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: 811-01880
The Income Fund of America
(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: July 31
Date of reporting period: July 31, 2016
Michael W. Stockton
The Income Fund of America
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
ITEM 1 – Reports to Stockholders
A new era of innovation
can power your portfolio.
The Income Fund of America® Annual report for the year ended July 31, 2016 |
The Income Fund of America seeks current income while secondarily striving for capital growth.
This fund is one of more than 40 offered by one of the nation’s largest mutual fund families, American Funds, from Capital Group. For 85 years, Capital has invested with a long-term focus based on thorough research and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2016 (the most recent calendar quarter-end):
Class A shares | 1 year | 5 years | 10 years | |||
Reflecting 5.75% maximum sales charge | –0.63% | 7.16% | 5.69% |
For other share class results, visit americanfunds.com and americanfundsretirement.com.
The total annual fund operating expense ratio is 0.56% for Class A shares as of the prospectus dated October 1, 2016 (unaudited).
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 August 31, 2016, calculated in accordance with the U.S. Securities and Exchange Commission (SEC) formula, was 2.70%. The fund’s 12-month distribution rate for Class A shares as of that date was 2.83%. 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. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal than investment-grade bonds. Bond ratings, which typically range from Aaa/AAA (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor’s, Moody’s and/or Fitch as an indication of an issuer’s creditworthiness. Investing outside the United States may be subject to additional risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries. Refer to the fund prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.
Amid a challenging and volatile market environment, The Income Fund of America advanced 7.10% for the 12-month period ending July 31, 2016. The fund paid dividends totaling 66 cents a share. A capital gain distribution of 37 cents a share was also paid in December.
The fund’s results outpaced the broader equity market and its peer group, the Lipper Income Funds Index. The unmanaged Standard & Poor’s 500 Composite Index, a market capitalization-weighted index based on the results of 500 widely held common stocks, gained 5.61%. The Lipper Income Funds Index gained 3.30%. The fund also outpaced the 5.94% return of the bond market, as represented by the unmanaged Barclays U.S. Aggregate Index.
As you can see in the table below, the fund has fared well against the Lipper and Barclays indexes for all the periods shown.
Navigating a volatile environment
From nearly start to finish of the fiscal year, geopolitical and macroeconomic issues rattled markets around the world. Investors have been confronted with the British vote to leave the European Union (Brexit), economic uncertainty in the U.S., economic deceleration in China and the introduction of negative interest rates in some markets. Nevertheless, the global economy is expected to remain on a path to growth — albeit slow growth.
To be sure, outlooks for country and regional economies vary considerably. Nowhere is this more apparent than with the U.S. and China, the world’s powerhouse economies. The U.S. again is showing its resilience, as American consumers continue to bolster the economy. Bright spots also appear in the housing and industrial sectors. In contrast, China’s transition toward more sustainable consumption-led growth proceeds along a bumpy path. While the risk that China might drag the global
Results at a glance
For periods ended July 31, 2016, with all distributions reinvested
Cumulative total returns | Average annual total returns | |||||||||||
1 year | 5 years | 10 years | Lifetime1 | |||||||||
The Income Fund of America (Class A shares) | 7.10 | % | 9.25 | % | 6.31 | % | 11.10 | % | ||||
Standard & Poor’s 500 Composite Index2 | 5.61 | 13.38 | 7.75 | 10.87 | ||||||||
Barclays U.S. Aggregate Index2 | 5.94 | 3.57 | 5.06 | 7.60 | 3 | |||||||
Lipper Income Funds Index | 3.30 | 5.40 | 4.99 | — | 4 | |||||||
Consumer Price Index (inflation)5 | 0.84 | 1.27 | 1.69 | 3.96 |
1 | Since December 1, 1973, when Capital Research and Management Company became the fund’s investment adviser. |
2 | The market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. |
3 | From December 1, 1973, through December 31, 1975, the Barclays U.S. Government/Credit Index was used because the Barclays U.S. Aggregate Index did not yet exist. |
4 | The inception date for the index was December 31, 1988 |
5 | Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics. |
The Income Fund of America | 1 |
economy into recession has diminished, further deceleration in the world’s second-largest economy and bouts of market turbulence in the months ahead can be expected.
In Europe, the Brexit vote has left investors uncertain about the future of the European Union (EU). The economic and political implications of the United Kingdom’s decision to leave the EU are likely to reverberate for years, but at this point, it seems as if the effects on the U.S. economy will likely be limited.
Top holdings support the fund
Companies across a variety of sectors and industries contributed to fund returns. Nine of the fund’s 10 largest holdings rose, with information technology firms providing some of the strongest support.
Among the top 10, Microsoft gained 21.37%. Shares rose partly on the strength of revenue growth from its Azure cloud computing service. Microsoft’s Office 365 — a cloud-delivered, subscription-based productivity suite — also grew rapidly during the period.
Intel, one of the world’s largest semiconductor chipmakers, jumped 20.42%. The digital technology company’s data center and “internet of things” businesses have become its primary growth engines. Intel is a leader in the design and development of the equipment that runs data centers on which cloud computing relies.
Industrials show strength
In the industrials sector, Lockheed Martin and General Electric, both among the fund’s top 10 holdings, contributed to fund results. Lockheed, a global aerospace and defense company, advanced 22.03%. The company has consolidated its position as the Pentagon’s largest supplier of military equipment during the past several years and continues to benefit from a steady flow of government contracts.
GE gained 19.31% as it moved to sell its financial and appliance businesses in order to focus on its industrial, health care and energy divisions. Shares also rallied after the company announced it would repurchase $50 billion in shares, one of the biggest corporate buybacks on record. GE Aviation, a leading provider of jet and turboprop engines for commercial, military, business and general aviation aircraft, helped drive the company’s growth.
Pharmaceutical returns muted
Among health care holdings, the returns from Merck, Pfizer and GlaxoSmithKline were somewhat muted. About halfway through the fiscal year, the shares of many pharmaceutical companies declined. However, the retreat seemed to be more about political rhetoric than company fundamentals as the level of debate about drug pricing heated up among U.S. presidential candidates. Merck declined 0.51%, Pfizer gained 2.30% and GlaxoSmithKline rose 2.47%. These three companies, all top 10 holdings, remain attractive not only because of a long history of paying dividends, but because they have quality leadership, robust product pipelines, solid balance sheets and healthy cash flow.
Energy and materials detract
The fund’s returns were dampened by several companies in the energy sector. Most notably, ConocoPhillips declined 18.91%. In February, ConocoPhillips announced its first dividend cut in 25 years and further reduced its capital-spending plans. Conversely, Spectra Energy lifted the fund. The energy infrastructure company was able to not only maintain but also increase its dividend. The stock rose 18.87% on the strength of new energy projects as the price of oil rose. Among companies in the materials sector, Potash of Saskatchewan declined 42.61% as weak fertilizer prices took a toll on the company’s bottom line. These sectors, as
Striking a balance between return and volatility
The Income Fund of America takes a sensible approach to income. Looking back 10 years, the fund has provided higher returns than bonds and income funds, and lower volatility than stocks. In addition, as can be seen on page 1, the fund’s lifetime results surpass those of both the stock and bond indexes.
For the 10-year period ended July 31, 2016
Sources: Stocks — S&P 500; Bonds — Barclays U.S. Aggregate Index; Income funds — Lipper Income Funds Index. Returns include reinvestment of all distributions. Volatility is calculated at net asset value by Lipper using annualized standard deviation (based on monthly returns), a measure of how returns over time have varied from the mean; a lower number signifies lower volatility.
2 | The Income Fund of America |
well as the overall market, were affected by volatile commodity prices. Oil, for example, fell from more than $90 a barrel in 2014 to less than $35 early in 2016. The price of oil was about $40 a barrel as the period ended.
Investments abroad
The fund can invest up to 25% of its assets in stocks outside the U.S., and during the past fiscal year, a number of our non-U.S. holdings contributed to absolute returns. The United Kingdom’s decision to leave the EU briefly roiled markets around the world, but had a relatively small impact on our holdings there, including GlaxoSmithKline, BAE Systems and Vodafone, all of which derive a significant portion of their revenue from outside the U.K. The fund’s exposure to non-U.S. common stocks totaled 16.5% at period’s end, but that may increase as we are seeing fairly attractive valuations for dividend-paying and other companies abroad.
For bonds, a volatile year
Early in the period, bonds issued by energy and natural resources companies were hurt by falling commodity prices, and the negative sentiment spread to the broader high-yield sector. But ultimately the fund’s allocation to bonds contributed to fund results, and our high-yield exposure was additive to returns and provided income.
Outlook
We expect the U.S. economy to continue setting the pace for global growth, but at a modest speed. The country’s gross domestic product seems more likely to rise at 2.5% than the 4% of past recoveries. The U.S. consumer appears in relatively good shape with household debt near 30-year lows, low unemployment and the emergence of the first signs of wage growth. However, business investment and productivity gains have been lagging, holding back a stronger U.S. recovery.
Given the global economic and political uncertainty, the Federal Reserve has recently pulled back its forecast for the number of interest-rate increases it expects to make for the remainder of 2016. This should continue to bolster higher yielding stocks. If the Fed, at some point, begins to aggressively raise rates, the environment for some income-oriented stocks may become more challenging. However, even in a rising interest-rate environment, some higher yielding stocks should continue to do well. Some companies, including banks, can benefit from gradually rising rates, as the hikes are likely to be in response to a strengthening economy.
We remain mindful that we are in a volatile and sometimes unsettling period. While the macroeconomic and geopolitical issues are likely to make the investment environment challenging, we continue to find opportunities to invest at relatively attractive valuations in companies we believe have the potential to prosper over the long run. We thank you for your commitment to The Income Fund of America and look forward to reporting to you again in six months.
Cordially,
Hilda L. Applbaum
Vice Chairman and Principal Executive Officer
David C. Barclay
President
September 8, 2016
For current information about the fund, visit americanfunds.com.
A lifetime of high current income
The Income Fund of America’s 12-month dividend yield vs. benchmarks
Year ended July 31
All numbers calculated by Lipper.
The Income Fund of America | 3 |
The value of a long-term perspective
Fund results shown are for Class A shares and reflect deduction of the maximum sales charge of 5.75% on the $10,000 investment.1 Thus, the net amount invested was $9,425.2 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. For current information and month-end results, visit americanfunds.com.
The results shown are before taxes on fund distributions and sale of fund shares.
1 | As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares. |
2 | The maximum initial sales charge was 8.5% prior to July 1, 1988. |
3 | For the period December 1, 1973 (when Capital Research and Management Company became the fund’s investment adviser), through July 31, 1974. |
4 | Includes reinvested dividends of $454,754 and reinvested capital gain distributions of $ $144,973. |
5 | The indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. |
6 | From December 1, 1973, through December 31, 1975, the Barclays U.S. Government/Credit Index was used because the Barclays U.S. Aggregate Index did not yet exist. |
7 | Includes capital gain distributions of $25,226, but does not reflect income dividends of $74,570 taken in cash. |
8 | From April 1990 to September 1994, and from September 2003 to March 2009, the fund accrued dividends daily but paid quarterly. Dividends reflect quarterly dividends actually paid during the period, while year-end values are adjusted for cumulative dividends accrued but not yet paid. |
Year ended July 31 | 19743 | 1975 | 1976 | 1977 | 1978 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | |||||||||||||||||||
VALUE OF DIVIDENDS | (dollars in thousands) | |||||||||||||||||||||||||||||||||||
Dividends in cash8 | $ | 0.3 | 0.7 | 0.9 | 0.8 | 0.8 | 0.9 | 1.0 | 1.0 | 1.2 | 1.3 | 1.3 | 1.4 | 1.5 | 1.6 | 1.5 | 1.7 | 1.6 | ||||||||||||||||||
Dividends reinvested8 | $ | 0.3 | 0.8 | 1.0 | 1.0 | 1.1 | 1.3 | 1.5 | 1.7 | 2.2 | 2.5 | 2.9 | 3.4 | 3.9 | 4.4 | 4.5 | 5.3 | 5.3 | ||||||||||||||||||
VALUE OF INVESTMENT | (dollars in thousands) | |||||||||||||||||||||||||||||||||||
Dividends in cash8 | $ | 8.8 | 10.1 | 12.2 | 12.7 | 12.6 | 12.7 | 12.5 | 12.8 | 12.3 | 16.1 | 15.7 | 19.4 | 21.7 | 23.6 | 22.3 | 25.6 | 24.4 | ||||||||||||||||||
Dividends reinvested8 | $ | 9.1 | 11.4 | 14.8 | 16.4 | 17.4 | 18.9 | 20.2 | 22.5 | 23.7 | 33.7 | 35.7 | 47.7 | 57.1 | 66.7 | 67.8 | 83.7 | 84.6 | ||||||||||||||||||
IFA TOTAL RETURN | (9.1 | )% | 25.3 | 29.5 | 11.1 | 6.2 | 8.7 | 6.6 | 11.5 | 5.2 | 42.3 | 6.0 | 33.5 | 19.9 | 16.7 | 1.7 | 23.4 | 1.1 |
4 | The Income Fund of America |
How a $10,000 investment has grown
There have always been reasons not to invest. If you look beyond the negative headlines, however, you will find that despite occasional stumbles, financial markets have tended to reward investors over the long term. Active management — bolstered by experience and careful research — can add even more value. As the chart below shows, over its lifetime, The Income Fund of America (IFA) has delivered higher returns than both the broader stock and bond markets. Dividends, particularly when reinvested, have accounted for a large portion of the fund’s overall results.
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||||||||||
1.8 | 1.7 | 1.7 | 1.7 | 1.8 | 1.8 | 2.0 | 2.0 | 2.2 | 2.3 | 2.2 | 2.3 | 2.1 | 1.9 | 1.9 | 2.2 | 2.7 | 2.8 | 2.5 | 2.1 | 2.3 | 2.2 | 2.1 | 2.1 | 2.5 | 2.1 | |||||||||||||||||||||||||
6.3 | 6.6 | 7.0 | 7.5 | 8.0 | 8.6 | 10.1 | 10.5 | 12.4 | 13.7 | 13.9 | 14.9 | 14.3 | 14.1 | 13.9 | 17.0 | 22.2 | 23.7 | 22.2 | 19.6 | 23.2 | 22.6 | 22.9 | 23.0 | 28.4 | 24.9 | |||||||||||||||||||||||||
25.4 | 28.4 | 29.9 | 28.8 | 31.6 | 34.0 | 41.7 | 44.4 | 45.6 | 42.3 | 46.5 | 41.4 | 44.1 | 49.1 | 54.0 | 57.0 | 61.9 | 53.5 | 44.0 | 48.5 | 53.2 | 55.4 | 61.6 | 67.2 | 66.8 | 69.3 | |||||||||||||||||||||||||
95.0 | 113.2 | 126.7 | 129.2 | 150.4 | 170.6 | 220.6 | 245.5 | 264.7 | 259.2 | 299.4 | 280.4 | 314.6 | 364.1 | 415.5 | 456.1 | 518.4 | 469.2 | 409.6 | 471.4 | 540.6 | 586.3 | 676.2 | 762.5 | 785.5 | 841.3 | |||||||||||||||||||||||||
12.3 | 19.1 | 11.9 | 2.0 | 16.4 | 13.5 | 29.3 | 11.3 | 7.8 | (2.1 | ) | 15.5 | (6.4 | ) | 12.2 | 15.8 | 14.1 | 9.8 | 13.6 | (9.5 | ) | (12.7 | ) | 15.1 | 14.7 | 8.4 | 15.3 | 12.8 | 3.0 | 7.1 |
The Income Fund of America | 5 |
A new era of innovation can power your portfolio.
6 | The Income Fund of America |
“Innovation creates long-term value.”
Hilda Applbaum
Portfolio manager Hilda Applbaum and many of the investment professionals at American Funds see a lot of the world in their search for companies that can help investors meet their objectives. They interview executives, tour facilities, talk with employees — essentially learn as much as they can about the organization.
Their investment decisions are based on factors ranging from the quality of the company’s leadership to its free cash flow. The decision is all about the company, not the country, sector or macroeconomic events. Bottom-up, not top-down.
They also keep their eyes on the big picture during their travels in the United States and abroad. And many of them are seeing a new era of innovation that has the potential to improve the standard of living across the globe, provide companies with greater profits and reward long-term investors in The Income Fund of America.
Innovation, Hilda says, can enhance the value of a company for an investor. “When a company continues to innovate and develop new products and processes, it improves the prospects for future revenue, earnings and dividend growth,” she says.
“Even if you take a relatively conservative approach to investing, that doesn’t mean you shouldn’t be investing in innovative companies — because innovation creates long-term value,” Hilda says.
The engine of change
The entrepreneurial spirit and commitment to innovation are providing opportunities for companies and investors around the globe, and that’s especially true in the United States, which leads the world in spending on research and development. This year, R&D spending is expected to increase 3.4% to $514 billion — about 2.8% of the nation’s gross domestic product.
Four of The Income Fund of America’s top 10 holdings — Intel, Microsoft, Pfizer and Merck — were among the top 10 U.S. companies in terms of R&D spending. The fund also held General Motors, the top spender on R&D, at period’s end.
Thomson Reuters included Microsoft and Intel on their 2015 Top 100 Global Innovators, as well as General Electric, another top 10 holding in IFA. And, if you consider patents a proxy for innovation, Microsoft, GE and Intel were among the top 10 in patent grants from 2000 to 2013.
Here’s a look at how R&D and new technology are spurring innovation and redefining some companies that are household names as well as top holdings in the fund.
Pharmaceutical innovation
When it comes to biopharmaceutical firms, the old saying is true — you’ve got to spend money to make money. In 2015, U.S. biopharma firms spent about $33 billion on R&D, or the bulk of the $51 billion spent by the entire pharmaceutical industry. The sector’s significant R&D investments have helped drive its contributions to the U.S. economy and allowed it to be a world leader in the development of new medicines.
Investment analyst Jay Markowitz doesn’t see this cycle ending soon. “We are in a 30- to 40-year cycle of innovation that was catalyzed by, among other things, the sequencing and the understanding of the human genome,” says Jay, who focuses on U.S. pharmaceutical and biotechnology companies.
