dividend
income
(000) | | | Value of
affiliates at
6/30/2018
(000) | |
| Materials 0.31% | | | | | | | | | | | | |
| Royal Gold, Inc. | | $ | — | | | $ | 45,227 | | | $ | 2,109 | | | $ | 394,988 | |
| Total 0.31% | | $ | 22,392 | | | $ | (121,394 | ) | | $ | 6,537 | | | $ | 394,988 | |
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 | Step bond; coupon rate may change at a later date. |
| 3 | Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $5,406,269,000, which represented 4.19% of the net assets of the fund. |
| 4 | Index-linked bond whose principal amount moves with a government price index. |
| 5 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
| 6 | Coupon rate may change periodically. |
| 7 | Purchased on a TBA basis. |
| 8 | Unaffiliated issuer at 6/30/2018. |
Key to abbreviations
ADR = American Depositary Receipts
TBA = To-be-announced
See Notes to Financial Statements
Financial statements
Statement of assets and liabilities
at June 30, 2018 | unaudited
(dollars in thousands) |
| Assets: | | | | | | | | |
| Investment securities, at value: | | | | | | | | |
| Unaffiliated issuers (cost: $103,207,545) | | $ | 129,612,097 | | | | | |
| Affiliated issuers (cost: $297,027) | | | 394,988 | | | $ | 130,007,085 | |
| Cash | | | | | | | 29,088 | |
| Receivables for: | | | | | | | | |
| Sales of investments | | | 1,357,250 | | | | | |
| Sales of fund’s shares | | | 213,276 | | | | | |
| Dividends and interest | | | 436,914 | | | | 2,007,440 | |
| | | | | | | | 132,043,613 | |
| Liabilities: | | | | | | | | |
| Payables for: | | | | | | | | |
| Purchases of investments | | | 2,646,796 | | | | | |
| Repurchases of fund’s shares | | | 159,367 | | | | | |
| Investment advisory services | | | 23,571 | | | | | |
| Services provided by related parties | | | 34,420 | | | | | |
| Trustees’ deferred compensation | | | 4,099 | | | | | |
| Other | | | 7,177 | | | | 2,875,430 | |
| Net assets at June 30, 2018 | | | | | | $ | 129,168,183 | |
| | | | | | | | | |
| Net assets consist of: | | | | | | | | |
| Capital paid in on shares of beneficial interest | | | | | | $ | 97,984,872 | |
| Undistributed net investment income | | | | | | | 379,549 | |
| Undistributed net realized gain | | | | | | | 4,301,491 | |
| Net unrealized appreciation | | | | | | | 26,502,271 | |
| Net assets at June 30, 2018 | | | | | | $ | 129,168,183 | |
See Notes to Financial Statements
(dollars and shares in thousands, except per-share amounts)
Shares of beneficial interest issued and outstanding (no stated par value) —
unlimited shares authorized (4,762,782 total shares outstanding)
| | | Net assets | | | Shares
outstanding | | | Net asset value
per share | |
| Class A | | $ | 64,323,730 | | | | 2,369,871 | | | $ | 27.14 | |
| Class C | | | 8,817,832 | | | | 326,935 | | | | 26.97 | |
| Class T | | | 11 | | | | — | * | | | 27.14 | |
| Class F-1 | | | 4,832,325 | | | | 178,186 | | | | 27.12 | |
| Class F-2 | | | 10,155,621 | | | | 374,397 | | | | 27.13 | |
| Class F-3 | | | 3,078,378 | | | | 113,458 | | | | 27.13 | |
| Class 529-A | | | 3,927,666 | | | | 144,951 | | | | 27.10 | |
| Class 529-C | | | 792,637 | | | | 29,249 | | | | 27.10 | |
| Class 529-E | | | 176,413 | | | | 6,514 | | | | 27.08 | |
| Class 529-T | | | 11 | | | | — | * | | | 27.14 | |
| Class 529-F-1 | | | 191,351 | | | | 7,067 | | | | 27.08 | |
| Class R-1 | | | 122,242 | | | | 4,535 | | | | 26.95 | |
| Class R-2 | | | 1,199,738 | | | | 44,486 | | | | 26.97 | |
| Class R-2E | | | 66,992 | | | | 2,478 | | | | 27.04 | |
| Class R-3 | | | 3,241,612 | | | | 120,043 | | | | 27.00 | |
| Class R-4 | | | 6,080,946 | | | | 224,443 | | | | 27.09 | |
| Class R-5E | | | 136,362 | | | | 5,032 | | | | 27.10 | |
| Class R-5 | | | 1,972,131 | | | | 72,583 | | | | 27.17 | |
| Class R-6 | | | 20,052,185 | | | | 738,554 | | | | 27.15 | |
| * | Amount less than one thousand. |
See Notes to Financial Statements
Statement of operations
for the six months ended June 30, 2018 | unaudited
(dollars in thousands) |
| Investment income: | | | | | | | | |
| Income: | | | | | | | | |
| Dividends (net of non-U.S. taxes of $19,555; also includes $6,537 from affiliates) | | $ | 864,375 | | | | | |
| Interest | | | 728,817 | | | $ | 1,593,192 | |
| Fees and expenses*: | | | | | | | | |
| Investment advisory services | | | 140,086 | | | | | |
| Distribution services | | | 159,287 | | | | | |
| Transfer agent services | | | 47,114 | | | | | |
| Administrative services | | | 18,870 | | | | | |
| Reports to shareholders | | | 1,630 | | | | | |
| Registration statement and prospectus | | | 3,357 | | | | | |
| Trustees’ compensation | | | 352 | | | | | |
| Auditing and legal | | | 37 | | | | | |
| Custodian | | | 786 | | | | | |
| Other | | | 1,788 | | | | | |
| Total fees and expenses before waiver | | | 373,307 | | | | | |
| Less investment advisory services waiver | | | 34 | | | | | |
| Total fees and expenses after waiver | | | | | | | 373,273 | |
| Net investment income | | | | | | | 1,219,919 | |
| | | | | | | | | |
| Net realized gain and unrealized depreciation: | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | |
| Investments: | | | | | | | | |
| Unaffiliated issuers | | | 3,590,954 | | | | | |
| Affiliated issuers | | | 22,392 | | | | | |
| Currency transactions | | | (2,389 | ) | | | 3,610,957 | |
| Net unrealized depreciation on: | | | | | | | | |
| Investments (net of non-U.S. taxes of $238): | | | | | | | | |
| Unaffiliated issuers | | | (3,620,180 | ) | | | | |
| Affiliated issuers | | | (121,394 | ) | | | | |
| Currency translations | | | (226 | ) | | | (3,741,800 | ) |
| Net realized gain and unrealized depreciation | | | | | | | (130,843 | ) |
| Net increase in net assets resulting from operations | | | | | | $ | 1,089,076 | |
| * | Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements. |
See Notes to Financial Statements
| Statements of changes in net assets | |
| | (dollars in thousands) |
| | | Six months ended
June 30, 2018* | | | Year ended
December 31, 2017 | |
| Operations: | | | | | | | | |
| Net investment income | | $ | 1,219,919 | | | $ | 2,003,605 | |
| Net realized gain | | | 3,610,957 | | | | 5,273,455 | |
| Net unrealized (depreciation) appreciation | | | (3,741,800 | ) | | | 9,021,015 | |
| Net increase in net assets resulting from operations | | | 1,089,076 | | | | 16,298,075 | |
| | | | | | | | | |
| Dividends and distributions paid to shareholders: | | | | | | | | |
| Dividends from net investment income | | | (928,013 | ) | | | (2,059,266 | ) |
| Distributions from net realized gain on investments | | | (222,386 | ) | | | (4,336,303 | ) |
| Total dividends and distributions paid to shareholders | | | (1,150,399 | ) | | | (6,395,569 | ) |
| | | | | | | | | |
| Net capital share transactions | | | 4,167,433 | | | | 14,029,507 | |
| | | | | | | | | |
| Total increase in net assets | | | 4,106,110 | | | | 23,932,013 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 125,062,073 | | | | 101,130,060 | |
| End of period (including undistributed net investment income: $379,549 and $87,643, respectively) | | $ | 129,168,183 | | | $ | 125,062,073 | |
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 capital and income.
The fund has 19 share classes consisting of six retail share classes (Classes A, C, T, F-1, F-2 and F-3), five 529 college savings plan share classes (Classes 529-A, 529-C, 529-E, 529-T and 529-F-1) and eight retirement plan share classes (Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education. The retirement plan share classes are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described further in the following table:
| Share class | | Initial sales
charge | | Contingent deferred sales
charge upon redemption | | Conversion feature |
| Classes A and 529-A | | Up to 5.75% | | None (except 1% for certain redemptions within 18 months of purchase without an initial sales charge) | | None |
| Class C | | None | | 1% for redemptions within one year of purchase | | Class C converts to Class F-1 after 10 years |
| Class 529-C | | None | | 1% for redemptions within one year of purchase | | Class 529-C converts to Class 529-A after 10 years |
| Class 529-E | | None | | None | | None |
| Classes T and 529-T* | | Up to 2.50% | | None | | None |
| Classes F-1, F-2, F-3 and 529-F-1 | | None | | None | | None |
| Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6 | | None | | None | | None |
| * | Class T and 529-T shares are not available for purchase. |
Holders of all share classes have equal pro rata rights to the assets, dividends and liquidation proceeds of the fund. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution, transfer agent and administrative services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each share class.
2. Significant accounting policies
The fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The fund’s financial statements have been prepared to comply with U.S. generally accepted accounting
principles (“U.S. GAAP”). These principles require the fund’s investment adviser to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Subsequent events, if any, have been evaluated through the date of issuance in the preparation of the financial statements. The fund follows the significant accounting policies described in this section, as well as the valuation policies described in the next section on valuation.
Cash — Cash may include amounts held in an interest bearing deposit facility.
Security transactions and related investment income — Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations — Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, transfer agent and administrative services, are charged directly to the respective share class.
Dividends and distributions to shareholders — Dividends and distributions 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 supplied by one or more pricing vendors on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. The effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments in the fund’s statement of operations. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
3. Valuation
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by U.S. GAAP. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs — The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.
Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including short-term securities, are generally valued at prices obtained from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.
| Fixed-income class | | Examples of standard inputs |
| All | | Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”) |
| Corporate bonds & notes; convertible securities | | Standard inputs and underlying equity of the issuer |
| Bonds & notes of governments & government agencies | | Standard inputs and interest rate volatilities |
| Mortgage-backed; asset-backed obligations | | Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information |
| 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 |
When the fund’s investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or deemed to be not representative), fixed-income securities will be valued in good faith at the mean quoted bid and ask prices that are reasonably and timely available (or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described for either equity or fixed-income securities, depending on which method is deemed most appropriate by the fund’s investment adviser.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the fund’s investment adviser are fair valued as determined in good faith under fair valuation guidelines adopted by authority of the fund’s board of trustees as further described. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. In addition, the closing prices of equity securities that trade in markets outside U.S. time zones may be adjusted to reflect significant events that occur after the close of local trading but before the net asset value of each share class of the fund is determined. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.
Processes and structure — The fund’s board of trustees has delegated authority to the fund’s investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation teams. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees. The fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.
The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control self-evaluation program facilitated by the investment adviser’s compliance group.
Classifications — The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are
based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Certain securities trading outside the U.S. may transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of June 30, 2018 (dollars in thousands):
| | | Investment securities | |
| | | Level 1* | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common stocks: | | | | | | | | | | | | | | | | |
| Information technology | | $ | 15,304,046 | | | $ | — | | | $ | — | | | $ | 15,304,046 | |
| Financials | | | 10,660,328 | | | | 143,913 | | | | — | | | | 10,804,241 | |
| Consumer discretionary | | | 10,343,459 | | | | — | | | | — | | | | 10,343,459 | |
| Energy | | | 9,049,287 | | | | — | | | | — | | | | 9,049,287 | |
| Health care | | | 8,881,100 | | | | — | | | | — | | | | 8,881,100 | |
| Consumer staples | | | 5,716,034 | | | | — | | | | — | | | | 5,716,034 | |
| Real estate | | | 3,817,760 | | | | — | | | | — | | | | 3,817,760 | |
| Materials | | | 3,526,535 | | | | — | | | | — | | | | 3,526,535 | |
| Industrials | | | 3,164,485 | | | | — | | | | — | | | | 3,164,485 | |
| Other | | | 518,530 | | | | — | | | | — | | | | 518,530 | |
| Miscellaneous | | | 5,205,168 | | | | — | | | | — | | | | 5,205,168 | |
| Preferred securities | | | — | | | | 5,022 | | | | — | | | | 5,022 | |
| Convertible stocks | | | 99,900 | | | | — | | | | — | | | | 99,900 | |
| Bonds, notes & other debt instruments: | | | | | | | | | | | | | | | | |
| Corporate bonds & notes | | | — | | | | 17,526,754 | | | | 887 | | | | 17,527,641 | |
| U.S. Treasury bonds & notes | | | — | | | | 17,339,952 | | | | — | | | | 17,339,952 | |
| Mortgage-backed obligations | | | — | | | | 10,463,572 | | | | — | | | | 10,463,572 | |
| Asset-backed obligations | | | — | | | | 1,020,675 | | | | — | | | | 1,020,675 | |
| Bonds & notes of governments & government agencies outside the U.S. | | | — | | | | 584,480 | | | | — | | | | 584,480 | |
| Municipals | | | — | | | | 342,166 | | | | — | | | | 342,166 | |
| Federal agency bonds & notes | | | — | | | | 304,089 | | | | — | | | | 304,089 | |
| Miscellaneous | | | — | | | | 29,206 | | | | — | | | | 29,206 | |
| Short-term securities | | | — | | | | 5,959,737 | | | | — | | | | 5,959,737 | |
| Total | | $ | 76,286,632 | | | $ | 53,719,566 | | | $ | 887 | | | $ | 130,007,085 | |
| * | Securities with a value of $2,258,479,000, which represented 1.75% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading. |
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 — sometimes rapidly or unpredictably — due to various factors, including events or conditions affecting the general economy or particular industries; overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions; and currency exchange rate, interest rate and commodity price fluctuations.
Issuer risks — The prices of, and the income generated by, securities held by the fund may decline in response to various factors directly related to the issuers of such securities, including reduced demand for an issuer’s goods or services, poor management performance and strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives.
Investing in growth-oriented stocks — Growth-oriented common stocks and other equity-type securities (such as preferred stocks, convertible preferred stocks and convertible bonds) may involve larger price swings and greater potential for loss than other types of investments.
Investing in income-oriented stocks — Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available for dividend payments at, the companies in which the fund invests.
Investing in debt instruments — The prices of, and the income generated by, bonds and other debt securities held by the fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities.
Rising interest rates will generally cause the prices of bonds and other debt securities to fall. Falling interest rates may cause an issuer to redeem, call or refinance a debt security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities. Longer maturity debt securities generally have greater sensitivity to changes in interest rates and may be subject to greater price fluctuations than shorter maturity debt securities.
Bonds and other debt securities are also 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. Credit risk is gauged, in part, by the credit ratings of the debt securities in which the fund invests. However, ratings are only the opinions of the rating agencies issuing them and are not guarantees as to credit quality or an evaluation of market risk. The fund’s investment adviser relies on its own credit analysts to research issuers and issues in seeking to mitigate various credit and default risks.
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 that are not backed by the full faith and credit of the U.S. government are neither issued nor guaranteed by the U.S. government.
Investing in mortgage-related and other asset-backed securities — Mortgage-related securities, such as mortgage-backed securities, and other asset-backed securities, include debt obligations that represent interests in pools of mortgages or other income-bearing assets, such as consumer loans or receivables. Such securities often involve risks that are different from or more acute than the risks associated with investing in other types of debt securities. Mortgage-backed and other asset-backed securities are subject to changes in the payment patterns of borrowers of the underlying debt. When interest rates fall, borrowers are more likely to refinance or prepay their debt before its stated maturity. This may result in the fund having to reinvest the proceeds in lower yielding securities, effectively reducing the fund’s income. Conversely, if interest rates rise and borrowers repay their debt more slowly than expected, the time in which the mortgage-backed and other asset-backed securities are paid off could be extended, reducing the fund’s cash available for reinvestment in higher yielding securities.
Liquidity risk — Certain fund holdings may be deemed to be less liquid or illiquid because they cannot be readily sold without significantly impacting the value of the holdings. Liquidity risk may result from the lack of an active market for a holding, legal or contractual restrictions on resale, or the reduced number and capacity of market participants to make a market in such holding. Market prices for less liquid or illiquid holdings may be volatile, and reduced liquidity may have an adverse impact on the market price of such holdings. Additionally, the sale of less liquid or illiquid holdings may involve substantial delays (including delays in settlement) and additional costs and the fund may be unable to sell such holdings when necessary to meet its liquidity needs.
Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations or revenues outside the U.S., may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts, terrorism and war) in the countries or regions in which the issuers operate or generate revenue. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Issuers of these securities may be more susceptible to actions of foreign governments, such as the imposition of price controls or punitive taxes, that could adversely impact the value of these securities. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different accounting practices and different regulatory, legal and reporting standards and practices, and may be more difficult to value, than those in the U.S. In addition, the value of investments outside the U.S. may be reduced by foreign taxes, including foreign
withholding taxes on interest and dividends. Further, there may be increased risks of delayed settlement of securities purchased or sold by the fund. The risks of investing outside the U.S. may be heightened in connection with investments in emerging markets.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.
5. Certain investment techniques
Index-linked bonds — The fund has invested in index-linked bonds, which are fixed-income securities whose principal value is periodically adjusted to a government price index. Over the life of an index-linked bond, interest is paid on the adjusted principal value. Increases or decreases in the principal value of index-linked bonds are recorded as interest income in the fund’s statement of operations.
Mortgage dollar rolls — The fund has entered into mortgage dollar roll transactions in which the fund sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Mortgage dollar rolls are accounted for as purchase and sale transactions. Portfolio turnover rates excluding and including mortgage dollar rolls are presented at the end of the fund’s financial highlights table.
Collateral — The fund participates in a collateral program due to its use of future delivery contracts that calls for the fund to either receive or pledge highly liquid assets, such as cash or U.S. government securities, as collateral based on the net gain or loss on unsettled contracts by certain counterparties. The purpose of the collateral is to cover potential losses that could occur in the event that either party cannot meet its contractual obligation. Non-cash collateral pledged by the fund, if any, is disclosed in the fund’s investment portfolio, and cash collateral pledged by the fund, if any, is held in a segregated account with the fund’s custodian, which is reflected as pledged cash in the fund’s statement of assets and liabilities.
6. 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, 2018, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any significant interest or penalties.
The fund’s tax returns are not subject to examination by federal, state and, if applicable, non-U.S. tax authorities after the expiration of each jurisdiction’s statute of limitations, which is generally three years after the date of filing but can be extended in certain jurisdictions.
Non-U.S. taxation — Dividend and interest income are recorded net of non-U.S. taxes paid. The fund may file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. As a result of rulings from European courts, the fund filed for additional reclaims related to prior years. These reclaims are recorded when the amount is known and there are no significant uncertainties on collectability. Gains realized by the fund on the sale of securities in certain countries, if any, may be subject to non-U.S. taxes. If applicable, the fund records an estimated deferred tax liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
Distributions — Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to different treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; cost of investments sold; paydowns on fixed-income securities and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.
The components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2017, the components of distributable earnings on a tax basis were as follows (dollars in thousands):
| Undistributed ordinary income | | $ | 89,578 | |
| Undistributed long-term capital gains | | | 221,974 | |
As of June 30, 2018, the tax basis unrealized appreciation (depreciation) and cost of investments were as follows (dollars in thousands):
| Gross unrealized appreciation on investments | | $ | 28,897,152 | |
| Gross unrealized depreciation on investments | | | (1,950,454 | ) |
| Net unrealized appreciation on investments | | | 26,946,698 | |
| Cost of investments | | | 103,060,387 | |
Distributions paid were characterized for tax purposes as follows (dollars in thousands):
| | | Six months ended June 30, 2018 | | | Year ended December 31, 2017 | |
| Share class | | Ordinary
income | | | Long-term
capital gains | | | Total
dividends and
distributions
paid | | | Ordinary
income | | | Long-term
capital gains | | | Total
dividends and
distributions
paid | |
| Class A | | $ | 470,353 | | | $ | 110,863 | | | $ | 581,216 | | | $ | 1,091,907 | | | $ | 2,212,925 | | | $ | 3,304,832 | |
| Class B1 | | | | | | | | | | | | | | | — | | | | — | | | | — | |
| Class C | | | 30,493 | | | | 15,282 | | | | 45,775 | | | | 87,142 | | | | 309,066 | | | | 396,208 | |
| Class T2 | | | — | 3 | | | — | 3 | | | — | 3 | | | — | 3 | | | — | 3 | | | — | 3 |
| Class F-1 | | | 34,806 | | | | 8,656 | | | | 43,462 | | | | 80,879 | | | | 172,915 | | | | 253,794 | |
| Class F-2 | | | 78,336 | | | | 16,867 | | | | 95,203 | | | | 150,501 | | | | 296,493 | | | | 446,994 | |
| Class F-34 | | | 25,187 | | | | 5,186 | | | | 30,373 | | | | 31,279 | | | | 77,895 | | | | 109,174 | |
| Class 529-A | | | 27,173 | | | | 6,781 | | | | 33,954 | | | | 61,155 | | | | 133,574 | | | | 194,729 | |
| Class 529-B1 | | | | | | | | | | | | | | | — | | | | — | | | | — | |
| Class 529-C | | | 2,469 | | | | 1,369 | | | | 3,838 | | | | 8,420 | | | | 29,790 | | | | 38,210 | |
| Class 529-E | | | 1,014 | | | | 303 | | | | 1,317 | | | | 2,492 | | | | 6,074 | | | | 8,566 | |
| Class 529-T2 | | | — | 3 | | | — | 3 | | | — | 3 | | | — | 3 | | | — | 3 | | | — | 3 |
| Class 529-F-1 | | | 1,512 | | | | 327 | | | | 1,839 | | | | 3,159 | | | | 6,095 | | | | 9,254 | |
| Class R-1 | | | 440 | | | | 222 | | | | 662 | | | | 1,360 | | | | 4,762 | | | | 6,122 | |
| Class R-2 | | | 4,244 | | | | 2,096 | | | | 6,340 | | | | 12,663 | | | | 44,461 | | | | 57,124 | |
| Class R-2E | | | 314 | | | | 113 | | | | 427 | | | | 565 | | | | 1,909 | | | | 2,474 | |
| Class R-3 | | | 18,546 | | | | 5,675 | | | | 24,221 | | | | 50,139 | | | | 123,059 | | | | 173,198 | |
| Class R-4 | | | 43,515 | | | | 10,579 | | | | 54,094 | | | | 109,385 | | | | 223,836 | | | | 333,221 | |
| Class R-5E | | | 968 | | | | 235 | | | | 1,203 | | | | 376 | | | | 1,010 | | | | 1,386 | |
| Class R-5 | | | 17,014 | | | | 3,408 | | | | 20,422 | | | | 42,776 | | | | 76,038 | | | | 118,814 | |
| Class R-6 | | | 171,629 | | | | 34,424 | | | | 206,053 | | | | 325,068 | | | | 616,401 | | | | 941,469 | |
| Total | | $ | 928,013 | | | $ | 222,386 | | | $ | 1,150,399 | | | $ | 2,059,266 | | | $ | 4,336,303 | | | $ | 6,395,569 | |
| 1 | Class B and 529-B shares were fully liquidated on May 5, 2017. |
| 2 | Class T and 529-T shares began investment operations on April 7, 2017. |
| 3 | Amount less than one thousand. |
| 4 | Class F-3 shares began investment operations on January 27, 2017. |
7. Fees and transactions with related parties
CRMC, the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. (“AFD”), the principal underwriter of the fund’s shares, and American Funds Service Company® (“AFS”), the fund’s transfer agent. CRMC, AFD and AFS are considered related parties to the fund.
Investment advisory services — The fund has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. At the beginning of the year, these fees were based on a series of decreasing annual rates beginning with 0.420% on the first $500 million of average daily net assets and decreasing to 0.207% on such assets in excess of $89 billion. On December 7, 2017, the fund’s board of trustees approved an amended investment advisory and service agreement effective February 1, 2018, decreasing the annual rate to 0.204% on average daily net assets in excess of
$115 billion. CRMC voluntarily reduced investment advisory services fees to the approved rate in advance of the effective date. For the six months ended June 30, 2018, total investment advisory services fees waived by CRMC were $34,000. As a result, the fee of $140,086,000 shown on the statement of operations, which was equivalent to an annualized rate of 0.222% of average daily net assets, was reduced to $140,052,000, which was equivalent to an annualized rate of 0.222% of average daily net assets.
Class-specific fees and expenses — Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are further described below:
Distribution services — The fund has plans of distribution for all share classes, except Class F-2, F-3, R-5E, R-5 and R-6 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted in this section. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
| Share class | | Currently approved limits | | Plan limits | |
| Class A | | | 0.25 | % | | | 0.25 | % | |
| Class 529-A | | | 0.25 | | | | 0.50 | | |
| Classes C, 529-C and R-1 | | | 1.00 | | | | 1.00 | | |
| Class R-2 | | | 0.75 | | | | 1.00 | | |
| Class R-2E | | | 0.60 | | | | 0.85 | | |
| Classes 529-E and R-3 | | | 0.50 | | | | 0.75 | | |
| Classes T, F-1, 529-T, 529-F-1 and R-4 | | | 0.25 | | | | 0.50 | | |
For Class A and 529-A shares, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These share classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limits are not exceeded. As of June 30, 2018, unreimbursed expenses subject to reimbursement totaled $1,402,000 for Class A shares. There were no unreimbursed expenses subject to reimbursement for Class 529-A shares.
Transfer agent services — The fund has a shareholder services agreement with AFS under which the fund compensates AFS for providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.
Administrative services — The fund has an administrative services agreement with CRMC under which the fund compensates CRMC for providing administrative services to Class A, C, T, F, 529 and R shares. These services include, but are not limited to, coordinating, monitoring, assisting and overseeing third parties that provide services to fund shareholders. Under the agreement, Class A shares pay an annual fee of 0.01% and Class C, T, F, 529 and R shares pay an annual fee of 0.05% of their respective average daily net assets.
529 plan services — Each 529 share class is subject to service fees to compensate the Virginia College Savings Plan (“Virginia529”) for its oversight and administration of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $20 billion of the net assets invested in the Class 529 shares of the American Funds and decreasing to 0.03% on such assets in excess of $100 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. The fee is included in other expenses in the fund’s statement of operations. Virginia529 is not considered a related party to the fund.
For the six months ended June 30, 2018, class-specific expenses under the agreements were as follows (dollars in thousands):
| Share class | | Distribution
services | | | Transfer agent
services | | | Administrative
services | | | 529 plan
services | |
| Class A | | | $79,272 | | | | $25,987 | | | | $3,171 | | | | Not applicable | |
| Class C | | | 43,652 | | | | 3,541 | | | | 2,185 | | | | Not applicable | |
| Class T | | | — | | | | — | * | | | — | * | | | Not applicable | |
| Class F-1 | | | 6,130 | | | | 2,848 | | | | 1,232 | | | | Not applicable | |
| Class F-2 | | | Not applicable | | | | 4,698 | | | | 2,300 | | | | Not applicable | |
| Class F-3 | | | Not applicable | | | | 94 | | | | 689 | | | | Not applicable | |
| Class 529-A | | | 4,478 | | | | 1,351 | | | | 963 | | | | $1,271 | |
| Class 529-C | | | 3,974 | | | | 289 | | | | 200 | | | | 264 | |
| Class 529-E | | | 428 | | | | 35 | | | | 43 | | | | 57 | |
| Class 529-T | | | — | | | | — | * | | | — | * | | | — | * |
| Class 529-F-1 | | | — | | | | 63 | | | | 46 | | | | 61 | |
| Class R-1 | | | 642 | | | | 60 | | | | 32 | | | | Not applicable | |
| Class R-2 | | | 4,508 | | | | 2,013 | | | | 301 | | | | Not applicable | |
| Class R-2E | | | 186 | | | | 60 | | | | 15 | | | | Not applicable | |
| Class R-3 | | | 8,328 | | | | 2,454 | | | | 834 | | | | Not applicable | |
| Class R-4 | | | 7,689 | | | | 3,020 | | | | 1,539 | | | | Not applicable | |
| Class R-5E | | | Not applicable | | | | 51 | | | | 22 | | | | Not applicable | |
| Class R-5 | | | Not applicable | | | | 493 | | | | 502 | | | | Not applicable | |
| Class R-6 | | | Not applicable | | | | 57 | | | | 4,796 | | | | Not applicable | |
| Total class-specific expenses | | | $159,287 | | | | $47,114 | | | | $18,870 | | | | $1,653 | |
| * | Amount less than one thousand. |
Trustees’ deferred compensation — Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation of $352,000 in the fund’s statement of operations reflects $215,000 in current fees (either paid in cash or deferred) and a net increase of $137,000 in the value of the deferred amounts.
Affiliated officers and trustees — Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFD and AFS. No affiliated officers or trustees received any compensation directly from the fund.
Security transactions with related funds — The fund may purchase from, or sell securities to, other funds managed by CRMC (or funds managed by certain affiliates of CRMC) under procedures adopted by the fund’s board of trustees. The funds involved in such transactions are considered related by virtue of having a common investment adviser (or affiliated investment advisers), common trustees and/or common officers. When such transactions occur, each transaction is executed at the current market price of the security and no brokerage commissions or fees are paid in accordance with Rule 17a-7 of the 1940 Act.
Interfund lending — Pursuant to an exemptive order issued by the SEC, the fund, along with other CRMC-managed funds (or funds managed by certain affiliates of CRMC), may participate in an interfund lending program. The program provides an alternate credit facility that permits the funds to lend or borrow cash for temporary purposes directly to or from one another, subject to the conditions of the exemptive order. The fund did not lend or borrow cash through the interfund lending program at any time during the six months ended June 30, 2018.
8. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
| | | Sales1 | | | Reinvestments of
dividends and distributions | | | Repurchases1 | | | Net increase
(decrease) | |
| Share class | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
| | | | | | | | | | | | | | | | | | | |
| Six months ended June 30, 2018 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 4,238,997 | | | | 155,809 | | | $ | 573,036 | | | | 21,000 | | | $ | (4,026,682 | ) | | | (148,008 | ) | | $ | 785,351 | | | | 28,801 | |
| Class C | | | 937,457 | | | | 34,700 | | | | 45,181 | | | | 1,665 | | | | (977,339 | ) | | | (36,189 | ) | | | 5,299 | | | | 176 | |
| Class T | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Class F-1 | | | 644,591 | | | | 23,687 | | | | 42,600 | | | | 1,562 | | | | (811,122 | ) | | | (29,773 | ) | | | (123,931 | ) | | | (4,524 | ) |
| Class F-2 | | | 2,416,912 | | | | 88,896 | | | | 91,396 | | | | 3,352 | | | | (1,061,498 | ) | | | (39,005 | ) | | | 1,446,810 | | | | 53,243 | |
| Class F-3 | | | 949,638 | | | | 34,839 | | | | 29,931 | | | | 1,097 | | | | (256,347 | ) | | | (9,449 | ) | | | 723,222 | | | | 26,487 | |
| Class 529-A | | | 289,421 | | | | 10,643 | | | | 33,946 | | | | 1,246 | | | | (250,827 | ) | | | (9,219 | ) | | | 72,540 | | | | 2,670 | |
| Class 529-C | | | 65,021 | | | | 2,394 | | | | 3,839 | | | | 141 | | | | (98,441 | ) | | | (3,619 | ) | | | (29,581 | ) | | | (1,084 | ) |
| Class 529-E | | | 13,246 | | | | 488 | | | | 1,316 | | | | 48 | | | | (12,501 | ) | | | (461 | ) | | | 2,061 | | | | 75 | |
| Class 529-T | | | — | | | | — | | | | — | 2 | | | — | 2 | | | — | | | | — | | | | — | 2 | | | — | 2 |
| Class 529-F-1 | | | 25,336 | | | | 934 | | | | 1,839 | | | | 67 | | | | (13,272 | ) | | | (489 | ) | | | 13,903 | | | | 512 | |
| Class R-1 | | | 15,268 | | | | 566 | | | | 658 | | | | 24 | | | | (27,633 | ) | | | (1,026 | ) | | | (11,707 | ) | | | (436 | ) |
| Class R-2 | | | 155,553 | | | | 5,748 | | | | 6,337 | | | | 234 | | | | (216,499 | ) | | | (8,017 | ) | | | (54,609 | ) | | | (2,035 | ) |
| Class R-2E | | | 23,265 | | | | 860 | | | | 428 | | | | 16 | | | | (14,003 | ) | | | (516 | ) | | | 9,690 | | | | 360 | |
| Class R-3 | | | 364,476 | | | | 13,460 | | | | 24,206 | | | | 892 | | | | (606,531 | ) | | | (22,409 | ) | | | (217,849 | ) | | | (8,057 | ) |
| Class R-4 | | | 538,719 | | | | 19,737 | | | | 54,087 | | | | 1,986 | | | | (861,060 | ) | | | (31,704 | ) | | | (268,254 | ) | | | (9,981 | ) |
| Class R-5E | | | 109,433 | | | | 4,030 | | | | 1,204 | | | | 44 | | | | (6,262 | ) | | | (232 | ) | | | 104,375 | | | | 3,842 | |
| Class R-5 | | | 183,610 | | | | 6,742 | | | | 20,388 | | | | 747 | | | | (321,681 | ) | | | (11,813 | ) | | | (117,683 | ) | | | (4,324 | ) |
| Class R-6 | | | 2,740,786 | | | | 100,556 | | | | 206,040 | | | | 7,551 | | | | (1,119,030 | ) | | | (41,109 | ) | | | 1,827,796 | | | | 66,998 | |
| Total net increase (decrease) | | $ | 13,711,729 | | | | 504,089 | | | $ | 1,136,432 | | | | 41,672 | | | $ | (10,680,728 | ) | | | (393,038 | ) | | $ | 4,167,433 | | | | 152,723 | |
See next page for footnotes.
| | | Sales | | | Reinvestments of
dividends and distributions | | | Repurchases | | | Net increase
(decrease) | |
| Share class | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
| | | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2017 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 8,554,152 | | | | 324,896 | | | $ | 3,259,567 | | | | 121,254 | | | $ | (8,902,605 | ) | | | (337,449 | ) | | $ | 2,911,114 | | | | 108,701 | |
| Class B3 | | | 194 | | | | 7 | | | | — | | | | — | | | | (68,161 | ) | | | (2,669 | ) | | | (67,967 | ) | | | (2,662 | ) |
| Class C | | | 1,940,598 | | | | 74,227 | | | | 390,976 | | | | 14,598 | | | | (2,017,593 | ) | | | (76,974 | ) | | | 313,981 | | | | 11,851 | |
| Class T4 | | | 10 | | | | — | 2 | | | — | | | | — | | | | — | | | | — | | | | 10 | | | | — | 2 |
| Class F-1 | | | 1,373,792 | | | | 52,244 | | | | 248,862 | | | | 9,262 | | | | (1,158,108 | ) | | | (43,829 | ) | | | 464,546 | | | | 17,677 | |
| Class F-2 | | | 4,858,604 | | | | 184,594 | | | | 429,964 | | | | 15,997 | | | | (2,875,175 | ) | | | (109,471 | ) | | | 2,413,393 | | | | 91,120 | |
| Class F-35 | | | 2,384,260 | | | | 90,293 | | | | 106,878 | | | | 3,961 | | | | (196,255 | ) | | | (7,283 | ) | | | 2,294,883 | | | | 86,971 | |
| Class 529-A | | | 734,731 | | | | 27,326 | | | | 194,672 | | | | 7,251 | | | | (477,540 | ) | | | (18,058 | ) | | | 451,863 | | | | 16,519 | |
| Class 529-B3 | | | 42 | | | | 2 | | | | — | | | | — | | | | (9,221 | ) | | | (361 | ) | | | (9,179 | ) | | | (359 | ) |
| Class 529-C | | | 148,336 | | | | 5,642 | | | | 38,199 | | | | 1,422 | | | | (439,474 | ) | | | (16,130 | ) | | | (252,939 | ) | | | (9,066 | ) |
| Class 529-E | | | 25,313 | | | | 960 | | | | 8,566 | | | | 319 | | | | (26,402 | ) | | | (998 | ) | | | 7,477 | | | | 281 | |
| Class 529-T4 | | | 10 | | | | — | 2 | | | 1 | | | | — | 2 | | | — | | | | — | | | | 11 | | | | — | 2 |
| Class 529-F-1 | | | 45,111 | | | | 1,710 | | | | 9,252 | | | | 345 | | | | (24,929 | ) | | | (942 | ) | | | 29,434 | | | | 1,113 | |
| Class R-1 | | | 24,816 | | | | 953 | | | | 6,116 | | | | 229 | | | | (63,902 | ) | | | (2,460 | ) | | | (32,970 | ) | | | (1,278 | ) |
| Class R-2 | | | 306,621 | | | | 11,713 | | | | 57,095 | | | | 2,133 | | | | (461,251 | ) | | | (17,655 | ) | | | (97,535 | ) | | | (3,809 | ) |
| Class R-2E | | | 50,383 | | | | 1,910 | | | | 2,473 | | | | 92 | | | | (15,219 | ) | | | (580 | ) | | | 37,637 | | | | 1,422 | |
| Class R-3 | | | 776,489 | | | | 29,784 | | | | 172,985 | | | | 6,465 | | | | (1,149,150 | ) | | | (43,804 | ) | | | (199,676 | ) | | | (7,555 | ) |
| Class R-4 | | | 1,238,514 | | | | 47,450 | | | | 333,197 | | | | 12,420 | | | | (1,709,546 | ) | | | (64,917 | ) | | | (137,835 | ) | | | (5,047 | ) |
| Class R-5E | | | 30,784 | | | | 1,154 | | | | 1,385 | | | | 51 | | | | (2,549 | ) | | | (94 | ) | | | 29,620 | | | | 1,111 | |
| Class R-5 | | | 446,667 | | | | 16,964 | | | | 118,669 | | | | 4,414 | | | | (645,809 | ) | | | (24,452 | ) | | | (80,473 | ) | | | (3,074 | ) |
| Class R-6 | | | 6,688,340 | | | | 254,080 | | | | 941,421 | | | | 35,000 | | | | (1,675,649 | ) | | | (63,182 | ) | | | 5,954,112 | | | | 225,898 | |
| Total net increase (decrease) | | $ | 29,627,767 | | | | 1,125,909 | | | $ | 6,320,278 | | | | 235,213 | | | $ | (21,918,538 | ) | | | (831,308 | ) | | $ | 14,029,507 | | | | 529,814 | |
| 1 | Includes exchanges between share classes of the fund. |
| 2 | Amount less than one thousand. |
| 3 | Class B and 529-B shares were fully liquidated on May 5, 2017. |
| 4 | Class T and 529-T shares began investment operations on April 7, 2017. |
| 5 | Class F-3 shares began investment operations on January 27, 2017. |
9. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $47,630,223,000 and $45,499,528,000, respectively, during the six months ended June 30, 2018.
Financial highlights
| | | | | | Income from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income | | | Net (losses) gains
on securities
(both realized
and unrealized) | | | Total from
investment
operations | |
| Class A: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | $ | 27.15 | | | $ | .26 | | | $ | (.02 | ) | | $ | .24 | |
| 12/31/2017 | | | 24.81 | | | | .48 | | | | 3.33 | | | | 3.81 | |
| 12/31/2016 | | | 23.83 | | | | .41 | | | | 1.62 | | | | 2.03 | |
| 12/31/2015 | | | 24.75 | | | | .42 | | | | — | 7 | | | .42 | |
| 12/31/2014 | | | 24.42 | | | | .41 | | | | 1.75 | | | | 2.16 | |
| 12/31/2013 | | | 20.40 | | | | .36 | | | | 4.04 | | | | 4.40 | |
| Class C: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 26.98 | | | | .16 | | | | (.03 | ) | | | .13 | |
| 12/31/2017 | | | 24.66 | | | | .26 | | | | 3.32 | | | | 3.58 | |
| 12/31/2016 | | | 23.71 | | | | .21 | | | | 1.60 | | | | 1.81 | |
| 12/31/2015 | | | 24.63 | | | | .22 | | | | .01 | | | | .23 | |
| 12/31/2014 | | | 24.30 | | | | .21 | | | | 1.75 | | | | 1.96 | |
| 12/31/2013 | | | 20.31 | | | | .19 | | | | 4.00 | | | | 4.19 | |
| Class T: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.15 | | | | .29 | | | | (.02 | ) | | | .27 | |
| 12/31/20173,10 | | | 25.77 | | | | .41 | | | | 2.38 | | | | 2.79 | |
| Class F-1: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.13 | | | | .25 | | | | (.02 | ) | | | .23 | |
| 12/31/2017 | | | 24.79 | | | | .45 | | | | 3.33 | | | | 3.78 | |
| 12/31/2016 | | | 23.82 | | | | .39 | | | | 1.61 | | | | 2.00 | |
| 12/31/2015 | | | 24.74 | | | | .40 | | | | .01 | | | | .41 | |
| 12/31/2014 | | | 24.41 | | | | .39 | | | | 1.75 | | | | 2.14 | |
| 12/31/2013 | | | 20.39 | | | | .36 | | | | 4.03 | | | | 4.39 | |
| Class F-2: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.13 | | | | .29 | | | | (.01 | ) | | | .28 | |
| 12/31/2017 | | | 24.79 | | | | .53 | | | | 3.32 | | | | 3.85 | |
| 12/31/2016 | | | 23.82 | | | | .46 | | | | 1.61 | | | | 2.07 | |
| 12/31/2015 | | | 24.74 | | | | .47 | | | | — | 7 | | | .47 | |
| 12/31/2014 | | | 24.41 | | | | .46 | | | | 1.75 | | | | 2.21 | |
| 12/31/2013 | | | 20.39 | | | | .41 | | | | 4.04 | | | | 4.45 | |
| Class F-3: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.14 | | | | .30 | | | | (.02 | ) | | | .28 | |
| 12/31/20173,11 | | | 25.38 | | | | .53 | | | | 2.77 | | | | 3.30 | |
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income) | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return2 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (.20 | ) | | $ | (.05 | ) | | $ | (.25 | ) | | $ | 27.14 | | | | .87 | %5 | | $ | 64,324 | | | | .57 | %6 | | | 1.95 | %6 |
| | (.49 | ) | | | (.98 | ) | | | (1.47 | ) | | | 27.15 | | | | 15.47 | | | | 63,563 | | | | .57 | | | | 1.80 | |
| | (.44 | ) | | | (.61 | ) | | | (1.05 | ) | | | 24.81 | | | | 8.62 | | | | 55,379 | | | | .59 | | | | 1.67 | |
| | (.40 | ) | | | (.94 | ) | | | (1.34 | ) | | | 23.83 | | | | 1.72 | | | | 49,215 | | | | .58 | | | | 1.69 | |
| | (.39 | ) | | | (1.44 | ) | | | (1.83 | ) | | | 24.75 | | | | 8.85 | | | | 46,917 | | | | .59 | | | | 1.62 | |
| | (.38 | ) | | | — | | | | (.38 | ) | | | 24.42 | | | | 21.73 | | | | 42,735 | | | | .61 | | | | 1.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.09 | ) | | | (.05 | ) | | | (.14 | ) | | | 26.97 | | | | .48 | 5 | | | 8,818 | | | | 1.36 | 6 | | | 1.16 | 6 |
| | (.28 | ) | | | (.98 | ) | | | (1.26 | ) | | | 26.98 | | | | 14.58 | | | | 8,816 | | | | 1.37 | | | | 1.01 | |
| | (.25 | ) | | | (.61 | ) | | | (.86 | ) | | | 24.66 | | | | 7.70 | | | | 7,767 | | | | 1.38 | | | | .88 | |
| | (.21 | ) | | | (.94 | ) | | | (1.15 | ) | | | 23.71 | | | | .93 | | | | 6,173 | | | | 1.38 | | | | .90 | |
| | (.19 | ) | | | (1.44 | ) | | | (1.63 | ) | | | 24.63 | | | | 8.03 | | | | 5,574 | | | | 1.39 | | | | .83 | |
| | (.20 | ) | | | — | | | | (.20 | ) | | | 24.30 | | | | 20.72 | | | | 5,247 | | | | 1.41 | | | | .83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.23 | ) | | | (.05 | ) | | | (.28 | ) | | | 27.14 | | | | .98 | 5,8 | | | — | 9 | | | .35 | 6,8 | | | 2.18 | 6,8 |
| | (.43 | ) | | | (.98 | ) | | | (1.41 | ) | | | 27.15 | | | | 10.91 | 5,8 | | | — | 9 | | | .36 | 6,8 | | | 2.08 | 6,8 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.19 | ) | | | (.05 | ) | | | (.24 | ) | | | 27.12 | | | | .83 | 5 | | | 4,832 | | | | .65 | 6 | | | 1.88 | 6 |
| | (.46 | ) | | | (.98 | ) | | | (1.44 | ) | | | 27.13 | | | | 15.40 | | | | 4,957 | | | | .65 | | | | 1.72 | |
| | (.42 | ) | | | (.61 | ) | | | (1.03 | ) | | | 24.79 | | | | 8.50 | | | | 4,091 | | | | .66 | | | | 1.60 | |
| | (.39 | ) | | | (.94 | ) | | | (1.33 | ) | | | 23.82 | | | | 1.67 | | | | 3,367 | | | | .65 | | | | 1.63 | |
| | (.37 | ) | | | (1.44 | ) | | | (1.81 | ) | | | 24.74 | | | | 8.80 | | | | 2,841 | | | | .65 | | | | 1.57 | |
| | (.37 | ) | | | — | | | | (.37 | ) | | | 24.41 | | | | 21.70 | | | | 2,471 | | | | .66 | | | | 1.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.23 | ) | | | (.05 | ) | | | (.28 | ) | | | 27.13 | | | | 1.00 | 5 | | | 10,156 | | | | .38 | 6 | | | 2.15 | 6 |
| | (.53 | ) | | | (.98 | ) | | | (1.51 | ) | | | 27.13 | | | | 15.69 | | | | 8,714 | | | | .39 | | | | 1.99 | |
| | (.49 | ) | | | (.61 | ) | | | (1.10 | ) | | | 24.79 | | | | 8.80 | | | | 5,703 | | | | .39 | | | | 1.88 | |
| | (.45 | ) | | | (.94 | ) | | | (1.39 | ) | | | 23.82 | | | | 1.92 | | | | 2,634 | | | | .39 | | | | 1.89 | |
| | (.44 | ) | | | (1.44 | ) | | | (1.88 | ) | | | 24.74 | | | | 9.08 | | | | 1,869 | | | | .39 | | | | 1.83 | |
| | (.43 | ) | | | — | | | | (.43 | ) | | | 24.41 | | | | 21.99 | | | | 768 | | | | .41 | | | | 1.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.24 | ) | | | (.05 | ) | | | (.29 | ) | | | 27.13 | | | | 1.01 | 5 | | | 3,078 | | | | .29 | 6 | | | 2.26 | 6 |
| | (.56 | ) | | | (.98 | ) | | | (1.54 | ) | | | 27.14 | | | | 13.17 | 5 | | | 2,361 | | | | .29 | 6 | | | 2.11 | 6 |
See end of table for footnotes.
Financial highlights (continued)
| | | | | | Income from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income | | | Net (losses) gains
on securities
(both realized
and unrealized) | | | Total from
investment
operations | |
| Class 529-A: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | $ | 27.11 | | | $ | .25 | | | $ | (.02 | ) | | $ | .23 | |
| 12/31/2017 | | | 24.77 | | | | .46 | | | | 3.33 | | | | 3.79 | |
| 12/31/2016 | | | 23.80 | | | | .39 | | | | 1.61 | | | | 2.00 | |
| 12/31/2015 | | | 24.72 | | | | .39 | | | | .01 | | | | .40 | |
| 12/31/2014 | | | 24.39 | | | | .38 | | | | 1.75 | | | | 2.13 | |
| 12/31/2013 | | | 20.38 | | | | .34 | | | | 4.03 | | | | 4.37 | |
| Class 529-C: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.11 | | | | .15 | | | | (.03 | ) | | | .12 | |
| 12/31/2017 | | | 24.75 | | | | .25 | | | | 3.33 | | | | 3.58 | |
| 12/31/2016 | | | 23.79 | | | | .20 | | | | 1.60 | | | | 1.80 | |
| 12/31/2015 | | | 24.70 | | | | .20 | | | | .02 | | | | .22 | |
| 12/31/2014 | | | 24.38 | | | | .19 | | | | 1.74 | | | | 1.93 | |
| 12/31/2013 | | | 20.37 | | | | .17 | | | | 4.03 | | | | 4.20 | |
| Class 529-E: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.09 | | | | .22 | | | | (.02 | ) | | | .20 | |
| 12/31/2017 | | | 24.76 | | | | .39 | | | | 3.32 | | | | 3.71 | |
| 12/31/2016 | | | 23.79 | | | | .33 | | | | 1.61 | | | | 1.94 | |
| 12/31/2015 | | | 24.71 | | | | .33 | | | | .01 | | | | .34 | |
| 12/31/2014 | | | 24.38 | | | | .32 | | | | 1.75 | | | | 2.07 | |
| 12/31/2013 | | | 20.37 | | | | .29 | | | | 4.02 | | | | 4.31 | |
| Class 529-T: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.15 | | | | .28 | | | | (.02 | ) | | | .26 | |
| 12/31/20173,10 | | | 25.77 | | | | .40 | | | | 2.38 | | | | 2.78 | |
| Class 529-F-1: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.09 | | | | .28 | | | | (.02 | ) | | | .26 | |
| 12/31/2017 | | | 24.75 | | | | .52 | | | | 3.33 | | | | 3.85 | |
| 12/31/2016 | | | 23.78 | | | | .44 | | | | 1.62 | | | | 2.06 | |
| 12/31/2015 | | | 24.71 | | | | .45 | | | | (.01 | ) | | | .44 | |
| 12/31/2014 | | | 24.37 | | | | .44 | | | | 1.76 | | | | 2.20 | |
| 12/31/2013 | | | 20.36 | | | | .39 | | | | 4.03 | | | | 4.42 | |
| Class R-1: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 26.97 | | | | .15 | | | | (.03 | ) | | | .12 | |
| 12/31/2017 | | | 24.64 | | | | .26 | | | | 3.32 | | | | 3.58 | |
| 12/31/2016 | | | 23.68 | | | | .22 | | | | 1.60 | | | | 1.82 | |
| 12/31/2015 | | | 24.61 | | | | .22 | | | | (.01 | ) | | | .21 | |
| 12/31/2014 | | | 24.28 | | | | .21 | | | | 1.75 | | | | 1.96 | |
| 12/31/2013 | | | 20.29 | | | | .19 | | | | 4.01 | | | | 4.20 | |
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income) | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return2 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (.19 | ) | | $ | (.05 | ) | | $ | (.24 | ) | | $ | 27.10 | | | | .83 | %5 | | $ | 3,928 | | | | .65 | %6 | | | 1.87 | %6 |
| | (.47 | ) | | | (.98 | ) | | | (1.45 | ) | | | 27.11 | | | | 15.42 | | | | 3,857 | | | | .65 | | | | 1.73 | |
| | (.42 | ) | | | (.61 | ) | | | (1.03 | ) | | | 24.77 | | | | 8.50 | | | | 3,115 | | | | .67 | | | | 1.59 | |
| | (.38 | ) | | | (.94 | ) | | | (1.32 | ) | | | 23.80 | | | | 1.63 | | | | 2,861 | | | | .68 | | | | 1.60 | |
| | (.36 | ) | | | (1.44 | ) | | | (1.80 | ) | | | 24.72 | | | | 8.76 | | | | 2,831 | | | | .68 | | | | 1.53 | |
| | (.36 | ) | | | — | | | | (.36 | ) | | | 24.39 | | | | 21.60 | | | | 2,599 | | | | .70 | | | | 1.53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.08 | ) | | | (.05 | ) | | | (.13 | ) | | | 27.10 | | | | .45 | 5 | | | 793 | | | | 1.41 | 6 | | | 1.10 | 6 |
| | (.24 | ) | | | (.98 | ) | | | (1.22 | ) | | | 27.11 | | | | 14.55 | | | | 822 | | | | 1.42 | | | | .96 | |
| | (.23 | ) | | | (.61 | ) | | | (.84 | ) | | | 24.75 | | | | 7.63 | | | | 975 | | | | 1.44 | | | | .82 | |
| | (.19 | ) | | | (.94 | ) | | | (1.13 | ) | | | 23.79 | | | | .88 | | | | 905 | | | | 1.45 | | | | .83 | |
| | (.17 | ) | | | (1.44 | ) | | | (1.61 | ) | | | 24.70 | | | | 7.90 | | | | 905 | | | | 1.46 | | | | .76 | |
| | (.19 | ) | | | — | | | | (.19 | ) | | | 24.38 | | | | 20.68 | | | | 841 | | | | 1.48 | | | | .76 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.16 | ) | | | (.05 | ) | | | (.21 | ) | | | 27.08 | | | | .72 | 5 | | | 176 | | | | .88 | 6 | | | 1.64 | 6 |
| | (.40 | ) | | | (.98 | ) | | | (1.38 | ) | | | 27.09 | | | | 15.11 | | | | 175 | | | | .89 | | | | 1.49 | |
| | (.36 | ) | | | (.61 | ) | | | (.97 | ) | | | 24.76 | | | | 8.24 | | | | 153 | | | | .91 | | | | 1.35 | |
| | (.32 | ) | | | (.94 | ) | | | (1.26 | ) | | | 23.79 | | | | 1.38 | | | | 142 | | | | .92 | | | | 1.36 | |
| | (.30 | ) | | | (1.44 | ) | | | (1.74 | ) | | | 24.71 | | | | 8.50 | | | | 144 | | | | .93 | | | | 1.28 | |
| | (.30 | ) | | | — | | | | (.30 | ) | | | 24.38 | | | | 21.31 | | | | 134 | | | | .95 | | | | 1.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.22 | ) | | | (.05 | ) | | | (.27 | ) | | | 27.14 | | | | .95 | 5,8 | | | — | 9 | | | .42 | 6,8 | | | 2.11 | 6,8 |
| | (.42 | ) | | | (.98 | ) | | | (1.40 | ) | | | 27.15 | | | | 10.88 | 5,8 | | | — | 9 | | | .41 | 6,8 | | | 2.03 | 6,8 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.22 | ) | | | (.05 | ) | | | (.27 | ) | | | 27.08 | | | | .95 | 5 | | | 191 | | | | .42 | 6 | | | 2.11 | 6 |
| | (.53 | ) | | | (.98 | ) | | | (1.51 | ) | | | 27.09 | | | | 15.68 | | | | 178 | | | | .42 | | | | 1.95 | |
| | (.48 | ) | | | (.61 | ) | | | (1.09 | ) | | | 24.75 | | | | 8.75 | | | | 135 | | | | .44 | | | | 1.82 | |
| | (.43 | ) | | | (.94 | ) | | | (1.37 | ) | | | 23.78 | | | | 1.82 | | | | 117 | | | | .46 | | | | 1.82 | |
| | (.42 | ) | | | (1.44 | ) | | | (1.86 | ) | | | 24.71 | | | | 9.05 | | | | 111 | | | | .46 | | | | 1.76 | |
| | (.41 | ) | | | — | | | | (.41 | ) | | | 24.37 | | | | 21.88 | | | | 101 | | | | .48 | | | | 1.76 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.09 | ) | | | (.05 | ) | | | (.14 | ) | | | 26.95 | | | | .51 | 5 | | | 122 | | | | 1.37 | 6 | | | 1.14 | 6 |
| | (.27 | ) | | | (.98 | ) | | | (1.25 | ) | | | 26.97 | | | | 14.56 | | | | 134 | | | | 1.37 | | | | .99 | |
| | (.25 | ) | | | (.61 | ) | | | (.86 | ) | | | 24.64 | | | | 7.75 | | | | 154 | | | | 1.38 | | | | .89 | |
| | (.20 | ) | | | (.94 | ) | | | (1.14 | ) | | | 23.68 | | | | .88 | | | | 151 | | | | 1.38 | | | | .90 | |
| | (.19 | ) | | | (1.44 | ) | | | (1.63 | ) | | | 24.61 | | | | 8.05 | | | | 158 | | | | 1.38 | | | | .83 | |
| | (.21 | ) | | | — | | | | (.21 | ) | | | 24.28 | | | | 20.76 | | | | 151 | | | | 1.39 | | | | .84 | |
See end of table for footnotes.