Not only has DNA analysis led to a new era in medicine, it also demonstrates the increasing speed with which innovation can occur. In 2003, scientists announced they had sequenced the human genome. It took eight years of work, thousands of researchers and cost about $2 billion. Today scientists can sequence a human genome in a couple of days for well under $10,000.
But in many cases, Jay says, the development of drugs can be slow and incredibly expensive. “It takes 10 to 15 years to go from concept to drug approval, and only about one in 10 actually gets approved,” he says.
Once approved, some drugs can command premium pricing. And because the barriers to entry in this arena are so high, a successful drug represents a long-term and unusually secure source of recurring revenue for its manufacturer. This cash flow, in some cases, is being used to reward investors with dividends.
For those afflicted with cancer or other ailments, what matters is that pharmaceutical innovation has resulted in treatment that can slow the progression of or even cure a disease.
Take former President Jimmy Carter, who announced in 2015 that melanoma had spread to his liver and brain. He underwent surgery, radiation therapy and a new kind of cancer treatment called immunotherapy. Then, just months after finding out he had metastatic cancer, Carter said that his doctors saw no tumors and that he no longer needs cancer treatment.
The Income Fund of America | 7 |
The U.S. is a world leader in biotechnology drugs
In 2015, biopharma firms in the U.S. spent about $33 billion on research and development, or the bulk of the $51 billion spent by the entire pharmaceutical industry. R&D spending has helped create drugs that can slow the progression of a disease or, in some cases, cure a condition.
Sources: Ernst & Young (U.S. biotech companies’ R&D expenditures) and FactSet Fundamentals (top 10 biotech companies worldwide). R&D expenditure data for 2014 and 2015 are estimates.
Carter’s remarkable outlook is likely due in large part to pembrolizumab, a drug that helps the immune system identify and fight tumors that would otherwise be “invisible” to antibodies. The drug, marketed under the name Keytruda, is a product of Merck, a top 10 holding and one of the top 10 U.S. companies in R&D spending. The company reported in July 2016 that Keytruda posted quarterly sales of $314 million, compared with $110 million in the same quarter last year.
Pfizer, the global pharmaceutical company headquartered in New York, is also among the fund’s top 10 holdings and one of the top 10 in R&D spending in the U.S. Several years ago, the company developed Ibrance, a drug that slowed the pace of metastatic breast cancer, doubling the time that patients could live without their tumors advancing. It’s one of the most dramatic advancements in decades. In addition, the drug may eventually generate significant revenue for the company.
“We are seeing evidence that the money these companies are investing in R&D is providing a return for society and shareholders,” Jay says. “The key is for these companies to be in continuous innovation, and not rely on a limited monopoly afforded by a drug patent.”
Finding such companies at attractive valuations can be especially important for income investors, Hilda says. The health care sector has a long history of paying dividends, and three companies — Merck, Pfizer and GlaxoSmithKline — were among the fund’s top 10 holdings at period’s end. Merck and Pfizer were yielding above 3% at that time, while GlaxoSmithKline was above 4%.
The cloud is now home to technology
Investment analyst Paul Benjamin says Microsoft has gone from being perceived as something of a dinosaur a few short years ago to a company on the cutting edge.
He credits Satya Nadella, who became CEO in 2014, for much of the change. “He’s performed a real balancing act between streamlining the company and heavily investing in big growth areas,” says Paul. “He’s very clearly replacing fat with muscle. The culture is better and stronger; the product quality is improving. They’re now viewed as innovators and leaders instead of losers. I would have never predicted that could happen so fast.”
Microsoft’s cloud computing platform, Azure, has helped turn Microsoft from a “mature” tech company to potentially a growth company. Microsoft’s Azure offers customers, for a fee, access to basically unlimited supercomputing power from the company’s servers.
“The cloud is growing so fast that it’s lifting the growth rate of the entire company,” Paul says. The company reported in July 2016 that sales of the Azure cloud computing service more than doubled.
For Microsoft, putting up big cloud numbers is vital because more companies are running their software and storing their data on a shared public cloud infrastructure, like Azure, Amazon Web Services or Google Compute Platform.
Microsoft’s recent results suggest that it is effectively managing the transition from selling software licenses to selling on-demand computing services.
8 | The Income Fund of America |
A 124-year-old company goes digital
General Electric, the world’s largest industrial conglomerate and one of the fund’s top 10 holdings, is taking number-crunching to new heights. Using a cloud-based computing system, GE is connecting machines, data and people. Call it the internet of things, machine learning, big data or convergence, GE’s move into digital business represents a remarkable evolution in the company’s history, says investment analyst Martin Jacobs.
“This is a really big deal for GE and represents the company’s commitment to the industrial digital transformation,” says Martin, who analyzes the U.S. industrial sector.
The system, which GE calls Predix, launched in March 2016 and allows customers to capture intelligence from their industrial assets.
“The way I think about it is that every piece of equipment is monitored, tracked and measured via sensors. This information is uploaded to the cloud and, through the power of supercomputing speed, is analyzed in a way to detect variations in behavior of the equipment,” Martin says. “Ultimately, this all provides customers with better outcomes — better efficiency, less downtime, predictive maintenance and improved safety.”
In an example of synergy between two top fund holdings, GE and Microsoft announced a partnership in July to bring the Predix software platform to Microsoft’s Azure cloud, allowing users to analyze and share data from their machines with Microsoft applications.
Investment analyst Mathews Cherian says Intel, another top 10 holding, also is a major player in cloud computing and the internet of things. “The cloud runs mostly on Intel server chips,” he says. “Intel is focused on enabling the cloud to support the huge amounts of new innovative applications that are being run on the cloud.”
The New Geography of Investing®
Where a company does business can be more important than where it’s located. Here’s a look at The Income Fund of America’s portfolio through the revenue lens. The charts below show the countries and regions in which the fund’s equity investments are located and where the revenue comes from.
The Income Fund of America vs. the S&P 500 with income reinvested
Equity portion breakdown by domicile (%)
As of June 30, 2016
Region | Fund | Index | |||||||
▀ | United States | 77 | % | 100 | % | ||||
▀ | Canada | 1 | — | ||||||
▀ | Europe | 16 | — | ||||||
▀ | Japan | — | — | ||||||
▀ | Asia-Pacific ex. Japan | 3 | — | ||||||
▀ | Emerging markets | 3 | — | ||||||
Total | 100 | % | 100 | % |
Equity portion breakdown by revenue (%)
Region | Fund | Index | |||||||
▀ | United States | 52 | % | 64 | % | ||||
▀ | Canada | 3 | 2 | ||||||
▀ | Europe | 16 | 12 | ||||||
▀ | Japan | 3 | 2 | ||||||
▀ | Asia-Pacific ex. Japan | 4 | 1 | ||||||
▀ | Emerging markets | 22 | 19 | ||||||
Total | 100 | % | 100 | % |
Source: Capital Group (as of June 30, 2016).
The Income Fund of America | 9 |
The U.S. leads the world in R&D spending
From cars to computers, R&D has helped turn concepts into cash
The U.S., which leads the world in spending on R&D, is expected to increase R&D spending 3.4% to $514 billion in 2016. R&D can be one of the drivers of economic growth and corporate success.
Research and development (R&D) as a percentage (%) of gross domestic product (GDP), as of 2015
(size of each circle represents the relative amount of annual R&D spending)
Sources: 2016 Global R&D Funding Forecast, Winter 2016, R&D Magazine, Advantage Business Media and Industrial Research Institute (R&D as a percentage of GDP); FactSet Data Systems/Reuters Global Fundamentals (top 10 U.S. companies by R&D spending). R&D as a percentage of GDP, based on 2015 estimated data for GDP and gross expenditures on R&D, was calculated and normalized using purchasing power parity (PPP), which estimates the adjustment needed between countries for the exchange rates to be equivalent to each currency’s purchasing power. PPP helps determine the exchange rate adjustment, so identical goods and services in different countries have the same price when expressed in the same currency.
These “mature” tech companies are benefiting from innovation, and they can also benefit long-term investors, says Mathews, who covers the semiconductor industry. “Many of these companies are high-margin businesses that generate a lot of cash, and they are doing a great job of returning value to shareholders.”
GE projects that its digital business could generate significant revenue by 2020, providing the company with a boost to its operating profit. For investors, it’s another example of how innovation and technology can spawn new businesses that few could have imagined a decade ago.
The driverless car is just down the road
Automakers around the world and numerous technology companies are not just working on autonomous vehicles, they’re putting them on the street.
Auto industry analyst Justin Toner says self-driving cars will be on the market in not too many years, and that many companies are going to benefit from the process it takes to get there. “It’s a really interesting and exciting time. Innovation is a global phenomenon, but a lot of the innovation is happening here in the U.S.” Justin says.
Audi, for example, recently received a permit from California to test self-driving cars on public roads. Google has logged about 1.3 million miles on its driverless cars in Mountain View, California, where the company is headquartered, and in Austin, Texas. In February, Google also began testing its cars in Kirkland, Washington. General Motors is now testing its self-driving Bolt in Arizona. Mercedes-Benz,
10 | The Income Fund of America |
“It’s a really interesting and exciting time.
Innovation is a global phenomenon, but a lot of
the innovation is happening here in the U.S.”
Justin Toner
BMW and Nissan are shooting for cars with self-driving capabilities by 2020. Tesla has targeted 2016 and Ford 2017.
Autonomous vehicles will use an array of sensors and massive amounts of data to navigate roads without a human driver. The cars represent an opportunity for companies that haven’t been part of the auto industry. In fact, the center of gravity in the car business may well have shifted from Motown to Mountain View.
Beyond Google, others from the technology sector working on elements of the driverless car include IBM, Intel, Analog Devices, Texas Instruments and Maxim Integrated Products. Many other companies worldwide are developing cameras, radars, sensors and other equipment. They include Delphi, Continental, TRW, Denso and Autoliv.
Driving returns for investors
Researchers at Morgan Stanley estimate the benefit of autonomous cars to the U.S. economy could range from $700 billion to $2.2 trillion per year — if 100% of the cars on the road are driverless. That’s unlikely in the near term, but a recent IHS Automotive study estimates 54 million will hit the streets worldwide by 2035.
Companies around the world will hitch a ride on driverless cars
Millions of self-driving cars may be on the road by 2035
Automakers around the world, and several technology companies, are not just working on driverless cars, but putting them on the street. Autonomous cars represent an opportunity for companies that have not traditionally been part of the auto industry.
Source: Chris Bryant and Andy Charman, “Race Is On to Build World’s First Driverless Car,” October 13, 2014. Used under license from Financial Times. All rights reserved. Capital Group is solely responsible for providing this abridged version of the original illustration, and The Financial Times Limited does not accept any liability for the accuracy or quality of the abridged version.
“Taken to the extreme, I believe that autonomous cars will eradicate automobile accidents, eliminate traffic and significantly reduce the real estate dedicated to automobiles, freeing land for more productive use,” Justin says.
Toner and other investment professionals say numerous potential beneficiaries, including companies working on the software, will be crucial for the car’s safety elements. Driverless cars could also be an opportunity for media and telecom companies to provide streaming video, considering that the average person spends about 90 minutes a day in a car.
Investment analyst David Penner says driverless cars could disrupt, revolutionize or possibly eliminate some industries. That’s why it’s important to have a global research network and an investment process that help separate the disruptors from the disrupted. “Avoiding the losers will be just as important as picking winners,” David says.
By the end of the decade, many driverless cars could be on the road, Justin says, transforming the auto and other industries, and changing the lives of people around the globe. ■
The Income Fund of America | 11 |
Fund results shown 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. For current information and month-end results, visit americanfunds.com.
Resilience during stock market declines | The Income Fund of America (IFA) vs. the S&P 500 during market declines* | |||||||||||
Dates of decline | S&P 500 | IFA cumulative | IFA advantage | |||||||||
cumulative total return | total return | (percentage points) | ||||||||||
September 21, 1976, through March 6, 1978 | –13.5 | % | 1.9 | % | 15.4 | % | ||||||
November 28, 1980, through August 12, 1982 | –20.2 | 19.0 | 39.2 | |||||||||
August 25 through December 4, 1987 | –32.8 | –13.6 | 19.2 | |||||||||
July 16 through October 11, 1990 | –19.2 | –10.2 | 9.0 | |||||||||
July 17 through August 31, 1998 | –19.2 | –9.5 | 9.7 | |||||||||
March 24, 2000, through October 9, 2002 | –47.4 | 0.7 | 48.1 | |||||||||
October 9, 2007, through March 9, 2009 | –55.3 | –43.5 | 11.8 | |||||||||
April 29 through October 3, 2011 | –18.6 | –11.6 | 7.0 |
* | Periods shown reflect S&P 500 price declines of 15% or more (without dividends reinvested) based on 100% recovery between declines (except for a 78% recovery between 3/6/78 and 11/28/80 and a 77% recovery between 3/9/09 and 4/29/11). The index is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index. |
Withdrawing income: the dividend advantage
Most fund investors reinvest their dividends, but some use dividends to meet current expenses. As shown below, the fund’s income has allowed withdrawals to be made without invading principal.
Charts show hypothetical $100,000 investments in the fund (at net asset value) and in the S&P 500 from January 1, 1974, to July 31, 2016. Example assumes an annual withdrawal equaling $5,000 the first year on December 31, 1974, and then increasing by 5% each year thereafter. Over the period, total withdrawals from each of the fund and the index come to $676,159.
Historical benefits of income
This chart shows one-year snapshots of the annual income produced by three hypothetical $10,000 investments made on July 31, 1974, in each of The Income Fund of America, the S&P 500 and three-month U.S. Treasury bills. Over the past 42 years, income from the fund has been substantially higher.
All results are calculated at net asset value with dividends and capital gains (where applicable) reinvested. Source for Treasury bills is the Federal Reserve. Income from three-month Treasury bills assumes reinvestment of both principal and interest at prevailing rates at the time of purchase. 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; the fund is not guaranteed.
Source: Thomson InvestmentView.
12 | The Income Fund of America |
July 31, 2016
Investment mix by security type
Percent of net assets
Five largest sectors in common stock holdings
Percent of net assets | ||||
Industrials | 9.69 | % | ||
Financials | 9.36 | |||
Information technology | 8.73 | |||
Consumer staples | 8.20 | |||
Health care | 7.90 | |||
Ten largest common stock holdings | ||||
Percent of net assets | ||||
Microsoft | 2.86 | % | ||
Merck | 2.62 | |||
General Electric | 2.13 | |||
Lockheed Martin | 2.02 | |||
Verizon Communications | 1.92 | |||
Intel | 1.89 | |||
McDonald’s | 1.86 | |||
Pfizer | 1.57 | |||
Procter & Gamble | 1.47 | |||
GlaxoSmithKline | 1.41 | |||
Country diversification by domicile | ||||
Percent of net assets | ||||
United States | 73.28 | % | ||
United Kingdom | 7.50 | |||
Euro zone* | 4.47 | |||
Canada | 1.50 | |||
Hong Kong | 1.37 | |||
Australia | 1.20 | |||
Taiwan | 1.16 | |||
Other countries | 2.62 | |||
Short-term securities & other assets less liabilities | 6.90 |
* | Countries using the euro as a common currency; those represented in the fund’s portfolio are Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. |
July 31, 2015
Investment mix by security type
Percent of net assets
Five largest sectors in common stock holdings
Percent of net assets | ||||
Industrials | 10.47 | % | ||
Health care | 9.85 | |||
Financials | 9.64 | |||
Information technology | 8.20 | |||
Consumer staples | 6.89 | |||
Ten largest common stock holdings | ||||
Percent of net assets | ||||
Merck | 3.05 | % | ||
Microsoft | 2.96 | |||
Pfizer | 2.28 | |||
General Electric | 2.07 | |||
Bristol-Myers Squibb | 1.64 | |||
Lockheed Martin | 1.56 | |||
Verizon Communications | 1.55 | |||
JPMorgan Chase | 1.37 | |||
Wells Fargo | 1.23 | |||
Procter & Gamble | 1.22 | |||
Country diversification by domicile | ||||
Percent of net assets | ||||
United States | 70.54 | % | ||
United Kingdom | 7.62 | |||
Euro zone† | 5.65 | |||
Australia | 2.08 | |||
Hong Kong | 1.83 | |||
Canada | 1.50 | |||
Switzerland | 1.13 | |||
Other countries | 2.72 | |||
Short-term securities & other assets less liabilities | 6.93 |
† | Countries using the euro as a common currency; those represented in the fund’s portfolio are Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. |
The Income Fund of America | 13 |
Summary investment portfolio July 31, 2016
Common stocks 68.98% | Shares | Value (000) | ||||||
Industrials 9.69% | ||||||||
General Electric Co. | 69,491,053 | $ | 2,163,951 | |||||
Lockheed Martin Corp. | 8,119,400 | 2,052,016 | ||||||
BAE Systems PLC | 126,401,776 | 893,310 | ||||||
Boeing Co. | 5,965,000 | 797,282 | ||||||
Waste Management, Inc. | 9,986,128 | 660,283 | ||||||
Other securities | 3,283,763 | |||||||
9,850,605 | ||||||||
Financials 9.36% | ||||||||
JPMorgan Chase & Co. | 21,515,056 | 1,376,318 | ||||||
CME Group Inc., Class A | 10,140,400 | 1,036,755 | ||||||
Crown Castle International Corp. | 10,449,000 | 1,013,867 | ||||||
Wells Fargo & Co. | 18,127,915 | 869,596 | ||||||
Digital Realty Trust, Inc. | 7,635,000 | 797,552 | ||||||
Iron Mountain Inc.1 | 13,724,780 | 565,598 | ||||||
Public Storage | 1,935,000 | 462,310 | ||||||
Prologis, Inc. | 8,390,000 | 457,171 | ||||||
Other securities | 2,934,094 | |||||||
9,513,261 | ||||||||
Information technology 8.73% | ||||||||
Microsoft Corp. | 51,193,209 | 2,901,631 | ||||||
Intel Corp. | 55,176,100 | 1,923,439 | ||||||
Texas Instruments Inc. | 15,550,000 | 1,084,613 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 170,719,000 | 922,502 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 2,166,470 | 60,184 | ||||||
Analog Devices, Inc. | 14,616,091 | 932,945 | ||||||
Other securities | 1,042,243 | |||||||
8,867,557 | ||||||||
Consumer staples 8.20% | ||||||||
Procter & Gamble Co. | 17,386,700 | 1,488,128 | ||||||
Coca-Cola Co. | 26,901,000 | 1,173,691 | ||||||
Philip Morris International Inc. | 10,668,607 | 1,069,635 | ||||||
Reynolds American Inc. | 20,846,668 | 1,043,584 | ||||||
Altria Group, Inc. | 12,191,000 | 825,331 | ||||||
British American Tobacco PLC | 11,743,200 | 749,801 | ||||||
Kellogg Co. | 5,550,000 | 459,040 | ||||||
Other securities | 1,519,158 | |||||||
8,328,368 | ||||||||
Health care 7.90% | ||||||||
Merck & Co., Inc. | 45,448,227 | 2,665,993 | ||||||
Pfizer Inc. | 43,114,280 | 1,590,486 | ||||||
GlaxoSmithKline PLC | 64,296,000 | 1,436,362 | ||||||
AstraZeneca PLC | 10,916,583 | 729,312 | ||||||
Bristol-Myers Squibb Co. | 7,670,738 | 573,848 | ||||||
Eli Lilly and Co. | 6,174,000 | 511,763 | ||||||
Other securities | 515,455 | |||||||
8,023,219 | ||||||||
Consumer discretionary 5.70% | ||||||||
McDonald’s Corp. | 16,029,280 | 1,885,845 | ||||||
Home Depot, Inc. | 5,295,000 | 731,981 | ||||||
Target Corp. | 9,450,000 | 711,868 | ||||||
General Motors Co. | 15,248,112 | 480,925 | ||||||
Other securities | 1,977,862 | |||||||
5,788,481 |
14 | The Income Fund of America |
Shares | Value (000) | |||||||
Energy 4.58% | ||||||||
Chevron Corp. | 9,800,000 | $ | 1,004,304 | |||||
Spectra Energy Corp | 27,235,500 | 979,661 | ||||||
BP PLC | 147,950,000 | 835,791 | ||||||
Royal Dutch Shell PLC, Class B | 21,362,147 | 566,000 | ||||||
Other securities | 1,266,571 | |||||||
4,652,327 | ||||||||
Telecommunication services 4.06% | ||||||||
Verizon Communications Inc. | 35,285,921 | 1,955,193 | ||||||
Telstra Corp. Ltd. | 171,521,533 | 752,107 | ||||||
Other securities | 1,424,172 | |||||||
4,131,472 | ||||||||
Materials 3.55% | ||||||||
E.I. du Pont de Nemours and Co. | 14,953,953 | 1,034,365 | ||||||
Dow Chemical Co. | 14,804,900 | 794,579 | ||||||
LyondellBasell Industries NV | 6,190,000 | 465,859 | ||||||
Other securities | 1,317,205 | |||||||
3,612,008 | ||||||||
Utilities 3.34% | ||||||||
Power Assets Holdings Ltd. | 78,458,500 | 768,061 | ||||||
Duke Energy Corp. | 7,854,999 | 672,309 | ||||||
Dominion Resources, Inc. | 7,335,000 | 572,277 | ||||||
Other securities | 1,381,740 | |||||||
3,394,387 | ||||||||
Miscellaneous 3.87% | ||||||||
Other common stocks in initial period of acquisition | 3,931,005 | |||||||
Total common stocks (cost: $53,173,564,000) | 70,092,690 | |||||||
Preferred securities 0.46% | ||||||||
Financials 0.46% | ||||||||
Wells Fargo & Co., Class A, Series Q, 5.85% depositary shares preferred noncumulative | 1,600,000 | 44,672 | ||||||
Other securities | 422,064 | |||||||
Total preferred securities (cost: $429,622,000) | 466,736 | |||||||
Rights & warrants 0.00% | ||||||||
Energy 0.00% | ||||||||
Other securities | — | |||||||
Total rights & warrants (cost: $2,171,000) | — | |||||||
Convertible stocks 0.61% | ||||||||
Other 0.61% | ||||||||
Other securities | 619,693 | |||||||
Total convertible stocks (cost: $693,340,000) | 619,693 | |||||||
Convertible bonds 0.78% | Principal amount (000) | |||||||
Other 0.55% | ||||||||
Other securities | 561,439 | |||||||
Miscellaneous 0.23% | ||||||||
Other convertible bonds in initial period of acquisition | 231,814 | |||||||
Total convertible bonds (cost: $773,704,000) | 793,253 |
The Income Fund of America | 15 |
Bonds, notes & other debt instruments 22.27% | Principal amount (000) | Value (000) | ||||||
Corporate bonds & notes 14.16% | ||||||||
Financials 2.36% | ||||||||
Crown Castle International Corp. 4.875% 2022 | $ | 9,800 | $ | 10,877 | ||||
JPMorgan Chase & Co. 1.35%–2.95% 2017–2026 | 49,390 | 50,284 | ||||||
JPMorgan Chase & Co., junior subordinated 5.30%–7.90% 2049 | 147,785 | 156,693 | ||||||
Wells Fargo & Co. 1.29%–4.90% 2019–20452 | 103,561 | 110,947 | ||||||
Wells Fargo & Co., Series K, junior subordinated 7.98% (undated) | 86,566 | 92,175 | ||||||
Other securities | 1,977,144 | |||||||
2,398,120 | ||||||||
Consumer discretionary 2.20% | ||||||||
McDonald’s Corp. 2.75%–4.88% 2020–2045 | 4,145 | 4,744 | ||||||
Other securities | 2,226,943 | |||||||
2,231,687 | ||||||||
Energy 2.11% | ||||||||
Chevron Corp. 2.954% 2026 | 10,215 | 10,548 | ||||||
Other securities | 2,136,415 | |||||||
2,146,963 | ||||||||
Health care 1.95% | ||||||||
Merck & Co., Inc. 1.10% 2018 | 6,710 | 6,739 | ||||||
Pfizer Inc. 7.20% 2039 | 1,353 | 2,098 | ||||||
Other securities | 1,970,442 | |||||||
1,979,279 | ||||||||
Telecommunication services 1.54% | ||||||||
Verizon Communications Inc. 1.38%–6.00% 2016–20482 | 261,397 | 278,528 | ||||||
Other securities | 1,281,629 | |||||||
1,560,157 | ||||||||
Industrials 1.26% | ||||||||
General Electric Capital Corp. 2.34%–6.00% 2019–2020 | 15,772 | 16,641 | ||||||
General Electric Co. 2.70%–5.00% 2022–2049 | 216,599 | 233,660 | ||||||
Lockheed Martin Corp. 1.85%–4.70% 2018–2046 | 23,080 | 25,981 | ||||||
Other securities | 1,006,372 | |||||||
1,282,654 | ||||||||
Information technology 0.51% | ||||||||
Microsoft Corp. 2.65%–4.20% 2022–2035 | 12,000 | 13,138 | ||||||
Other securities | 507,921 | |||||||
521,059 | ||||||||
Consumer staples 0.47% | ||||||||
Coca-Cola Co. 1.80% 2016 | 10,000 | 10,011 | ||||||
Philip Morris International Inc. 1.88%–4.25% 2021–2044 | 12,580 | 13,768 | ||||||
Reynolds American Inc. 2.30%–6.15% 2018–2045 | 52,430 | 60,998 | ||||||
Other securities | 393,177 | |||||||
477,954 | ||||||||
Other corporate bonds & notes 1.76% | ||||||||
Other securities | 1,785,994 | |||||||
Total corporate bonds & notes | 14,383,867 | |||||||
U.S. Treasury bonds & notes 5.81% | ||||||||
U.S. Treasury 5.37% | ||||||||
U.S. Treasury 2.00% 2025 | 513,475 | 538,106 | ||||||
U.S. Treasury 2.875% 2045 | 929,150 | 1,066,608 | ||||||
U.S. Treasury 0.50%–6.25% 2017–20463 | 3,541,242 | 3,857,173 | ||||||
5,461,887 |
16 | The Income Fund of America |
Principal amount (000) | Value (000) | |||||||
U.S. Treasury inflation-protected securities 0.44% | ||||||||
U.S. Treasury Inflation-Protected Securities 0.38%–1.38% 2024–20464 | $ | 404,462 | $ | 442,519 | ||||
Total U.S. Treasury bonds & notes | 5,904,406 | |||||||
Mortgage-backed obligations 1.81% | ||||||||
Fannie Mae 2.30%–9.69% 2018–20472,5,6 | 825,371 | 887,110 | ||||||
Freddie Mac 2.27%–9.00% 2019–20462,5 | 528,981 | 569,203 | ||||||
Other securities | 382,496 | |||||||
1,838,809 | ||||||||
Federal agency bonds & notes 0.07% | ||||||||
Fannie Mae 6.25%–7.13% 2029–2030 | 33,500 | 49,262 | ||||||
Federal Home Loan Bank 0.875% 2018 | 12,860 | 12,894 | ||||||
Other securities | 4,117 | |||||||
66,273 | ||||||||
Other bonds & notes 0.42% | ||||||||
Other securities | 432,725 | |||||||
Total bonds, notes & other debt instruments (cost: $21,794,167,000) | 22,626,080 | |||||||
Short-term securities 6.85% | ||||||||
Chariot Funding, LLC 1.00% due 1/17/20177 | 25,000 | 24,875 | ||||||
Chevron Corp. 0.52% due 8/2/2016–8/16/20167 | 117,600 | 117,590 | ||||||
Coca-Cola Co. 0.56%–0.69% due 8/9/2016–1/12/20177 | 214,800 | 214,447 | ||||||
Fannie Mae 0.38%–0.53% due 9/8/2016–1/5/2017 | 200,000 | 199,756 | ||||||
Federal Home Loan Bank 0.25%–0.63% due 8/9/2016–5/15/2017 | 2,950,792 | 2,947,750 | ||||||
Freddie Mac 0.33%–0.49% due 8/16/2016–2/2/2017 | 823,958 | 823,053 | ||||||
GE Capital Treasury Services (U.S.) LLC 0.40% due 8/31/2016 | 50,000 | 49,984 | ||||||
General Electric Co. 0.34% due 8/1/2016 | 40,700 | 40,699 | ||||||
Intel Corp. 0.41% due 8/30/2016 | 18,800 | 18,794 | ||||||
Jupiter Securitization Co., LLC 0.45% due 8/25/20167 | 50,000 | 49,982 | ||||||
Microsoft Corp. 0.42%–0.46% due 8/3/2016–9/14/20167 | 218,600 | 218,546 | ||||||
Pfizer Inc. 0.47%–0.67% due 9/12/2016–10/18/20167 | 227,200 | 227,036 | ||||||
U.S. Treasury Bills 0.36%–0.46% due 8/18/2016–12/8/2016 | 232,900 | 232,835 | ||||||
Wells Fargo Bank, N.A. 0.86%–1.05% due 11/3/2016–1/20/2017 | 190,000 | 190,000 | ||||||
Other securities | 1,606,519 | |||||||
Total short-term securities (cost: $6,960,868,000) | 6,961,866 | |||||||
Total investment securities 99.95% (cost: $83,827,436,000) | 101,560,318 | |||||||
Other assets less liabilities 0.05% | 49,705 | |||||||
Net assets 100.00% | $ | 101,610,023 |
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.
The Income Fund of America | 17 |
Forward currency contracts
The fund has entered into forward currency contracts as shown in the following table. The average month-end notional amount of open forward currency contracts while held was $661,445,000.
Contract amount | Unrealized (depreciation) appreciation | |||||||||||
Settlement date | Counterparty | Receive (000) | Deliver (000) | at 7/31/2016 (000) | ||||||||
Sales: | ||||||||||||
Australian dollars | 8/15/2016 | HSBC Bank | $134,377 | A$182,300 | $(4,079 | ) | ||||||
Australian dollars | 9/9/2016 | JPMorgan Chase | $96,752 | A$130,000 | (1,899 | ) | ||||||
British pounds | 8/19/2016 | Bank of America, N.A. | $37,778 | £26,550 | 2,629 | |||||||
British pounds | 8/19/2016 | JPMorgan Chase | $163,054 | £122,500 | 878 | |||||||
British pounds | 8/19/2016 | Barclays Bank PLC | $256,477 | £195,043 | (1,737 | ) | ||||||
British pounds | 8/19/2016 | HSBC Bank | $256,403 | £195,043 | (1,812 | ) | ||||||
British pounds | 8/22/2016 | HSBC Bank | $35,092 | £26,450 | 74 | |||||||
British pounds | 9/8/2016 | HSBC Bank | $30,100 | £22,900 | (228 | ) | ||||||
Euros | 9/23/2016 | UBS AG | $84,824 | €76,900 | (1,360 | ) | ||||||
$(7,534 | ) |
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 year ended July 31, 2016, appear below.