Financial highlights (continued)
| | | | | | Income from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income | | | Net (losses) gains
on securities
(both realized
and unrealized) | | | Total from
investment
operations | |
| Class R-2: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | $ | 26.98 | | | $ | .15 | | | $ | (.02 | ) | | $ | .13 | |
| 12/31/2017 | | | 24.66 | | | | .26 | | | | 3.31 | | | | 3.57 | |
| 12/31/2016 | | | 23.70 | | | | .22 | | | | 1.60 | | | | 1.82 | |
| 12/31/2015 | | | 24.62 | | | | .23 | | | | .01 | | | | .24 | |
| 12/31/2014 | | | 24.30 | | | | .21 | | | | 1.74 | | | | 1.95 | |
| 12/31/2013 | | | 20.30 | | | | .20 | | | | 4.02 | | | | 4.22 | |
| Class R-2E: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.05 | | | | .20 | | | | (.03 | ) | | | .17 | |
| 12/31/2017 | | | 24.74 | | | | .35 | | | | 3.31 | | | | 3.66 | |
| 12/31/2016 | | | 23.77 | | | | .29 | | | | 1.62 | | | | 1.91 | |
| 12/31/2015 | | | 24.75 | | | | .29 | | | | .10 | | | | .39 | |
| 12/31/20143,12 | | | 25.81 | | | | .15 | | | | .41 | | | | .56 | |
| Class R-3: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.01 | | | | .21 | | | | (.02 | ) | | | .19 | |
| 12/31/2017 | | | 24.69 | | | | .38 | | | | 3.31 | | | | 3.69 | |
| 12/31/2016 | | | 23.72 | | | | .32 | | | | 1.62 | | | | 1.94 | |
| 12/31/2015 | | | 24.65 | | | | .33 | | | | (.01 | ) | | | .32 | |
| 12/31/2014 | | | 24.32 | | | | .32 | | | | 1.75 | | | | 2.07 | |
| 12/31/2013 | | | 20.32 | | | | .29 | | | | 4.02 | | | | 4.31 | |
| Class R-4: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.10 | | | | .25 | | | | (.02 | ) | | | .23 | |
| 12/31/2017 | | | 24.76 | | | | .46 | | | | 3.33 | | | | 3.79 | |
| 12/31/2016 | | | 23.80 | | | | .40 | | | | 1.60 | | | | 2.00 | |
| 12/31/2015 | | | 24.72 | | | | .41 | | | | — | 7 | | | .41 | |
| 12/31/2014 | | | 24.38 | | | | .40 | | | | 1.75 | | | | 2.15 | |
| 12/31/2013 | | | 20.37 | | | | .36 | | | | 4.02 | | | | 4.38 | |
| Class R-5E: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.12 | | | | .31 | | | | (.05 | ) | | | .26 | |
| 12/31/2017 | | | 24.78 | | | | .52 | | | | 3.33 | | | | 3.85 | |
| 12/31/2016 | | | 23.82 | | | | .48 | | | | 1.56 | | | | 2.04 | |
| 12/31/20153,13 | | | 25.09 | | | | .05 | | | | (.36 | ) | | | (.31 | ) |
| Class R-5: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | | 27.18 | | | | .29 | | | | (.02 | ) | | | .27 | |
| 12/31/2017 | | | 24.83 | | | | .54 | | | | 3.34 | | | | 3.88 | |
| 12/31/2016 | | | 23.85 | | | | .47 | | | | 1.62 | | | | 2.09 | |
| 12/31/2015 | | | 24.77 | | | | .48 | | | | — | 7 | | | .48 | |
| 12/31/2014 | | | 24.43 | | | | .47 | | | | 1.76 | | | | 2.23 | |
| 12/31/2013 | | | 20.41 | | | | .43 | | | | 4.03 | | | | 4.46 | |
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return2 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (.09 | ) | | $ | (.05 | ) | | $ | (.14 | ) | | $ | 26.97 | | | | .48 | %5 | | $ | 1,200 | | | | 1.36 | %6 | | | 1.15 | %6 |
| | (.27 | ) | | | (.98 | ) | | | (1.25 | ) | | | 26.98 | | | | 14.58 | | | | 1,255 | | | | 1.37 | | | | 1.00 | |
| | (.25 | ) | | | (.61 | ) | | | (.86 | ) | | | 24.66 | | | | 7.74 | | | | 1,241 | | | | 1.37 | | | | .89 | |
| | (.22 | ) | | | (.94 | ) | | | (1.16 | ) | | | 23.70 | | | | .97 | | | | 1,220 | | | | 1.32 | | | | .95 | |
| | (.19 | ) | | | (1.44 | ) | | | (1.63 | ) | | | 24.62 | | | | 8.03 | | | | 1,308 | | | | 1.36 | | | | .86 | |
| | (.22 | ) | | | — | | | | (.22 | ) | | | 24.30 | | | | 20.87 | | | | 1,304 | | | | 1.34 | | | | .90 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.13 | ) | | | (.05 | ) | | | (.18 | ) | | | 27.04 | | | | .63 | 5 | | | 67 | | | | 1.08 | 6 | | | 1.47 | 6 |
| | (.37 | ) | | | (.98 | ) | | | (1.35 | ) | | | 27.05 | | | | 14.89 | | | | 57 | | | | 1.08 | | | | 1.32 | |
| | (.33 | ) | | | (.61 | ) | | | (.94 | ) | | | 24.74 | | | | 8.10 | | | | 17 | | | | 1.08 | | | | 1.18 | |
| | (.43 | ) | | | (.94 | ) | | | (1.37 | ) | | | 23.77 | | | | 1.60 | | | | 2 | | | | .96 | | | | 1.22 | |
| | (.21 | ) | | | (1.41 | ) | | | (1.62 | ) | | | 24.75 | | | | 2.17 | 5,8 | | | — | 9 | | | .16 | 5,8 | | | .58 | 5,8 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.15 | ) | | | (.05 | ) | | | (.20 | ) | | | 27.00 | | | | .69 | 5 | | | 3,242 | | | | .93 | 6 | | | 1.58 | 6 |
| | (.39 | ) | | | (.98 | ) | | | (1.37 | ) | | | 27.01 | | | | 15.05 | | | | 3,460 | | | | .93 | | | | 1.44 | |
| | (.36 | ) | | | (.61 | ) | | | (.97 | ) | | | 24.69 | | | | 8.24 | | | | 3,349 | | | | .93 | | | | 1.33 | |
| | (.31 | ) | | | (.94 | ) | | | (1.25 | ) | | | 23.72 | | | | 1.34 | | | | 3,170 | | | | .93 | | | | 1.35 | |
| | (.30 | ) | | | (1.44 | ) | | | (1.74 | ) | | | 24.65 | | | | 8.51 | | | | 3,315 | | | | .94 | | | | 1.28 | |
| | (.31 | ) | | | — | | | | (.31 | ) | | | 24.32 | | | | 21.33 | | | | 3,212 | | | | .94 | | | | 1.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.19 | ) | | | (.05 | ) | | | (.24 | ) | | | 27.09 | | | | .84 | 5 | | | 6,081 | | | | .63 | 6 | | | 1.89 | 6 |
| | (.47 | ) | | | (.98 | ) | | | (1.45 | ) | | | 27.10 | | | | 15.44 | | | | 6,353 | | | | .63 | | | | 1.74 | |
| | (.43 | ) | | | (.61 | ) | | | (1.04 | ) | | | 24.76 | | | | 8.50 | | | | 5,930 | | | | .64 | | | | 1.63 | |
| | (.39 | ) | | | (.94 | ) | | | (1.33 | ) | | | 23.80 | | | | 1.67 | | | | 4,431 | | | | .63 | | | | 1.65 | |
| | (.37 | ) | | | (1.44 | ) | | | (1.81 | ) | | | 24.72 | | | | 8.85 | | | | 4,385 | | | | .64 | | | | 1.58 | |
| | (.37 | ) | | | — | | | | (.37 | ) | | | 24.38 | | | | 21.68 | | | | 3,994 | | | | .65 | | | | 1.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.23 | ) | | | (.05 | ) | | | (.28 | ) | | | 27.10 | | | | .94 | 5 | | | 136 | | | | .40 | 6 | | | 2.30 | 6 |
| | (.53 | ) | | | (.98 | ) | | | (1.51 | ) | | | 27.12 | | | | 15.70 | | | | 32 | | | | .41 | | | | 1.93 | |
| | (.47 | ) | | | (.61 | ) | | | (1.08 | ) | | | 24.78 | | | | 8.65 | | | | 2 | | | | .42 | | | | 1.94 | |
| | (.12 | ) | | | (.84 | ) | | | (.96 | ) | | | 23.82 | | | | (1.21 | )5 | | | — | 9 | | | .05 | 5 | | | .20 | 5 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (.23 | ) | | | (.05 | ) | | | (.28 | ) | | | 27.17 | | | | .99 | 5 | | | 1,972 | | | | .33 | 6 | | | 2.18 | 6 |
| | (.55 | ) | | | (.98 | ) | | | (1.53 | ) | | | 27.18 | | | | 15.78 | | | | 2,090 | | | | .33 | | | | 2.04 | |
| | (.50 | ) | | | (.61 | ) | | | (1.11 | ) | | | 24.83 | | | | 8.88 | | | | 1,986 | | | | .34 | | | | 1.91 | |
| | (.46 | ) | | | (.94 | ) | | | (1.40 | ) | | | 23.85 | | | | 1.98 | | | | 2,571 | | | | .34 | | | | 1.94 | |
| | (.45 | ) | | | (1.44 | ) | | | (1.89 | ) | | | 24.77 | | | | 9.16 | | | | 2,616 | | | | .34 | | | | 1.88 | |
| | (.44 | ) | | | — | | | | (.44 | ) | | | 24.43 | | | | 22.04 | | | | 2,492 | | | | .34 | | | | 1.89 | |
See end of table for footnotes.
Financial highlights (continued)
| | | | | | Income from investment operations1 | |
| Period ended | | Net asset
value,
beginning
of period | | | Net
investment
income | | | Net (losses) gains
on securities
(both realized
and unrealized) | | | Total from
investment
operations | |
| Class R-6: | | | | | | | | | | | | | | | | |
| 6/30/20183,4 | | $ | 27.16 | | | $ | .30 | | | $ | (.02 | ) | | $ | .28 | |
| 12/31/2017 | | | 24.81 | | | | .56 | | | | 3.33 | | | | 3.89 | |
| 12/31/2016 | | | 23.84 | | | | .48 | | | | 1.61 | | | | 2.09 | |
| 12/31/2015 | | | 24.76 | | | | .49 | | | | — | 7 | | | .49 | |
| 12/31/2014 | | | 24.42 | | | | .49 | | | | 1.75 | | | | 2.24 | |
| 12/31/2013 | | | 20.40 | | | | .44 | | | | 4.03 | | | | 4.47 | |
| | | Six months | | | | | | | | | | | | | | |
| Portfolio turnover rate for all share | | ended
June 30, | | Year ended December 31 |
| classes14 | | 20183,4,5 | | 2017 | | 2016 | | 2015 | | 2014 | | 2013 |
| Excluding mortgage dollar roll transactions | | | 41 | % | | | 58 | % | | | 48 | % | | | 45 | % | | | 48 | % | | | Not available |
| Including mortgage dollar roll transactions | | | 61 | % | | | 95 | % | | | 79 | % | | | 82 | % | | | 68 | % | | | 55 | % |
See Notes to Financial Statements
| Dividends and distributions | | | | | | | | | | | | | | | | |
Dividends
(from net
investment
income) | | | Distributions
(from capital
gains) | | | Total
dividends
and
distributions | | | Net asset
value, end
of period | | | Total
return2 | | | Net assets,
end of period
(in millions) | | | Ratio of
expenses
to average
net assets | | | Ratio of net
income
to average
net assets | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (.24 | ) | | $ | (.05 | ) | | $ | (.29 | ) | | $ | 27.15 | | | | 1.01 | %5 | | $ | 20,052 | | | | .28 | %6 | | | 2.25 | %6 |
| | (.56 | ) | | | (.98 | ) | | | (1.54 | ) | | | 27.16 | | | | 15.84 | | | | 18,238 | | | | .28 | | | | 2.10 | |
| | (.51 | ) | | | (.61 | ) | | | (1.12 | ) | | | 24.81 | | | | 8.90 | | | | 11,058 | | | | .29 | | | | 1.98 | |
| | (.47 | ) | | | (.94 | ) | | | (1.41 | ) | | | 23.84 | | | | 2.02 | | | | 7,290 | | | | .29 | | | | 1.99 | |
| | (.46 | ) | | | (1.44 | ) | | | (1.90 | ) | | | 24.76 | | | | 9.22 | | | | 6,076 | | | | .29 | | | | 1.93 | |
| | (.45 | ) | | | — | | | | (.45 | ) | | | 24.42 | | | | 22.12 | | | | 3,910 | | | | .29 | | | | 1.95 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns exclude any applicable sales charges, including contingent deferred sales charges. |
| 3 | Based on operations for a period that is less than a full year. |
| 4 | Unaudited. |
| 5 | Not annualized. |
| 6 | Annualized. |
| 7 | Amount less than $.01. |
| 8 | All or a significant portion of assets in this class consisted of seed capital invested by CRMC and/or its affiliates. Fees for distribution services are not charged or accrued on these seed capital assets. If such fees were paid by the fund on seed capital assets, fund expenses would have been higher and net income and total return would have been lower. |
| 9 | Amount less than $1 million. |
| 10 | Class T and 529-T shares began investment operations on April 7, 2017. |
| 11 | Class F-3 shares began investment operations on January 27, 2017. |
| 12 | Class R-2E shares began investment operations on August 29, 2014. |
| 13 | Class R-5E shares began investment operations on November 20, 2015. |
| 14 | Refer to Note 5 for further information on mortgage dollar rolls. |
As a fund shareholder, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period (January 1, 2018, through June 30, 2018).
Actual expenses:
The first line of each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled “Expenses paid during period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Notes:
Retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2, F-3 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.
Note that the expenses shown in the table on the following page are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | | Beginning
account value
1/1/2018 | | | Ending
account value
6/30/2018 | | | Expenses paid
during period* | | | Annualized
expense ratio | |
| Class A – actual return | | $ | 1,000.00 | | | $ | 1,008.69 | | | $ | 2.84 | | | | .57 | % |
| Class A – assumed 5% return | | | 1,000.00 | | | | 1,021.97 | | | | 2.86 | | | | .57 | |
| Class C – actual return | | | 1,000.00 | | | | 1,004.79 | | | | 6.76 | | | | 1.36 | |
| Class C – assumed 5% return | | | 1,000.00 | | | | 1,018.05 | | | | 6.80 | | | | 1.36 | |
| Class T – actual return | | | 1,000.00 | | | | 1,009.80 | | | | 1.74 | | | | .35 | |
| Class T – assumed 5% return | | | 1,000.00 | | | | 1,023.06 | | | | 1.76 | | | | .35 | |
| Class F-1 – actual return | | | 1,000.00 | | | | 1,008.35 | | | | 3.24 | | | | .65 | |
| Class F-1 – assumed 5% return | | | 1,000.00 | | | | 1,021.57 | | | | 3.26 | | | | .65 | |
| Class F-2 – actual return | | | 1,000.00 | | | | 1,010.02 | | | | 1.89 | | | | .38 | |
| Class F-2 – assumed 5% return | | | 1,000.00 | | | | 1,022.91 | | | | 1.91 | | | | .38 | |
| Class F-3 – actual return | | | 1,000.00 | | | | 1,010.10 | | | | 1.45 | | | | .29 | |
| Class F-3 – assumed 5% return | | | 1,000.00 | | | | 1,023.36 | | | | 1.45 | | | | .29 | |
| Class 529-A – actual return | | | 1,000.00 | | | | 1,008.34 | | | | 3.24 | | | | .65 | |
| Class 529-A – assumed 5% return | | | 1,000.00 | | | | 1,021.57 | | | | 3.26 | | | | .65 | |
| Class 529-C – actual return | | | 1,000.00 | | | | 1,004.46 | | | | 7.01 | | | | 1.41 | |
| Class 529-C – assumed 5% return | | | 1,000.00 | | | | 1,017.80 | | | | 7.05 | | | | 1.41 | |
| Class 529-E – actual return | | | 1,000.00 | | | | 1,007.19 | | | | 4.38 | | | | .88 | |
| Class 529-E – assumed 5% return | | | 1,000.00 | | | | 1,020.43 | | | | 4.41 | | | | .88 | |
| Class 529-T – actual return | | | 1,000.00 | | | | 1,009.50 | | | | 2.09 | | | | .42 | |
| Class 529-T – assumed 5% return | | | 1,000.00 | | | | 1,022.71 | | | | 2.11 | | | | .42 | |
| Class 529-F-1 – actual return | | | 1,000.00 | | | | 1,009.49 | | | | 2.09 | | | | .42 | |
| Class 529-F-1 – assumed 5% return | | | 1,000.00 | | | | 1,022.71 | | | | 2.11 | | | | .42 | |
| Class R-1 – actual return | | | 1,000.00 | | | | 1,005.15 | | | | 6.81 | | | | 1.37 | |
| Class R-1 – assumed 5% return | | | 1,000.00 | | | | 1,018.00 | | | | 6.85 | | | | 1.37 | |
| Class R-2 – actual return | | | 1,000.00 | | | | 1,004.85 | | | | 6.76 | | | | 1.36 | |
| Class R-2 – assumed 5% return | | | 1,000.00 | | | | 1,018.05 | | | | 6.80 | | | | 1.36 | |
| Class R-2E – actual return | | | 1,000.00 | | | | 1,006.32 | | | | 5.37 | | | | 1.08 | |
| Class R-2E – assumed 5% return | | | 1,000.00 | | | | 1,019.44 | | | | 5.41 | | | | 1.08 | |
| Class R-3 – actual return | | | 1,000.00 | | | | 1,006.94 | | | | 4.63 | | | | .93 | |
| Class R-3 – assumed 5% return | | | 1,000.00 | | | | 1,020.18 | | | | 4.66 | | | | .93 | |
| Class R-4 – actual return | | | 1,000.00 | | | | 1,008.40 | | | | 3.14 | | | | .63 | |
| Class R-4 – assumed 5% return | | | 1,000.00 | | | | 1,021.67 | | | | 3.16 | | | | .63 | |
| Class R-5E – actual return | | | 1,000.00 | | | | 1,009.42 | | | | 1.99 | | | | .40 | |
| Class R-5E – assumed 5% return | | | 1,000.00 | | | | 1,022.81 | | | | 2.01 | | | | .40 | |
| Class R-5 – actual return | | | 1,000.00 | | | | 1,009.85 | | | | 1.64 | | | | .33 | |
| Class R-5 – assumed 5% return | | | 1,000.00 | | | | 1,023.16 | | | | 1.66 | | | | .33 | |
| Class R-6 – actual return | | | 1,000.00 | | | | 1,010.14 | | | | 1.40 | | | | .28 | |
| Class R-6 – assumed 5% return | | | 1,000.00 | | | | 1,023.41 | | | | 1.40 | | | | .28 | |
| * | 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). |
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Office of the fund
6455 Irvine Center Drive
Irvine, CA 92618-4518
Investment adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
6455 Irvine Center Drive
Irvine, CA 92618-4518
Transfer agent for shareholder accounts
American Funds Service Company
(Write to the address near you.)
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Counsel
Morgan, Lewis & Bockius LLP
300 South Grand Avenue, 22nd Floor
Los Angeles, CA 90071-3132
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 investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at (800) 421-4225 or visit the American Funds website at americanfunds.com. Fund shares offered through American Funds Distributors, Inc.
“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, 2018, 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, 2018, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
Bloomberg® is a trademark of Bloomberg Finance L.P. (collectively with its affiliates, “Bloomberg”). Barclays® is a trademark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Neither Bloomberg nor Barclays approves or endorses this material, guarantees the accuracy or completeness of any information herein and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.
The Standard & Poor’s 500 Composite Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2018 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC.
American Funds from Capital Group
The Capital Advantage®
Since 1931, American Funds, part of Capital Group, has helped investors pursue long-term investment success. Our consistent approach — in combination with The Capital SystemSM — has resulted in a superior long-term track record.