Beginning shares or principal amount | Additions | Reductions | Ending shares or principal amount | Dividend or interest income (000) | Value of affiliates at 7/31/2016 (000) | |||||||||||||||||||
Iron Mountain Inc. | 13,644,780 | 80,000 | — | 13,724,780 | $ | 23,385 | $ | 565,598 | ||||||||||||||||
Iron Mountain Inc. 6.00% 20207 | — | $ | 31,925,000 | — | $ | 31,925,000 | 1,607 | 33,761 | ||||||||||||||||
Iron Mountain Inc. 5.75% 2024 | $ | 4,325,000 | — | — | $ | 4,325,000 | 265 | 4,464 | ||||||||||||||||
Iron Mountain Inc. 6.00% 2023 | $ | 950,000 | — | — | $ | 950,000 | 57 | 1,014 | ||||||||||||||||
Hubbell Inc. | 3,430,000 | — | — | 3,430,000 | 8,404 | 369,857 | ||||||||||||||||||
R.R. Donnelley & Sons Co. | 13,345,400 | — | — | 13,345,400 | 13,879 | 239,150 | ||||||||||||||||||
R.R. Donnelley & Sons Co. 7.875% 2021 | $ | 3,050,000 | $ | 21,395,000 | $ | 1,000,000 | $ | 23,445,000 | 936 | 25,555 | ||||||||||||||
R.R. Donnelley & Sons Co. 7.00% 2022 | $ | 17,500,000 | $ | 2,000,000 | — | $ | 19,500,000 | 1,242 | 19,890 | |||||||||||||||
R.R. Donnelley & Sons Co. 6.50% 2023 | $ | 11,580,000 | $ | 8,300,000 | $ | 5,600,000 | $ | 14,280,000 | 1,010 | 14,137 | ||||||||||||||
R.R. Donnelley & Sons Co. 7.625% 2020 | — | $ | 8,750,000 | $ | 5,050,000 | $ | 3,700,000 | 398 | 4,015 | |||||||||||||||
R.R. Donnelley & Sons Co. 8.25% 2019 | — | $ | 2,475,000 | — | $ | 2,475,000 | 84 | 2,732 | ||||||||||||||||
R.R. Donnelley & Sons Co. 7.25% 2018 | $ | 7,234,000 | $ | 2,000,000 | $ | 7,234,000 | $ | 2,000,000 | 461 | 2,148 | ||||||||||||||
Outfront Media Inc. | 9,064,824 | — | — | 9,064,824 | 11,641 | 210,939 | ||||||||||||||||||
CBS Outdoor Americas Inc. 5.25% 2022 | $ | 25,000,000 | $ | 4,500,000 | — | $ | 29,500,000 | 1,535 | 30,569 | |||||||||||||||
CBS Outdoor Americas Inc. 5.625% 202413 | $ | 7,650,000 | $ | 2,496,000 | $ | 6,750,000 | $ | 3,396,000 | 298 | 3,596 | ||||||||||||||
TalkTalk Telecom Group PLC | 58,313,942 | 107,949 | — | 58,421,891 | 12,701 | 177,059 | ||||||||||||||||||
Corporate Risk Holdings LLC 9.50% 20197,13 | $ | 49,900,000 | — | $ | 4,900,000 | $ | 45,000,000 | 4,334 | 42,637 | |||||||||||||||
Corporate Risk Holdings I, Inc.8,9 | — | 2,205,215 | — | 2,205,215 | — | 20,575 | ||||||||||||||||||
Corporate Risk Holdings LLC 13.50% 20207,8,10 | — | $ | 14,211,162 | — | $ | 14,211,162 | 1,599 | 14,629 | ||||||||||||||||
Corporate Risk Holdings Corp.8,9 | — | 11,149 | — | 11,149 | — | — | ||||||||||||||||||
Redwood Trust, Inc. | 5,079,717 | 365,000 | — | 5,444,717 | 5,996 | 77,696 | ||||||||||||||||||
CEVA Group PLC, Series A-1, 3.68% convertible preferred8,9,11 | 29,937 | — | — | 29,937 | — | 13,621 | ||||||||||||||||||
CEVA Group PLC8,9,11 | 35,229 | — | — | 35,229 | — | 11,802 | ||||||||||||||||||
CEVA Logistics U.S. Holdings Inc., Term Loan B, 6.50%2,5,12,13 | $ | 6,995,197 | — | $ | 70,837 | $ | 6,924,360 | 474 | 5,773 | |||||||||||||||
CEVA Group PLC, Series A-2, 2.68% convertible preferred8,9,11 | 13,633 | — | — | 13,633 | — | 4,567 | ||||||||||||||||||
CEVA Logistics Holdings BV, Term Loan, 6.50% 20212,5,12,13 | $ | 5,071,518 | — | $ | 51,357 | $ | 5,020,161 | 349 | 4,186 | |||||||||||||||
CEVA Group PLC, Apollo Global Securities LLC LOC, 6.50% 20212,5,12 | $ | 4,870,074 | — | — | $ | 4,870,074 | 253 | 4,060 | ||||||||||||||||
CEVA Group PLC 7.00% 20217 | $ | 2,250,000 | — | — | $ | 2,250,000 | 158 | 1,896 |
18 | The Income Fund of America |
Beginning shares or principal amount | Additions | Reductions | Ending shares or principal amount | Dividend or interest income (000) | Value of affiliates at 7/31/2016 (000) | |||||||||||||||||||
CEVA Group PLC 9.00% 20217 | $ | 1,050,000 | — | — | $ | 1,050,000 | $ | 95 | $ | 830 | ||||||||||||||
CEVA Logistics Canada, ULC, Term Loan, 6.50% 20212,5,12,13 | $ | 874,399 | — | $ | 8,855 | $ | 865,544 | 60 | 722 | |||||||||||||||
Rotech Healthcare Inc., Term Loan, 13.00% 20202,5,8,10,12 | $ | 20,743,820 | $ | 2,418,965 | — | $ | 23,162,785 | 2,692 | 20,378 | |||||||||||||||
Rotech Healthcare Inc., Term Loan A, 5.50% 20182,5,8,12 | $ | 11,888,250 | — | $ | 121,000 | $ | 11,767,250 | 662 | 11,708 | |||||||||||||||
Rotech Healthcare Inc., Term Loan B, 10.00% 20192,5,8,12 | $ | 9,200,000 | — | — | $ | 9,200,000 | 935 | 9,154 | ||||||||||||||||
Rotech Healthcare Inc.8,9 | 543,172 | — | — | 543,172 | — | 543 | ||||||||||||||||||
Douglas Dynamics, Inc. | 1,444,000 | — | — | 1,444,000 | 1,321 | 38,699 | ||||||||||||||||||
NII Holdings, Inc.9 | 7,992,669 | — | 297,966 | 7,694,703 | — | 23,392 | ||||||||||||||||||
Baytex Energy Corp.14 | 12,060,956 | 299,802 | 12,360,758 | — | 932 | — | ||||||||||||||||||
Baytex Energy Corp. 5.125% 20217,14 | $ | 10,050,000 | — | — | $ | 10,050,000 | 557 | — | ||||||||||||||||
Baytex Energy Corp. 5.625% 20247,14 | $ | 3,450,000 | — | — | $ | 3,450,000 | 201 | — | ||||||||||||||||
Cliffs Natural Resources Inc. 4.875% 202114 | $ | 4,945,000 | — | — | $ | 4,945,000 | 257 | �� | ||||||||||||||||
Cliffs Natural Resources Inc. 8.25% 20207,14 | $ | 7,475,000 | $ | 16,625,000 | $ | 10,300,000 | $ | 13,800,000 | 716 | — | ||||||||||||||
Cliffs Natural Resources Inc., Series A, 7.00% convertible preferred 201614 | 2,925,000 | — | 2,925,000 | — | 1,181 | — | ||||||||||||||||||
Diebold, Inc.14 | 3,925,000 | 297,000 | 4,222,000 | — | 3,937 | — | ||||||||||||||||||
Digital Realty Trust, Inc.14 | 7,115,000 | 3,360,000 | 2,840,000 | 7,635,000 | 22,812 | — | ||||||||||||||||||
$ | 127,424 | $ | 2,011,352 |
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 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
2 | Coupon rate may change periodically. |
3 | A portion of this security was pledged as collateral. The total value of pledged collateral was $2,963,000, which represented less than .01% 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 | Purchased on a TBA basis. |
7 | 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 $6,655,197,000, which represented 6.55% of the net assets of the fund. |
8 | Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous” and “Other securities,” was $141,409,000, which represented .14% of the net assets of the fund. |
9 | Security did not produce income during the last 12 months. |
10 | Payment in kind; the issuer has the option of paying additional securities in lieu of cash. |
11 | Acquired through a private placement transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale. Further details on these holdings appear below. |
12 | Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $457,805,000, which represented .45% of the net assets of the fund. |
13 | This security changed its name due to a corporate action during the reporting period. |
14 | Unaffiliated issuer at 7/31/2016. |
Private placement securities | Acquisition date | Cost (000) | Value (000) | Percent of net assets | ||||||||||
CEVA Group PLC, Series A-1, 3.68% convertible preferred | 4/3/2013 | $ | 29,938 | $ | 13,621 | .01 | % | |||||||
CEVA Group PLC | 11/24/2015 | 34,036 | 11,802 | .01 | ||||||||||
CEVA Group PLC, Series A-2, 2.68% convertible preferred | 5/2/2013 | 13,172 | 4,567 | — | ||||||||||
Total private placement securities | $ | 77,146 | $ | 29,990 | .02 | % |
Key to abbreviations and symbols
A$ = Australian dollars
ADR = American Depositary Receipts
£ = British pounds
€ = Euros
LOC = Letter of Credit
TBA = To be announced
See Notes to Financial Statements
The Income Fund of America | 19 |
Statement of assets and liabilities | |||||||||
at July 31, 2016 | (dollars in thousands) | ||||||||
Assets: | |||||||||
Investment securities, at value: | |||||||||
Unaffiliated issuers (cost: $81,964,654) | $ | 99,548,966 | |||||||
Affiliated issuers (cost: $1,862,782) | 2,011,352 | $ | 101,560,318 | ||||||
Cash | 4,252 | ||||||||
Cash denominated in currencies other than U.S. dollars (cost: $224) | 224 | ||||||||
Unrealized appreciation on open forward currency contracts | 3,581 | ||||||||
Receivables for: | |||||||||
Sales of investments | 618,478 | ||||||||
Sales of fund’s shares | 116,073 | ||||||||
Closed forward currency contracts | 662 | ||||||||
Dividends and interest | 406,458 | ||||||||
Other | 400 | 1,142,071 | |||||||
102,710,446 | |||||||||
Liabilities: | |||||||||
Unrealized depreciation on open forward currency contracts | 11,115 | ||||||||
Payables for: | |||||||||
Purchases of investments | 949,668 | ||||||||
Repurchases of fund’s shares | 85,160 | ||||||||
Closed forward currency contracts | 12 | ||||||||
Investment advisory services | 15,707 | ||||||||
Services provided by related parties | 29,809 | ||||||||
Trustees’ deferred compensation | 4,151 | ||||||||
Other | 4,801 | 1,089,308 | |||||||
Net assets at July 31, 2016 | $ | 101,610,023 | |||||||
Net assets consist of: | |||||||||
Capital paid in on shares of beneficial interest | $ | 83,475,415 | |||||||
Undistributed net investment income | 508,078 | ||||||||
Accumulated net realized loss | (96,992 | ) | |||||||
Net unrealized appreciation | 17,723,522 | ||||||||
Net assets at July 31, 2016 | $ | 101,610,023 |
(dollars and shares in thousands, except per-share amounts) | ||||||||||||
Shares of beneficial interest issued and outstanding (no stated par value) — unlimited shares authorized (4,686,945 total shares outstanding) | ||||||||||||
Net assets | Shares outstanding | Net asset value per share | ||||||||||
Class A | $ | 75,436,707 | 3,475,950 | $ | 21.70 | |||||||
Class B | 112,456 | 5,210 | 21.59 | |||||||||
Class C | 6,195,905 | 289,042 | 21.44 | |||||||||
Class F-1 | 4,420,722 | 204,178 | 21.65 | |||||||||
Class F-2 | 5,076,047 | 234,034 | 21.69 | |||||||||
Class 529-A | 1,525,072 | 70,408 | 21.66 | |||||||||
Class 529-B | 7,935 | 367 | 21.65 | |||||||||
Class 529-C | 462,942 | 21,462 | 21.57 | |||||||||
Class 529-E | 65,721 | 3,043 | 21.60 | |||||||||
Class 529-F-1 | 60,591 | 2,798 | 21.66 | |||||||||
Class R-1 | 132,940 | 6,163 | 21.57 | |||||||||
Class R-2 | 577,533 | 26,898 | 21.47 | |||||||||
Class R-2E | 7,246 | 335 | 21.66 | |||||||||
Class R-3 | 1,217,026 | 56,282 | 21.62 | |||||||||
Class R-4 | 1,188,825 | 54,863 | 21.67 | |||||||||
Class R-5E | 10 | 1 | 21.69 | |||||||||
Class R-5 | 515,980 | 23,772 | 21.70 | |||||||||
Class R-6 | 4,606,365 | 212,139 | 21.71 |
See Notes to Financial Statements
20 | The Income Fund of America |
Statement of operations | ||||||||
for the year ended July 31, 2016 | (dollars in thousands) | |||||||
Investment income: | ||||||||
Income: | ||||||||
Dividends (net of non-U.S. taxes of $30,420; also includes $106,188 from affiliates) | $ | 2,552,053 | ||||||
Interest (includes $21,236 from affiliates) | 1,025,697 | $ | 3,577,750 | |||||
Fees and expenses*: | ||||||||
Investment advisory services | 207,936 | |||||||
Distribution services | 264,189 | |||||||
Transfer agent services | 74,958 | |||||||
Administrative services | 18,918 | |||||||
Reports to shareholders | 2,928 | |||||||
Registration statement and prospectus | 1,965 | |||||||
Trustees’ compensation | 347 | |||||||
Auditing and legal | 1,909 | |||||||
Custodian | 2,667 | |||||||
Other | 1,997 | 577,814 | ||||||
Net investment income | 2,999,936 | |||||||
Net realized loss and unrealized appreciation: | ||||||||
Net realized (loss) gain on: | ||||||||
Investments (includes $365,039 net loss from affiliates) | (171,008 | ) | ||||||
Forward currency contracts | 103,668 | |||||||
Currency transactions | (10,892 | ) | (78,232 | ) | ||||
Net unrealized appreciation (depreciation) on: | ||||||||
Investments (net of non-U.S. taxes of $118) | 3,752,882 | |||||||
Forward currency contracts | (13,488 | ) | ||||||
Currency translations | (1,090 | ) | 3,738,304 | |||||
Net realized loss and unrealized appreciation | 3,660,072 | |||||||
Net increase in net assets resulting from operations | $ | 6,660,008 |
*Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.
Statements of changes in net assets | ||||||||
(dollars in thousands) | ||||||||
Year ended July 31 | ||||||||
2016 | 2015 | |||||||
Operations: | ||||||||
Net investment income | $ | 2,999,936 | $ | 3,032,727 | ||||
Net realized (loss) gain | (78,232 | ) | 3,852,401 | |||||
Net unrealized appreciation (depreciation) | 3,738,304 | (4,115,199 | ) | |||||
Net increase in net assets resulting from operations | 6,660,008 | 2,769,929 | ||||||
Dividends and distributions paid to shareholders: | ||||||||
Dividends from net investment income | (2,980,153 | ) | (3,456,253 | ) | ||||
Distributions from net realized gain on investments | (1,680,493 | ) | — | |||||
Total dividends and distributions paid to shareholders | (4,660,646 | ) | (3,456,253 | ) | ||||
Net capital share transactions | 2,618,650 | 3,840,273 | ||||||
Total increase in net assets | 4,618,012 | 3,153,949 | ||||||
Net assets: | ||||||||
Beginning of year | 96,992,011 | 93,838,062 | ||||||
End of year (including undistributed net investment income: $508,078 and $492,116, respectively) | $ | 101,610,023 | $ | 96,992,011 |
See Notes to Financial Statements
The Income Fund of America | 21 |
Notes to financial statements
1. Organization
The Income Fund of America (the “fund”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks current income while secondarily striving for capital growth.
The fund has 18 share classes consisting of five retail share classes (Classes A, B and C, as well as two F share classes, F-1 and F-2), five 529 college savings plan share classes (Classes 529-A, 529-B, 529-C, 529-E 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 one year of purchase without an initial sales charge) | None | |||
Classes B and 529-B* | None | Declines from 5% to 0% for redemptions within six years of purchase | Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years | |||
Class C | None | 1% for redemptions within one year of purchase | Class C converts to Class F-1 after 10 years | |||
Class 529-C | None | 1% for redemptions within one year of purchase | None | |||
Class 529-E | None | None | None | |||
Classes F-1, F-2 and 529-F-1 | None | None | None | |||
Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6 | None | None | None |
*Class B and 529-B shares of the fund are not available for purchase.
On November 20, 2015, the fund made an additional retirement plan share class (Class R-5E) available for sale pursuant to an amendment to its registration statement filed with the U.S. Securities and Exchange Commission. Refer to the fund’s prospectus for more details.
Holders of all share classes have equal pro rata rights to the assets, dividends and liquidation proceeds of the fund. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution, transfer agent and administrative services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each share class.
2. Significant accounting policies
The fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The fund’s financial statements have been prepared to comply with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles require the fund’s investment adviser to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Subsequent events, if any, have been evaluated through the date of issuance in the preparation of the financial statements. The fund follows the significant accounting policies described in this section, as well as the valuation policies described in the next section on valuation.
Security transactions and related investment income — Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
22 | The Income Fund of America |
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. Forward currency contracts are valued at the mean of representative quoted bid and ask prices, generally based on prices supplied by one or more pricing vendors.
The Income Fund of America | 23 |
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 with supplemental information to support the changes. 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
24 | The Income Fund of America |
reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following tables present the fund’s valuation levels as of July 31, 2016 (dollars in thousands):
Investment securities | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Common stocks: | ||||||||||||||||
Industrials | $ | 9,838,801 | $ | 11,802 | $ | 2 | $ | 9,850,605 | ||||||||
Financials | 9,513,261 | — | — | 9,513,261 | ||||||||||||
Information technology | 8,846,982 | — | 20,575 | 8,867,557 | ||||||||||||
Consumer staples | 8,328,368 | — | — | 8,328,368 | ||||||||||||
Health care | 8,022,676 | — | 543 | 8,023,219 | ||||||||||||
Consumer discretionary | 5,788,465 | — | 16 | 5,788,481 | ||||||||||||
Energy | 4,652,327 | — | — | 4,652,327 | ||||||||||||
Telecommunication services | 4,131,472 | — | — | 4,131,472 | ||||||||||||
Materials | 3,604,281 | — | 7,727 | 3,612,008 | ||||||||||||
Utilities | 3,394,387 | — | — | 3,394,387 | ||||||||||||
Miscellaneous | 3,926,652 | — | 4,353 | 3,931,005 | ||||||||||||
Preferred securities | 466,736 | — | — | 466,736 | ||||||||||||
Convertible stocks | 601,505 | 18,188 | — | 619,693 | ||||||||||||
Convertible bonds | — | 793,253 | — | 793,253 | ||||||||||||
Bonds, notes & other debt instruments: | ||||||||||||||||
Corporate bonds & notes | — | 14,327,958 | 55,909 | 14,383,867 | ||||||||||||
U.S. Treasury bonds & notes | — | 5,904,406 | — | 5,904,406 | ||||||||||||
Mortgage-backed obligations | — | 1,838,809 | — | 1,838,809 | ||||||||||||
Federal agency bonds & notes | — | 66,273 | — | 66,273 | ||||||||||||
Other | — | 432,725 | — | 432,725 | ||||||||||||
Short-term securities | — | 6,961,866 | — | 6,961,866 | ||||||||||||
Total | $ | 71,115,913 | $ | 30,355,280 | $ | 89,125 | $ | 101,560,318 |
Other investments* | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Unrealized appreciation on open forward currency contracts | $ | — | $ | 3,581 | $ | — | $ | 3,581 | ||||||||
Liabilities: | ||||||||||||||||
Unrealized depreciation on open forward currency contracts | — | (11,115 | ) | — | (11,115 | ) | ||||||||||
Total | $ | — | $ | (7,534 | ) | $ | — | $ | (7,534 | ) |
*Forward currency contracts are not included in the investment portfolio.
4. Risk factors
Investing in the fund may involve certain risks including, but not limited to, those described below.
Market conditions — The prices of, and the income generated by, the common stocks and other securities held by the fund may decline — sometimes rapidly or unpredictably — due to various factors, including events or conditions affecting the general economy or particular industries; overall market changes; local, regional or global political, social or economic instability; governmental 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 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.
The Income Fund of America | 25 |
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 lower rated debt instruments — Lower rated bonds and other lower rated debt securities generally have higher rates of interest and involve greater risk of default or price declines due to changes in the issuer’s creditworthiness than those of higher quality debt securities. The market prices of these securities may fluctuate more than the prices of higher quality debt securities and may decline significantly in periods of general economic difficulty. These risks may be increased with respect to investments in junk bonds.
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
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, which may increase the fund’s portfolio turnover rate.
Loan transactions — The fund has entered into loan transactions in which the fund acquires a loan either through an agent, by assignment from another holder, or as a participation interest in another holder’s portion of a loan. The loan is often administered by a financial institution that acts as agent for the holders of the loan, and the fund may be required to receive approval from the agent and/or borrower prior to the sale of the investment. The loan’s interest rate and maturity date may change based on the terms of the loan, including potential early payments of principal.
Unfunded commitments — The fund has participated in a transaction that involves unfunded commitments, which may obligate the fund to purchase additional shares of the applicable issuer. Under the terms of the commitments, which will expire no later than April 1, 2021, the maximum potential exposure as of July 31, 2016, was $1,819,000. Should such commitments become due in full, these amounts would represent less than .01% of the net assets of the fund as of July 31, 2016.
Forward currency contracts — The fund has entered into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The fund’s investment adviser uses forward currency contracts to manage the fund’s exposure to changes in exchange rates. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates.
26 | The Income Fund of America |
On a daily basis, the fund’s investment adviser values forward currency contracts and records unrealized appreciation or depreciation for open forward currency contracts in the fund’s statement of assets and liabilities. Realized gains or losses are recorded at the time the forward currency contract is closed or offset by another contract with the same broker for the same settlement date and currency.
Closed forward currency contracts that have not reached their settlement date are included in the respective receivables or payables for closed forward currency contracts in the fund’s statement of assets and liabilities. Net realized gains or losses from closed forward currency contracts and net unrealized appreciation or depreciation from open forward currency contracts are recorded in the fund’s statement of operations.