| | Aligned with investor success |
| | We base our decisions on a long-term perspective, which we believe aligns our goals with the interests of our clients. Our portfolio managers average 27 years of investment experience, including 22 years at our company, reflecting a career commitment to our long-term approach.1 |
| | |
| | The Capital System |
| | The Capital System combines individual accountability with teamwork. Funds using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. An extensive global research effort is the backbone of our system. |
| | |
| | American Funds’ superior long-term track record |
| | Equity funds have beaten their Lipper peer indexes in 92% of 10-year periods and 99% of 20-year periods. Fixed income funds have beaten their Lipper indexes in 77% of 10-year periods and 80% of 20-year periods.2 Fund management fees have been among the lowest in the industry.3 |
| | 1 | Portfolio manager experience as of December 31, 2017. |
| | 2 | Based on Class F-2 share results for rolling periods through December 31, 2017. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except Capital Income Builder and SMALLCAP World Fund, for which the Lipper average was used). Expenses differ for each share class, so results will vary. Class F-2 shares were first offered on August 1, 2008. Class F-2 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Results for certain funds with an inception date after August 1, 2008, also include hypothetical returns because those funds’ Class F-2 shares sold after the funds’ date of first offering. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale. |
| | 3 | On average, our management fees were in the lowest quintile 71% of the time, based on the 20-year period ended December 31, 2017, versus comparable Lipper categories, excluding funds of funds. |
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, 2018
Common stocks 59.10%
Information technology 11.85% | Shares | Value
(000) |
| Microsoft Corp. | 43,746,000 | $4,313,793 |
| Intel Corp. | 35,524,100 | 1,765,903 |
| Broadcom Inc. | 6,442,200 | 1,563,135 |
| ASML Holding NV (New York registered) | 4,573,458 | 905,408 |
| ASML Holding NV | 1,845,000 | 365,634 |
| Alphabet Inc., Class C1 | 846,200 | 944,063 |
| Alphabet Inc., Class A1 | 250,900 | 283,314 |
| Intuit Inc. | 4,000,000 | 817,220 |
| Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 19,350,000 | 707,436 |
| TE Connectivity Ltd. | 6,600,000 | 594,396 |
| Facebook, Inc., Class A1 | 3,058,600 | 594,347 |
| VeriSign, Inc.1 | 4,300,000 | 590,906 |
| Symantec Corp. | 27,011,806 | 557,794 |
| Visa Inc., Class A | 2,770,000 | 366,886 |
| Activision Blizzard, Inc. | 3,894,100 | 297,198 |
| Apple Inc. | 1,185,000 | 219,355 |
| Mastercard Inc., Class A | 946,000 | 185,908 |
| Amphenol Corp., Class A | 1,401,000 | 122,097 |
| Analog Devices, Inc. | 1,139,000 | 109,253 |
| | | 15,304,046 |
| Financials 8.36% | | |
| Berkshire Hathaway Inc., Class A1 | 9,412 | 2,654,561 |
| Berkshire Hathaway Inc., Class B1 | 800,000 | 149,320 |
| Wells Fargo & Co. | 35,924,500 | 1,991,654 |
| SunTrust Banks, Inc. | 14,027,000 | 926,063 |
| JPMorgan Chase & Co. | 8,370,000 | 872,154 |
| Chubb Ltd. | 6,010,000 | 763,390 |
| BlackRock, Inc. | 1,507,000 | 752,053 |
| Capital One Financial Corp. | 5,658,047 | 519,974 |
| PNC Financial Services Group, Inc. | 3,110,000 | 420,161 |
| Goldman Sachs Group, Inc. | 1,753,628 | 386,798 |
| Bank of America Corp. | 9,000,000 | 253,710 |
| Citigroup Inc. | 3,750,000 | 250,950 |
| Legal & General Group PLC | 70,000,000 | 245,737 |
| Itaú Unibanco Holding SA, preferred nominative (ADR) | 16,537,000 | 171,654 |
| HDFC Bank Ltd.2 | 4,676,184 | 143,913 |
| BNP Paribas SA | 2,000,000 | 124,231 |
| Intercontinental Exchange, Inc. | 1,278,000 | 93,997 |
| Blackstone Group LP | 2,099,064 | 67,527 |
| Marsh & McLennan Companies, Inc. | 200,000 | 16,394 |
| | | 10,804,241 |
| Consumer discretionary 8.01% | | |
| Home Depot, Inc. | 13,857,000 | 2,703,501 |
| NIKE, Inc., Class B | 23,885,000 | 1,903,157 |
| Comcast Corp., Class A | 42,066,532 | 1,380,203 |
American Balanced Fund — Page 1 of 33
Common stocks
Consumer discretionary (continued) | Shares | Value
(000) |
| Amazon.com, Inc.1 | 811,500 | $1,379,388 |
| CBS Corp., Class B | 10,100,000 | 567,822 |
| McDonald’s Corp. | 3,445,000 | 539,797 |
| VF Corp. | 4,055,000 | 330,564 |
| General Motors Co. | 8,382,000 | 330,251 |
| MGM Resorts International | 9,675,000 | 280,865 |
| Charter Communications, Inc., Class A1 | 842,100 | 246,912 |
| Netflix, Inc.1 | 607,000 | 237,598 |
| LVMH Moët Hennessy-Louis Vuitton SE | 467,000 | 155,537 |
| Marriott International, Inc., Class A | 800,000 | 101,280 |
| Starbucks Corp. | 1,585,000 | 77,427 |
| Hasbro, Inc. | 719,000 | 66,371 |
| Booking Holdings Inc.1 | 11,200 | 22,703 |
| Las Vegas Sands Corp. | 263,000 | 20,083 |
| | | 10,343,459 |
| Energy 7.01% | | |
| Royal Dutch Shell PLC, Class B (ADR) | 21,823,000 | 1,585,441 |
| Royal Dutch Shell PLC, Class B | 4,000,000 | 143,246 |
| Royal Dutch Shell PLC, Class A (ADR) | 497,977 | 34,475 |
| Royal Dutch Shell PLC, Class A | 130,129 | 4,515 |
| ConocoPhillips | 19,500,000 | 1,357,590 |
| EOG Resources, Inc. | 9,603,000 | 1,194,901 |
| Chevron Corp. | 7,094,755 | 896,990 |
| Enbridge Inc. | 14,018,194 | 500,309 |
| Enbridge Inc. (CAD denominated)3 | 4,808,645 | 171,914 |
| Enbridge Inc. (CAD denominated) | 81,955 | 2,930 |
| Noble Energy, Inc. | 18,490,000 | 652,327 |
| Suncor Energy Inc. | 14,451,346 | 588,101 |
| Baker Hughes, a GE Co., Class A | 14,888,000 | 491,751 |
| Concho Resources Inc.1 | 2,049,000 | 283,479 |
| Halliburton Co. | 6,000,000 | 270,360 |
| Phillips 66 | 2,030,000 | 227,989 |
| Cabot Oil & Gas Corp. | 8,126,000 | 193,399 |
| Schlumberger Ltd. | 2,500,000 | 167,575 |
| Murphy Oil Corp. | 3,600,080 | 121,575 |
| Pioneer Natural Resources Co. | 500,000 | 94,620 |
| Weatherford International PLC1 | 20,000,000 | 65,800 |
| | | 9,049,287 |
| Health care 6.88% | | |
| UnitedHealth Group Inc. | 13,158,500 | 3,228,306 |
| Merck & Co., Inc. | 17,600,000 | 1,068,320 |
| Aetna Inc. | 5,444,700 | 999,103 |
| Johnson & Johnson | 7,915,300 | 960,443 |
| Express Scripts Holding Co.1 | 10,865,755 | 838,945 |
| AbbVie Inc. | 3,835,000 | 355,313 |
| Thermo Fisher Scientific Inc. | 1,445,000 | 299,317 |
| ResMed Inc. | 1,999,200 | 207,077 |
| Medtronic PLC | 2,040,000 | 174,644 |
| Boston Scientific Corp.1 | 4,913,000 | 160,655 |
| Gilead Sciences, Inc. | 2,000,000 | 141,680 |
| Bristol-Myers Squibb Co. | 2,500,000 | 138,350 |
| Humana Inc. | 454,000 | 135,124 |
| AstraZeneca PLC | 1,705,000 | 118,202 |
American Balanced Fund — Page 2 of 33
Common stocks
Health care (continued) | Shares | Value
(000) |
| Vertex Pharmaceuticals Inc.1 | 295,800 | $50,274 |
| Regeneron Pharmaceuticals, Inc.1 | 15,500 | 5,347 |
| | | 8,881,100 |
| Consumer staples 4.42% | | |
| Philip Morris International Inc. | 22,067,000 | 1,781,689 |
| Nestlé SA | 9,909,000 | 769,466 |
| Kraft Heinz Co. | 11,710,850 | 735,676 |
| Coca-Cola Co. | 15,695,019 | 688,383 |
| Altria Group, Inc. | 6,378,300 | 362,224 |
| British American Tobacco PLC | 3,907,515 | 197,511 |
| British American Tobacco PLC (ADR) | 2,139,768 | 107,951 |
| Coca-Cola European Partners plc | 5,040,000 | 204,826 |
| Constellation Brands, Inc., Class A | 733,000 | 160,432 |
| Costco Wholesale Corp. | 695,000 | 145,241 |
| Procter & Gamble Co. | 1,750,000 | 136,605 |
| General Mills, Inc. | 2,700,000 | 119,502 |
| Walgreens Boots Alliance, Inc. | 1,900,000 | 114,028 |
| Kellogg Co. | 1,400,000 | 97,818 |
| Pinnacle Foods Inc. | 1,455,300 | 94,682 |
| | | 5,716,034 |
| Real estate 2.96% | | |
| Simon Property Group, Inc. REIT | 8,347,000 | 1,420,576 |
| Crown Castle International Corp. REIT | 5,595,800 | 603,339 |
| Equinix, Inc. REIT | 1,030,000 | 442,787 |
| American Tower Corp. REIT | 2,492,000 | 359,271 |
| Iron Mountain Inc. REIT | 10,166,200 | 355,919 |
| Digital Realty Trust, Inc. REIT | 2,500,000 | 278,950 |
| AGNC Investment Corp. REIT | 9,142,000 | 169,950 |
| Ventas, Inc. REIT | 2,931,000 | 166,920 |
| Gaming and Leisure Properties, Inc. REIT | 560,000 | 20,048 |
| | | 3,817,760 |
| Materials 2.73% | | |
| DowDuPont Inc. | 22,703,688 | 1,496,627 |
| LyondellBasell Industries NV | 5,329,100 | 585,401 |
| Praxair, Inc. | 2,571,000 | 406,604 |
| Royal Gold, Inc.4 | 4,254,500 | 394,988 |
| Sherwin-Williams Co. | 748,000 | 304,862 |
| Nucor Corp. | 3,500,000 | 218,750 |
| CF Industries Holdings, Inc. | 2,687,000 | 119,303 |
| | | 3,526,535 |
| Industrials 2.45% | | |
| Boeing Co. | 3,025,000 | 1,014,918 |
| Lockheed Martin Corp. | 3,380,000 | 998,553 |
| FedEx Corp. | 1,200,000 | 272,472 |
| Caterpillar Inc. | 1,300,000 | 176,371 |
| Norfolk Southern Corp. | 1,140,000 | 171,992 |
| Cummins Inc. | 1,250,000 | 166,250 |
| TransDigm Group Inc. | 402,000 | 138,746 |
American Balanced Fund — Page 3 of 33
Common stocks
Industrials (continued) | Shares | Value
(000) |
| Parker-Hannifin Corp. | 820,000 | $127,797 |
| Johnson Controls International PLC | 2,911,375 | 97,386 |
| | | 3,164,485 |
| Utilities 0.30% | | |
| DTE Energy Co. | 2,000,000 | 207,260 |
| Dominion Energy, Inc. | 1,500,000 | 102,270 |
| Pinnacle West Capital Corp. | 1,000,000 | 80,560 |
| | | 390,090 |
| Telecommunication services 0.10% | | |
| AT&T Inc. | 4,000,000 | 128,440 |
| Miscellaneous 4.03% | | |
| Other common stocks in initial period of acquisition | | 5,205,168 |
| Total common stocks (cost: $49,215,992,000) | | 76,330,645 |
Preferred securities 0.00%
Financials 0.00% | | |
| CoBank, ACB, Class E, noncumulative3 | 7,440 | 5,022 |
| Total preferred securities (cost: $5,208,000) | | 5,022 |
Convertible stocks 0.08%
Miscellaneous 0.08% | | |
| Other convertible stocks in initial period of acquisition | | 99,900 |
| Total convertible stocks (cost: $105,498,000) | | 99,900 |
Bonds, notes & other debt instruments 36.86%
Corporate bonds & notes 13.57%
Financials 4.32% | Principal amount
(000) | |
| ACE INA Holdings Inc. 2.30% 2020 | $7,635 | 7,466 |
| ACE INA Holdings Inc. 2.875% 2022 | 22,180 | 21,799 |
| ACE INA Holdings Inc. 3.35% 2026 | 5,180 | 5,029 |
| American Express Co. 2.20% 2020 | 29,000 | 28,338 |
| American Express Co. 3.375% 2021 | 25,000 | 25,020 |
| American Express Co. 3.00% 2024 | 37,500 | 35,816 |
| American International Group, Inc. 4.20% 2028 | 48,070 | 47,037 |
| American International Group, Inc. 4.75% 2048 | 23,860 | 23,069 |
| Australia & New Zealand Banking Group Ltd. 2.625% 2022 | 29,000 | 28,041 |
| AXA Equitable Holdings, Inc. 3.90% 20233 | 8,105 | 8,047 |
| AXA SA, Series B, junior subordinated 6.379% (undated)3,5 | 2,000 | 2,124 |
| Bank of America Corp. 2.625% 2020 | 20,000 | 19,757 |
| Bank of America Corp. 2.738% 2022 (3-month USD-LIBOR + 0.37% on 1/23/2021)5 | 38,000 | 37,355 |
| Bank of America Corp. 3.499% 2022 (3-month USD-LIBOR + 0.63% on 5/17/2021)5 | 30,000 | 29,994 |
| Bank of America Corp. 2.816% 2023 (3-month USD-LIBOR + 0.93% on 7/21/2022)5 | 30,500 | 29,499 |
| Bank of America Corp. 3.124% 2023 (3-month USD-LIBOR + 1.16% on 1/20/2022)5 | 28,000 | 27,534 |
| Bank of America Corp. 3.55% 2024 (3-month USD-LIBOR + 0.78% on 3/5/2023)5 | 195,254 | 193,315 |
| Bank of America Corp. 3.248% 2027 | 11,250 | 10,493 |
American Balanced Fund — Page 4 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Financials (continued) | Principal amount
(000) | Value
(000) |
| Bank of America Corp. 3.419% 2028 (3-month USD-LIBOR + 1.04% on 12/20/2027)5 | $26,728 | $25,189 |
| Bank of America Corp. 3.593% 2028 (3-month USD-LIBOR + 1.37% on 7/21/2027)5 | 16,000 | 15,287 |
| Bank of America Corp. 3.824% 2028 (3-month USD-LIBOR + 1.575% on 1/20/2027)5 | 10,500 | 10,250 |
| Bank of America Corp. 3.97% 2029 (3-month USD-LIBOR + 1.07% on 3/5/2028)5 | 35,000 | 34,475 |
| Bank of America Corp. 4.244% 2038 (3-month USD-LIBOR + 1.814% on 4/24/2037)5 | 7,500 | 7,291 |
| Bank of Nova Scotia 2.50% 2021 | 31,500 | 30,954 |
| BB&T Corp. 2.45% 2020 | 37,000 | 36,646 |
| BB&T Corp. 2.625% 2022 | 22,500 | 21,942 |
| BB&T Corp. 2.75% 2022 | 22,887 | 22,361 |
| BB&T Corp. 3.70% 2025 | 27,000 | 26,881 |
| Berkshire Hathaway Finance Corp. 1.30% 2019 | 15,320 | 15,092 |
| Berkshire Hathaway Inc. 2.00% 2018 | 16,340 | 16,329 |
| Berkshire Hathaway Inc. 2.75% 2023 | 5,000 | 4,897 |
| BNP Paribas 3.50% 20233 | 118,825 | 115,904 |
| BNP Paribas 3.375% 20253 | 48,228 | 45,618 |
| BNP Paribas 4.375% 20253 | 5,700 | 5,570 |
| BNP Paribas 4.375% 20263 | 6,350 | 6,169 |
| Capital One Financial Corp. 3.45% 2021 | 103,000 | 102,823 |
| Capital One Financial Corp. 3.20% 2023 | 20,000 | 19,437 |
| Capital One Financial Corp. 3.20% 2025 | 20,000 | 18,798 |
| Capital One Financial Corp. 4.25% 2025 | 45,000 | 44,901 |
| Carlyle Investment Management (1-month USD-LIBOR + 2.00%) 3.894% 20192,3,6,7 | 504 | 503 |
| Carlyle Investment Management (1-month USD-LIBOR + 2.00%) 3.894% 20192,3,6,7 | 384 | 384 |
| Charles Schwab Corp. 3.45% 2026 | 1,616 | 1,590 |
| Citigroup Inc. 2.35% 2021 | 71,000 | 68,628 |
| Citigroup Inc. 2.70% 2021 | 24,500 | 24,037 |
| Citigroup Inc. 2.90% 2021 | 53,000 | 51,957 |
| Citigroup Inc. 2.876% 2023 (3-month USD-LIBOR + 0.95% on 7/24/2022)5 | 60,817 | 58,683 |
| Citigroup Inc. 3.142% 2023 (3-month USD-LIBOR + 0.722% on 1/4/2022)5 | 20,700 | 20,291 |
| Citigroup Inc. 3.875% 2023 | 38,183 | 38,218 |
| Citigroup Inc. 3.20% 2026 | 27,000 | 25,149 |
| CME Group Inc. 3.75% 2028 | 25,175 | 25,361 |
| CME Group Inc. 5.30% 2043 | 3,135 | 3,687 |
| CME Group Inc. 4.15% 2048 | 12,000 | 12,158 |
| Commonwealth Bank of Australia 2.25% 20203 | 6,250 | 6,162 |
| Cooperatieve Rabobank U.A. 2.75% 2023 | 31,500 | 30,340 |
| Crédit Agricole SA SA 2.375% 20213 | 6,645 | 6,430 |
| Crédit Agricole SA 3.375% 20223 | 20,125 | 19,715 |
| Crédit Agricole SA 4.375% 20253 | 14,825 | 14,363 |
| Credit Suisse Group AG 3.45% 2021 | 20,000 | 19,936 |
| Credit Suisse Group AG 3.80% 2022 | 6,802 | 6,777 |
| Credit Suisse Group AG 2.997% 2023 (3-month USD-LIBOR + 1.20% on 12/14/2022)3,5 | 33,250 | 31,831 |
| Credit Suisse Group AG 3.80% 2023 | 32,275 | 31,892 |
| Credit Suisse Group AG 3.869% 2029 (3-month USD-LIBOR + 1.41% on 1/12/2028)3,5 | 12,300 | 11,584 |
| Danske Bank AS 2.00% 20213 | 20,120 | 19,220 |
| Danske Bank AS 2.70% 20223 | 47,600 | 46,196 |
| Deutsche Bank AG 2.70% 2020 | 20,000 | 19,460 |
| Deutsche Bank AG 3.375% 2021 | 4,500 | 4,355 |
| Deutsche Bank AG 3.95% 2023 | 111,000 | 106,660 |
| DNB ASA 2.375% 20213 | 10,000 | 9,691 |
| Ford Motor Credit Co. 3.81% 2024 | 64,467 | 62,630 |
| General Motors Financial Co. 3.50% 2019 | 4,685 | 4,710 |
| General Motors Financial Co. 4.20% 2021 | 23,000 | 23,335 |
| General Motors Financial Co. 3.45% 2022 | 42,140 | 41,438 |
American Balanced Fund — Page 5 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Financials (continued) | Principal amount
(000) | Value
(000) |
| General Motors Financial Co. 4.15% 2023 | $40,370 | $40,398 |
| General Motors Financial Co. 4.30% 2025 | 18,175 | 17,851 |
| Goldman Sachs Group, Inc. 2.90% 2018 | 15,000 | 15,004 |
| Goldman Sachs Group, Inc. 1.95% 2019 | 5,140 | 5,090 |
| Goldman Sachs Group, Inc. 2.55% 2019 | 11,000 | 10,936 |
| Goldman Sachs Group, Inc. 2.60% 2020 | 14,610 | 14,478 |
| Goldman Sachs Group, Inc. 2.625% 2021 | 9,465 | 9,268 |
| Goldman Sachs Group, Inc. (3-month USD-LIBOR + 1.36%) 3.720% 20217 | 25,782 | 26,355 |
| Goldman Sachs Group, Inc. 5.25% 2021 | 20,000 | 21,026 |
| Goldman Sachs Group, Inc. 3.00% 2022 | 75,000 | 73,354 |
| Goldman Sachs Group, Inc. 5.75% 2022 | 20,000 | 21,405 |
| Goldman Sachs Group, Inc. 2.905% 2023 (3-month USD-LIBOR + 0.99% on 7/24/2022)5 | 110,763 | 106,753 |
| Goldman Sachs Group, Inc. 3.20% 2023 | 91,500 | 89,227 |
| Goldman Sachs Group, Inc. 3.691% 2028 (3-month USD-LIBOR + 1.51% on 6/5/2027)5 | 10,000 | 9,487 |
| Goldman Sachs Group, Inc. 3.814% 2029 (3-month USD-LIBOR + 1.158% on 4/23/2028)5 | 24,507 | 23,310 |
| Goldman Sachs Group, Inc. 4.223% 2029 (3-month USD-LIBOR + 1.301% on 5/1/2028)5 | 31,493 | 31,075 |
| Groupe BPCE SA 2.75% 20233 | 34,500 | 32,976 |
| Groupe BPCE SA 5.70% 20233 | 13,830 | 14,479 |
| Groupe BPCE SA 4.625% 20243 | 34,250 | 33,849 |
| Groupe BPCE SA 5.15% 20243 | 54,250 | 55,054 |
| HSBC Holdings PLC 2.65% 2022 | 35,000 | 33,896 |
| HSBC Holdings PLC 3.262% 2023 (3-month USD-LIBOR + 1.055% on 3/13/2022)5 | 50,500 | 49,484 |
| HSBC Holdings PLC 3.326% 20247 | 11,250 | 11,225 |
| HSBC Holdings PLC 3.95% 2024 (3-month USD-LIBOR + 0.987% on 5/18/2023)5 | 19,400 | 19,359 |
| HSBC Holdings PLC 4.25% 2024 | 8,000 | 7,966 |
| HSBC Holdings PLC 4.583% 2029 (3-month USD-LIBOR + 1.535% on 6/19/2028)5 | 25,500 | 25,776 |
| Intercontinentalexchange, Inc. 2.50% 2018 | 20,000 | 20,001 |
| Intesa Sanpaolo SpA 3.125% 20223 | 50,835 | 46,950 |
| Intesa Sanpaolo SpA 3.375% 20233 | 35,900 | 33,023 |
| Intesa Sanpaolo SpA 5.017% 20243 | 35,985 | 32,691 |
| Intesa Sanpaolo SpA 5.25% 2024 | 12,600 | 12,304 |
| Intesa Sanpaolo SpA 3.875% 20273 | 35,763 | 30,904 |
| Intesa Sanpaolo SpA 3.875% 20283 | 12,750 | 10,946 |
| Jefferies Financial Group Inc. 5.50% 2023 | 830 | 859 |
| JPMorgan Chase & Co. 2.25% 2020 | 14,585 | 14,402 |
| JPMorgan Chase & Co. 2.55% 2020 | 32,300 | 31,836 |
| JPMorgan Chase & Co. 2.40% 2021 | 32,500 | 31,674 |
| JPMorgan Chase & Co. 2.55% 2021 | 24,235 | 23,757 |
| JPMorgan Chase & Co. 3.25% 2022 | 10,000 | 9,910 |
| JPMorgan Chase & Co. 2.70% 2023 | 27,600 | 26,505 |
| JPMorgan Chase & Co. 3.559% 2024 (3-month USD-LIBOR + 0.73% on 4/23/2023)5 | 48,175 | 47,738 |
| JPMorgan Chase & Co. 3.875% 2024 | 25,000 | 24,778 |
| JPMorgan Chase & Co. 3.30% 2026 | 10,000 | 9,569 |
| JPMorgan Chase & Co. 3.509% 2029 (3-month USD-LIBOR + 0.945% on 1/23/2028)5 | 32,750 | 31,094 |
| JPMorgan Chase & Co. 4.005% 2029 (3-month USD-LIBOR + 1.12% on 4/23/2028)5 | 5,620 | 5,554 |
JPMorgan Chase & Co., Series Z, junior subordinated 5.30% (undated)
(3-month USD-LIBOR + 3.80% on 5/1/2020)5 | 35,000 | 35,735 |
JPMorgan Chase & Co., Series S, junior subordinated, perpetual, 6.75% (undated)
(3-month USD-LIBOR + 3.78% on 2/1/2024)5 | 25,000 | 27,219 |
| JPMorgan Chase Bank NA (3-month USD-LIBOR + 0.34%) 2.702% 20217 | 28,050 | 28,064 |
| Keybank National Association 2.50% 2019 | 17,000 | 16,869 |
| Keybank National Association 3.375% 20233 | 21,000 | 20,871 |
| Lloyds Banking Group PLC 3.00% 2022 | 30,000 | 29,238 |
| Lloyds Banking Group PLC 2.907% 2023 (3-month USD-LIBOR + 0.81% on 11/7/2022)5 | 74,300 | 70,817 |
American Balanced Fund — Page 6 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Financials (continued) | Principal amount
(000) | Value
(000) |
| Lloyds Banking Group PLC 4.45% 2025 | $12,400 | $12,482 |
| Lloyds Banking Group PLC 4.582% 2025 | 14,750 | 14,477 |
| Lloyds Banking Group PLC 3.75% 2027 | 10,000 | 9,466 |
| Lloyds Banking Group PLC 4.375% 2028 | 10,025 | 9,919 |
| Metropolitan Life Global Funding I 1.55% 20193 | 15,500 | 15,263 |
| Metropolitan Life Global Funding I 2.30% 20193 | 10,120 | 10,088 |
| Metropolitan Life Global Funding I 2.00% 20203 | 6,125 | 5,999 |
| Metropolitan Life Global Funding I 2.50% 20203 | 46,300 | 45,588 |
| Metropolitan Life Global Funding I 1.95% 20213 | 15,500 | 14,847 |
| Metropolitan Life Global Funding I 2.40% 20213 | 24,175 | 23,729 |
| Mitsubishi UFJ Financial Group, Inc. 2.19% 2021 | 25,500 | 24,495 |
| Mitsubishi UFJ Financial Group, Inc. 2.665% 2022 | 30,500 | 29,446 |
| Mitsubishi UFJ Financial Group, Inc. 2.998% 2022 | 18,300 | 17,971 |
| Mizuho Financial Group, Ltd. 3.549% 2023 | 51,500 | 51,143 |
| Moody’s Corp. 2.75% 2021 | 20,000 | 19,558 |
| Morgan Stanley 2.50% 2021 | 46,000 | 44,942 |
| Morgan Stanley 2.75% 2022 | 15,000 | 14,535 |
| Morgan Stanley 3.125% 2023 | 100,592 | 98,214 |
| Morgan Stanley 3.737% 2024 (3-month USD-LIBOR + 0.847% on 4/24/2023)5 | 121,400 | 120,765 |
| Morgan Stanley 4.00% 2025 | 8,950 | 8,928 |
| Morgan Stanley 3.875% 2026 | 19,500 | 19,207 |
| Morgan Stanley 3.625% 2027 | 9,875 | 9,511 |
| Morgan Stanley 3.772% 2029 (3-month USD-LIBOR + 1.14% on 1/24/2028)5 | 79,880 | 77,067 |
| National Australia Bank Ltd. 1.375% 2019 | 10,200 | 10,050 |
| National Australia Bank Ltd. 1.875% 2021 | 10,200 | 9,745 |
| National Australia Bank Ltd. 2.50% 2022 | 29,500 | 28,274 |
| National Australia Bank Ltd. 2.875% 2023 | 23,725 | 23,010 |
| Nationwide Mutual Insurance Co. (3-month USD-LIBOR + 2.29%) 4.631% 20243,7 | 8,150 | 8,150 |