The following tables present the financial statement impacts resulting from the fund’s use of forward currency contracts as of, or for the year ended, July 31, 2016 (dollars in thousands):
Assets | Liabilities | |||||||||||||
Contract | Risk type | Location on statement of assets and liabilities | Value | Location on statement of assets and liabilities | Value | |||||||||
Forward currency | Currency | Unrealized appreciation on open forward currency contracts | $ | 3,581 | Unrealized depreciation on open forward currency contracts | $ | 11,115 | |||||||
Forward currency | Currency | Receivables for closed forward currency contracts | 662 | Payables for closed forward currency contracts | 12 | |||||||||
$ | 4,243 | $ | 11,127 | |||||||||||
Net realized gain | Net unrealized depreciation | |||||||||||||
Contract | Risk type | Location on statement of operations | Value | Location on statement of operations | Value | |||||||||
Forward currency | Currency | Net realized gain on forward currency contracts | $ | 103,668 | Net unrealized depreciation on forward currency contracts | $ | (13,488 | ) |
Collateral — The fund participates in a collateral program due to its use of forward currency contracts and future delivery contracts. For forward currency contracts, the program calls for the fund to either receive or pledge collateral based on the net gain or loss on unsettled forward currency contracts by counterparty. The purpose of the collateral is to cover potential losses that could occur in the event that either party cannot meet its contractual obligations.
Rights of offset — The fund has entered into enforceable master netting agreements with certain counterparties for forward currency contracts, where on any date amounts payable by each party to the other (in the same currency with respect to the same transaction) may be closed or offset by each party’s payment obligation. If an early termination date occurs under these agreements following an event of default or termination event, all obligations of each party to its counterparty are settled net through a single payment in a single currency (“close-out netting”). For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to these master netting arrangements in the statement of assets and liabilities.
The following table presents the fund’s forward currency contracts by counterparty that are subject to master netting agreements but that are not offset in the fund’s statement of assets and liabilities. The net amount column shows the impact of offsetting on the fund’s statement of assets and liabilities as of July 31, 2016 if close-out netting was exercised (dollars in thousands):
Gross amounts recognized in the | Gross amounts not offset in the statement of assets and liabilities and subject to a master netting agreement | |||||||||||||||||||
Counterparty | statement of assets and liabilities | Available to offset | Non-cash collateral* | Cash collateral | Net amount | |||||||||||||||
Assets: | ||||||||||||||||||||
Bank of America, N.A. | $ | 2,723 | $ | (12 | ) | $ | (2,711 | ) | $ | — | $ | — | ||||||||
Citibank | 161 | — | (161 | ) | — | — | ||||||||||||||
HSBC Bank | 74 | (74 | ) | — | — | — | ||||||||||||||
JPMorgan Chase | 1,285 | (1,285 | ) | — | — | — | ||||||||||||||
Total | $ | 4,243 | $ | (1,371 | ) | $ | (2,872 | ) | $ | — | $ | — |
The Income Fund of America | 27 |
Gross amounts recognized in the | Gross amounts not offset in the statement of assets and liabilities and subject to a master netting agreement | |||||||||||||||||||
Counterparty | statement of assets and liabilities | Available to offset | Non-cash collateral* | Cash collateral | Net amount | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Bank of America, N.A. | $ | 12 | $ | (12 | ) | $ | — | $ | — | $ | — | |||||||||
Barclays Bank PLC | 1,737 | — | — | — | 1,737 | |||||||||||||||
HSBC Bank | 6,119 | (74 | ) | (2,495 | ) | — | 3,550 | |||||||||||||
JPMorgan Chase | 1,899 | (1,285 | ) | — | — | 614 | ||||||||||||||
UBS AG | 1,360 | — | (380 | ) | — | 980 | ||||||||||||||
Total | $ | 11,127 | $ | (1,371 | ) | $ | (2,875 | ) | $ | — | $ | 6,881 |
*Non-cash collateral is shown on a settlement basis.
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 July 31, 2016, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2012, by state tax authorities for tax years before 2011 and by tax authorities outside the U.S. for tax years before 2014.
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 are subject to non-U.S. taxes. 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; unrealized appreciation of certain investments in securities outside the U.S.; 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.
During the year ended July 31, 2016, the fund reclassified $3,774,000 from undistributed net investment income to accumulated net realized loss and $47,000 from undistributed net investment income to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.
As of July 31, 2016, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows (dollars in thousands):
Undistributed ordinary income | $ | 523,312 | ||
Post-October capital loss deferral* | (88,896 | ) | ||
Gross unrealized appreciation on investment securities | 19,804,516 | |||
Gross unrealized depreciation on investment securities | (2,105,237 | ) | ||
Net unrealized appreciation on investment securities | 17,699,279 | |||
Cost of investment securities | 83,861,039 |
*This deferral is considered incurred in the subsequent year.
28 | The Income Fund of America |
The tax character of distributions paid to shareholders was as follows (dollars in thousands):
Year ended July 31, 2016 | Year ended July 31, 2015 | |||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||
dividends and | dividends and | |||||||||||||||||||||||
Ordinary | Long-term | distributions | Ordinary | Long-term | distributions | |||||||||||||||||||
Share class | income | capital gains | paid | income | capital gains | paid | ||||||||||||||||||
Class A | $ | 2,268,689 | $ | 1,259,675 | $ | 3,528,364 | $ | 2,652,016 | $ | — | $ | 2,652,016 | ||||||||||||
Class B | 4,390 | 3,780 | 8,170 | 12,848 | — | 12,848 | ||||||||||||||||||
Class C | 145,393 | 108,381 | 253,774 | 188,824 | — | 188,824 | ||||||||||||||||||
Class F-1 | 128,057 | 72,956 | 201,013 | 140,923 | — | 140,923 | ||||||||||||||||||
Class F-2 | 142,468 | 73,652 | 216,120 | 142,230 | — | 142,230 | ||||||||||||||||||
Class 529-A | 44,586 | 25,554 | 70,140 | 53,022 | — | 53,022 | ||||||||||||||||||
Class 529-B | 272 | 247 | 519 | 730 | — | 730 | ||||||||||||||||||
Class 529-C | 10,332 | 7,919 | 18,251 | 13,212 | — | 13,212 | ||||||||||||||||||
Class 529-E | 1,779 | 1,101 | 2,880 | 2,176 | — | 2,176 | ||||||||||||||||||
Class 529-F-1 | 1,868 | 989 | 2,857 | 2,101 | — | 2,101 | ||||||||||||||||||
Class R-1 | 3,096 | 2,291 | 5,387 | 3,933 | — | 3,933 | ||||||||||||||||||
Class R-2 | 13,455 | 10,059 | 23,514 | 18,272 | — | 18,272 | ||||||||||||||||||
Class R-2E1 | 79 | 6 | 85 | 1 | — | 1 | ||||||||||||||||||
Class R-3 | 33,659 | 21,237 | 54,896 | 44,001 | — | 44,001 | ||||||||||||||||||
Class R-4 | 35,211 | 20,359 | 55,570 | 43,909 | — | 43,909 | ||||||||||||||||||
Class R-5E2 | — | 3 | — | 3 | — | 3 | ||||||||||||||||||
Class R-5 | 20,792 | 11,143 | 31,935 | 24,087 | — | 24,087 | ||||||||||||||||||
Class R-6 | 126,027 | 61,144 | 187,171 | 113,968 | — | 113,968 | ||||||||||||||||||
Total | $ | 2,980,153 | $ | 1,680,493 | $ | 4,660,646 | $ | 3,456,253 | $ | — | $ | 3,456,253 |
1 | Class R-2E shares were offered beginning August 29, 2014. |
2 | Class R-5E shares were offered beginning November 20, 2015. |
3 | Amount less than one thousand. |
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. These fees are based on a series of decreasing annual rates beginning with 0.250% on the first $500 million of daily net assets and decreasing to 0.123% on such assets in excess of $89 billion. The agreement also provides for monthly fees, accrued daily, of 2.25% of the fund’s monthly gross income. On December 3, 2015, the fund’s board of trustees approved an amended investment advisory and service agreement effective February 1, 2016, decreasing the annual rates on daily net assets in excess of $115 billion to 0.121%. For the year ended July 31, 2016, the investment advisory services fee was $207,936,000, which was equivalent to an annualized rate of 0.219% 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, 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.
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
The Income Fund of America | 29 |
15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of July 31, 2016, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A shares.
Share class | Currently approved limits | Plan limits | ||||||||
Class A | 0.25 | % | 0.25 | % | ||||||
Class 529-A | 0.25 | 0.50 | ||||||||
Classes B and 529-B | 1.00 | 1.00 | ||||||||
Classes C, 529-C and R-1 | 1.00 | 1.00 | ||||||||
Class R-2 | 0.75 | 1.00 | ||||||||
Class R-2E | 0.60 | 0.85 | ||||||||
Classes 529-E and R-3 | 0.50 | 0.75 | ||||||||
Classes F-1, 529-F-1 and R-4 | 0.25 | 0.50 |
Transfer agent services — The fund has a 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, 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, 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 $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.05% on such assets in excess of $70 billion. Effective July 1, 2016, the quarterly fee will be amended to annual rates of 0.10% on the first $20 billion of the net assets invested in the Class 529 shares of the American Funds, 0.05% on net assets between $20 billion and $100 billion, and 0.03% on net assets over $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 year ended July 31, 2016, 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 | $169,801 | $54,344 | $7,106 | Not applicable | |||||||||||
Class B | 1,910 | 166 | Not applicable | Not applicable | |||||||||||
Class C | 59,929 | 4,638 | 3,001 | Not applicable | |||||||||||
Class F-1 | 10,268 | 4,992 | 2,056 | Not applicable | |||||||||||
Class F-2 | Not applicable | 4,545 | 2,118 | Not applicable | |||||||||||
Class 529-A | 3,244 | 931 | 720 | $1,252 | |||||||||||
Class 529-B | 126 | 12 | 6 | 11 | |||||||||||
Class 529-C | 4,394 | 311 | 222 | 385 | |||||||||||
Class 529-E | 310 | 18 | 31 | 54 | |||||||||||
Class 529-F-1 | — | 36 | 28 | 49 | |||||||||||
Class R-1 | 1,294 | 114 | 65 | Not applicable | |||||||||||
Class R-2 | 4,145 | 1,854 | 279 | Not applicable | |||||||||||
Class R-2E | 19 | 5 | 2 | Not applicable | |||||||||||
Class R-3 | 5,925 | 1,663 | 595 | Not applicable | |||||||||||
Class R-4 | 2,824 | 1,040 | 566 | Not applicable | |||||||||||
Class R-5E* | Not applicable | — | † | — | † | Not applicable | |||||||||
Class R-5 | Not applicable | 273 | 298 | Not applicable | |||||||||||
Class R-6 | Not applicable | 16 | 1,825 | Not applicable | |||||||||||
Total class-specific expenses | $264,189 | $74,958 | $18,918 | $1,751 |
* | Class R-5E shares were offered beginning November 20, 2015. | |
† | 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
30 | The Income Fund of America |
selected funds. Trustees’ compensation of $347,000 in the fund’s statement of operations reflects $372,000 in current fees (either paid in cash or deferred) and a net decrease of $25,000 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 CRMC-managed funds (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.
8. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
Sales1 | Reinvestments of dividends | Repurchases1 | Net increase (decrease) | |||||||||||||||||||||||||||||
Share class | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||||||||
Year ended July 31, 2016 | ||||||||||||||||||||||||||||||||
Class A | $ | 5,724,803 | 278,796 | $ | 3,431,843 | 169,512 | $ | (8,133,956 | ) | (396,067 | ) | $ | 1,022,690 | 52,241 | ||||||||||||||||||
Class B | 2,255 | 111 | 8,057 | 401 | (194,331 | ) | (9,516 | ) | (184,019 | ) | (9,004 | ) | ||||||||||||||||||||
Class C | 800,596 | 39,422 | 245,379 | 12,275 | (1,341,731 | ) | (66,129 | ) | (295,756 | ) | (14,432 | ) | ||||||||||||||||||||
Class F-1 | 821,628 | 40,041 | 193,056 | 9,559 | (840,785 | ) | (41,089 | ) | 173,899 | 8,511 | ||||||||||||||||||||||
Class F-2 | 1,606,112 | 77,658 | 201,943 | 9,979 | (889,128 | ) | (43,422 | ) | 918,927 | 44,215 | ||||||||||||||||||||||
Class 529-A | 151,646 | 7,395 | 70,119 | 3,470 | (214,848 | ) | (10,442 | ) | 6,917 | 423 | ||||||||||||||||||||||
Class 529-B | 258 | 13 | 518 | 26 | (12,186 | ) | (595 | ) | (11,410 | ) | (556 | ) | ||||||||||||||||||||
Class 529-C | 52,710 | 2,579 | 18,243 | 907 | (82,435 | ) | (4,020 | ) | (11,482 | ) | (534 | ) | ||||||||||||||||||||
Class 529-E | 7,224 | 354 | 2,880 | 143 | (10,002 | ) | (486 | ) | 102 | 11 | ||||||||||||||||||||||
Class 529-F-1 | 11,150 | 543 | 2,854 | 141 | (12,409 | ) | (602 | ) | 1,595 | 82 | ||||||||||||||||||||||
Class R-1 | 20,908 | 1,025 | 5,378 | 267 | (34,450 | ) | (1,680 | ) | (8,164 | ) | (388 | ) | ||||||||||||||||||||
Class R-2 | 118,475 | 5,829 | 23,486 | 1,173 | (172,413 | ) | (8,491 | ) | (30,452 | ) | (1,489 | ) | ||||||||||||||||||||
Class R-2E | 7,179 | 360 | 85 | 4 | (684 | ) | (33 | ) | 6,580 | 331 | ||||||||||||||||||||||
Class R-3 | 222,663 | 10,882 | 54,725 | 2,714 | (356,500 | ) | (17,385 | ) | (79,112 | ) | (3,789 | ) | ||||||||||||||||||||
Class R-4 | 228,593 | 11,123 | 55,548 | 2,749 | (318,178 | ) | (15,568 | ) | (34,037 | ) | (1,696 | ) | ||||||||||||||||||||
Class R-5E2 | 10 | 1 | — | 3 | — | 3 | — | 3 | — | 3 | 10 | 1 | ||||||||||||||||||||
Class R-5 | 116,052 | 5,661 | 31,927 | 1,578 | (294,802 | ) | (14,350 | ) | (146,823 | ) | (7,111 | ) | ||||||||||||||||||||
Class R-6 | 1,464,284 | 71,448 | 187,031 | 9,227 | (362,130 | ) | (17,515 | ) | 1,289,185 | 63,160 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 11,356,546 | 553,241 | $ | 4,533,072 | 224,125 | $ | (13,270,968 | ) | (647,390 | ) | $ | 2,618,650 | 129,976 |
The Income Fund of America | 31 |
Sales1 | Reinvestments of dividends | Repurchases1 | Net increase (decrease) | |||||||||||||||||||||||||||||
Share class | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||||||||
Year ended July 31, 2015 | ||||||||||||||||||||||||||||||||
Class A | $ | 6,799,575 | 313,392 | $ | 2,564,923 | 118,409 | $ | (7,191,840 | ) | (331,631 | ) | $ | 2,172,658 | 100,170 | ||||||||||||||||||
Class B | 6,142 | 286 | 12,632 | 586 | (319,960 | ) | (14,873 | ) | (301,186 | ) | (14,001 | ) | ||||||||||||||||||||
Class C | 1,134,135 | 52,855 | 180,877 | 8,438 | (1,476,126 | ) | (68,920 | ) | (161,114 | ) | (7,627 | ) | ||||||||||||||||||||
Class F-1 | 1,142,485 | 52,837 | 134,607 | 6,228 | (928,887 | ) | (42,846 | ) | 348,205 | 16,219 | ||||||||||||||||||||||
Class F-2 | 1,557,560 | 71,770 | 131,617 | 6,083 | (580,458 | ) | (26,780 | ) | 1,108,719 | 51,073 | ||||||||||||||||||||||
Class 529-A | 181,865 | 8,403 | 53,006 | 2,452 | (198,921 | ) | (9,201 | ) | 35,950 | 1,654 | ||||||||||||||||||||||
Class 529-B | 915 | 42 | 729 | 34 | (16,095 | ) | (746 | ) | (14,451 | ) | (670 | ) | ||||||||||||||||||||
Class 529-C | 61,911 | 2,870 | 13,208 | 612 | (75,581 | ) | (3,512 | ) | (462 | ) | (30 | ) | ||||||||||||||||||||
Class 529-E | 8,791 | 407 | 2,176 | 101 | (10,867 | ) | (504 | ) | 100 | 4 | ||||||||||||||||||||||
Class 529-F-1 | 13,159 | 608 | 2,099 | 97 | (9,349 | ) | (432 | ) | 5,909 | 273 | ||||||||||||||||||||||
Class R-1 | 31,622 | 1,464 | 3,913 | 181 | (28,794 | ) | (1,338 | ) | 6,741 | 307 | ||||||||||||||||||||||
Class R-2 | 126,784 | 5,904 | 18,246 | 850 | (177,349 | ) | (8,260 | ) | (32,319 | ) | (1,506 | ) | ||||||||||||||||||||
Class R-2E4 | 94 | 4 | 1 | — | 3 | — | 3 | — | 3 | 95 | 4 | |||||||||||||||||||||
Class R-3 | 248,510 | 11,496 | 43,878 | 2,032 | (365,620 | ) | (16,941 | ) | (73,232 | ) | (3,413 | ) | ||||||||||||||||||||
Class R-4 | 306,349 | 14,154 | 43,888 | 2,029 | (330,284 | ) | (15,265 | ) | 19,953 | 918 | ||||||||||||||||||||||
Class R-5 | 195,218 | 8,999 | 24,077 | 1,112 | (123,241 | ) | (5,683 | ) | 96,054 | 4,428 | ||||||||||||||||||||||
Class R-6 | 1,252,456 | 57,974 | 113,878 | 5,257 | (737,681 | ) | (33,850 | ) | 628,653 | 29,381 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 13,067,571 | 603,465 | $ | 3,343,755 | 154,501 | $ | (12,571,053 | ) | (580,782 | ) | $ | 3,840,273 | 177,184 |
1 | Includes exchanges between share classes of the fund. |
2 | Class R-5E shares were offered beginning November 20, 2015. |
3 | Amount less than one thousand. |
4 | Class R-2E shares were offered beginning August 29, 2014. |
9. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $40,435,109,000 and $42,240,126,000, respectively, during the year ended July 31, 2016.
32 | The Income Fund of America |
Financial highlights
Income from investment operations1 | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | Net investment income2 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return3 | Net assets, end of period (in millions) | Ratio of expenses to average net assets2 | Ratio of net income to average net assets2 | |||||||||||||||||||||||||||||||||||||
Class A: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | $ | 21.31 | $ | .66 | $ | .76 | $ | 1.42 | $ | (.66 | ) | $ | (.37 | ) | $ | (1.03 | ) | $ | 21.70 | 7.10 | % | $ | 75,437 | .56 | % | 3.22 | % | |||||||||||||||||||||
Year ended 7/31/2015 | 21.45 | .69 | (.04 | ) | .65 | (.79 | ) | — | (.79 | ) | 21.31 | 3.01 | 72,952 | .55 | 3.19 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.64 | .78 | 1.69 | 2.47 | (.66 | ) | — | (.66 | ) | 21.45 | 12.78 | 71,290 | .57 | 3.76 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.66 | .67 | 1.99 | 2.66 | (.68 | ) | — | (.35 | ) | 19.64 | 15.33 | 63,968 | .58 | 3.58 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.97 | .66 | .73 | 1.39 | (.70 | ) | — | (.70 | ) | 17.66 | 8.45 | 56,153 | .59 | 3.92 | ||||||||||||||||||||||||||||||||||
Class B: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.17 | .50 | .77 | 1.27 | (.48 | ) | (.37 | ) | (.85 | ) | 21.59 | 6.35 | 112 | 1.31 | 2.45 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.30 | .53 | (.05 | ) | .48 | (.61 | ) | — | (.61 | ) | 21.17 | 2.23 | 301 | 1.30 | 2.45 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.50 | .61 | 1.69 | 2.30 | (.50 | ) | — | (.50 | ) | 21.30 | 11.92 | 601 | 1.32 | 2.99 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.53 | .53 | 1.97 | 2.50 | (.53 | ) | — | (.28 | ) | 19.50 | 14.48 | 818 | 1.33 | 2.86 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.85 | .53 | .71 | 1.24 | (.56 | ) | — | (.56 | ) | 17.53 | 7.56 | 1,161 | 1.34 | 3.19 | ||||||||||||||||||||||||||||||||||
Class C: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.06 | .49 | .76 | 1.25 | (.50 | ) | (.37 | ) | (.87 | ) | 21.44 | 6.27 | 6,196 | 1.36 | 2.41 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.21 | .51 | (.04 | ) | .47 | (.62 | ) | — | (.62 | ) | 21.06 | 2.19 | 6,390 | 1.35 | 2.39 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.42 | .60 | 1.69 | 2.29 | (.50 | ) | — | (.50 | ) | 21.21 | 11.91 | 6,597 | 1.37 | 2.95 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.47 | .51 | 1.97 | 2.48 | (.53 | ) | — | (.28 | ) | 19.42 | 14.41 | 6,389 | 1.38 | 2.79 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.80 | .52 | .71 | 1.23 | (.56 | ) | — | (.56 | ) | 17.47 | 7.55 | 6,096 | 1.38 | 3.13 | ||||||||||||||||||||||||||||||||||
Class F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.26 | .64 | .76 | 1.40 | (.64 | ) | (.37 | ) | (1.01 | ) | 21.65 | 7.02 | 4,421 | .65 | 3.12 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.40 | .67 | (.04 | ) | .63 | (.77 | ) | — | (.77 | ) | 21.26 | 2.94 | 4,160 | .64 | 3.10 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.60 | .76 | 1.68 | 2.44 | (.64 | ) | — | (.64 | ) | 21.40 | 12.66 | 3,841 | .65 | 3.71 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.62 | .65 | 2.00 | 2.65 | (.67 | ) | — | (.34 | ) | 19.60 | 15.30 | 3,554 | .65 | 3.50 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.94 | .65 | .72 | 1.37 | (.69 | ) | — | (.69 | ) | 17.62 | 8.35 | 2,563 | .64 | 3.87 | ||||||||||||||||||||||||||||||||||
Class F-2: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.30 | .70 | .75 | 1.45 | (.69 | ) | (.37 | ) | (1.06 | ) | 21.69 | 7.28 | 5,076 | .39 | 3.38 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.44 | .73 | (.04 | ) | .69 | (.83 | ) | — | (.83 | ) | 21.30 | 3.20 | 4,042 | .38 | 3.35 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.63 | .80 | 1.71 | 2.51 | (.70 | ) | — | (.70 | ) | 21.44 | 12.97 | 2,975 | .40 | 3.89 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.65 | .70 | 1.99 | 2.69 | (.71 | ) | — | (.37 | ) | 19.63 | 15.53 | 1,434 | .41 | 3.74 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.97 | .69 | .72 | 1.41 | (.73 | ) | — | (.73 | ) | 17.65 | 8.59 | 1,020 | .40 | 4.09 | ||||||||||||||||||||||||||||||||||
Class 529-A: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.27 | .64 | .76 | 1.40 | (.64 | ) | (.37 | ) | (1.01 | ) | 21.66 | 7.00 | 1,525 | .66 | 3.11 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.41 | .67 | (.04 | ) | .63 | (.77 | ) | — | (.77 | ) | 21.27 | 2.92 | 1,489 | .65 | 3.09 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.60 | .75 | 1.70 | 2.45 | (.64 | ) | — | (.64 | ) | 21.41 | 12.69 | 1,463 | .67 | 3.66 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.63 | .65 | 1.98 | 2.63 | (.66 | ) | — | (.34 | ) | 19.60 | 15.19 | 1,298 | .68 | 3.48 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.95 | .64 | .72 | 1.36 | (.68 | ) | — | (.68 | ) | 17.63 | 8.30 | 1,102 | .68 | 3.82 | ||||||||||||||||||||||||||||||||||
Class 529-B: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.23 | .48 | .76 | 1.24 | (.45 | ) | (.37 | ) | (.82 | ) | 21.65 | 6.18 | 8 | 1.45 | 2.32 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.36 | .50 | (.05 | ) | .45 | (.58 | ) | — | (.58 | ) | 21.23 | 2.10 | 20 | 1.43 | 2.33 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.55 | .58 | 1.70 | 2.28 | (.47 | ) | — | (.47 | ) | 21.36 | 11.79 | 34 | 1.45 | 2.85 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.57 | .50 | 1.99 | 2.49 | (.51 | ) | — | (.27 | ) | 19.55 | 14.35 | 45 | 1.46 | 2.73 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.89 | .51 | .71 | 1.22 | (.54 | ) | — | (.54 | ) | 17.57 | 7.41 | 58 | 1.47 | 3.06 |
See page 35 for footnotes.
The Income Fund of America | 33 |
Financial highlights (continued)
Income from investment operations1 | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | Net investment income2 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return3 | Net assets, end of period (in millions) | Ratio of expenses to average net assets2 | Ratio of net income to average net assets2 | |||||||||||||||||||||||||||||||||||||
Class 529-C: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | $ | 21.18 | $ | .48 | $ | .76 | $ | 1.24 | $ | (.48 | ) | $ | (.37 | ) | $ | (.85 | ) | $ | 21.57 | 6.20 | % | $ | 463 | 1.43 | % | 2.34 | % | |||||||||||||||||||||
Year ended 7/31/2015 | 21.33 | .50 | (.05 | ) | .45 | (.60 | ) | — | (.60 | ) | 21.18 | 2.09 | 466 | 1.42 | 2.32 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.53 | .59 | 1.69 | 2.28 | (.48 | ) | — | (.48 | ) | 21.33 | 11.82 | 470 | 1.44 | 2.88 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.56 | .50 | 1.99 | 2.49 | (.52 | ) | — | (.27 | ) | 19.53 | 14.36 | 420 | 1.45 | 2.71 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.89 | .51 | .71 | 1.22 | (.55 | ) | — | (.55 | ) | 17.56 | 7.43 | 370 | 1.47 | 3.04 | ||||||||||||||||||||||||||||||||||
Class 529-E: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.21 | .59 | .76 | 1.35 | (.59 | ) | (.37 | ) | (.96 | ) | 21.60 | 6.76 | 66 | .89 | 2.88 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.35 | .62 | (.04 | ) | .58 | (.72 | ) | — | (.72 | ) | 21.21 | 2.68 | 64 | .89 | 2.85 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.55 | .70 | 1.69 | 2.39 | (.59 | ) | — | (.59 | ) | 21.35 | 12.39 | 65 | .91 | 3.41 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.58 | .60 | 1.99 | 2.59 | (.62 | ) | — | (.32 | ) | 19.55 | 14.95 | 59 | .92 | 3.24 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.91 | .60 | .71 | 1.31 | (.64 | ) | — | (.64 | ) | 17.58 | 7.99 | 52 | .93 | 3.57 | ||||||||||||||||||||||||||||||||||
Class 529-F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.27 | .69 | .76 | 1.45 | (.69 | ) | (.37 | ) | (1.06 | ) | 21.66 | 7.25 | 61 | .43 | 3.34 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.41 | .72 | (.04 | ) | .68 | (.82 | ) | — | (.82 | ) | 21.27 | 3.16 | 58 | .42 | 3.31 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.60 | .80 | 1.70 | 2.50 | (.69 | ) | — | (.69 | ) | 21.41 | 12.94 | 52 | .44 | 3.89 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.63 | .69 | 1.98 | 2.67 | (.70 | ) | — | (.36 | ) | 19.60 | 15.44 | 44 | .45 | 3.70 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.95 | .68 | .72 | 1.40 | (.72 | ) | — | (.72 | ) | 17.63 | 8.53 | 36 | .46 | 4.04 | ||||||||||||||||||||||||||||||||||
Class R-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.18 | .49 | .76 | 1.25 | (.49 | ) | (.37 | ) | (.86 | ) | 21.57 | 6.25 | 133 | 1.37 | 2.40 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.33 | .51 | (.05 | ) | .46 | (.61 | ) | — | (.61 | ) | 21.18 | 2.16 | 139 | 1.36 | 2.38 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.53 | .60 | 1.69 | 2.29 | (.49 | ) | — | (.49 | ) | 21.33 | 11.88 | 133 | 1.39 | 2.93 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.56 | .52 | 1.98 | 2.50 | (.53 | ) | — | (.28 | ) | 19.53 | 14.43 | 120 | 1.39 | 2.78 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.89 | .52 | .71 | 1.23 | (.56 | ) | — | (.56 | ) | 17.56 | 7.50 | 122 | 1.40 | 3.11 | ||||||||||||||||||||||||||||||||||
Class R-2: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.09 | .49 | .75 | 1.24 | (.49 | ) | (.37 | ) | (.86 | ) | 21.47 | 6.25 | 577 | 1.36 | 2.41 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.23 | .52 | (.04 | ) | .48 | (.62 | ) | — | (.62 | ) | 21.09 | 2.24 | 599 | 1.32 | 2.42 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.45 | .60 | 1.68 | 2.28 | (.50 | ) | — | (.50 | ) | 21.23 | 11.85 | 635 | 1.37 | 2.95 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.49 | .52 | 1.98 | 2.50 | (.54 | ) | — | (.28 | ) | 19.45 | 14.47 | 609 | 1.36 | 2.80 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.82 | .52 | .71 | 1.23 | (.56 | ) | — | (.56 | ) | 17.49 | 7.52 | 567 | 1.40 | 3.11 | ||||||||||||||||||||||||||||||||||
Class R-2E: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.29 | .58 | .75 | 1.33 | (.59 | ) | (.37 | ) | (.96 | ) | 21.66 | 6.64 | 7 | 1.03 | 2.86 | |||||||||||||||||||||||||||||||||
Period from 8/29/2014 to 7/31/20154,5 | 21.98 | .54 | (.47 | ) | .07 | (.76 | ) | — | (.76 | ) | 21.29 | .28 | 6,7 | — | 8 | .96 | 6,9 | 2.73 | 6,9 | |||||||||||||||||||||||||||||
Class R-3: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.23 | .59 | .75 | 1.34 | (.58 | ) | (.37 | ) | (.95 | ) | 21.62 | 6.71 | 1,217 | .92 | 2.85 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.37 | .61 | (.04 | ) | .57 | (.71 | ) | — | (.71 | ) | 21.23 | 2.65 | 1,275 | .92 | 2.83 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.57 | .69 | 1.69 | 2.38 | (.58 | ) | — | (.58 | ) | 21.37 | 12.35 | 1,357 | .94 | 3.38 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.60 | .60 | 1.98 | 2.58 | (.61 | ) | — | (.32 | ) | 19.57 | 14.91 | 1,323 | .94 | 3.22 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.92 | .60 | .72 | 1.32 | (.64 | ) | — | (.64 | ) | 17.60 | 8.01 | 1,204 | .96 | 3.55 |
34 | The Income Fund of America |
Income from investment operations1 | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | Net investment income2 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return3 | Net assets, end of period (in millions) | Ratio of expenses to average net assets2 | Ratio of net income to average net assets2 | |||||||||||||||||||||||||||||||||||||
Class R-4: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | $ | 21.27 | $ | .65 | $ | .76 | $ | 1.41 | $ | (.64 | ) | $ | (.37 | ) | $ | (1.01 | ) | $ | 21.67 | 7.07 | % | $ | 1,189 | .62 | % | 3.15 | % | |||||||||||||||||||||
Year ended 7/31/2015 | 21.42 | .68 | (.06 | ) | .62 | (.77 | ) | — | (.77 | ) | 21.27 | 2.90 | 1,203 | .62 | 3.12 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.61 | .76 | 1.70 | 2.46 | (.65 | ) | — | (.65 | ) | 21.42 | 12.71 | 1,192 | .64 | 3.67 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.63 | .66 | 1.99 | 2.65 | (.67 | ) | — | (.34 | ) | 19.61 | 15.29 | 1,045 | .64 | 3.52 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.95 | .65 | .72 | 1.37 | (.69 | ) | — | (.69 | ) | 17.63 | 8.33 | 880 | .65 | 3.86 | ||||||||||||||||||||||||||||||||||
Class R-5E: | ||||||||||||||||||||||||||||||||||||||||||||||||
Period from 11/20/2015 to 7/31/20165,10 | 21.03 | .47 | 1.07 | 1.54 | (.51 | ) | (.37 | ) | (.88 | ) | 21.69 | 7.70 | 7 | — | 8 | .48 | 9 | 3.30 | 9 | |||||||||||||||||||||||||||||
Class R-5: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.31 | .71 | .76 | 1.47 | (.71 | ) | (.37 | ) | (1.08 | ) | 21.70 | 7.34 | 516 | .33 | 3.46 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.45 | .74 | (.04 | ) | .70 | (.84 | ) | — | (.84 | ) | 21.31 | 3.25 | 658 | .32 | 3.41 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.64 | .82 | 1.70 | 2.52 | (.71 | ) | — | (.71 | ) | 21.45 | 13.03 | 567 | .34 | 3.98 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.66 | .71 | 1.99 | 2.70 | (.72 | ) | — | (.37 | ) | 19.64 | 15.60 | 525 | .34 | 3.83 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.97 | .70 | .73 | 1.43 | (.74 | ) | — | (.74 | ) | 17.66 | 8.70 | 462 | .35 | 4.17 | ||||||||||||||||||||||||||||||||||
Class R-6: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 7/31/2016 | 21.32 | .72 | .76 | 1.48 | (.72 | ) | (.37 | ) | (1.09 | ) | 21.71 | 7.39 | 4,606 | .28 | 3.49 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2015 | 21.46 | .75 | (.04 | ) | .71 | (.85 | ) | — | (.85 | ) | 21.32 | 3.30 | 3,176 | .28 | 3.45 | |||||||||||||||||||||||||||||||||
Year ended 7/31/2014 | 19.65 | .83 | 1.70 | 2.53 | (.72 | ) | — | (.72 | ) | 21.46 | 13.08 | 2,566 | .29 | 4.03 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2013 | 17.66 | .72 | 2.00 | 2.72 | (.73 | ) | — | (.38 | ) | 19.65 | 15.72 | 1,631 | .29 | 3.85 | ||||||||||||||||||||||||||||||||||
Year ended 7/31/2012 | 16.98 | .71 | .72 | 1.43 | (.75 | ) | — | (.75 | ) | 17.66 | 8.69 | 1,025 | .30 | 4.21 |
Year ended July 31 | ||||||||||||||||||||
Portfolio turnover rate for all share classes11 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Including mortgage dollar roll transactions | 52 | % | 45 | % | 39 | % | 47 | % | 41 | % | ||||||||||
Excluding mortgage dollar roll transactions | 39 | % | 32 | % | Not available |
1 | Based on average shares outstanding. |
2 | For the year ended July 31, 2014, this column reflects the impact of a corporate action event that resulted in a one-time increase to net investment income. If the corporate action event had not occurred, the Class A net investment income per share would have been lower by $.11; the Class A ratio of expenses to average net assets would have been lower by .01 percentage points; and the Class A ratio of net income to average net assets would have been lower by .51 percentage points. The impact to the other share classes would have been similar. |
3 | Total returns exclude any applicable sales charges, including contingent deferred sales charges. |
4 | Class R-2E shares were offered beginning August 29, 2014. |
5 | Based on operations for the period shown and, accordingly, is not representative of a full year. |
6 | 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. |
7 | Not annualized. |
8 | Amount less than $1 million. |
9 | Annualized. |
10 | Class R-5E shares were offered beginning November 20, 2015. |
11 | Refer to Note 5 for more information on mortgage dollar rolls. |
See Notes to Financial Statements
The Income Fund of America | 35 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of The Income Fund of America:
We have audited the accompanying statement of assets and liabilities of The Income Fund of America (the “Fund”), including the summary investment portfolio, as of July 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2016, by correspondence with the custodian, brokers, and agent banks; where replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Income Fund of America as of July 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Costa Mesa, California
September 8, 2016
36 | The Income Fund of America |
Expense example | unaudited |
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 (February 1, 2016, through July 31, 2016).
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 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.