| New York Life Global Funding 1.50% 20193 | 15,265 | 14,983 |
| New York Life Global Funding 1.95% 20203 | 16,000 | 15,707 |
| New York Life Global Funding 1.70% 20213 | 40,500 | 38,562 |
| New York Life Global Funding 2.35% 20263 | 11,890 | 10,821 |
| Nordea Bank AB 2.50% 20203 | 14,825 | 14,584 |
| Nordea Bank AB 2.25% 20213 | 8,800 | 8,528 |
| PNC Bank 1.45% 2019 | 33,375 | 32,912 |
| PNC Bank 2.40% 2019 | 14,800 | 14,700 |
| PNC Bank 2.60% 2020 | 30,000 | 29,645 |
| PNC Bank 2.55% 2021 | 17,000 | 16,584 |
| PNC Bank 3.50% 2023 | 25,327 | 25,372 |
| PNC Financial Services Group, Inc. 3.90% 2024 | 20,000 | 20,053 |
| PRICOA Global Funding I 2.45% 20223 | 5,295 | 5,081 |
| Prudential Financial, Inc. 2.30% 2018 | 7,595 | 7,593 |
| Prudential Financial, Inc. 3.50% 2024 | 23,600 | 23,419 |
| Rabobank Nederland 1.375% 2019 | 16,560 | 16,285 |
| Rabobank Nederland 2.75% 2022 | 23,500 | 22,925 |
| Rabobank Nederland 4.375% 2025 | 22,650 | 22,234 |
| Santander Holdings USA, Inc. 3.70% 2022 | 28,500 | 28,097 |
| Santander Holdings USA, Inc. 3.40% 2023 | 31,500 | 30,436 |
| Skandinaviska Enskilda Banken AB 2.375% 20193 | 9,599 | 9,570 |
| Skandinaviska Enskilda Banken AB 2.45% 20203 | 27,550 | 27,166 |
| Skandinaviska Enskilda Banken AB 1.875% 2021 | 38,790 | 36,981 |
| Skandinaviska Enskilda Banken AB 2.80% 2022 | 9,960 | 9,708 |
| Sumitomo Mitsui Banking Corp. 2.50% 2018 | 12,475 | 12,475 |
| Sumitomo Mitsui Banking Corp. 3.102% 2023 | 52,500 | 51,306 |
American Balanced Fund — Page 7 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Financials (continued) | Principal amount
(000) | Value
(000) |
| Svenska Handelsbanken AB 1.95% 2020 | $6,855 | $6,672 |
| Synchrony Bank 3.65% 2021 | 37,625 | 37,670 |
| Travelers Companies, Inc. 4.00% 2047 | 13,520 | 13,026 |
| UBS Group AG 4.125% 20253 | 28,250 | 28,070 |
| UniCredit SPA 3.75% 20223 | 88,069 | 84,103 |
| UniCredit SPA 4.625% 20273 | 10,000 | 9,310 |
| UniCredit SPA 5.861% 20323,5 | 52,700 | 47,054 |
| Unum Group 3.875% 2025 | 5,045 | 4,906 |
| US Bancorp 2.35% 2020 | 25,000 | 24,778 |
| US Bancorp 2.625% 2022 | 16,225 | 15,891 |
| US Bancorp 2.85% 2023 | 63,000 | 61,705 |
| US Bancorp 2.375% 2026 | 35,000 | 31,868 |
| US Bancorp 3.15% 2027 | 34,000 | 32,525 |
| US Bank NA 1.40% 2019 | 5,465 | 5,412 |
| US Bank NA 2.125% 2019 | 30,000 | 29,718 |
| Wells Fargo & Co. 2.55% 2020 | 9,575 | 9,420 |
| Wells Fargo & Co. 2.10% 2021 | 25,600 | 24,611 |
| Wells Fargo & Co. 2.50% 2021 | 43,000 | 42,075 |
| Wells Fargo & Co. 4.60% 2021 | 25,000 | 25,807 |
| Wells Fargo & Co. 2.625% 2022 | 30,500 | 29,396 |
| Wells Fargo & Co. 3.069% 2023 | 60,000 | 58,364 |
| Wells Fargo & Co. 3.00% 2026 | 21,000 | 19,540 |
| Wells Fargo & Co. 3.00% 2026 | 13,400 | 12,382 |
| Wells Fargo & Co. 3.584% 2028 (3-month USD-LIBOR + 1.31% on 5/15/2027)5 | 16,755 | 16,065 |
| Westpac Banking Corp. 2.15% 2020 | 28,000 | 27,554 |
| Westpac Banking Corp. 2.75% 2023 | 27,500 | 26,234 |
| | | 5,573,059 |
| Health care 1.81% | | |
| Abbott Laboratories 2.80% 2020 | 13,870 | 13,770 |
| Abbott Laboratories 2.90% 2021 | 67,382 | 66,388 |
| Abbott Laboratories 3.40% 2023 | 12,260 | 12,106 |
| Abbott Laboratories 3.75% 2026 | 21,120 | 20,789 |
| Abbott Laboratories 4.75% 2036 | 4,800 | 5,076 |
| Abbott Laboratories 4.90% 2046 | 3,500 | 3,759 |
| AbbVie Inc. 2.50% 2020 | 10,400 | 10,276 |
| AbbVie Inc. 2.30% 2021 | 25,485 | 24,780 |
| AbbVie Inc. 2.90% 2022 | 37,353 | 36,272 |
| AbbVie Inc. 3.20% 2022 | 4,646 | 4,573 |
| AbbVie Inc. 2.85% 2023 | 14,887 | 14,349 |
| AbbVie Inc. 3.60% 2025 | 23,000 | 22,302 |
| AbbVie Inc. 4.30% 2036 | 4,730 | 4,538 |
| AbbVie Inc. 4.45% 2046 | 31,570 | 30,282 |
| Allergan PLC 3.00% 2020 | 26,950 | 26,826 |
| Allergan PLC 3.45% 2022 | 96,422 | 94,935 |
| Allergan PLC 3.80% 2025 | 10,437 | 10,147 |
| Allergan PLC 4.55% 2035 | 17,870 | 16,993 |
| Allergan PLC 4.75% 2045 | 21,404 | 20,665 |
| Allergan, Inc. 5.00% 20213 | 35,099 | 36,339 |
| AmerisourceBergen Corp. 3.25% 2025 | 2,170 | 2,061 |
| AmerisourceBergen Corp. 4.25% 2045 | 2,045 | 1,803 |
| Amgen Inc. 1.85% 2021 | 13,745 | 13,154 |
| Amgen Inc. 2.70% 2022 | 10,620 | 10,322 |
| Amgen Inc. 4.40% 2045 | 16,000 | 15,363 |
American Balanced Fund — Page 8 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Health care (continued) | Principal amount
(000) | Value
(000) |
| Anthem, Inc. 2.95% 2022 | $26,430 | $25,687 |
| Anthem, Inc. 4.101% 2028 | 40,000 | 39,277 |
| AstraZeneca PLC 2.375% 2022 | 29,195 | 28,109 |
| AstraZeneca PLC 3.375% 2025 | 30,445 | 29,308 |
| Baxalta Inc. 4.00% 2025 | 12,000 | 11,762 |
| Bayer AG 2.375% 20193 | 8,245 | 8,177 |
| Bayer US Finance II LLC 3.875% 20233 | 46,412 | 46,453 |
| Bayer US Finance II LLC 4.25% 20253 | 59,336 | 59,770 |
| Bayer US Finance II LLC 4.625% 20383 | 11,798 | 11,735 |
| Bayer US Finance II LLC 4.875% 20483 | 27,071 | 27,435 |
| Becton, Dickinson and Co. 2.133% 2019 | 17,750 | 17,647 |
| Becton, Dickinson and Co. 2.404% 2020 | 17,750 | 17,439 |
| Becton, Dickinson and Co. 2.894% 2022 | 39,820 | 38,540 |
| Becton, Dickinson and Co. 3.363% 2024 | 40,505 | 38,944 |
| Boston Scientific Corp. 3.375% 2022 | 20,000 | 19,743 |
| Boston Scientific Corp. 3.85% 2025 | 45,500 | 45,085 |
| CVS Health Corp. 3.35% 2021 | 67,095 | 67,059 |
| CVS Health Corp. 3.70% 2023 | 75,032 | 74,347 |
| CVS Health Corp. 4.10% 2025 | 115,625 | 115,159 |
| CVS Health Corp. 4.30% 2028 | 72,170 | 71,301 |
| CVS Health Corp. 4.78% 2038 | 19,437 | 19,273 |
| CVS Health Corp. 5.05% 2048 | 11,937 | 12,102 |
| EMD Finance LLC 2.95% 20223 | 12,850 | 12,569 |
| EMD Finance LLC 3.25% 20253 | 16,200 | 15,509 |
| GlaxoSmithKline PLC 3.625% 2025 | 24,165 | 24,141 |
| HCA Inc. 6.50% 2020 | 9,800 | 10,229 |
| Humana Inc. 3.15% 2022 | 20,000 | 19,481 |
| Johnson & Johnson 2.25% 2022 | 28,250 | 27,633 |
| Johnson & Johnson 2.45% 2026 | 8,360 | 7,849 |
| Johnson & Johnson 3.625% 2037 | 7,250 | 7,094 |
| Johnson & Johnson 3.75% 2047 | 5,000 | 4,900 |
| Medtronic, Inc. 3.50% 2025 | 22,500 | 22,277 |
| Medtronic, Inc. 4.375% 2035 | 12,627 | 13,074 |
| Medtronic, Inc. 4.625% 2045 | 11,095 | 11,779 |
| Mylan Laboratories Inc. 3.15% 2021 | 18,347 | 18,152 |
| Novartis Capital Corp. 2.40% 2022 | 28,000 | 27,205 |
| Pfizer Inc. 7.20% 2039 | 485 | 673 |
| Roche Holdings, Inc. 2.875% 20213 | 24,400 | 24,173 |
| Roche Holdings, Inc. 1.75% 20223 | 18,330 | 17,432 |
| Roche Holdings, Inc. 3.35% 20243 | 9,000 | 8,948 |
| Roche Holdings, Inc. 3.00% 20253 | 19,000 | 18,354 |
| Shire PLC 1.90% 2019 | 20,000 | 19,700 |
| Shire PLC 2.40% 2021 | 51,904 | 49,725 |
| Shire PLC 2.875% 2023 | 105,025 | 98,875 |
| Shire PLC 3.20% 2026 | 90,000 | 82,592 |
| Teva Pharmaceutical Finance Company BV 2.20% 2021 | 128,578 | 119,338 |
| Teva Pharmaceutical Finance Company BV 2.80% 2023 | 158,775 | 137,251 |
| Teva Pharmaceutical Finance Company BV 3.15% 2026 | 147,999 | 119,116 |
| Thermo Fisher Scientific Inc. 4.15% 2024 | 11,840 | 12,027 |
| UnitedHealth Group Inc. 2.125% 2021 | 26,195 | 25,535 |
| WellPoint, Inc. 2.25% 2019 | 15,500 | 15,374 |
American Balanced Fund — Page 9 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Health care (continued) | Principal amount
(000) | Value
(000) |
| Zimmer Holdings, Inc. 3.15% 2022 | $18,910 | $18,575 |
| Zimmer Holdings, Inc. 4.25% 2035 | 1,197 | 1,131 |
| | | 2,332,931 |
| Energy 1.53% | | |
| Anadarko Petroleum Corp. 4.85% 2021 | 24,635 | 25,366 |
| Anadarko Petroleum Corp. 5.55% 2026 | 13,895 | 14,910 |
| Anadarko Petroleum Corp. 6.60% 2046 | 14,150 | 17,053 |
| Canadian Natural Resources Ltd. 2.95% 2023 | 34,865 | 33,662 |
| Canadian Natural Resources Ltd. 3.80% 2024 | 1,720 | 1,706 |
| Canadian Natural Resources Ltd. 3.85% 2027 | 7,500 | 7,327 |
| Canadian Natural Resources Ltd. 4.95% 2047 | 7,500 | 7,765 |
| Cenovus Energy Inc. 3.00% 2022 | 2,000 | 1,917 |
| Cenovus Energy Inc. 3.80% 2023 | 20,710 | 20,207 |
| Cenovus Energy Inc. 4.25% 2027 | 52,985 | 51,109 |
| Cenovus Energy Inc. 5.25% 2037 | 12,500 | 12,321 |
| Cenovus Energy Inc. 5.40% 2047 | 32,500 | 31,909 |
| Chevron Corp. 2.566% 2023 | 13,000 | 12,584 |
| Concho Resources Inc. 4.30% 2028 | 23,825 | 23,842 |
| Concho Resources Inc. 4.85% 2048 | 9,046 | 9,197 |
| Devon Energy Corp. 5.00% 2045 | 6,000 | 6,122 |
| Enbridge Energy Partners, LP 9.875% 2019 | 11,250 | 11,737 |
| Enbridge Energy Partners, LP 4.375% 2020 | 15,730 | 16,015 |
| Enbridge Energy Partners, LP 5.875% 2025 | 21,005 | 22,886 |
| Enbridge Energy Partners, LP 5.50% 2040 | 15,000 | 15,649 |
| Enbridge Energy Partners, LP 7.375% 2045 | 52,240 | 66,640 |
| Enbridge Energy Partners, LP, Series B, 7.50% 2038 | 9,250 | 11,447 |
| Enbridge Inc. 4.00% 2023 | 26,535 | 26,642 |
| Enbridge Inc. 3.70% 2027 | 26,253 | 24,915 |
| Energy Transfer Partners, LP 4.15% 2020 | 11,500 | 11,645 |
| Energy Transfer Partners, LP 4.20% 2023 | 11,190 | 11,184 |
| Energy Transfer Partners, LP 4.75% 2026 | 19,000 | 18,849 |
| Energy Transfer Partners, LP 4.00% 2027 | 25,745 | 24,095 |
| Energy Transfer Partners, LP 4.20% 2027 | 13,373 | 12,615 |
| Energy Transfer Partners, LP 4.95% 2028 | 15,906 | 15,881 |
| Energy Transfer Partners, LP 6.125% 2045 | 14,990 | 15,031 |
| Energy Transfer Partners, LP 5.30% 2047 | 40,414 | 37,076 |
| Energy Transfer Partners, LP 5.40% 2047 | 96,728 | 88,995 |
| Energy Transfer Partners, LP 6.00% 2048 | 36,160 | 36,169 |
| EnLink Midstream Partners, LP 4.15% 2025 | 29,650 | 27,435 |
| EnLink Midstream Partners, LP 5.05% 2045 | 9,405 | 7,672 |
| EnLink Midstream Partners, LP 5.45% 2047 | 18,515 | 15,609 |
| Enterprise Products Operating LLC 3.90% 2024 | 16,545 | 16,581 |
| Enterprise Products Operating LLC 3.95% 2027 | 550 | 545 |
| EOG Resources, Inc. 4.15% 2026 | 10,220 | 10,466 |
| EQT Corp. 3.00% 2022 | 16,800 | 16,194 |
| EQT Corp. 3.90% 2027 | 15,080 | 14,099 |
| Exxon Mobil Corp. 2.222% 2021 | 18,000 | 17,674 |
| Exxon Mobil Corp. 2.726% 2023 | 12,000 | 11,781 |
| Halliburton Co. 3.80% 2025 | 8,000 | 7,955 |
| Kinder Morgan Energy Partners, LP 2.65% 2019 | 20,000 | 19,963 |
| Kinder Morgan Energy Partners, LP 9.00% 2019 | 4,395 | 4,544 |
| Kinder Morgan Energy Partners, LP 3.50% 2021 | 8,980 | 8,969 |
| Kinder Morgan Energy Partners, LP 5.40% 2044 | 13,135 | 12,785 |
American Balanced Fund — Page 10 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Energy (continued) | Principal amount
(000) | Value
(000) |
| Kinder Morgan Energy Partners, LP 5.50% 2044 | $11,321 | $11,275 |
| Kinder Morgan, Inc. 3.05% 2019 | 8,070 | 8,048 |
| Kinder Morgan, Inc. 6.50% 2020 | 10,700 | 11,250 |
| Kinder Morgan, Inc. 4.30% 2028 | 80,865 | 78,496 |
| Kinder Morgan, Inc. 5.30% 2034 | 8,205 | 8,101 |
| Kinder Morgan, Inc. 5.55% 2045 | 27,109 | 27,465 |
| Kinder Morgan, Inc. 5.20% 2048 | 73,631 | 71,397 |
| Marathon Oil Corp. 4.40% 2027 | 31,665 | 31,823 |
| MPLX LP 4.125% 2027 | 13,650 | 13,039 |
| MPLX LP 4.00% 2028 | 9,735 | 9,278 |
| MPLX LP 4.50% 2038 | 25,500 | 23,612 |
| Noble Energy, Inc. 3.85% 2028 | 19,650 | 18,808 |
| Noble Energy, Inc. 4.95% 2047 | 13,500 | 13,555 |
| Petróleos Mexicanos 5.35% 20283 | 15,590 | 14,795 |
| Petróleos Mexicanos 5.50% 2044 | 3,370 | 2,851 |
| Petróleos Mexicanos 5.625% 2046 | 8,800 | 7,449 |
| Petróleos Mexicanos 6.75% 2047 | 59,847 | 57,034 |
| Petróleos Mexicanos 6.35% 20483 | 88,165 | 80,230 |
| Phillips 66 Partners LP 3.605% 2025 | 1,950 | 1,862 |
| Phillips 66 3.90% 2028 | 24,325 | 23,779 |
| Phillips 66 4.875% 2044 | 40,000 | 41,441 |
| Phillips 66 Partners LP 3.55% 2026 | 3,350 | 3,137 |
| Phillips 66 Partners LP 3.75% 2028 | 8,775 | 8,214 |
| Phillips 66 Partners LP 4.68% 2045 | 6,580 | 6,186 |
| Phillips 66 Partners LP 4.90% 2046 | 20,100 | 19,323 |
| Pioneer Natural Resources Co. 3.45% 2021 | 11,530 | 11,560 |
| Sabine Pass Liquefaction, LLC 5.625% 20235 | 75,500 | 80,159 |
| Sabine Pass Liquefaction, LLC 5.75% 2024 | 50,000 | 53,451 |
| Sabine Pass Liquefaction, LLC 5.875% 2026 | 10,265 | 11,023 |
| Sabine Pass Liquefaction, LLC 4.20% 2028 | 57,100 | 54,997 |
| Schlumberger BV 3.625% 20223 | 11,340 | 11,349 |
| Schlumberger BV 4.00% 20253 | 23,448 | 23,400 |
| Shell International Finance BV 2.25% 2020 | 8,375 | 8,243 |
| Shell International Finance BV 1.875% 2021 | 15,000 | 14,547 |
| Statoil ASA 2.75% 2021 | 5,395 | 5,323 |
| Statoil ASA 3.25% 2024 | 1,690 | 1,665 |
| Statoil ASA 4.25% 2041 | 6,000 | 5,962 |
| TC PipeLines, LP 4.375% 2025 | 6,390 | 6,326 |
| TransCanada PipeLines Ltd. 4.25% 2028 | 17,075 | 17,155 |
| TransCanada PipeLines Ltd. 4.75% 2038 | 22,400 | 22,448 |
| TransCanada PipeLines Ltd. 5.00% 2043 | 10,000 | 10,164 |
| TransCanada PipeLines Ltd. 4.875% 2048 | 23,500 | 23,812 |
TransCanada PipeLines Ltd., junior subordinated, 5.625% 2075
(3-month USD-LIBOR + 3.528% on 5/20/2025)5 | 6,410 | 6,266 |
| Western Gas Partners LP 3.95% 2025 | 3,730 | 3,522 |
| Western Gas Partners LP 4.65% 2026 | 7,045 | 6,930 |
| Western Gas Partners LP 5.30% 2048 | 20,000 | 18,430 |
| Williams Partners LP 4.50% 2023 | 6,400 | 6,503 |
| Williams Partners LP 4.30% 2024 | 7,870 | 7,905 |
| Williams Partners LP 4.85% 2048 | 30,000 | 28,668 |
| Woodside Petroleum Ltd. 3.65% 20253 | 12,400 | 12,098 |
| | | 1,981,094 |
American Balanced Fund — Page 11 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Consumer discretionary 1.38% | Principal amount
(000) | Value
(000) |
| Amazon.com, Inc. 2.40% 2023 | $36,545 | $35,232 |
| Amazon.com, Inc. 2.80% 2024 | 56,300 | 53,751 |
| Amazon.com, Inc. 3.80% 2024 | 35,000 | 35,744 |
| American Honda Finance Corp. 2.65% 2021 | 32,000 | 31,752 |
| American Honda Finance Corp. 3.50% 2028 | 32,000 | 31,379 |
| Bayerische Motoren Werke AG 3.45% 20233 | 61,070 | 60,449 |
| CBS Corp. 3.50% 2025 | 15,000 | 14,362 |
| CBS Corp. 4.60% 2045 | 25,000 | 23,134 |
| CCO Holdings LLC and CCO Holdings Capital Corp. 4.464% 2022 | 12,500 | 12,651 |
| CCO Holdings LLC and CCO Holdings Capital Corp. 4.50% 2024 | 20,375 | 20,372 |
| CCO Holdings LLC and CCO Holdings Capital Corp. 4.908% 2025 | 10,000 | 10,110 |
| CCO Holdings LLC and CCO Holdings Capital Corp. 4.20% 2028 | 22,210 | 20,825 |
| CCO Holdings LLC and CCO Holdings Capital Corp. 6.484% 2045 | 16,350 | 17,278 |
| CCO Holdings LLC and CCO Holdings Capital Corp. 5.375% 2047 | 25,785 | 23,480 |
| Comcast Corp. 3.15% 2026 | 11,215 | 10,538 |
| Comcast Corp. 2.35% 2027 | 17,000 | 14,907 |
| Comcast Corp. 3.30% 2027 | 11,250 | 10,592 |
| Comcast Corp. 3.20% 2036 | 7,250 | 6,039 |
| Comcast Corp. 6.45% 2037 | 15,000 | 17,851 |
| Comcast Corp. 3.90% 2038 | 12,750 | 11,630 |
| Comcast Corp. 4.60% 2045 | 20,000 | 19,299 |
| Comcast Corp. 4.00% 2048 | 26,750 | 23,605 |
| DaimlerChrysler North America Holding Corp. 1.50% 20193 | 25,500 | 25,133 |
| DaimlerChrysler North America Holding Corp. 2.25% 20193 | 13,000 | 12,862 |
| DaimlerChrysler North America Holding Corp. 2.25% 20203 | 9,780 | 9,621 |
| DaimlerChrysler North America Holding Corp. 2.00% 20213 | 22,525 | 21,562 |
| DaimlerChrysler North America Holding Corp. 3.00% 20213 | 40,000 | 39,551 |
| DaimlerChrysler North America Holding Corp. 3.35% 20233 | 12,800 | 12,583 |
| DaimlerChrysler North America Holding Corp. 3.75% 20283 | 4,198 | 4,075 |
| Ford Motor Co. 5.291% 2046 | 5,000 | 4,654 |
| Ford Motor Credit Co. 2.551% 2018 | 9,015 | 9,010 |
| Ford Motor Credit Co. 2.597% 2019 | 13,000 | 12,903 |
| Ford Motor Credit Co. 2.343% 2020 | 84,005 | 81,844 |
| Ford Motor Credit Co. 3.157% 2020 | 44,135 | 43,884 |
| Ford Motor Credit Co. 3.20% 2021 | 8,300 | 8,212 |
| Ford Motor Credit Co. 3.339% 2022 | 27,500 | 26,932 |
| Ford Motor Credit Co. 3.096% 2023 | 43,286 | 41,306 |
| Ford Motor Credit Co. 4.14% 2023 | 20,000 | 19,988 |
| Ford Motor Credit Co. 4.375% 2023 | 26,189 | 26,320 |
| Ford Motor Credit Co. 3.664% 2024 | 10,000 | 9,580 |
| Ford Motor Credit Co. 4.134% 2025 | 21,355 | 20,850 |
| Ford Motor Credit Co. 3.815% 2027 | 9,367 | 8,683 |
| General Motors Co. 4.875% 2023 | 22,735 | 23,392 |
| General Motors Co. 4.35% 2025 | 20,515 | 20,242 |
| General Motors Co. 6.60% 2036 | 9,435 | 10,233 |
| General Motors Financial Co. 2.35% 2019 | 18,000 | 17,851 |
| General Motors Financial Co. 2.40% 2019 | 20,435 | 20,344 |
| General Motors Financial Co. 3.70% 2020 | 20,890 | 21,006 |
| General Motors Financial Co. 3.20% 2021 | 20,000 | 19,752 |
| General Motors Financial Co. 3.45% 2022 | 30,000 | 29,594 |
| General Motors Financial Co. 3.25% 2023 | 44,500 | 43,159 |
| General Motors Financial Co. 3.70% 2023 | 43,947 | 43,210 |
| General Motors Financial Co. 3.50% 2024 | 46,510 | 44,331 |
| General Motors Financial Co. 3.95% 2024 | 45,284 | 44,354 |
American Balanced Fund — Page 12 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Consumer discretionary (continued) | Principal amount
(000) | Value
(000) |
| General Motors Financial Co. 4.35% 2027 | $11,250 | $10,901 |
| Home Depot, Inc. 1.80% 2020 | 26,880 | 26,403 |
| Home Depot, Inc. 4.40% 2021 | 15,000 | 15,543 |
| Home Depot, Inc. 5.95% 2041 | 7,500 | 9,273 |
| Home Depot, Inc. 4.25% 2046 | 16,500 | 16,625 |
| Hyundai Capital America 2.00% 20193 | 11,960 | 11,807 |
| Hyundai Capital America 2.55% 20203 | 8,300 | 8,160 |
| Hyundai Capital America 3.45% 20213 | 58,690 | 58,262 |
| Hyundai Capital America 3.75% 20213 | 20,000 | 19,990 |
| Hyundai Capital America 3.10% 20223 | 26,390 | 25,767 |
| Hyundai Capital America 3.25% 20223 | 13,055 | 12,709 |
| Lowe’s Companies, Inc. 2.50% 2026 | 23,310 | 21,347 |
| McDonald’s Corp. 2.625% 2022 | 23,710 | 23,249 |
| McDonald’s Corp. 3.50% 2027 | 6,555 | 6,404 |
| McDonald’s Corp. 3.80% 2028 | 14,775 | 14,734 |
| McDonald’s Corp. 4.875% 2045 | 12,000 | 12,647 |
| NBC Universal Enterprise, Inc. 5.25% 20493 | 5,730 | 5,802 |
| Newell Rubbermaid Inc. 3.15% 2021 | 25,777 | 25,553 |
| Newell Rubbermaid Inc. 3.85% 2023 | 4,770 | 4,702 |
| Nissan Motor Co., Ltd. 2.60% 20223 | 29,255 | 28,102 |
| Nordstrom, Inc. 4.00% 2021 | 6,245 | 6,299 |
| Starbucks Corp. 3.10% 2023 | 51,087 | 50,121 |
| Thomson Reuters Corp. 4.30% 2023 | 4,500 | 4,596 |
| Thomson Reuters Corp. 3.35% 2026 | 12,410 | 11,497 |
| Thomson Reuters Corp. 5.65% 2043 | 2,000 | 2,165 |
| Time Warner Cable Inc. 6.75% 2018 | 20,000 | 20,000 |
| Time Warner Inc. 3.80% 2027 | 6,045 | 5,726 |
| Toyota Motor Credit Corp. 2.60% 2022 | 18,015 | 17,650 |
| Toyota Motor Credit Corp. 2.25% 2023 | 14,085 | 13,270 |
| Toyota Motor Credit Corp. 3.05% 2028 | 15,800 | 15,044 |
| | | 1,786,349 |
| Consumer staples 1.30% | | |
| Altria Group, Inc. 9.25% 2019 | 5,067 | 5,413 |
| Altria Group, Inc. 2.625% 2020 | 14,760 | 14,683 |
| Altria Group, Inc. 2.95% 2023 | 8,000 | 7,784 |
| Altria Group, Inc. 9.95% 2038 | 13,500 | 21,485 |
| Altria Group, Inc. 4.50% 2043 | 10,000 | 9,605 |
| Altria Group, Inc. 5.375% 2044 | 6,825 | 7,390 |
| Anheuser-Busch InBev NV 2.20% 2018 | 18,700 | 18,693 |
| Anheuser-Busch InBev NV 3.30% 2023 | 62,345 | 61,869 |
| Anheuser-Busch InBev NV 3.50% 2024 | 28,585 | 28,472 |
| Anheuser-Busch InBev NV 3.65% 2026 | 37,965 | 37,215 |
| Anheuser-Busch InBev NV 4.00% 2028 | 69,467 | 69,417 |
| Anheuser-Busch InBev NV 4.60% 2048 | 24,578 | 24,196 |
| British American Tobacco International Finance PLC 3.95% 20253 | 16,500 | 16,143 |
| British American Tobacco PLC 2.297% 20203 | 35,827 | 35,071 |
| British American Tobacco PLC 2.764% 20223 | 35,630 | 34,188 |
| British American Tobacco PLC 3.222% 20243 | 119,000 | 112,828 |
| British American Tobacco PLC 3.557% 20273 | 66,150 | 61,640 |
| British American Tobacco PLC 4.39% 20373 | 25,500 | 23,982 |
| British American Tobacco PLC 4.54% 20473 | 40,500 | 37,935 |
| Constellation Brands, Inc. 2.00% 2019 | 19,000 | 18,725 |
| Constellation Brands, Inc. 2.25% 2020 | 19,000 | 18,559 |
American Balanced Fund — Page 13 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Consumer staples (continued) | Principal amount
(000) | Value
(000) |
| Constellation Brands, Inc. 2.65% 2022 | $43,645 | $41,888 |
| Constellation Brands, Inc. 2.70% 2022 | 6,780 | 6,563 |
| Constellation Brands, Inc. 3.20% 2023 | 30,742 | 29,935 |
| Constellation Brands, Inc. 3.60% 2028 | 10,000 | 9,467 |
| Constellation Brands, Inc. 4.50% 2047 | 3,465 | 3,308 |
| Constellation Brands, Inc. 4.10% 2048 | 22,000 | 19,638 |
| Costco Wholesale Corp. 2.15% 2021 | 17,500 | 17,119 |
| Costco Wholesale Corp. 2.30% 2022 | 17,500 | 17,001 |
| Costco Wholesale Corp. 2.75% 2024 | 57,500 | 55,708 |
| Costco Wholesale Corp. 3.00% 2027 | 17,500 | 16,719 |
| General Mills, Inc. (3-month USD-LIBOR + 0.54%) 2.893% 20217 | 14,250 | 14,277 |
| General Mills, Inc. 3.70% 2023 | 3,120 | 3,091 |