The Income Fund of America | 37 |
Beginning account value 2/1/2016 | Ending account value 7/31/2016 | Expenses paid during period* | Annualized expense ratio | |||||||||||||
Class A - actual return | $ | 1,000.00 | $ | 1,115.31 | $ | 2.95 | .56 | % | ||||||||
Class A - assumed 5% return | 1,000.00 | 1,022.08 | 2.82 | .56 | ||||||||||||
Class B - actual return | 1,000.00 | 1,111.54 | 6.93 | 1.32 | ||||||||||||
Class B - assumed 5% return | 1,000.00 | 1,018.30 | 6.62 | 1.32 | ||||||||||||
Class C - actual return | 1,000.00 | 1,111.28 | 7.14 | 1.36 | ||||||||||||
Class C - assumed 5% return | 1,000.00 | 1,018.10 | 6.82 | 1.36 | ||||||||||||
Class F-1 - actual return | 1,000.00 | 1,115.08 | 3.47 | .66 | ||||||||||||
Class F-1 - assumed 5% return | 1,000.00 | 1,021.58 | 3.32 | .66 | ||||||||||||
Class F-2 - actual return | 1,000.00 | 1,116.88 | 2.05 | .39 | ||||||||||||
Class F-2 - assumed 5% return | 1,000.00 | 1,022.92 | 1.96 | .39 | ||||||||||||
Class 529-A - actual return | 1,000.00 | 1,114.99 | 3.47 | .66 | ||||||||||||
Class 529-A - assumed 5% return | 1,000.00 | 1,021.58 | 3.32 | .66 | ||||||||||||
Class 529-B - actual return | 1,000.00 | 1,110.54 | 7.56 | 1.44 | ||||||||||||
Class 529-B - assumed 5% return | 1,000.00 | 1,017.70 | 7.22 | 1.44 | ||||||||||||
Class 529-C - actual return | 1,000.00 | 1,110.75 | 7.45 | 1.42 | ||||||||||||
Class 529-C - assumed 5% return | 1,000.00 | 1,017.80 | 7.12 | 1.42 | ||||||||||||
Class 529-E - actual return | 1,000.00 | 1,114.06 | 4.73 | .90 | ||||||||||||
Class 529-E - assumed 5% return | 1,000.00 | 1,020.39 | 4.52 | .90 | ||||||||||||
Class 529-F-1 - actual return | 1,000.00 | 1,116.25 | 2.26 | .43 | ||||||||||||
Class 529-F-1 - assumed 5% return | 1,000.00 | 1,022.73 | 2.16 | .43 | ||||||||||||
Class R-1 - actual return | 1,000.00 | 1,111.57 | 7.09 | 1.35 | ||||||||||||
Class R-1 - assumed 5% return | 1,000.00 | 1,018.15 | 6.77 | 1.35 | ||||||||||||
Class R-2 - actual return | 1,000.00 | 1,111.07 | 6.98 | 1.33 | ||||||||||||
Class R-2 - assumed 5% return | 1,000.00 | 1,018.25 | 6.67 | 1.33 | ||||||||||||
Class R-2E - actual return | 1,000.00 | 1,112.70 | 5.46 | 1.04 | ||||||||||||
Class R-2E - assumed 5% return | 1,000.00 | 1,019.69 | 5.22 | 1.04 | ||||||||||||
Class R-3 - actual return | 1,000.00 | 1,113.69 | 4.73 | .90 | ||||||||||||
Class R-3 - assumed 5% return | 1,000.00 | 1,020.39 | 4.52 | .90 | ||||||||||||
Class R-4 - actual return | 1,000.00 | 1,115.61 | 3.21 | .61 | ||||||||||||
Class R-4 - assumed 5% return | 1,000.00 | 1,021.83 | 3.07 | .61 | ||||||||||||
Class R-5E - actual return | 1,000.00 | 1,115.73 | 2.63 | .50 | ||||||||||||
Class R-5E - assumed 5% return | 1,000.00 | 1,022.38 | 2.51 | .50 | ||||||||||||
Class R-5 - actual return | 1,000.00 | 1,116.53 | 1.68 | .32 | ||||||||||||
Class R-5 - assumed 5% return | 1,000.00 | 1,023.27 | 1.61 | .32 | ||||||||||||
Class R-6 - actual return | 1,000.00 | 1,116.74 | 1.47 | .28 | ||||||||||||
Class R-6 - assumed 5% return | 1,000.00 | 1,023.47 | 1.41 | .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 366 (to reflect the one-half year period). |
Tax information | unaudited |
We are required to advise you of the federal tax status of certain distributions received by shareholders during the fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended July 31, 2016:
Long-term capital gains | $ | 1,680,494,000 | |
Qualified dividend income | $ | 2,789,497,000 | |
Corporate dividends received deduction | $ | 1,772,852,000 | |
U.S. government income that may be exempt from state taxation | $ | 104,945,000 |
Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2017, to determine the calendar year amounts to be included on their 2016 tax returns. Shareholders should consult their tax advisors.
38 | The Income Fund of America |
Board of trustees and other officers
Independent trustees1
Name and year of birth | Year first elected a trustee of the fund2 | Principal occupation(s) during past five years | Number of portfolios in fund complex overseen by trustee3 | Other directorships4 held by trustee | ||||
William H. Baribault, 1945 | 2012 | CEO and President, Richard Nixon Foundation; Chairman of the Board and CEO, Oakwood Enterprises (private investment and consulting) | 81 | General Finance Corporation | ||||
Vanessa C. L. Chang, 1952 | 2012 | Director, EL & EL Investments (real estate) | 16 | Edison International; Sykes Enterprises; Transocean Ltd. | ||||
Linda Griego, 1947 | 2012 | President and CEO, Griego Enterprises, Inc. (business management company) | 7 | AECOM Technology Corporation; CBS Corporation | ||||
Leonade D. Jones, 1947 | 1993 | Retired; former Treasurer, The Washington Post Company (retired 1996) | 10 | None | ||||
William D. Jones, 1955 | 2008 | Real estate developer/owner, President and CEO, CityLink Investment Corporation (acquires, develops and manages real estate ventures in urban communities) and City Scene Management Company (provides commercial asset management services) | 8 | Sempra Energy | ||||
James J. Postl, 1946 | 2008 | Retired; former President and CEO, Pennzoil-Quaker State Company (automotive products and services) (retired 2002) | 4 | Pulte, Inc. | ||||
Margaret Spellings, 1957 | 2012 | President, The University of North Carolina; former President, George W. Bush Foundation; former President and CEO, Margaret Spellings & Company (public policy and strategic consulting); former President, U.S. Chamber Foundation and Senior Advisor to the President and CEO, U.S. Chamber of Commerce | 82 | ClubCorp Holdings, Inc. | ||||
Isaac Stein, 1946 Chairman of the Board (Independent and Non-Executive) | 2004 | Private investor; former President, Waverley Associates (private investment fund); Chairman Emeritus of the Board of Trustees, Stanford University | 4 | None |
Interested trustee5,6
Name, year of birth and position with fund | Year first elected a trustee or officer of the fund2 | Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund | Number of portfolios in fund complex overseen by trustee3 | Other directorships4 held by trustee | ||||
Hilda L. Applbaum, 1961 Vice Chairman of the Board | 1998 | Partner — Capital World Investors, Capital Research and Management Company | 1 | None |
The fund’s statement of additional information includes further details about fund trustees and is available without charge upon request by calling American Funds Service Company at (800) 421-4225 or by visiting the American Funds website at americanfunds.com. The address for all trustees and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Secretary.
See page 40 for footnotes.
The Income Fund of America | 39 |
Other officers6
Name, year of birth and position with fund | Year first elected an officer of the fund2 | Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund |
David C. Barclay, 1956 President | 1998 | Partner — Capital Fixed Income Investors, Capital Research and Management Company |
Dina N. Perry, 1945 Senior Vice President | 1994 | Partner — Capital World Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.7 |
Paul F. Roye, 1953 Senior Vice President | 2007 | Director, Capital Research and Management Company; Senior Vice President and Senior Counsel — Fund Business Management Group, Capital Research and Management Company |
Andrew B. Suzman, 1967 Senior Vice President | 2004 | Partner — Capital World Investors, Capital Research and Management Company; Director, Capital Strategy Research, Inc.;7 Director, The Capital Group Companies, Inc.7 |
Joanna F. Jonsson, 1963 Vice President | 2006 | Partner — Capital World Investors, Capital Research and Management Company; Director, Capital Research and Management Company; Partner — Capital World Investors, Capital Bank and Trust Company7 |
Donald H. Rolfe, 1972 Vice President | 2012 | Vice President and Senior Counsel — Fund Business Management Group, Capital Research and Management Company |
Anirudh Samsi, 1971 Vice President | 2016 | Partner — Capital World Investors, Capital Research and Management Company |
John H. Smet, 1956 Vice President | 1994 | Partner — Capital Fixed Income Investors, Capital Research and Management Company; Director, Capital Research and Management Company |
Michael W. Stockton, 1967 Secretary | 2014 | Vice President — Fund Business Management Group, Capital Research and Management Company |
Kimberley H. Monasterio, 1963 Treasurer | 2016 | Vice President — Investment Operations, Capital Research and Management Company |
Viviane T. Russo, 1981 Assistant Secretary | 2014 | Associate — Fund Business Management Group, Capital Research and Management Company |
Brian C. Janssen, 1972 Assistant Treasurer | 2016 | Vice President — Investment Operations, Capital Research and Management Company |
Dori Laskin, 1951 Assistant Treasurer | 2011 | Vice President — Investment Operations, Capital Research and Management Company |
1 | The term independent trustee refers to a trustee who is not an “interested person” of the fund within the meaning of the Investment Company Act of 1940. |
2 | Trustees and officers of the fund serve until their resignation, removal or retirement. |
3 | Funds managed by Capital Research and Management Company or its affiliates. |
4 | This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research and Management Company or its affiliates) that are held by each trustee as a trustee or director of a public company or a registered investment company. |
5 | The term interested trustee refers to a trustee who is an “interested person” within the meaning of the Investment Company Act of 1940, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter). |
6 | All of the directors/trustees and/or officers listed are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser. |
7 | Company affiliated with Capital Research and Management Company. |
40 | The Income Fund of America |
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.
“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 July 31, 2016, portfolio of The Income Fund of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
The Income Fund of America 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 The Income Fund of America, 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, 2016, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
The American Funds 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 SystemSM | |
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. | |
Superior long-term track record | |
Our equity funds have beaten their Lipper peer indexes in 91% of 10-year periods and 95% of 20-year periods. Our fixed income funds have beaten their Lipper indexes in 58% of 10-year periods and 58% of 20-year periods.2 Our fund management fees have been among the lowest in the industry.3 |
1 | Portfolio manager experience as of December 31, 2015. | |
2 | Based on Class A share results for rolling periods through December 31, 2015. 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). | |
3 | On average, our management fees were in the lowest quintile 68% of the time, based on the 20-year period ended December 31, 2015, versus comparable Lipper categories, excluding funds of funds. |
ITEM 2 – Code of Ethics
The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made to American Funds Service Company at 800/421-9225 or to the Secretary of the Registrant, 6455 Irvine Center Drive, Irvine, California 92618.
ITEM 3 – Audit Committee Financial Expert
The Registrant’s board has determined that Vanessa C. L. Chang, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.
ITEM 4 – Principal Accountant Fees and Services
Registrant: | ||||
a) Audit Fees: | ||||
2015 | $161,000 | |||
2016 | $165,000 | |||
b) Audit-Related Fees: | ||||
2015 | $22,000 | |||
2016 | $30,000 | |||
The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s investment adviser conducted in accordance with Statement on Standards for Attestation Engagements Number 16 issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2015 | $9,000 | |||
2016 | $10,000 |
The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns including returns relating to the Registrant’s investments in non-U.S. jurisdictions. | ||||
d) All Other Fees: | ||||
2015 | None | |||
2016 | None | |||
Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below): | ||||
a) Audit Fees: | ||||
Not Applicable | ||||
b) Audit-Related Fees: | ||||
2015 | $1,435,000 | |||
2016 | $471,000 | |||
The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Standards for Attestation Engagements Number 16 issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2015 | None | |||
2016 | None | |||
The tax fees consist of consulting services relating to the Registrant’s investments. | ||||
d) All Other Fees: | ||||
2015 | $5,000 | |||
2016 | $3,000 | |||
The other fees consist of subscription services related to an accounting research tool. |
All audit and permissible non-audit services that the Registrant’s audit committee considers compatible with maintaining the independent registered public accounting firm’s independence are required to be pre-approved by the committee. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser and affiliates.
Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant, adviser and affiliates that provide ongoing services to the Registrant, were $1,743,000 for fiscal year 2015 and $644,000 for fiscal year 2016. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence.
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
Common stocks 68.98% Industrials 9.69% | Shares | Value (000) |
General Electric Co. | 69,491,053 | $2,163,951 |
Lockheed Martin Corp. | 8,119,400 | 2,052,016 |
BAE Systems PLC | 126,401,776 | 893,310 |
Boeing Co. | 5,965,000 | 797,282 |
Waste Management, Inc. | 9,986,128 | 660,283 |
Ryanair Holdings PLC (ADR) | 6,452,401 | 456,636 |
Norfolk Southern Corp. | 5,000,000 | 448,900 |
KONE Oyj, Class B | 7,723,000 | 391,048 |
Hubbell Inc.1 | 3,430,000 | 369,857 |
PACCAR Inc | 6,220,500 | 366,823 |
Caterpillar Inc. | 4,287,000 | 354,792 |
Edenred SA | 11,360,000 | 257,629 |
R.R. Donnelley & Sons Co.1 | 13,345,400 | 239,150 |
Macquarie Infrastructure Corp. | 2,490,000 | 190,858 |
Abertis Infraestructuras, SA, Class A | 6,901,362 | 108,560 |
Geberit AG | 127,000 | 49,007 |
Douglas Dynamics, Inc.1 | 1,444,000 | 38,699 |
CEVA Group PLC1,2,3,4 | 35,229 | 11,802 |
Atrium Corp.3,4,5 | 1,807 | 2 |
9,850,605 | ||
Financials 9.36% | ||
JPMorgan Chase & Co. | 21,515,056 | 1,376,318 |
CME Group Inc., Class A | 10,140,400 | 1,036,755 |
Crown Castle International Corp. | 10,449,000 | 1,013,867 |
Wells Fargo & Co. | 18,127,915 | 869,596 |
Digital Realty Trust, Inc. | 7,635,000 | 797,552 |
Iron Mountain Inc.1 | 13,724,780 | 565,598 |
Public Storage | 1,935,000 | 462,310 |
Prologis, Inc. | 8,390,000 | 457,171 |
BM&FBOVESPA SA - Bolsa de Valores, Mercadorias e Futuros, ordinary nominative | 64,673,012 | 380,770 |
Lamar Advertising Co., Class A | 5,253,322 | 356,490 |
Toronto-Dominion Bank (CAD denominated) | 7,805,000 | 340,081 |
PacWest Bancorp | 5,868,000 | 242,642 |
BlackRock, Inc. | 600,000 | 219,750 |
Outfront Media Inc.1 | 9,064,824 | 210,939 |