| Imperial Tobacco Finance PLC 3.50% 20233 | 17,000 | 16,631 |
| Kraft Heinz Co. 3.50% 2022 | 23,285 | 23,088 |
| Kraft Heinz Co. 4.375% 2046 | 5,290 | 4,590 |
| Kroger Co. 3.50% 2026 | 16,135 | 15,361 |
| Maple Escrow 3.551% 20213 | 33,725 | 33,775 |
| Maple Escrow 4.057% 20233 | 61,675 | 61,973 |
| Maple Escrow 4.417% 20253 | 24,162 | 24,313 |
| Maple Escrow 4.597% 20283 | 23,096 | 23,217 |
| Maple Escrow 4.985% 20383 | 17,945 | 18,104 |
| Maple Escrow 5.085% 20483 | 32,576 | 32,944 |
| Mead Johnson Nutrition Co. 3.00% 2020 | 6,525 | 6,500 |
| Mead Johnson Nutrition Co. 4.125% 2025 | 3,355 | 3,420 |
| Molson Coors Brewing Co. 1.45% 2019 | 7,465 | 7,349 |
| Molson Coors Brewing Co. 1.90% 2019 | 10,015 | 9,945 |
| Molson Coors Brewing Co. 2.25% 2020 | 8,590 | 8,457 |
| Molson Coors Brewing Co. 2.10% 2021 | 11,385 | 10,924 |
| Molson Coors Brewing Co. 3.00% 2026 | 9,670 | 8,796 |
| Molson Coors Brewing Co. 4.20% 2046 | 10,475 | 9,434 |
| Pernod Ricard SA 4.45% 20223 | 9,600 | 9,876 |
| Philip Morris International Inc. 2.00% 2020 | 28,010 | 27,565 |
| Philip Morris International Inc. 1.875% 2021 | 25,020 | 24,231 |
| Philip Morris International Inc. 2.375% 2022 | 20,565 | 19,687 |
| Philip Morris International Inc. 2.50% 2022 | 31,500 | 30,229 |
| Philip Morris International Inc. 2.625% 2022 | 30,160 | 29,405 |
| Philip Morris International Inc. 3.25% 2024 | 10,000 | 9,715 |
| Philip Morris International Inc. 3.375% 2025 | 27,395 | 26,656 |
| Philip Morris International Inc. 4.25% 2044 | 6,000 | 5,693 |
| Procter & Gamble Co. 1.70% 2021 | 8,270 | 7,961 |
| Reckitt Benckiser Group PLC 2.375% 20223 | 19,000 | 18,171 |
| Reckitt Benckiser Group PLC 2.75% 20243 | 8,078 | 7,626 |
| Reynolds American Inc. 3.25% 2022 | 11,420 | 11,205 |
| Reynolds American Inc. 4.00% 2022 | 6,695 | 6,743 |
| Reynolds American Inc. 4.85% 2023 | 12,000 | 12,483 |
| Reynolds American Inc. 4.45% 2025 | 60,115 | 60,503 |
| Reynolds American Inc. 5.70% 2035 | 1,555 | 1,673 |
| Reynolds American Inc. 5.85% 2045 | 32,595 | 35,747 |
| Wal-Mart Stores, Inc. 3.40% 2023 | 30,140 | 30,374 |
| Wal-Mart Stores, Inc. 3.55% 2025 | 23,618 | 23,785 |
| Wal-Mart Stores, Inc. 3.70% 2028 | 15,841 | 15,965 |
American Balanced Fund — Page 14 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Consumer staples (continued) | Principal amount
(000) | Value
(000) |
| Wal-Mart Stores, Inc. 4.05% 2048 | $17,714 | $17,772 |
| WM. Wrigley Jr. Co 3.375% 20203 | 22,500 | 22,568 |
| | | 1,674,461 |
| Utilities 1.16% | | |
| Abu Dhabi National Energy Co. PJSC (TAQA) 4.375% 20253 | 25,500 | 25,282 |
| Abu Dhabi National Energy Co. PJSC (TAQA) 4.875% 20303 | 11,250 | 11,244 |
| AEP Transmission Company LLC 3.75% 2047 | 9,870 | 9,185 |
| Ameren Corp. 3.65% 2026 | 1,410 | 1,368 |
| Ameren Corp. 3.70% 2047 | 23,960 | 22,436 |
| American Electric Power Co., Inc. 2.15% 2020 | 9,800 | 9,569 |
| American Electric Power Co., Inc. 2.95% 2022 | 13,694 | 13,340 |
| Berkshire Hathaway Energy Co. 2.40% 2020 | 4,355 | 4,321 |
| Berkshire Hathaway Energy Co. 2.80% 2023 | 16,000 | 15,617 |
| Centerpoint Energy, Inc. 2.50% 2022 | 4,510 | 4,330 |
| CMS Energy Corp. 5.05% 2022 | 9,215 | 9,668 |
| Comision Federal de Electricidad 4.75% 20273 | 10,725 | 10,470 |
| Commonwealth Edison Company 2.55% 2026 | 11,270 | 10,361 |
| Commonwealth Edison Company 4.35% 2045 | 8,345 | 8,546 |
| Commonwealth Edison Company 4.00% 2048 | 11,750 | 11,513 |
| Consolidated Edison Co. of New York 4.50% 2058 | 19,825 | 19,740 |
| Consolidated Edison Company of New York, Inc. 3.875% 2047 | 9,600 | 9,028 |
| Consumers Energy Co. 3.375% 2023 | 1,435 | 1,433 |
| Consumers Energy Co. 3.125% 2024 | 10,520 | 10,215 |
| Consumers Energy Co. 3.25% 2046 | 10,635 | 9,318 |
| Consumers Energy Co. 4.05% 2048 | 27,710 | 27,707 |
| Dominion Resources, Inc. 1.875% 20183 | 25,000 | 24,906 |
| Dominion Resources, Inc. 1.60% 2019 | 3,660 | 3,605 |
| Dominion Resources, Inc. 2.962% 20195 | 11,040 | 11,018 |
| Dominion Resources, Inc. 2.579% 20205 | 7,025 | 6,924 |
| Dominion Resources, Inc. 2.00% 2021 | 13,335 | 12,724 |
| Dominion Resources, Inc. 2.75% 2022 | 36,516 | 35,443 |
| Duke Energy Carolinas, Inc. 3.70% 2047 | 6,625 | 6,178 |
| Duke Energy Corp. 3.75% 2024 | 24,295 | 24,232 |
| Duke Energy Corp. 2.65% 2026 | 21,250 | 19,167 |
| Duke Energy Florida, LLC 3.20% 2027 | 23,075 | 22,216 |
| Duke Energy Ohio, Inc. 3.70% 2046 | 7,475 | 6,895 |
| Duke Energy Progress Inc. 4.15% 2044 | 26,190 | 25,887 |
| Duke Energy Progress Inc. 3.70% 2046 | 29,270 | 26,983 |
| EDP Finance BV 3.625% 20243 | 63,525 | 60,967 |
| Electricité de France SA 2.35% 20203 | 4,600 | 4,513 |
| Electricité de France SA 6.95% 20393 | 10,325 | 13,110 |
| Emera Inc. 6.75% 2076 (3-month USD-LIBOR + 5.44% on 6/15/2026)5 | 11,600 | 12,122 |
| Emera US Finance LP 2.15% 2019 | 9,165 | 9,071 |
| Emera US Finance LP 2.70% 2021 | 11,940 | 11,629 |
| Emera US Finance LP 3.55% 2026 | 17,715 | 16,702 |
| Enel Finance International SA 2.875% 20223 | 13,466 | 12,839 |
| Enel Finance International SA 2.75% 20233 | 53,034 | 49,391 |
| Enel Finance International SA 3.625% 20273 | 29,500 | 27,024 |
| Enel Finance International SA 3.50% 20283 | 26,650 | 23,986 |
| Enersis Américas SA 4.00% 2026 | 4,330 | 4,136 |
| Entergy Corp. 4.00% 2022 | 7,994 | 8,098 |
| Entergy Corp. 2.95% 2026 | 24,040 | 21,989 |
| Eversource Energy 2.70% 2026 | 4,085 | 3,795 |
American Balanced Fund — Page 15 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Utilities (continued) | Principal amount
(000) | Value
(000) |
| Exelon Corp. 2.85% 2020 | $15,000 | $14,873 |
| Exelon Corp. 3.497% 20225 | 90,158 | 89,262 |
| Exelon Corp. 3.40% 2026 | 2,840 | 2,701 |
| Exelon Corp. 4.45% 2046 | 12,640 | 12,319 |
| FirstEnergy Corp. 3.90% 2027 | 48,970 | 47,578 |
| FirstEnergy Corp. 4.85% 2047 | 43,720 | 44,840 |
| FirstEnergy Corp., Series B, 4.25% 2023 | 33,180 | 33,736 |
| Great Plains Energy Inc. 4.20% 2047 | 8,400 | 8,285 |
| MidAmerican Energy Holdings Co. 2.40% 2019 | 5,500 | 5,487 |
| MidAmerican Energy Holdings Co. 3.75% 2023 | 20,000 | 20,258 |
| MidAmerican Energy Holdings Co. 3.10% 2027 | 21,335 | 20,547 |
| National Rural Utilities Cooperative Finance Corp. 10.375% 2018 | 8,450 | 8,667 |
| National Rural Utilities Cooperative Finance Corp. 2.00% 2020 | 14,460 | 14,259 |
| National Rural Utilities Cooperative Finance Corp. 2.30% 2020 | 8,805 | 8,645 |
| National Rural Utilities Cooperative Finance Corp. 2.95% 2024 | 11,500 | 11,112 |
| National Rural Utilities Cooperative Finance Corp. 3.05% 2027 | 22,000 | 20,869 |
| NiSource Finance Corp. 2.65% 2022 | 14,850 | 14,364 |
| Northeast Utilities 3.15% 2025 | 8,845 | 8,524 |
| Northern States Power Co. 4.125% 2044 | 18,000 | 18,147 |
| NV Energy, Inc 6.25% 2020 | 10,168 | 10,864 |
| Pacific Gas and Electric Co. 3.25% 2023 | 6,742 | 6,442 |
| Pacific Gas and Electric Co. 3.85% 2023 | 21,430 | 21,147 |
| Pacific Gas and Electric Co. 3.40% 2024 | 3,369 | 3,152 |
| Pacific Gas and Electric Co. 3.75% 2024 | 20,000 | 19,312 |
| Pacific Gas and Electric Co. 2.95% 2026 | 9,275 | 8,287 |
| Pacific Gas and Electric Co. 3.30% 2027 | 25,869 | 23,266 |
| Pacific Gas and Electric Co. 3.30% 2027 | 11,325 | 10,251 |
| Pacific Gas and Electric Co. 4.75% 2044 | 4,930 | 4,690 |
| Pacific Gas and Electric Co. 3.95% 2047 | 10,000 | 8,582 |
| PacifiCorp., First Mortgage Bonds, 5.65% 2018 | 2,465 | 2,468 |
| PacifiCorp., First Mortgage Bonds, 3.60% 2024 | 18,405 | 18,568 |
| Public Service Co. of Colorado 2.25% 2022 | 6,000 | 5,746 |
| Public Service Electric and Gas Co., 3.05% 2024 | 13,425 | 13,121 |
| Public Service Enterprise Group Inc. 1.90% 2021 | 6,810 | 6,588 |
| Public Service Enterprise Group Inc. 2.65% 2022 | 25,075 | 24,156 |
| Public Service Enterprise Group Inc. 2.25% 2026 | 3,875 | 3,503 |
| Puget Energy, Inc. 6.50% 2020 | 5,750 | 6,161 |
| Puget Energy, Inc. 6.00% 2021 | 13,200 | 14,126 |
| Puget Energy, Inc. 5.625% 2022 | 15,427 | 16,372 |
| Puget Energy, Inc. 3.65% 2025 | 9,400 | 9,159 |
| Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series T, 3.375% 2023 | 14,000 | 13,944 |
| South Carolina Electric & Gas Co. 4.10% 2046 | 13,624 | 12,427 |
| Southern California Edison Co., 1.845% 20228 | 8,814 | 8,599 |
| Tampa Electric Co. 4.35% 2044 | 11,410 | 11,563 |
| Teco Finance, Inc. 5.15% 2020 | 5,627 | 5,783 |
| Virginia Electric and Power Co. 2.95% 2026 | 8,247 | 7,731 |
| Virginia Electric and Power Co. 3.50% 2027 | 20,753 | 20,399 |
| Xcel Energy Inc. 4.70% 2020 | 4,845 | 4,951 |
| Xcel Energy Inc. 3.30% 2025 | 5,795 | 5,613 |
| Xcel Energy Inc. 4.00% 2028 | 20,360 | 20,391 |
| | | 1,502,076 |
American Balanced Fund — Page 16 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Industrials 0.57% | Principal amount
(000) | Value
(000) |
| 3M Co. 2.25% 2026 | $10,000 | $9,073 |
| American Airlines, Inc., Series 2013-2, Class A, 4.95% 20248 | 8,142 | 8,402 |
| Canadian National Railway Co. 3.20% 2046 | 17,110 | 14,728 |
| Canadian National Railway Co. 3.65% 2048 | 33,595 | 31,380 |
| Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20208 | 3,205 | 3,273 |
| Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20208 | 19 | 20 |
| Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20218 | 146 | 150 |
| Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20228 | 1,312 | 1,410 |
| Continental Airlines, Inc., Series 2000-2, Class A1, 7.707% 20228 | 376 | 403 |
| Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20228 | 1,744 | 1,829 |
| CSX Corp. 3.80% 2028 | 43,025 | 41,984 |
| CSX Corp. 4.30% 2048 | 19,000 | 18,164 |
| ERAC USA Finance Co. 2.80% 20183 | 9,900 | 9,899 |
| ERAC USA Finance Co. 2.70% 20233 | 25,500 | 24,093 |
| FedEx Corp. 4.75% 2045 | 35,000 | 34,961 |
| Fortive Corp. 1.80% 2019 | 8,000 | 7,913 |
| Fortive Corp. 2.35% 2021 | 6,505 | 6,308 |
| General Dynamics Corp. 3.375% 2023 | 25,075 | 25,134 |
| General Dynamics Corp. 3.50% 2025 | 36,455 | 36,437 |
| General Electric Capital Corp., Series A, 6.00% 2019 | 2,577 | 2,662 |
| General Electric Co. 2.70% 2022 | 11,000 | 10,648 |
| General Electric Co. 4.125% 2042 | 11,000 | 10,231 |
| Honeywell International Inc. 1.85% 2021 | 17,905 | 17,178 |
| Lockheed Martin Corp. 3.10% 2023 | 4,710 | 4,652 |
| Lockheed Martin Corp. 3.55% 2026 | 18,885 | 18,610 |
| Northrop Grumman Corp. 2.55% 2022 | 13,220 | 12,743 |
| Northrop Grumman Corp., 2.93% 2025 | 56,745 | 53,941 |
| Northrop Grumman Corp. 3.25% 2028 | 23,975 | 22,602 |
| Rockwell Collins, Inc. 1.95% 2019 | 8,465 | 8,385 |
| Rockwell Collins, Inc. 2.80% 2022 | 36,585 | 35,671 |
| Rockwell Collins, Inc. 3.20% 2024 | 17,295 | 16,677 |
| Roper Technologies, Inc. 2.80% 2021 | 9,660 | 9,441 |
| Roper Technologies, Inc. 3.80% 2026 | 8,325 | 8,085 |
| Siemens AG 1.70% 20213 | 25,500 | 24,310 |
| Siemens AG 2.70% 20223 | 55,520 | 54,109 |
| Southwest Airlines Co. 2.75% 2019 | 6,255 | 6,234 |
| Union Pacific Corp. 5.70% 2018 | 11,150 | 11,189 |
| Union Pacific Corp. 3.75% 2025 | 24,640 | 24,724 |
| Union Pacific Corp. 3.95% 2028 | 30,000 | 30,192 |
| United Technologies Corp. 2.30% 2022 | 22,570 | 21,687 |
| United Technologies Corp. 3.10% 2022 | 14,783 | 14,607 |
| United Technologies Corp. 3.125% 2027 | 33,000 | 30,705 |
| Waste Management, Inc. 2.90% 2022 | 15,000 | 14,687 |
| | | 739,531 |
| Information technology 0.47% | | |
| Alphabet Inc. 1.998% 2026 | 17,000 | 15,201 |
| Apple Inc. 2.25% 2021 | 23,000 | 22,607 |
| Apple Inc. 2.50% 2022 | 16,750 | 16,431 |
| Apple Inc. 2.75% 2025 | 31,000 | 29,691 |
| Apple Inc. 2.90% 2027 | 20,000 | 18,825 |
| Apple Inc. 3.00% 2024 | 10,000 | 9,798 |
| Broadcom Ltd. 2.375% 2020 | 15,000 | 14,810 |
| Broadcom Ltd. 3.00% 2022 | 87,850 | 85,497 |
American Balanced Fund — Page 17 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Information technology (continued) | Principal amount
(000) | Value
(000) |
| Broadcom Ltd. 2.65% 2023 | $31,000 | $29,215 |
| Broadcom Ltd. 3.625% 2024 | 55,500 | 53,771 |
| Broadcom Ltd. 3.875% 2027 | 98,110 | 92,930 |
| Broadcom Ltd. 3.50% 2028 | 28,000 | 25,539 |
| Intel Corp. 3.70% 2025 | 22,000 | 22,157 |
| Microsoft Corp. 1.55% 2021 | 11,600 | 11,135 |
| Microsoft Corp. 2.40% 2026 | 15,000 | 13,886 |
| Microsoft Corp. 3.30% 2027 | 21,655 | 21,396 |
| Microsoft Corp. 4.20% 2035 | 18,000 | 18,950 |
| Microsoft Corp. 4.10% 2037 | 10,750 | 11,214 |
| Microsoft Corp. 3.70% 2046 | 15,000 | 14,598 |
| Oracle Corp. 2.65% 2026 | 10,000 | 9,229 |
| Visa Inc. 2.80% 2022 | 23,000 | 22,571 |
| Visa Inc. 3.15% 2025 | 49,000 | 47,441 |
| | | 606,892 |
| Telecommunication services 0.43% | | |
| AT&T Inc. 3.00% 2022 | 30,000 | 29,108 |
| AT&T Inc. 4.10% 20283 | 21,736 | 20,803 |
| AT&T Inc. 4.30% 2042 | 5,235 | 4,462 |
| AT&T Inc. 4.35% 2045 | 4,765 | 4,053 |
| British Telecommunications PLC 2.35% 2019 | 13,285 | 13,249 |
| British Telecommunications PLC 9.625% 20305 | 16,988 | 24,320 |
| Deutsche Telekom International Finance BV 1.95% 20213 | 10,000 | 9,540 |
| Deutsche Telekom International Finance BV 2.82% 20223 | 45,985 | 44,702 |
| Deutsche Telekom International Finance BV 3.60% 20273 | 37,214 | 35,143 |
| Deutsche Telekom International Finance BV 9.25% 2032 | 6,194 | 8,879 |
| France Télécom 4.125% 2021 | 20,000 | 20,451 |
| Orange SA 2.75% 2019 | 14,870 | 14,862 |
| Orange SA 5.50% 2044 | 14,000 | 15,545 |
| SoftBank Group Corp. 3.36% 20233,8 | 12,188 | 12,081 |
| Verizon Communications Inc. 3.50% 2024 | 8,500 | 8,229 |
| Verizon Communications Inc. 4.125% 2027 | 26,900 | 26,564 |
| Verizon Communications Inc. 4.50% 2033 | 28,166 | 27,362 |
| Verizon Communications Inc. 4.40% 2034 | 14,875 | 13,904 |
| Verizon Communications Inc. 4.272% 2036 | 47,680 | 44,089 |
| Verizon Communications Inc. 4.125% 2046 | 39,649 | 33,974 |
| Vodafone Group PLC 3.75% 2024 | 50,000 | 49,615 |
| Vodafone Group PLC 4.125% 2025 | 33,000 | 32,877 |
| Vodafone Group PLC 4.375% 2028 | 17,500 | 17,307 |
| Vodafone Group PLC 5.00% 2038 | 20,000 | 19,809 |
| Vodafone Group PLC 5.25% 2048 | 25,000 | 25,036 |
| | | 555,964 |
| Real estate 0.38% | | |
| Alexandria Real Estate Equities, Inc. 3.95% 2028 | 3,970 | 3,820 |
| American Campus Communities, Inc. 3.35% 2020 | 16,070 | 16,035 |
| American Campus Communities, Inc. 3.75% 2023 | 11,715 | 11,661 |
| American Campus Communities, Inc. 4.125% 2024 | 10,965 | 10,920 |
| American Tower Corp. 3.40% 2019 | 13,550 | 13,589 |
| American Tower Corp. 3.55% 2027 | 6,815 | 6,348 |
| American Tower Corp. 3.60% 2028 | 15,000 | 13,921 |
| Brandywine Operating Partnership, LP 3.95% 2023 | 1,639 | 1,632 |
| Corporate Office Properties LP 3.60% 2023 | 6,000 | 5,811 |
American Balanced Fund — Page 18 of 33
Bonds, notes & other debt instruments
Corporate bonds & notes (continued)
Real estate (continued) | Principal amount
(000) | Value
(000) |
| Corporate Office Properties LP 5.25% 2024 | $20,030 | $20,744 |
| Corporate Office Properties LP 5.00% 2025 | 1,235 | 1,262 |
| EPR Properties 4.75% 2026 | 43,650 | 42,753 |
| EPR Properties 4.50% 2027 | 20,125 | 19,249 |
| ERP Operating LP 4.75% 2020 | 12,000 | 12,333 |
| Essex Portfolio LP 3.875% 2024 | 27,215 | 27,041 |
| Essex Portfolio LP 3.50% 2025 | 27,075 | 26,169 |
| Essex Portfolio LP 3.375% 2026 | 2,395 | 2,277 |
| Hospitality Properties Trust 4.25% 2021 | 30,925 | 31,148 |
| Hospitality Properties Trust 5.00% 2022 | 4,350 | 4,474 |
| Hospitality Properties Trust 4.50% 2023 | 30,950 | 31,117 |
| Hospitality Properties Trust 4.95% 2027 | 11,000 | 10,869 |
| Hospitality Properties Trust 3.95% 2028 | 12,610 | 11,539 |
| Prologis, Inc. 4.25% 2023 | 20,000 | 20,625 |
| Public Storage 2.37% 2022 | 8,640 | 8,300 |
| Scentre Group 2.375% 20193 | 14,845 | 14,660 |
| Scentre Group 3.25% 20253 | 1,780 | 1,678 |
| Scentre Group 3.50% 20253 | 10,415 | 10,049 |
| Scentre Group 3.75% 20273 | 13,620 | 13,097 |
| Select Income REIT 3.60% 2020 | 8,000 | 7,960 |
| WEA Finance LLC 2.70% 20193 | 5,395 | 5,373 |
| WEA Finance LLC 3.25% 20203 | 32,500 | 32,444 |
| WEA Finance LLC 3.75% 20243 | 22,800 | 22,534 |
| Westfield Corp. Ltd. 3.15% 20223 | 35,935 | 35,248 |
| | | 496,680 |
| Materials 0.22% | | |
BHP Billiton Finance Ltd. 6.25% 2075
(USD Semi Annual 30/360 (vs. 3M LIBOR) 5Y + 4.971% on 10/19/2020)3,5 | 3,175 | 3,328 |
| Chevron Phillips Chemical Company LLC 3.30% 20233 | 22,030 | 21,881 |
| Chevron Phillips Chemical Company LLC 3.70% 20283 | 25,000 | 24,716 |
| Eastman Chemical Co. 2.70% 2020 | 21,000 | 20,882 |
| Eastman Chemical Co. 3.80% 2025 | 7,405 | 7,325 |
| Ecolab Inc. 4.35% 2021 | 816 | 843 |
| Ecolab Inc. 5.50% 2041 | 204 | 241 |
| Ecolab Inc. 3.95% 2047 | 1,664 | 1,596 |
| Georgia-Pacific Corp. 2.539% 20193 | 21,000 | 20,869 |
| Holcim Ltd. 5.15% 20233 | 17,000 | 17,848 |
| International Paper Co. 7.30% 2039 | 7,835 | 10,046 |
| Monsanto Co. 4.40% 2044 | 13,090 | 12,164 |
| Mosaic Co. 3.25% 2022 | 19,000 | 18,469 |
| Mosaic Co. 4.05% 2027 | 17,940 | 17,170 |
| Sherwin-Williams Co. 2.25% 2020 | 19,000 | 18,692 |
| Sherwin-Williams Co. 2.75% 2022 | 17,460 | 16,914 |
| Sherwin-Williams Co. 3.125% 2024 | 4,260 | 4,073 |
| Sherwin-Williams Co. 3.45% 2027 | 10,930 | 10,336 |
| Vale SA 6.25% 2026 | 27,219 | 29,546 |
| Westlake Chemical Corp. 4.375% 2047 | 23,435 | 21,665 |
| | | 278,604 |
| Total corporate bonds & notes | | 17,527,641 |
American Balanced Fund — Page 19 of 33
Bonds, notes & other debt instruments
U.S. Treasury bonds & notes 13.42%
U.S. Treasury 11.41% | Principal amount
(000) | Value
(000) |
| U.S. Treasury 1.25% 2019 | $60,000 | $59,348 |
| U.S. Treasury 1.25% 2019 | 25,000 | 24,784 |
| U.S. Treasury 1.75% 2019 | 250,000 | 247,515 |
| U.S. Treasury 1.75% 2019 | 110,000 | 109,087 |
| U.S. Treasury 1.875% 2019 | 285,500 | 282,979 |
| U.S. Treasury 1.25% 2020 | 120,000 | 117,710 |
| U.S. Treasury 1.375% 2020 | 443,000 | 434,415 |
| U.S. Treasury 1.375% 2020 | 76,875 | 74,785 |
| U.S. Treasury 1.50% 2020 | 101,000 | 99,054 |
| U.S. Treasury 1.625% 2020 | 25,000 | 24,631 |
| U.S. Treasury 1.875% 2020 | 275,000 | 270,366 |
| U.S. Treasury 2.00% 2020 | 125,000 | 124,065 |
| U.S. Treasury 2.25% 2020 | 336,000 | 334,505 |
| U.S. Treasury 2.25% 2020 | 239,500 | 238,516 |
| U.S. Treasury 2.375% 2020 | 660,867 | 659,142 |
| U.S. Treasury 2.50% 2020 | 760,000 | 759,605 |
| U.S. Treasury 1.125% 2021 | 187,250 | 178,640 |
| U.S. Treasury 1.25% 2021 | 100,900 | 97,280 |
| U.S. Treasury 1.375% 2021 | 232,870 | 225,753 |
| U.S. Treasury 1.375% 2021 | 101,350 | 97,938 |
| U.S. Treasury 1.75% 2021 | 69,250 | 67,192 |
| U.S. Treasury 2.00% 2021 | 75,000 | 73,328 |
| U.S. Treasury 2.125% 2021 | 394,876 | 390,181 |
| U.S. Treasury 2.25% 2021 | 200,000 | 198,222 |
| U.S. Treasury 2.25% 2021 | 97,270 | 96,168 |
| U.S. Treasury 2.375% 2021 | 566,984 | 563,514 |
| U.S. Treasury 2.625% 2021 | 20,000 | 20,002 |
| U.S. Treasury 1.875% 2022 | 100,000 | 97,109 |
| U.S. Treasury 1.875% 2022 | 77,000 | 74,530 |
| U.S. Treasury 1.875% 2022 | 75,195 | 72,673 |
| U.S. Treasury 2.00% 2022 | 180,000 | 174,670 |
| U.S. Treasury 2.00% 2022 | 35,000 | 34,187 |
| U.S. Treasury 2.125% 2022 | 220,000 | 214,405 |
| U.S. Treasury 1.375% 2023 | 100,000 | 93,383 |
| U.S. Treasury 1.375% 2023 | 36,935 | 34,584 |
| U.S. Treasury 2.375% 2023 | 40,000 | 39,392 |
| U.S. Treasury 2.50% 2023 | 131,046 | 129,701 |
| U.S. Treasury 2.625% 2023 | 249,692 | 248,394 |
| U.S. Treasury 2.75% 2023 | 280,832 | 280,998 |
| U.S. Treasury 2.00% 2024 | 146,216 | 139,907 |
| U.S. Treasury 2.00% 2024 | 100,000 | 95,606 |
| U.S. Treasury 2.00% 2024 | 59,750 | 57,212 |
| U.S. Treasury 2.125% 2024 | 462,901 | 444,829 |
| U.S. Treasury 2.125% 2024 | 100,000 | 96,222 |
| U.S. Treasury 2.125% 2024 | 88,500 | 85,401 |
| U.S. Treasury 2.25% 2024 | 670,750 | 648,749 |
| U.S. Treasury 2.25% 2024 | 64,750 | 62,654 |
| U.S. Treasury 2.25% 2024 | 50,000 | 48,632 |
| U.S. Treasury 2.00% 2025 | 30,000 | 28,521 |
| U.S. Treasury 2.125% 2025 | 25,000 | 23,913 |
| U.S. Treasury 2.50% 2025 | 1,109,800 | 1,089,069 |
| U.S. Treasury 2.625% 2025 | 106,415 | 105,150 |
| U.S. Treasury 2.75% 2025 | 198,830 | 197,913 |
| U.S. Treasury 2.875% 2025 | 724,229 | 726,757 |
American Balanced Fund — Page 20 of 33
Bonds, notes & other debt instruments
U.S. Treasury bonds & notes (continued)
U.S. Treasury (continued) | Principal amount
(000) | Value
(000) |
| U.S. Treasury 2.875% 2025 | $441,845 | $443,329 |
| U.S. Treasury 2.00% 2026 | 72,620 | 68,010 |
| U.S. Treasury 2.25% 2027 | 287,283 | 272,839 |
| U.S. Treasury 2.25% 2027 | 80,250 | 76,530 |
| U.S. Treasury 2.375% 2027 | 4,350 | 4,185 |
| U.S. Treasury 2.75% 2028 | 46,018 | 45,579 |
| U.S. Treasury 2.875% 2028 | 566,946 | 567,655 |
| U.S. Treasury 5.375% 2031 | 20,000 | 25,255 |
| U.S. Treasury 2.75% 2042 | 32,950 | 31,637 |
| U.S. Treasury 2.875% 2043 | 36,410 | 35,688 |
| U.S. Treasury 3.125% 2043 | 48,025 | 49,188 |
| U.S. Treasury 3.125% 2044 | 39,797 | 40,767 |
| U.S. Treasury 3.625% 2044 | 25,000 | 27,832 |
| U.S. Treasury 2.50% 2045 | 115,000 | 104,609 |
| U.S. Treasury 3.00% 2045 | 25,000 | 25,039 |
| U.S. Treasury 3.00% 2045 | 25,000 | 25,036 |
| U.S. Treasury 2.50% 2046 | 52,120 | 47,253 |
| U.S. Treasury 2.875% 2046 | 370,000 | 361,545 |
| U.S. Treasury 2.75% 2047 | 433,849 | 413,124 |
| U.S. Treasury 3.00% 2047 | 70,902 | 70,962 |
| U.S. Treasury 3.00% 2048 | 717,093 | 717,903 |
| U.S. Treasury 3.125% 2048 | 74,830 | 76,761 |
| | | 14,744,012 |
| U.S. Treasury inflation-protected securities 2.01% | | |
| U.S. Treasury Inflation-Protected Security 2.125% 20199 | 58,340 | 58,811 |
| U.S. Treasury Inflation-Protected Security 0.125% 20219 | 105,699 | 104,100 |
| U.S. Treasury Inflation-Protected Security 0.125% 20249 | 102,338 | 99,509 |
| U.S. Treasury Inflation-Protected Security 0.625% 20249 | 352,744 | 352,393 |
| U.S. Treasury Inflation-Protected Security 0.375% 20259 | 275,187 | 270,403 |
| U.S. Treasury Inflation-Protected Security 2.375% 20259 | 66,450 | 73,700 |
| U.S. Treasury Inflation-Protected Security 0.125% 20269 | 167,216 | 160,239 |
| U.S. Treasury Inflation-Protected Security 0.375% 20279 | 353,070 | 343,113 |
| U.S. Treasury Inflation-Protected Security 0.375% 20279 | 38,916 | 37,866 |
| U.S. Treasury Inflation-Protected Security 0.50% 20289 | 479,871 | 398,776 |
| U.S. Treasury Inflation-Protected Security 1.75% 20289 | 32,167 | 35,167 |
| U.S. Treasury Inflation-Protected Security 0.75% 20429 | 53,786 | 52,517 |
| U.S. Treasury Inflation-Protected Security 1.375% 20449 | 127,321 | 142,104 |
| U.S. Treasury Inflation-Protected Security 1.00% 20469 | 119,629 | 123,182 |
| U.S. Treasury Inflation-Protected Security 0.875% 20479 | 229,090 | 228,931 |
| U.S. Treasury Inflation-Protected Security 1.00% 20489 | 138,523 | 115,129 |
| | | 2,595,940 |
| Total U.S. Treasury bonds & notes | | 17,339,952 |
| Mortgage-backed obligations 8.10% | | |
| Arroyo Mortgage Trust, Series 2018-1, Class A1, 3.763% 20483,7,8 | 35,014 | 35,443 |
| CHL Mortgage Pass-Through Trust, Series 2003-56, Class 6A1, 3.716% 20337,8 | 1,191 | 1,221 |
| Citigroup Commercial Mortgage Trust, Series 2015-GC29, Class AAB, 2.984% 20488 | 3,370 | 3,329 |
| Commercial Mortgage Trust, Series 2015-PC1, Class A5, 3.902% 20508 | 15,265 | 15,450 |
| Connecticut Avenue Securities, Series 2013-C01, Class M1, (1-month USD-LIBOR + 2.00%) 4.091% 20233,7,8 | 64 | 64 |
Connecticut Avenue Securities, Series 2014-C02, Class 1M1,
(1-month USD-LIBOR + 0.95%) 3.041% 20247,8 | 104 | 105 |
| Connecticut Avenue Securities, Series 2014-C01, Class M1, (1-month USD-LIBOR + 1.60%) 3.691% 20243,7,8 | 316 | 318 |
American Balanced Fund — Page 21 of 33
Bonds, notes & other debt instruments
Mortgage-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| CS First Boston Mortgage Securities Corp., Series 2002-34, Class IA1, 7.50% 20328 | $416 | $456 |
| CS First Boston Mortgage Securities Corp., Series 2002-30, Class IA1, 7.50% 20328 | 312 | 349 |
| CS First Boston Mortgage Securities Corp., Series 2003-21, Class VA1, 6.50% 20338 | 435 | 468 |
| CS First Boston Mortgage Securities Corp., Series 2003-29, Class VA1, 7.00% 20338 | 679 | 731 |
| CS First Boston Mortgage Securities Corp., Series 2004-5, Class IVA1, 6.00% 20348 | 1,902 | 1,941 |
| CSAIL Commercial Mortgage Trust, Series 2015-C4, Class ASB, 3.6167% 20488 | 5,600 | 5,634 |
| DBUBS Mortgage Trust, Series 2011-LC1A, Class A3, 5.002% 20463,8 | 9,500 | 9,788 |
| Fannie Mae 4.50% 20258 | 2,148 | 2,220 |
| Fannie Mae 4.50% 20258 | 1,977 | 2,043 |
| Fannie Mae 3.00% 20328 | 49,119 | 48,857 |
| Fannie Mae 3.5% 20338 | 333,683 | 338,106 |
| Fannie Mae 3.50% 20338 | 67,370 | 68,230 |
| Fannie Mae 3.50% 20338,10 | 66,165 | 66,881 |
| Fannie Mae 3.5% 20338 | 51,776 | 52,462 |
| Fannie Mae 3.50% 20338,10 | 13,836 | 14,000 |
| Fannie Mae 3.50% 20338 | 8,504 | 8,612 |
| Fannie Mae 5.50% 20338 | 1,980 | 2,153 |
| Fannie Mae 5.50% 20338 | 1,801 | 1,960 |
| Fannie Mae 5.50% 20338 | 215 | 233 |
| Fannie Mae 4.50% 20348 | 6,733 | 7,044 |
| Fannie Mae 5.00% 20358 | 711 | 759 |
| Fannie Mae 6.50% 20358 | 1,894 | 2,113 |
| Fannie Mae 3.00% 20368 | 92,630 | 91,281 |
| Fannie Mae 3.00% 20368 | 25,985 | 25,647 |
| Fannie Mae 3.00% 20368 | 5,169 | 5,102 |
| Fannie Mae 6.00% 20368 | 598 | 659 |
| Fannie Mae 3.00% 20378 | 125,077 | 123,450 |
| Fannie Mae 3.00% 20378 | 91,861 | 90,523 |
| Fannie Mae 3.00% 20378 | 74,406 | 73,322 |
| Fannie Mae 3.00% 20378 | 45,413 | 44,752 |
| Fannie Mae 3.00% 20378 | 23,314 | 22,974 |
| Fannie Mae 3.00% 20378 | 14,381 | 14,172 |
| Fannie Mae 6.00% 20378 | 5,502 | 6,077 |
| Fannie Mae 6.50% 20378 | 1,240 | 1,408 |
| Fannie Mae 6.50% 20378 | 829 | 899 |
| Fannie Mae 6.50% 20388 | 1,666 | 1,838 |
| Fannie Mae 5.50% 20398 | 52 | 56 |
| Fannie Mae 4.00% 20408 | 2,601 | 2,678 |
| Fannie Mae 4.50% 20408 | 11,134 | 11,719 |
| Fannie Mae 4.50% 20408 | 8,987 | 9,458 |
| Fannie Mae 4.50% 20408 | 6,887 | 7,248 |
| Fannie Mae 5.00% 20408 | 7,843 | 8,413 |
| Fannie Mae 5.00% 20408 | 2,411 | 2,587 |
| Fannie Mae 5.00% 20408 | 1,031 | 1,107 |
| Fannie Mae 5.00% 20408 | 814 | 874 |
| Fannie Mae 4.00% 20418 | 9,338 | 9,606 |
| Fannie Mae 4.00% 20418 | 7,280 | 7,489 |
| Fannie Mae 4.00% 20418 | 5,835 | 5,995 |
| Fannie Mae 4.00% 20418 | 4,371 | 4,500 |
| Fannie Mae 4.00% 20418 | 2,589 | 2,666 |
| Fannie Mae 4.00% 20418 | 2,327 | 2,396 |
| Fannie Mae 4.00% 20418 | 1,166 | 1,198 |
| Fannie Mae 4.50% 20418 | 6,126 | 6,448 |
| Fannie Mae 5.00% 20418 | 1,433 | 1,538 |
| Fannie Mae 5.00% 20418 | 1,277 | 1,370 |
American Balanced Fund — Page 22 of 33
Bonds, notes & other debt instruments
Mortgage-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| Fannie Mae 5.00% 20418 | $1,034 | $1,109 |
| Fannie Mae 5.00% 20418 | 994 | 1,063 |
| Fannie Mae 5.00% 20418 | 937 | 998 |
| Fannie Mae 5.00% 20418 | 799 | 857 |
| Fannie Mae 5.00% 20418 | 784 | 834 |
| Fannie Mae 5.00% 20418 | 589 | 632 |
| Fannie Mae 5.00% 20418 | 481 | 514 |
| Fannie Mae 5.00% 20418 | 373 | 401 |
| Fannie Mae 5.00% 20418 | 307 | 330 |
| Fannie Mae 5.00% 20418 | 176 | 189 |
| Fannie Mae 5.00% 20418 | 129 | 137 |
| Fannie Mae 5.00% 20418 | 107 | 115 |
| Fannie Mae 5.00% 20418 | 96 | 102 |
| Fannie Mae 5.00% 20418 | 63 | 68 |
| Fannie Mae 5.00% 20418 | 37 | 40 |
| Fannie Mae 5.00% 20418 | 19 | 21 |
| Fannie Mae 5.00% 20418 | 13 | 13 |
| Fannie Mae 3.00% 20428 | 4,098 | 4,004 |
| Fannie Mae 3.50% 20428 | 17,088 | 17,149 |
| Fannie Mae 4.00% 20428 | 20,628 | 21,238 |
| Fannie Mae 4.00% 20428 | 11,448 | 11,777 |
| Fannie Mae 4.00% 20428 | 7,665 | 7,907 |
| Fannie Mae 4.00% 20428 | 6,915 | 7,118 |
| Fannie Mae 4.00% 20428 | 5,530 | 5,689 |
| Fannie Mae 4.00% 20428 | 2,161 | 2,220 |
| Fannie Mae 4.00% 20428 | 1,703 | 1,750 |
| Fannie Mae 5.00% 20428 | 247 | 262 |
| Fannie Mae 3.50% 20438 | 21,890 | 21,928 |
| Fannie Mae 3.50% 20438 | 14,428 | 14,448 |
| Fannie Mae 3.50% 20438 | 10,630 | 10,645 |
| Fannie Mae 3.50% 20438 | 4,673 | 4,679 |
| Fannie Mae 3.50% 20438 | 2,058 | 2,061 |
| Fannie Mae 3.50% 20438 | 1,394 | 1,397 |
| Fannie Mae 4.00% 20438 | 13,528 | 13,855 |
| Fannie Mae 4.00% 20438 | 11,136 | 11,465 |
| Fannie Mae 4.00% 20438 | 6,709 | 6,902 |
| Fannie Mae 4.00% 20438 | 2,491 | 2,555 |
| Fannie Mae 4.00% 20438 | 467 | 482 |
| Fannie Mae 4.00% 20438 | 346 | 358 |
| Fannie Mae 4.00% 20438 | 297 | 305 |
| Fannie Mae 4.50% 20438 | 10,634 | 11,140 |
| Fannie Mae 3.50% 20448 | 70,862 | 70,870 |
| Fannie Mae 3.50% 20458 | 48,733 | 48,658 |
| Fannie Mae 3.50% 20458 | 17,492 | 17,508 |
| Fannie Mae 3.50% 20458 | 12,643 | 12,622 |
| Fannie Mae 4.00% 20458 | 60,876 | 62,629 |
| Fannie Mae 4.00% 20458 | 59,479 | 61,191 |
| Fannie Mae 4.00% 20458 | 32,984 | 33,934 |
| Fannie Mae 4.00% 20458 | 29,630 | 30,446 |
| Fannie Mae 4.00% 20458 | 19,592 | 20,132 |
| Fannie Mae 4.00% 20458 | 14,506 | 14,888 |
| Fannie Mae 3.00% 20468 | 182,399 | 176,969 |
| Fannie Mae 3.50% 20468 | 85,333 | 85,188 |
| Fannie Mae 3.50% 20468 | 25,239 | 25,237 |
| Fannie Mae 3.50% 20468 | 22,463 | 22,425 |
American Balanced Fund — Page 23 of 33
Bonds, notes & other debt instruments
Mortgage-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| Fannie Mae 3.50% 20468 | $17,413 | $17,383 |
| Fannie Mae 3.50% 20468 | 12,862 | 12,840 |
| Fannie Mae 4.00% 20468 | 92,749 | 94,719 |
| Fannie Mae 4.00% 20468 | 68,925 | 70,432 |
| Fannie Mae 4.00% 20468 | 29,444 | 30,053 |
| Fannie Mae 4.00% 20468 | 4,106 | 4,194 |
| Fannie Mae 4.00% 20468 | 3,986 | 4,085 |
| Fannie Mae 4.00% 20468 | 2,618 | 2,680 |
| Fannie Mae 3.50% 20478 | 104,214 | 103,917 |
| Fannie Mae 3.50% 20478 | 85,829 | 85,723 |
| Fannie Mae 3.50% 20478 | 67,678 | 67,502 |
| Fannie Mae 3.50% 20478 | 29,458 | 29,377 |
| Fannie Mae 3.50% 20478 | 20,899 | 20,844 |
| Fannie Mae 3.50% 20478 | 19,816 | 19,759 |
| Fannie Mae 3.50% 20478 | 3,135 | 3,129 |
| Fannie Mae 3.50% 20478 | 2,027 | 2,023 |
| Fannie Mae 4.00% 20478 | 103,465 | 105,705 |
| Fannie Mae 4.00% 20478 | 74,275 | 75,856 |
| Fannie Mae 4.00% 20478 | 64,209 | 65,635 |
| Fannie Mae 4.00% 20478 | 53,620 | 54,789 |
| Fannie Mae 4.00% 20478 | 48,378 | 49,394 |
| Fannie Mae 4.00% 20478 | 37,410 | 38,348 |
| Fannie Mae 4.00% 20478 | 18,864 | 19,265 |
| Fannie Mae 4.0% 20478 | 11,282 | 11,514 |
| Fannie Mae 4.00% 20478 | 9,114 | 9,313 |
| Fannie Mae 4.00% 20478 | 8,024 | 8,195 |
| Fannie Mae 4.50% 20478 | 16,835 | 17,575 |
| Fannie Mae 6.50% 20478 | 119 | 128 |
| Fannie Mae 6.50% 20478 | 60 | 64 |
| Fannie Mae 7.00% 20478 | 97 | 106 |
| Fannie Mae 7.00% 20478 | 86 | 93 |
| Fannie Mae 7.00% 20478 | 78 | 85 |
| Fannie Mae 7.00% 20478 | 9 | 10 |
| Fannie Mae 3.50% 20488 | 287,538 | 286,601 |
| Fannie Mae 3.50% 20488 | 21,391 | 21,301 |
| Fannie Mae 3.50% 20488 | 9,335 | 9,308 |
| Fannie Mae 4.00% 20488 | 394,694 | 403,094 |
| Fannie Mae 4.00% 20488 | 134,449 | 137,393 |
| Fannie Mae 4.00% 20488,10 | 125,375 | 127,638 |
| Fannie Mae 4.00% 20488 | 73,375 | 74,983 |
| Fannie Mae 4.00% 20488,10 | 53,256 | 54,294 |
| Fannie Mae 4.00% 20488,10 | 35,219 | 35,823 |
| Fannie Mae 4.00% 20488 | 22,001 | 22,469 |
| Fannie Mae 4.00% 20488 | 12,176 | 12,435 |
| Fannie Mae 4.00% 20488 | 10,173 | 10,396 |
| Fannie Mae 4.00% 20488 | 8,175 | 8,349 |
| Fannie Mae 4.00% 20488 | 4,881 | 4,988 |
| Fannie Mae 4.50% 20488 | 137,563 | 144,155 |
| Fannie Mae 4.50% 20488 | 108,949 | 113,571 |
| Fannie Mae 4.50% 20488 | 74,864 | 78,185 |
| Fannie Mae 4.50% 20488 | 71,000 | 74,156 |
| Fannie Mae 4.50% 20488,10 | 53,383 | 55,407 |
| Fannie Mae 4.50% 20488,10 | 49,143 | 51,082 |
| Fannie Mae 4.50% 20488 | 34,151 | 35,964 |
| Fannie Mae 4.50% 20488,10 | 7,474 | 7,783 |
American Balanced Fund — Page 24 of 33
Bonds, notes & other debt instruments
Mortgage-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| Fannie Mae 4.50% 20488 | $6,630 | $6,931 |
| Fannie Mae 4.50% 20488 | 5,605 | 5,853 |
| Fannie Mae, Series 2001-4, Class NA, 9.178% 20257,8 | 1 | 1 |
| Fannie Mae, Series 2001-20, Class D, 11.012% 20317,8 | — | — |
| Fannie Mae, Series 2001-T10, Class A1, 7.00% 20418 | 191 | 217 |
| Fannie Mae, Series 2001-50, Class BA, 7.00% 20418 | 115 | 127 |
| Fannie Mae, Series 2002-W3, Class A5, 7.50% 20418 | 245 | 280 |
| Fannie Mae, Series 2002-W1, Class 2A, 5.839% 20427,8 | 266 | 288 |
| Fannie Mae, Series 2012-M9, Class A2, Multi Family, 2.482% 20228 | 19,457 | 19,084 |
| Fannie Mae, Series 2012-M5, Class A2, Multi Family, 2.715% 20228 | 13,934 | 13,752 |
| Fannie Mae, Series 2014-M1, Class A2, Multi Family, 3.297% 20237,8 | 15,641 | 15,765 |
| Fannie Mae, Series 2013-M14, Class A2, Multi Family, 3.329% 20237,8 | 19,245 | 19,439 |
| Fannie Mae, Series 2014-M2, Class A2, Multi Family, 3.513% 20237,8 | 16,585 | 16,939 |
| Fannie Mae, Series 2014-M9, Class A2, Multi Family, 3.103% 20247,8 | 16,865 | 16,802 |
| Fannie Mae, Series 2014-M3, Class A2, Multi Family, 3.501% 20247,8 | 18,000 | 18,302 |
| Fannie Mae, Series 2017-M3, Class A2, Multi Family, 2.568% 20267,8 | 38,665 | 36,175 |
| Fannie Mae, Series 2017-M7, Class A2, Multi Family, 2.961% 20277,8 | 22,406 | 21,647 |
| Fannie Mae, Series 2006-43, Class JO, principal only, 0% 20368 | 872 | 737 |
| Flagstar Mortgage Trust, Series 2018-3INV, Class A3, 4.00% 20483,8 | 49,278 | 49,421 |
| Freddie Mac 6.50% 20278 | 359 | 392 |
| Freddie Mac 6.50% 20278 | 221 | 246 |
| Freddie Mac 6.50% 20278 | 42 | 47 |
| Freddie Mac 6.50% 20288 | 302 | 333 |
| Freddie Mac 3.00% 20338 | 5,851 | 5,813 |
| Freddie Mac 3.50% 20338 | 22,000 | 22,270 |
| Freddie Mac 3.50% 20338 | 6,913 | 7,000 |
| Freddie Mac 3.00% 20368 | 185 | 182 |
| Freddie Mac 3.00% 20378 | 50,302 | 49,517 |
| Freddie Mac 3.00% 20378 | 48,868 | 48,106 |
| Freddie Mac 5.50% 20378 | 306 | 329 |
| Freddie Mac 5.50% 20378 | 35 | 38 |
| Freddie Mac 5.50% 20388 | 138 | 149 |
| Freddie Mac 5.50% 20388 | 56 | 61 |
| Freddie Mac 6.00% 20388 | 975 | 1,070 |
| Freddie Mac 5.50% 20398 | 221 | 239 |
| Freddie Mac 4.50% 20408 | 8,164 | 8,590 |
| Freddie Mac 4.50% 20408 | 661 | 695 |
| Freddie Mac 4.50% 20418 | 1,492 | 1,563 |
| Freddie Mac 4.50% 20418 | 1,039 | 1,086 |
| Freddie Mac 4.50% 20418 | 497 | 520 |
| Freddie Mac 4.50% 20418 | 470 | 494 |
| Freddie Mac 4.50% 20418 | 110 | 115 |
| Freddie Mac 4.50% 20418 | 50 | 53 |
| Freddie Mac 5.00% 20418 | 403 | 430 |
| Freddie Mac 3.50% 20428 | 1,404 | 1,409 |
| Freddie Mac 4.00% 20428 | 11,479 | 11,803 |
| Freddie Mac 3.50% 20438 | 1,191 | 1,195 |
| Freddie Mac 4.00% 20438 | 1,664 | 1,710 |
| Freddie Mac 4.00% 20438 | 764 | 785 |
| Freddie Mac 4.00% 20438 | 663 | 682 |
| Freddie Mac 4.00% 20438 | 359 | 371 |
| Freddie Mac 3.50% 20448 | 27,011 | 27,092 |
| Freddie Mac 4.00% 20448 | 12,381 | 12,672 |
| Freddie Mac 4.00% 20448 | 5,265 | 5,418 |
| Freddie Mac 3.50% 20458 | 4,693 | 4,688 |
American Balanced Fund — Page 25 of 33
Bonds, notes & other debt instruments
Mortgage-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| Freddie Mac 3.50% 20458 | $293 | $293 |
| Freddie Mac 3.50% 20458 | 23 | 23 |
| Freddie Mac 4.00% 20458 | 68,058 | 69,984 |
| Freddie Mac 4.00% 20458 | 32,083 | 33,081 |
| Freddie Mac 4.00% 20458 | 18,005 | 18,565 |
| Freddie Mac 4.00% 20458 | 11,260 | 11,579 |
| Freddie Mac 4.00% 20458 | 5,042 | 5,160 |
| Freddie Mac 3.50% 20468 | 47,897 | 47,731 |
| Freddie Mac 3.50% 20468 | 41,543 | 41,350 |
| Freddie Mac 3.50% 20468 | 17,304 | 17,246 |
| Freddie Mac 3.50% 20468 | 12,492 | 12,449 |
| Freddie Mac 3.50% 20468 | 11,732 | 11,693 |
| Freddie Mac 3.50% 20468 | 10,613 | 10,594 |
| Freddie Mac 3.50% 20468 | 6,564 | 6,541 |
| Freddie Mac 3.50% 20468 | 5,245 | 5,237 |
| Freddie Mac 3.50% 20468 | 331 | 330 |
| Freddie Mac 3.50% 20468 | 58 | 58 |
| Freddie Mac 3.50% 20468 | 38 | 38 |
| Freddie Mac 4.00% 20468 | 48,546 | 49,583 |
| Freddie Mac 4.00% 20468 | 26,816 | 27,447 |
| Freddie Mac 4.00% 20468 | 21,478 | 21,984 |
| Freddie Mac 4.00% 20468 | 14,856 | 15,206 |
| Freddie Mac 4.00% 20468 | 8,027 | 8,223 |
| Freddie Mac 4.00% 20468 | 3,261 | 3,338 |
| Freddie Mac 4.00% 20468 | 1,974 | 2,026 |
| Freddie Mac 4.50% 20468 | 2,852 | 2,971 |
| Freddie Mac 4.50% 20468 | 1,460 | 1,521 |
| Freddie Mac 3.50% 20478 | 339,022 | 337,466 |
| Freddie Mac 3.50% 20478 | 167,682 | 166,889 |
| Freddie Mac 3.50% 20478 | 48,041 | 47,825 |
| Freddie Mac 3.50% 20478 | 47,808 | 47,593 |
| Freddie Mac 3.50% 20478 | 24,351 | 24,239 |
| Freddie Mac 3.50% 20478 | 24,303 | 24,191 |
| Freddie Mac 3.50% 20478 | 13,266 | 13,253 |
| Freddie Mac 3.50% 20478 | 665 | 664 |
| Freddie Mac 4.00% 20478 | 126,936 | 129,584 |
| Freddie Mac 4.00% 20478 | 125,226 | 127,935 |
| Freddie Mac 4.00% 20478 | 114,067 | 116,701 |
| Freddie Mac 4.00% 20478 | 68,407 | 69,834 |
| Freddie Mac 4.00% 20478 | 47,828 | 48,802 |
| Freddie Mac 4.00% 20478 | 14,774 | 15,117 |
| Freddie Mac 4.00% 20478 | 7,325 | 7,483 |
| Freddie Mac 4.00% 20478 | 5,218 | 5,325 |
| Freddie Mac 4.00% 20478 | 4,668 | 4,771 |
| Freddie Mac 3.50% 20488 | 37,033 | 36,859 |
| Freddie Mac 4.00% 20488 | 181,740 | 185,386 |
| Freddie Mac 4.00% 20488 | 64,739 | 66,065 |
| Freddie Mac 4.00% 20488 | 60,013 | 61,230 |
| Freddie Mac 4.00% 20488 | 31,688 | 32,338 |
| Freddie Mac 4.00% 20488 | 2,410 | 2,459 |
| Freddie Mac 4.00% 20488 | 1,554 | 1,586 |
| Freddie Mac 4.50% 20488,10 | 33,709 | 35,022 |
| Freddie Mac 4.50% 20488 | 13,691 | 14,270 |
| Freddie Mac 4.50% 20488,10 | 8,791 | 9,149 |
| Freddie Mac 20407,8 | 60 | 63 |
American Balanced Fund — Page 26 of 33
Bonds, notes & other debt instruments
Mortgage-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| Freddie Mac Pool #760014 2.978% 20457,8 | $5,451 | $5,452 |
| Freddie Mac, Series 2013-DN1, Class M1, (1-month USD-LIBOR + 3.40%) 5.491% 20237,8 | 668 | 671 |
| Freddie Mac, Series 2014-DN2, Class M2, (1-month USD-LIBOR + 1.65%) 3.741% 20247,8 | 5,547 | 5,625 |
| Freddie Mac, Series 2014-HQ2, Class M2, (1-month USD-LIBOR + 2.20%) 4.291% 20247,8 | 17,363 | 17,894 |
| Freddie Mac, Series 2014-HQ1, Class M2, (1-month USD-LIBOR + 2.50%) 4.591% 20247,8 | 1,743 | 1,752 |
| Freddie Mac, Series 2015-HQ2, Class M2, (1-month USD-LIBOR + 1.95%) 4.041% 20257,8 | 9,316 | 9,562 |
| Freddie Mac, Series T-041, Class 3A, 5.569% 20327,8 | 1,332 | 1,394 |
| Freddie Mac, Series 3318, Class JT, 5.50% 20378 | 2,322 | 2,437 |
| Freddie Mac, Series KS01, Class A1, Multi Family, 1.693% 20228 | 1,623 | 1,595 |
| Freddie Mac, Series K019, Class A2, Multi Family, 2.272% 20228 | 16,000 | 15,608 |
| Freddie Mac, Series K021, Class A2, Multi Family, 2.396% 20228 | 16,555 | 16,182 |
| Freddie Mac, Series K723, Class A2, Multi Family, 2.454% 20238 | 17,125 | 16,620 |
| Freddie Mac, Series KS01, Class A2, Multi Family, 2.522% 20238 | 1,075 | 1,053 |
| Freddie Mac, Series K034, Class A1, Multi Family, 2.669% 20238 | 5,575 | 5,549 |
| Freddie Mac, Series K725, Class A2, Multi Family, 3.002% 20248 | 44,445 | 44,196 |
| Freddie Mac, Series K043, Class A2, Multi Family, 3.062% 20248 | 18,400 | 18,304 |
| Freddie Mac, Series K056, Class A1, Multi Family, 2.20% 20258 | 22,228 | 21,286 |
| Freddie Mac, Series K044, Class A2, Multi Family, 2.811% 20258 | 13,505 | 13,229 |
| Freddie Mac, Series K057, Class A2, Multi Family, 2.57% 20268 | 37,740 | 35,882 |
| Freddie Mac, Series K066, Class A2, Multi Family, 3.117% 20278 | 28,540 | 27,940 |
| Freddie Mac, Series K067, Class A2, Multi Family, 3.194% 20278 | 49,815 | 49,078 |
| Freddie Mac, Series K069, Class A2, Multi Family, 3.187% 20277,8 | 20,520 | 20,135 |
| Freddie Mac, Series K070, Class A2, Multi Family, 3.303% 20277,8 | 55,295 | 54,754 |
| Freddie Mac, Series K063, Class A2, Multi Family, 3.43% 20278 | 17,500 | 17,589 |
| Freddie Mac, Series K072, Class A2, Multi Family, 3.444% 20278 | 27,510 | 27,565 |
| Freddie Mac, Series K073, Class A2, Multi Family, 3.35% 20288 | 24,286 | 24,132 |
| Freddie Mac, Series K075, Class A2, Multi Family, 3.65% 20287,8 | 38,730 | 39,420 |
| Freddie Mac, Series K076, Class A2, Multi Family, 3.90% 20288 | 98,604 | 102,162 |
| Freddie Mac, Series K077, Class A2, Multi Family, 3.90% 2028 | 40,910 | 42,257 |
| Freddie Mac, Series K726, Class A2, Multi Family, 2.905% 20498 | 28,420 | 28,074 |
| Freddie Mac, Series 3156, Class PO, principal only, 0% 20368 | 2,224 | 1,884 |
| Freddie Mac, Series 3146, Class PO, principal only, 0% 20368 | 1,492 | 1,248 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-2, Class HA, 2.25% 20568 | 116,865 | 113,464 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-3, Class HA, 2.25% 20568 | 66,389 | 65,497 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-1, Class HA, 2.50% 20567,8 | 72,627 | 70,917 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-2, Class MA, 3.00% 20568 | 109,497 | 106,880 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-1, Class MA, 3.00% 20568 | 19,726 | 19,315 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-4, Class HT, 2.50% 20577,8 | 27,952 | 27,249 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2018-2, Class MT, 3.50% 20578 | 30,221 | 29,683 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-4, Class MT, 3.50% 20578 | 21,619 | 21,253 |
| Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-4, Class M45T, 4.50% 20578 | 27,978 | 29,207 |
| Government National Mortgage Assn. 6.00% 20388 | 3,687 | 4,076 |
| Government National Mortgage Assn. 4.00% 20398 | 1,373 | 1,409 |
| Government National Mortgage Assn. 4.00% 20398 | 1,169 | 1,199 |
| Government National Mortgage Assn. 4.00% 20398 | 714 | 733 |
| Government National Mortgage Assn. 4.00% 20408 | 10,552 | 10,926 |
| Government National Mortgage Assn. 4.00% 20408 | 7,300 | 7,538 |
| Government National Mortgage Assn. 4.00% 20408 | 2,037 | 2,109 |
| Government National Mortgage Assn. 4.00% 20408 | 1,971 | 2,042 |
| Government National Mortgage Assn. 4.00% 20408 | 1,737 | 1,791 |
| Government National Mortgage Assn. 4.00% 20408 | 1,056 | 1,088 |
| Government National Mortgage Assn. 4.00% 20408 | 1,015 | 1,046 |
| Government National Mortgage Assn. 4.00% 20418 | 14,754 | 15,207 |
| Government National Mortgage Assn. 4.00% 20418 | 2,196 | 2,262 |
| Government National Mortgage Assn. 4.00% 20418 | 1,058 | 1,090 |
American Balanced Fund — Page 27 of 33
Bonds, notes & other debt instruments
Mortgage-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| Government National Mortgage Assn. 4.00% 20418 | $235 | $242 |
| Government National Mortgage Assn. 4.00% 20448 | 137 | 142 |
| Government National Mortgage Assn. 4.50% 20458 | 11,551 | 12,172 |
| Government National Mortgage Assn. 4.5% 20458 | 270 | 285 |
| Government National Mortgage Assn. 4.00% 20478 | 117,754 | 120,821 |
| Government National Mortgage Assn. 4.00% 20478 | 106,973 | 110,147 |
| Government National Mortgage Assn. 4.00% 20478 | 13,959 | 14,323 |
| Government National Mortgage Assn. 4.00% 20478 | 11,366 | 11,663 |
| Government National Mortgage Assn. 3.50% 20488,10 | 281,700 | 282,712 |
| Government National Mortgage Assn. 3.50% 20488 | 129,596 | 130,210 |
| Government National Mortgage Assn. 4.00% 20488 | 310,770 | 318,866 |
| Government National Mortgage Assn. 4.00% 20488,10 | 147,273 | 150,917 |
| Government National Mortgage Assn. 4.00% 20488,10 | 113,777 | 116,424 |
| Government National Mortgage Assn. 4.50% 20488,10 | 102,894 | 106,963 |
| Government National Mortgage Assn. 4.50% 20488 | 73,843 | 76,815 |
| Government National Mortgage Assn. 4.50% 20488 | 73,117 | 76,085 |
| Government National Mortgage Assn. 4.50% 20488,10 | 61,971 | 64,316 |
| Government National Mortgage Assn. 5.082% 20618 | 558 | 566 |
| GS Mortgage Securities Corp. II, Series 2015-GS1, Class AAB, 3.553% 20488 | 5,000 | 5,026 |
| J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP9, Class AM, 5.372% 20478 | 5,129 | 5,166 |
| L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20263,8 | 5,592 | 5,720 |
| LB-UBS Commercial Mortgage Trust, Series 2007-C6, Class AM, 6.114% 20407,8 | 1,422 | 1,421 |
| Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C27, Class ASB, 3.557% 20478 | 4,000 | 4,041 |
| Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C22, Class ASB, 3.04% 20488 | 3,380 | 3,343 |
| Morgan Stanley Capital I Trust, Series 2014-CPT, Class A, 3.35% 20293,8 | 14,570 | 14,629 |
| Nationstar HECM Loan Trust, Series 2017-1A, Class A, 1.968% 20272,3,8 | 1,705 | 1,699 |
| Nationstar HECM Loan Trust, Series 2017-1A, Class M1, 2.9419% 20272,3,8 | 3,155 | 3,130 |
| Royal Bank of Canada 1.875% 20208 | 18,000 | 17,720 |
| Sequoia Mortgage Trust, Series 2018-CH1, Class A1, 4.00% 20483,8 | 47,093 | 47,638 |
| Towd Point Mortgage Trust, Series 2017-1, Class A1, 2.75% 20563,7,8 | 68,847 | 67,671 |
| Wachovia Bank Commercial Mortgage Trust, Series 2007-C33, Class AM, 6.209% 20517,8 | 8,481 | 8,708 |
| Wells Fargo Mortgage-backed Securities Trust, Series 2005-AR10, Class IIA6, 3.911% 20357,8 | 3,818 | 3,942 |
| Westpac Banking Corp. 2.25% 20203,8 | 12,500 | 12,282 |
| | | 10,463,572 |
| Asset-backed obligations 0.79% | | |
| Aesop Funding LLC, Series 2013-2A, Class A, 2.97% 20203,8 | 16,535 | 16,547 |
| Aesop Funding LLC, Series 2015-1, Class A, 2.50% 20213,8 | 15,000 | 14,785 |
| Aesop Funding LLC, Series 2014-2A, Class A, 2.50% 20213,8 | 14,000 | 13,883 |
| Aesop Funding LLC, Series 2015-2A, Class A, 2.63% 20213,8 | 1,150 | 1,136 |
| AmeriCredit Automobile Receivables Trust, Series 2016-4, Class A2A, 1.34% 20208 | 526 | 526 |
| AmeriCredit Automobile Receivables Trust, Series 2016-3, Class B, 1.80% 20218 | 1,020 | 1,005 |
| AmeriCredit Automobile Receivables Trust, Series 2016-1, Class C, 2.89% 20228 | 4,875 | 4,872 |
Angel Oak Capital Advisors, LLC, Series 2013-9A, Class A1R, CLO,
(3-month USD-LIBOR + 1.01%) 3.369% 20253,7,8 | 16,608 | 16,626 |
| Avant Loans Funding Trust, Series 2017-A, Class A, 2.41% 20213,8 | 50 | 50 |
| BlueMountain CLO Ltd., Series 2013-4A, Class AR, (3-month USD-LIBOR + 1.01%) 3.358% 20253,7,8 | 19,632 | 19,656 |
| Cabela’s Master Credit Card Trust, Series 2016-1, Class A1, 1.78% 20228 | 19,600 | 19,397 |
| Capital One Multi-Asset Execution Trust, Series 2017-A1, Class A1, 2.00% 20238 | 40,000 | 39,437 |
| Chrysler Capital Auto Receivables Trust, Series 2015-AA, Class B, 2.07% 20213,8 | 2,500 | 2,498 |
| CIFC Funding Ltd., Series 2014-3A, Class AR, (3-month USD-LIBOR + 0.95%) 3.312% 20263,7,8 | 11,320 | 11,332 |
| Citibank Credit Card Issuance Trust, Series 2014-A6, Class A6, 2.15% 20218 | 16,725 | 16,630 |
| CLI Funding V LLC, Series 2013-2A, Class Note, 3.22% 20283,8 | 453 | 447 |
| CPS Auto Receivables Trust, Series 2017-B, Class A, 1.75% 20203,8 | 7,873 | 7,854 |
| CPS Auto Receivables Trust, Series 2015-A, Class B, 2.79% 20213,8 | 810 | 810 |
American Balanced Fund — Page 28 of 33
Bonds, notes & other debt instruments
Asset-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| CPS Auto Receivables Trust, Series 2016-A, Class C, 3.80% 20213,8 | $10,350 | $10,412 |
| CPS Auto Receivables Trust, Series 2015-A, Class C, 4.00% 20213,8 | 960 | 970 |
| CWABS, Inc., Series 2004-BC1, Class M1, (1-month USD-LIBOR + 0.50%) 2.841% 20347,8 | 1,713 | 1,705 |
| Discover Card Execution Note Trust, Series 2014-A4, Class A4, 2.12% 20218 | 7,595 | 7,555 |
| Drive Auto Receivables Trust, Series 2017-BA, Class B, 2.20% 20203,8 | 1,668 | 1,670 |
| Drive Auto Receivables Trust, Series 2015-BA, Class C, 2.76% 20213,8 | 1,645 | 1,646 |
| Drive Auto Receivables Trust, Series 2015-CA, Class C, 3.01% 20213,8 | 916 | 917 |
| Drive Auto Receivables Trust, Series 2015-AA, Class C, 3.06% 20213,8 | 2,303 | 2,306 |
| Drive Auto Receivables Trust, Series 2015-DA, Class C, 3.38% 20213,8 | 8,378 | 8,393 |
| Drive Auto Receivables Trust, Series 2016-AA, Class C, 3.91% 20213,8 | 4,076 | 4,094 |
| Drive Auto Receivables Trust, Series 2017-AA, Class C, 2.98% 20223,8 | 4,665 | 4,666 |
| Drivetime Auto Owner Trust, Series 2016-1A, Class C, 3.54% 20213,8 | 1,214 | 1,216 |
| Enterprise Fleet Financing LLC, Series 2016-2, Class A2, 1.74% 20223,8 | 3,810 | 3,794 |
| Enterprise Fleet Financing LLC, Series 2017-1, Class A2, 2.13% 20223,8 | 5,277 | 5,247 |
| Enterprise Fleet Financing LLC, Series 2017-1, Class A3, 2.60% 20223,8 | 7,345 | 7,288 |
| Fin. Auth., Student Loan Rev. Ref. Bonds, Series 2015-B-1, (1-month USD-LIBOR + 0.75%) 2.852% 20307,8 | 6,542 | 6,569 |
| First Investors Auto Owner Trust, Series 2014-2A, Class C, 2.70% 20203,8 | 3,600 | 3,598 |
| First Investors Auto Owner Trust, Series 2014-1A, Class C, 2.74% 20203,8 | 1,316 | 1,316 |
| Ford Credit Auto Owner Trust, Series 2015-1 Class A, 2.12% 20263,8 | 8,500 | 8,389 |
| Ford Credit Auto Owner Trust, Series 2014-2A, 2.31% 20263,8 | 8,880 | 8,813 |
| Ford Credit Auto Owner Trust, Series 2016-1, Class A, 2.31% 20273,8 | 35,370 | 34,667 |
| Ford Credit Auto Owner Trust, Series 2015-2, Class A, 2.44% 20273,8 | 33,450 | 33,026 |
| Ford Credit Auto Owner Trust, Series 2017-1, Class A, 2.62% 20283,8 | 64,610 | 63,318 |
| Ford Credit Auto Owner Trust, Series 2018-1, Class A, 3.19% 20313,8 | 149,970 | 147,768 |
| Ford Credit Floorplan Master Owner Trust, Series 2016-3, Class A1, 1.55% 20218 | 22,500 | 22,214 |
| Ford Credit Floorplan Master Owner Trust, Series 2015-2, Class A1, 1.98% 20228 | 14,390 | 14,192 |
| Global SC Finance II SRL, Series 2017-1A, Class A, 3.85% 20373,8 | 30,735 | 30,495 |
| Hertz Vehicle Financing LLC, Rental Car Asset-Backed Notes, Series 2013-1A, Class A2, 1.83% 20193,8 | 5,167 | 5,162 |
| Hertz Vehicle Financing LLC, Rental Car Asset-Backed Notes, Series 2015-3A, Class A, 2.67% 20213,8 | 5,505 | 5,414 |
| Hertz Vehicle Financing LLC, Rental Car Asset-Backed Notes, Series 2015-1, Class A, 2.73% 20213,8 | 9,113 | 9,018 |
| Hertz Vehicle Financing LLC, Rental Car Asset-Backed Notes, Series 2018-1A, Class A, 3.29% 20243,8 | 23,825 | 23,321 |
| Santander Drive Auto Receivables Trust, Series 2014-2, Class C, 2.33% 20198 | 10 | 10 |
| Santander Drive Auto Receivables Trust, Series 2017-1, Class A2, 1.49% 20208 | 76 | 76 |
| Santander Drive Auto Receivables Trust, Series 2017-1, Class A3, 1.77% 20208 | 2,815 | 2,810 |
| Santander Drive Auto Receivables Trust, Series 2015-2, Class C, 2.44% 20218 | 8,680 | 8,676 |
| Santander Drive Auto Receivables Trust, Series 2016-2, Class C, 2.66% 20218 | 5,555 | 5,535 |
| Santander Drive Auto Receivables Trust, Series 2015-5, Class C, 2.74% 20218 | 3,400 | 3,401 |
| Santander Drive Auto Receivables Trust, Series 2015-3, Class C, 2.74% 20218 | 90 | 90 |
| Santander Drive Auto Receivables Trust, Series 2015-4, Class C, 2.97% 20218 | 9,559 | 9,568 |
| Santander Drive Auto Receivables Trust, Series 2016-1, Class C, 3.09% 20228 | 3,000 | 3,004 |
| SMB Private Education Loan Trust, Series 2015-A, Class A2A, 2.49% 20273,8 | 1,770 | 1,748 |
Social Professional Loan Program LLC, Series 2015-C, Class A1, (1-month USD-LIBOR + 1.05%)
3.141% 20353,7,8 | 2,589 | 2,608 |
| Social Professional Loan Program LLC, Series 2015-D, Class A2, 2.72% 20363,8 | 12,392 | 12,233 |
| South Carolina Student Loan Corp., Series 2014-1, Class A1, (1-month USD-LIBOR + 0.75%) 2.732% 20307,8 | 4,550 | 4,573 |
| South Carolina Student Loan Corp., Series 2014-1, Class A2, (1-month USD-LIBOR + 1.00%) 2.982% 20337,8 | 12,240 | 12,446 |
| Symphony CLO Ltd, Series 2013-12A, Class AR, CLO, (3-month USD-LIBOR + 1.03%) 3.378% 20253,7,8 | 47,545 | 47,593 |
| TAL Advantage V LLC, Series 2013-1A, Class A, 2.83% 20383,8 | 2,093 | 2,057 |
| TAL Advantage V LLC, Series 2013-2A, Class A, 3.55% 20383,8 | 4,867 | 4,832 |
| TAL Advantage V LLC, Series 2014-3A, Class A, 3.27% 20393,8 | 558 | 550 |
| TAL Advantage V LLC, Series 2014-2A, Class A2, 3.33% 20393,8 | 12,947 | 12,843 |
| TAL Advantage V LLC, Series 2014-1A, Class A, 3.51% 20393,8 | 6,035 | 5,994 |
| TAL Advantage V LLC, Series 2017-1A, Class A, 4.50% 20423,8 | 12,887 | 13,150 |
| Triton Container Finance LLC, Series 2017-1A, Class A, 3.52% 20423,8 | 35,021 | 34,522 |
| Triton Container Finance LLC, Series 2017-2A, Class A, 3.62% 20423,8 | 18,924 | 18,612 |
American Balanced Fund — Page 29 of 33
Bonds, notes & other debt instruments
Asset-backed obligations (continued) | Principal amount
(000) | Value
(000) |
| Verizon Owner Trust, Series 2016-2A, Class A, 1.68% 20213,8 | $16,300 | $16,135 |
| Verizon Owner Trust, Series 2017-2A, Class A, 1.92% 20213,8 | 44,210 | 43,599 |
| Verizon Owner Trust, Series 2017-1A, Class A, 2.06% 20213,8 | 48,825 | 48,284 |
| Westlake Automobile Receivables Trust, Series 2017-1A, Class A2, 1.78% 20203,8 | 3,292 | 3,288 |
| Westlake Automobile Receivables Trust, Series 2016-1A, Class C, 3.29% 20213,8 | 2,614 | 2,618 |
| World Financial Network Credit Card Master Note Trust, Series 2018-A, Class A, 3.07% 20248 | 33,000 | 32,871 |
| World Omni Auto Receivables Trust, Series 2014-B, Class A3, 1.14% 20208 | 299 | 299 |
| | | 1,020,675 |
| Bonds & notes of governments & government agencies outside the U.S. 0.45% | | |
| CPPIB Capital Inc. 1.25% 20193 | 23,300 | 22,913 |
| CPPIB Capital Inc. 2.375% 20213 | 26,000 | 25,623 |
| CPPIB Capital Inc. 2.25% 20223 | 25,714 | 25,081 |
| CPPIB Capital Inc. 2.75% 20273 | 26,400 | 25,434 |
| Israel (State of) 3.15% 2023 | 35,000 | 34,672 |
| Japan Finance Organization for Municipalities 2.125% 20193 | 10,000 | 9,967 |
| Manitoba (Province of) 3.05% 2024 | 13,500 | 13,359 |
| Ontario (Province of) 2.55% 2021 | 25,200 | 24,951 |
| Ontario (Province of) 3.20% 2024 | 10,000 | 9,972 |
| Portuguese Republic 5.125% 2024 | 128,585 | 133,488 |
| Qatar (State of) 3.875% 20233 | 29,400 | 29,434 |
| Qatar (State of) 4.50% 20283 | 23,370 | 23,629 |
| Qatar (State of) 5.103% 20483 | 24,295 | 24,276 |
| Quebec (Province of) 2.375% 2022 | 51,867 | 50,752 |
| Quebec (Province of) 2.75% 2027 | 26,000 | 25,030 |
| Saudi Arabia (Kingdom of) 4.00% 20253 | 42,305 | 42,158 |
| Saudi Arabia (Kingdom of) 3.625% 20283 | 17,150 | 16,344 |
| Saudi Arabia (Kingdom of) 4.50% 20303 | 9,985 | 9,993 |
| Saudi Arabia (Kingdom of) 4.625% 20473 | 11,090 | 10,364 |
Swedish Export Credit Corp. 2.875% 2023
(USD Semi Annual 30/360 (vs. 3M LIBOR) 5Y + 1.45% on 11/14/2018)3,5 | 3,000 | 2,982 |
| United Mexican States 4.15% 2027 | 24,375 | 24,058 |
| | | 584,480 |
Municipals 0.27%
Illinois 0.16% | | |
| G.O. Bonds, Pension Funding Series 2003, 5.10% 20338 | 222,845 | 211,244 |
| California 0.04% | | |
| Dept. of Veterans Affairs, Veterans G.O. Ref. Bonds, Series 2015-CM, AMT, 2.45% 2031 | 1,700 | 1,699 |
| High-Speed Passenger Train G.O. Ref. Bonds, Series 2017-B, 2.193% 2047 (put 2020) | 18,925 | 18,711 |
| Industry Public Facs. Auth., Tax Allocation Rev. Ref. Bonds (Civic - Recreational-Industrial Redev. Project No. 1), Series 2015-A, Assured Guaranty Municipal insured, 3.821% 2022 | 11,640 | 11,844 |
| Los Angeles Community College Dist. (County of Los Angeles), G.O. Build America Bonds, 2008 Election, Series 2010-E, 6.60% 2042 | 15,000 | 21,017 |
| | | 53,271 |
| New Jersey 0.03% | | |
Econ. Dev. Auth., School Facs. Construction Rev. Ref. Bonds, Series 2013-I,
(SIFMA Municipal Swap Index + 1.60%) 3.11% 20287 | 5,000 | 4,955 |
| Econ. Dev. Auth., School Facs. Construction Rev. Ref. Bonds, Series 2015-YY, 4.447% 2020 | 12,000 | 12,253 |
| Transportation Trust Fund Auth., Transportation System Rev. Ref. Bonds, Series 2013-B, 1.758% 2018 | 15,250 | 15,164 |
| | | 32,372 |
American Balanced Fund — Page 30 of 33
Bonds, notes & other debt instruments
Municipals (continued)
Florida 0.02% | Principal amount
(000) | Value
(000) |
| Hurricane Catastrophe Fund Fin. Corp., Rev. Bonds, Series 2013-A, 2.995% 2020 | $4,000 | $4,013 |
| State Board of Administration Fin. Corp., Rev. Bonds, Series 2016-A, 2.638% 2021 | 16,500 | 16,355 |
| | | 20,368 |
| Michigan 0.01% | | |
| City of Detroit, Sewage Disposal System Rev. Ref. Bonds, Series 2006-D, Assured Guaranty Municipal insured, (3-month USD-LIBOR + 0.60%) 2.146% 20327 | 5,000 | 4,782 |
Fin. Auth., Local Government Loan Program Rev. Bonds (City of Detroit Fin. Recovery
Income Tax Local Project), Series 2014-F-2, 4.60% 2022 | 9,000 | 9,176 |
| | | 13,958 |
| New York 0.01% | | |
| Utility Debt Securitization Auth., Restructuring Bonds, Series 2013-T-1, 2.042% 2021 | 2,247 | 2,239 |
| Utility Debt Securitization Auth., Restructuring Bonds, Series 2013-T-4, 3.435% 2025 | 2,625 | 2,647 |
| | | 4,886 |
| South Dakota 0.00% | | |
| Housing Dev. Auth., Homeownership Mortgage Bonds, Series 2013-E, AMT, 4.00% 2044 | 395 | 409 |
| Housing Dev. Auth., Homeownership Mortgage Bonds, Series 2014-F, 4.00% 2034 | 775 | 786 |
| Housing Dev. Auth., Homeownership Mortgage Bonds, Series 2015-D, 4.00% 2045 | 2,595 | 2,712 |
| | | 3,907 |
| Connecticut 0.00% | | |
| Housing Fin. Auth., Housing Mortgage Fin. Program Bonds, Series 2014-A-1, 4.00% 2044 | 1,175 | 1,218 |
| Maine 0.00% | | |
| Housing Auth., Mortgage Purchase Rev. Ref. Bonds, Series 2014-A-1, AMT, 3.25% 2043 | 470 | 478 |
| Iowa 0.00% | | |
Fin. Auth., Single Family Mortgage Bonds (Mortgage-Backed Securities Program), Series 2013-1,
2.15% 20438 | 494 | 464 |
| | | 342,166 |
| Federal agency bonds & notes 0.24% | | |
| Fannie Mae 2.00% 2022 | 30,000 | 29,262 |
| Fannie Mae 2.125% 2026 | 45,510 | 42,754 |
| Fannie Mae 6.25% 2029 | 4,000 | 5,140 |
| Federal Home Loan Bank 2.375% 2020 | 200,000 | 199,425 |
| Federal Home Loan Bank 5.50% 2036 | 600 | 783 |
| Private Export Funding Corp. 3.55% 2024 | 25,897 | 26,725 |
| | | 304,089 |
| Miscellaneous 0.02% | | |
| Other bonds & notes in initial period of acquisition | | 29,206 |
| Total bonds, notes & other debt instruments (cost: $48,216,449,000) | | 47,611,781 |
| Short-term securities 4.61% | | |
| Apple Inc. 2.08% due 9/12/20183 | 100,000 | 99,570 |
| Army and Air Force Exchange Service 1.92% due 7/2/20183 | 80,000 | 79,987 |
| CAFCO, LLC 2.26% due 8/15/20183 | 35,000 | 34,905 |
American Balanced Fund — Page 31 of 33
| Short-term securities | Principal amount
(000) | Value
(000) |
| Chevron Corp. 2.02%–2.04% due 8/14/2018–8/21/20183 | $125,000 | $124,649 |
| Ciesco LLC 2.23% due 8/28/20183 | 25,000 | 24,910 |
| CRC Funding, LLC 2.25% due 9/11/20183 | 50,000 | 49,775 |
| Eli Lilly and Co. 1.96% due 7/16/20183 | 50,000 | 49,955 |
| ExxonMobil Corp. 1.93%–2.03% due 7/23/2018–9/5/2018 | 190,000 | 189,571 |
| Fannie Mae 1.32%–1.81% due 7/2/2018–7/24/2018 | 170,000 | 169,909 |
| Federal Home Loan Bank 1.55%–1.93% due 7/2/2018–9/28/2018 | 675,700 | 674,476 |
| Freddie Mac 1.80% due 7/18/2018–7/20/2018 | 143,900 | 143,784 |
| PepsiCo Inc. 1.98%–1.99% due 8/6/2018–8/7/20183 | 100,000 | 99,785 |
| Pfizer Inc. 1.88% due 8/13/20183 | 50,000 | 49,872 |
| U.S. Treasury Bills 1.53%–2.24% due 7/5/2018–6/20/2019 | 4,103,300 | 4,068,659 |
| Wal-Mart Stores, Inc. 1.93%–2.00% due 7/3/2018–7/20/20183 | 100,000 | 99,930 |
| Total short-term securities (cost: $5,961,425,000) | | 5,959,737 |
| Total investment securities 100.65% (cost: $103,504,572,000) | | 130,007,085 |
| Other assets less liabilities (0.65)% | | (838,902) |
| Net assets 100.00% | | $129,168,183 |
As permitted by U.S. Securities and Exchange Commission regulations, "Miscellaneous" securities include holdings in their first year of acquisition that have not previously been publicly disclosed.
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 was $149,629,000, which represented .12% of the net assets of the fund. |
| 3 | Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $5,406,269,000, which represented 4.19% of the net assets of the fund. |
| 4 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
| 5 | Step bond; coupon rate may change at a later date. |
| 6 | Value determined using significant unobservable inputs. |
| 7 | Coupon rate may change periodically. |
| 8 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
| 9 | Index-linked bond whose principal amount moves with a government price index. |
| 10 | Purchased on a TBA basis. |
| |
| Key to abbreviations |
| ADR = American Depositary Receipts |
| AMT = Alternative Minimum Tax |
| Auth. = Authority |
| CLO = Collateralized Loan Obligations |
| Dept. = Department |
| Dev. = Development |
| Econ. = Economic |
| Facs. = Facilities |
| Fin. = Finance |
| G.O. = General Obligation |
| LIBOR = London Interbank Offered Rate |
| Redev. = Redevelopment |
| Ref. = Refunding |
| Rev. = Revenue |
| SIFMA = Securities Industry and Financial Markets Association |
| TBA = To-be-announced |
American Balanced Fund — Page 32 of 33
Additional financial disclosures are included in the fund’s current shareholder report and should be read in conjunction with this report.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at (800) 421-4225 or visit the American Funds website at americanfunds.com. Fund shares offered through American Funds Distributors, Inc.
| MFGEFPX-011-0818O-S66049 | American Balanced Fund — Page 33 of 33 |
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) | Effective May 28, 2018, the American Balanced Fund’s investment adviser implemented a new fixed income order management, trading, and compliance system. In connection with introducing this new system, additional automated and manual controls were implemented and some existing controls were modified. None of these changes were in response to any identified deficiency or weakness in the American Balanced Fund’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/ Donald H. Rolfe |
| | Donald H. Rolfe, Executive Vice President and Principal Executive Officer |
| | |
| | Date: August 31, 2018 |
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/ Donald H. Rolfe |
Donald H. Rolfe, Executive Vice President and Principal Executive Officer |
| |
| Date: August 31, 2018 |
| By /s/Hong T. Le, Treasurer |
Hong T. Le, Treasurer and Principal Financial Officer |
| |
| Date: August 31, 2018 |