Link Real Estate Investment Trust | 19,651,812 | 146,659 |
Camden Property Trust | 1,270,300 | 113,806 |
Equity Residential | 1,575,000 | 107,084 |
Simon Property Group, Inc. | 470,100 | 106,732 |
Apollo Global Management, LLC, Class A | 5,479,700 | 93,977 |
Umpqua Holdings Corp. | 5,541,365 | 84,395 |
Sun Hung Kai Properties Ltd. | 5,660,234 | 80,981 |
Redwood Trust, Inc.1 | 5,444,717 | 77,696 |
Fibra Uno Administración, SA de CV | 34,021,600 | 69,386 |
National Australia Bank Ltd. | 3,360,000 | 67,768 |
New York Community Bancorp, Inc. | 4,478,000 | 64,707 |
Common stocks Financials (continued) | Shares | Value (000) |
Svenska Handelsbanken AB, Class A | 5,236,729 | $63,034 |
AXA SA | 2,685,000 | 54,723 |
Prudential PLC | 2,970,000 | 52,474 |
9,513,261 | ||
Information technology 8.73% | ||
Microsoft Corp. | 51,193,209 | 2,901,631 |
Intel Corp. | 55,176,100 | 1,923,439 |
Texas Instruments Inc. | 15,550,000 | 1,084,613 |
Taiwan Semiconductor Manufacturing Co., Ltd. | 170,719,000 | 922,502 |
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 2,166,470 | 60,184 |
Analog Devices, Inc. | 14,616,091 | 932,945 |
International Business Machines Corp. | 2,200,000 | 353,364 |
Maxim Integrated Products, Inc. | 7,046,000 | 287,336 |
Paychex, Inc. | 2,285,500 | 135,484 |
Vanguard International Semiconductor Corp. | 67,990,000 | 123,103 |
Quanta Computer Inc.4 | 33,916,655 | 68,953 |
Cisco Systems, Inc. | 1,750,000 | 53,428 |
Corporate Risk Holdings I, Inc.1,3,4 | 2,205,215 | 20,575 |
Corporate Risk Holdings Corp.1,3,4 | 11,149 | — |
8,867,557 | ||
Consumer staples 8.20% | ||
Procter & Gamble Co. | 17,386,700 | 1,488,128 |
Coca-Cola Co. | 26,901,000 | 1,173,691 |
Philip Morris International Inc. | 10,668,607 | 1,069,635 |
Reynolds American Inc. | 20,846,668 | 1,043,584 |
Altria Group, Inc. | 12,191,000 | 825,331 |
British American Tobacco PLC | 11,743,200 | 749,801 |
Kellogg Co. | 5,550,000 | 459,040 |
Nestlé SA | 4,395,000 | 352,344 |
Hershey Co. | 3,000,000 | 332,280 |
Kimberly-Clark Corp. | 1,575,000 | 204,041 |
General Mills, Inc. | 2,835,000 | 203,808 |
Kraft Heinz Co. | 2,278,000 | 196,796 |
Campbell Soup Co. | 2,000,000 | 124,540 |
Costco Wholesale Corp. | 630,000 | 105,349 |
8,328,368 | ||
Health care 7.90% | ||
Merck & Co., Inc. | 45,448,227 | 2,665,993 |
Pfizer Inc. | 43,114,280 | 1,590,486 |
GlaxoSmithKline PLC | 64,296,000 | 1,436,362 |
AstraZeneca PLC | 10,916,583 | 729,312 |
Bristol-Myers Squibb Co. | 7,670,738 | 573,848 |
Eli Lilly and Co. | 6,174,000 | 511,763 |
AbbVie Inc. | 4,200,000 | 278,166 |
Novartis AG | 2,355,000 | 195,116 |
Novartis AG (ADR) | 500,000 | 41,630 |
Rotech Healthcare Inc.1,3,4 | 543,172 | 543 |
8,023,219 |
Common stocks Consumer discretionary 5.70% | Shares | Value (000) |
McDonald’s Corp. | 16,029,280 | $1,885,845 |
Home Depot, Inc. | 5,295,000 | 731,981 |
Target Corp. | 9,450,000 | 711,868 |
General Motors Co. | 15,248,112 | 480,925 |
ProSiebenSat.1 Media SE | 6,645,000 | 303,776 |
Hasbro, Inc. | 3,516,373 | 285,635 |
Las Vegas Sands Corp. | 5,350,000 | 270,977 |
Starwood Hotels & Resorts Worldwide, Inc. | 2,650,000 | 206,859 |
Marks and Spencer Group PLC | 40,000,000 | 169,031 |
Nokian Renkaat Oyj | 4,200,161 | 156,041 |
Compass Group PLC | 7,411,761 | 140,859 |
Pearson PLC | 9,850,000 | 114,977 |
Charter Communications, Inc., Class A4 | 433,120 | 101,727 |
Taylor Wimpey plc | 42,915,000 | 87,863 |
Sands China Ltd. | 16,678,600 | 63,633 |
SES SA, Class A (FDR) | 2,870,000 | 62,874 |
TopBuild Corp.4 | 360,000 | 13,594 |
Adelphia Recovery Trust, Series ACC-13,4 | 9,913,675 | 16 |
5,788,481 | ||
Energy 4.58% | ||
Chevron Corp. | 9,800,000 | 1,004,304 |
Spectra Energy Corp | 27,235,500 | 979,661 |
Royal Dutch Shell PLC, Class B | 21,362,147 | 566,000 |
Royal Dutch Shell PLC, Class B (ADR) | 7,111,000 | 385,487 |
BP PLC | 147,950,000 | 835,791 |
ConocoPhillips | 9,450,000 | 385,749 |
Coal India Ltd. | 38,878,615 | 190,374 |
Helmerich & Payne, Inc. | 2,879,000 | 178,412 |
Keyera Corp. | 4,235,000 | 121,570 |
Southwestern Energy Co.4 | 287,764 | 4,196 |
Denbury Resources Inc. | 270,000 | 783 |
Ascent Resources - Utica, LLC, Class A3,4 | 86,629,567 | — |
4,652,327 | ||
Telecommunication services 4.06% | ||
Verizon Communications Inc. | 35,285,921 | 1,955,193 |
Telstra Corp. Ltd. | 171,521,533 | 752,107 |
Vodafone Group PLC | 135,700,000 | 412,254 |
Vodafone Group PLC (ADR) | 1,000,000 | 30,900 |
AT&T Inc. | 10,170,000 | 440,259 |
NTT DoCoMo, Inc. | 8,090,000 | 217,998 |
TalkTalk Telecom Group PLC1 | 58,421,891 | 177,059 |
Deutsche Telekom AG | 6,000,000 | 102,130 |
NII Holdings, Inc.1,4 | 7,694,703 | 23,392 |
Mobile TeleSystems OJSC (ADR) | 2,270,000 | 20,180 |
4,131,472 | ||
Materials 3.55% | ||
E.I. du Pont de Nemours and Co. | 14,953,953 | 1,034,365 |
Dow Chemical Co. | 14,804,900 | 794,579 |
LyondellBasell Industries NV | 6,190,000 | 465,859 |
BASF SE | 4,500,000 | 353,478 |
WestRock Co. | 7,394,832 | 317,312 |
Air Products and Chemicals, Inc. | 2,048,886 | 306,145 |
Common stocks Materials (continued) | Shares | Value (000) |
Potash Corp. of Saskatchewan Inc. | 10,400,000 | $162,240 |
Amcor Ltd. | 7,785,000 | 88,861 |
Rio Tinto PLC | 2,500,000 | 81,442 |
Warrior Met Coal, LLC, Class B3,4,5 | 45,477 | 5,548 |
Warrior Met Coal, LLC, Class A3,4,5 | 17,859 | 2,179 |
3,612,008 | ||
Utilities 3.34% | ||
Power Assets Holdings Ltd. | 78,458,500 | 768,061 |
Duke Energy Corp. | 7,854,999 | 672,309 |
Dominion Resources, Inc. | 7,335,000 | 572,277 |
EDP - Energias de Portugal, SA | 91,826,149 | 314,966 |
Enel SPA | 68,062,000 | 313,352 |
DTE Energy Co. | 2,500,000 | 243,800 |
HK Electric Investments and HK Electric Investments Ltd., units | 230,870,000 | 221,098 |
SSE PLC | 7,975,487 | 160,016 |
PG&E Corp. | 1,492,607 | 95,437 |
Ratchaburi Electricity Generating Holding PCL | 11,646,844 | 17,305 |
National Grid PLC | 1,100,000 | 15,766 |
3,394,387 | ||
Miscellaneous 3.87% | ||
Other common stocks in initial period of acquisition | 3,931,005 | |
Total common stocks (cost: $53,173,564,000) | 70,092,690 | |
Preferred securities 0.46% Financials 0.46% | ||
Citigroup Inc., Series K, depositary shares | 2,463,848 | 73,349 |
Citigroup Inc. 7.875% preferred | 2,637,610 | 69,079 |
Vornado Realty Trust, Series I, 6.625% | 3,380,000 | 87,035 |
PNC Financial Services Group, Inc., Series P, noncumulative depositary shares | 2,000,000 | 60,640 |
U.S. Bancorp, Series G, noncumulative convertible preferred | 2,270,400 | 59,098 |
Wells Fargo & Co., Class A, Series Q, 5.85% depositary shares preferred noncumulative | 1,600,000 | 44,672 |
HSBC Holdings PLC, Series 2, 8.00% | 1,505,000 | 40,379 |
Goldman Sachs Group, Inc., Series J, 5.50% depositary shares | 1,200,000 | 32,484 |
Total preferred securities (cost: $429,622,000) | 466,736 | |
Rights & warrants 0.00% Energy 0.00% | ||
Gener8 Maritime, Inc., warrants, expire 20173,4,5 | 8,514 | — |
Total rights & warrants (cost: $2,171,000) | — | |
Convertible stocks 0.61% Financials 0.21% | ||
American Tower Corp., Series B, 5.50% depository share, convertible preferred 2018 | 1,375,000 | 152,144 |
American Tower Corp., Series A, convertible preferred | 600,000 | 67,578 |
219,722 |
Convertible stocks Telecommunication services 0.19% | Shares | Value (000) |
Frontier Communications Corp., Series A, convertible preferred | 1,925,000 | $190,344 |
Materials 0.09% | ||
Alcoa Inc., Class B, Series 1, cummulative convertible preferred 2017 | 2,500,000 | 90,500 |
Energy 0.07% | ||
Southwestern Energy Co., Series B, 6.25% convertible preferred 2018 | 2,060,000 | 68,701 |
Consumer staples 0.03% | ||
Bunge Ltd. 4.875% convertible preferred | 322,700 | 32,238 |
Industrials 0.02% | ||
CEVA Group PLC, Series A-1, 3.68% convertible preferred1,2,3,4 | 29,937 | 13,621 |
CEVA Group PLC, Series A-2, 2.68% convertible preferred1,2,3,4 | 13,633 | 4,567 |
18,188 | ||
Total convertible stocks (cost: $693,340,000) | 619,693 | |
Convertible bonds 0.78% Financials 0.55% | Principal amount (000) | |
Barclays PLC, Equity Linked Notes (Weyerhaeuser Co.), 4.52% 2016 | $ 4,206 | 135,309 |
Barclays PLC, Equity Linked Notes (Weyerhaeuser Co.), 5.12% 2017 | 7,159 | 228,033 |
Goldman Sachs, Equity Linked Notes (Costco Wholesale Corp.), 3.64% 2017 | 1,112 | 173,962 |
Lloyds Banking Group PLC, convertible notes, 7.50% 2049 | 21,200 | 21,200 |
558,504 | ||
Energy 0.00% | ||
American Energy (Permian Basin), convertible notes, 8.00% 20223,5,6 | 24,453 | 2,935 |
Miscellaneous 0.23% | ||
Other convertible bonds in initial period of acquisition | 231,814 | |
Total convertible bonds (cost: $773,704,000) | 793,253 | |
Bonds, notes & other debt instruments 22.27% Corporate bonds & notes 14.16% Financials 2.36% | ||
ACE INA Holdings Inc. 2.30% 2020 | 4,485 | 4,635 |
ACE INA Holdings Inc. 2.875% 2022 | 9,345 | 9,866 |
ACE INA Holdings Inc. 3.15% 2025 | 9,885 | 10,540 |
ACE INA Holdings Inc. 3.35% 2026 | 9,345 | 10,097 |
ACE INA Holdings Inc. 4.35% 2045 | 1,395 | 1,657 |
Alexandria Real Estate Equities, Inc. 2.75% 2020 | 795 | 803 |
Alexandria Real Estate Equities, Inc. 3.90% 2023 | 1,600 | 1,671 |
Alexandria Real Estate Equities, Inc. 4.30% 2026 | 2,200 | 2,359 |
Alexandria Real Estate Equities, Inc. 4.50% 2029 | 1,355 | 1,432 |
American Campus Communities, Inc. 3.35% 2020 | 3,380 | 3,520 |
American Campus Communities, Inc. 3.75% 2023 | 3,985 | 4,178 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Financials (continued) | Principal amount (000) | Value (000) |
American Campus Communities, Inc. 4.125% 2024 | $19,700 | $20,998 |
American Express Co. 6.15% 2017 | 12,610 | 13,279 |
American Express Credit Co. 1.55% 2017 | 4,525 | 4,547 |
American International Group, Inc. 3.875% 2035 | 3,000 | 2,938 |
American Tower Corp. 3.40% 2019 | 6,400 | 6,707 |
American Tower Corp. 7.25% 2019 | 15,025 | 17,038 |
Bank of America Corp. 5.75% 2017 | 8,100 | 8,553 |
Bank of America Corp. 5.625% 2020 | 9,000 | 10,219 |
Bank of America Corp. 2.625% 2021 | 27,353 | 27,900 |
Bank of America Corp. 5.00% 2021 | 3,500 | 3,942 |
Bank of America Corp. 3.50% 2026 | 9,847 | 10,304 |
Bank of America Corp., Series AA, 6.10% (undated) | 11,175 | 11,698 |
Bank of America Corp., Series DD, 6.30% (undated) | 6,560 | 7,165 |
Bank of America Corp. junior subordinated 6.25% noncumulative (undated) | 5,525 | 5,794 |
Bank of America Corp., Series M, junior subordinated 8.125% noncumulative (undated) | 30,924 | 31,658 |
Barclays Bank PLC 3.25% 2021 | 8,600 | 8,735 |
Barclays Bank PLC 3.65% 2025 | 10,000 | 9,896 |
BB&T Corp. 1.45% 2019 | 8,780 | 8,818 |
BB&T Corp. 2.45% 2020 | 19,000 | 19,599 |
Berkshire Hathaway Inc. 2.90% 2020 | 6,000 | 6,361 |
Berkshire Hathaway Inc. 2.20% 2021 | 1,790 | 1,854 |
Berkshire Hathaway Inc. 3.125% 2026 | 2,355 | 2,511 |
BNP Paribas 4.375% 20265 | 18,125 | 18,702 |
BPCE SA group 2.65% 2021 | 4,000 | 4,125 |
BPCE SA group 5.70% 20235 | 20,500 | 22,399 |
BPCE SA group 5.15% 20245 | 10,060 | 10,654 |
Brandywine Operating Partnership, LP 5.70% 2017 | 20 | 21 |
Brandywine Operating Partnership, LP 3.95% 2023 | 1,729 | 1,773 |
CIT Group Inc. 4.25% 2017 | 9,000 | 9,196 |
CIT Group Inc. 5.00% 2017 | 11,000 | 11,250 |
CIT Group Inc. 3.875% 2019 | 71,030 | 72,628 |
CIT Group Inc., Series C, 5.50% 20195 | 13,650 | 14,503 |
Citigroup Inc. 2.05% 2019 | 10,500 | 10,619 |
Citigroup Inc. 8.50% 2019 | 4,894 | 5,784 |
Citigroup Inc. 2.35% 2021 | 13,000 | 13,075 |
Citigroup Inc. 2.70% 2021 | 10,500 | 10,722 |
Citigroup Inc. 3.70% 2026 | 5,000 | 5,317 |
Citigroup Inc. 4.125% 2028 | 19,890 | 20,339 |
Citigroup Inc., Series P, 5.95% (undated) | 18,390 | 18,959 |
Citigroup Inc., Series T, 6.25% (undated) | 4,650 | 5,016 |
Citigroup Inc., Series A, junior subordinated 5.95% (undated) | 13,295 | 13,649 |
Citigroup Inc., Series Q, junior subordinated 5.95% (undated) | 10,675 | 10,722 |
CNA Financial Corp. 3.95% 2024 | 5,000 | 5,329 |
Communications Sales & Leasing, Inc. 6.00% 20235 | 16,450 | 17,016 |
Communications Sales & Leasing, Inc. 8.25% 2023 | 17,213 | 17,665 |
Corporate Office Properties LP 5.25% 2024 | 9,630 | 10,460 |
Corporate Office Properties LP 5.00% 2025 | 4,145 | 4,452 |
Corporate Office Properties Trust 3.60% 2023 | 320 | 319 |
Credit Agricole SA 4.375% 20255 | 21,920 | 22,446 |
Credit Suisse Group AG 3.45% 20215 | 8,750 | 8,895 |
Credit Suisse Group AG 3.80% 20235 | 14,925 | 15,171 |
Crescent Resources 10.25% 20175 | 42,046 | 42,072 |
Crown Castle International Corp. 4.875% 2022 | 9,800 | 10,877 |
DCT Industrial Trust Inc. 4.50% 2023 | 5,570 | 5,932 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Financials (continued) | Principal amount (000) | Value (000) |
DDR Corp. 3.625% 2025 | $5,000 | $5,080 |
Developers Diversified Realty Corp. 7.50% 2017 | 38,892 | 40,359 |
Developers Diversified Realty Corp. 4.75% 2018 | 5,000 | 5,229 |
Developers Diversified Realty Corp. 7.875% 2020 | 6,505 | 7,883 |
Discover Financial Services 3.45% 2026 | 4,318 | 4,361 |
DNB ASA 2.375% 20215 | 11,400 | 11,682 |
EPR Properties 4.50% 2025 | 7,945 | 8,094 |
ERP Operating LP 7.125% 2017 | 10,000 | 10,689 |
Essex Portfolio L.P. 3.625% 2022 | 9,550 | 10,115 |
Essex Portfolio L.P. 3.25% 2023 | 4,400 | 4,548 |
Essex Portfolio L.P. 3.875% 2024 | 5,900 | 6,334 |
Essex Portfolio L.P. 3.375% 2026 | 1,005 | 1,042 |
Gaming and Leisure Properties, Inc. 4.375% 2021 | 1,700 | 1,774 |
Gaming and Leisure Properties, Inc. 5.375% 2026 | 11,400 | 12,184 |
Goldman Sachs Group, Inc. 2.55% 2019 | 16,200 | 16,613 |
Goldman Sachs Group, Inc. 2.60% 2020 | 7,900 | 8,093 |
Goldman Sachs Group, Inc. 5.25% 2021 | 3,000 | 3,407 |
Goldman Sachs Group, Inc. 5.75% 2022 | 20,000 | 23,310 |
Goldman Sachs Group, Inc. 4.75% 2045 | 4,455 | 5,098 |
Goldman Sachs Group, Inc. 5.15% 2045 | 900 | 992 |
Goldman Sachs Group, Inc. 5.30% (undated) | 14,825 | 15,103 |
HBOS PLC 6.75% 20185 | 17,300 | 18,675 |
Hospitality Properties Trust 5.625% 2017 | 8,684 | 8,884 |
Hospitality Properties Trust 6.70% 2018 | 12,625 | 13,179 |
Hospitality Properties Trust 4.25% 2021 | 20,500 | 21,484 |
Hospitality Properties Trust 5.00% 2022 | 6,500 | 7,051 |
Hospitality Properties Trust 4.50% 2023 | 11,060 | 11,413 |
Hospitality Properties Trust 4.50% 2025 | 5,940 | 6,049 |
Host Hotels & Resorts LP 4.50% 2026 | 5,675 | 6,069 |
HSBC Holdings PLC 2.95% 2021 | 14,000 | 14,263 |
HSBC Holdings PLC 4.25% 2024 | 9,000 | 9,394 |
HSBC Holdings PLC 4.30% 2026 | 6,755 | 7,255 |
HSBK (Europe) BV 7.25% 20175 | 8,790 | 9,075 |
Icahn Enterprises Finance Corp. 3.50% 2017 | 23,075 | 23,075 |
Intercontinentalexchange, Inc. 2.50% 2018 | 12,000 | 12,336 |
Intesa Sanpaolo SpA 5.017% 20245 | 41,610 | 39,883 |
Iron Mountain Inc. 6.00% 20201,5 | 31,925 | 33,761 |
Iron Mountain Inc. 6.00% 20231 | 950 | 1,014 |
Iron Mountain Inc. 5.75% 20241 | 4,325 | 4,464 |
iStar Financial Inc. 4.00% 2017 | 28,625 | 28,518 |
iStar Financial Inc. 4.875% 2018 | 11,575 | 11,503 |
iStar Financial Inc. 5.00% 2019 | 14,275 | 14,132 |
iStar Financial Inc., Series B, 9.00% 2017 | 37,360 | 38,948 |
JPMorgan Chase & Co. 1.35% 2017 | 4,240 | 4,250 |
JPMorgan Chase & Co. 2.25% 2020 | 10,000 | 10,204 |
JPMorgan Chase & Co. 2.55% 2020 | 11,150 | 11,450 |
JPMorgan Chase & Co. 2.40% 2021 | 14,000 | 14,266 |
JPMorgan Chase & Co. 2.95% 2026 | 10,000 | 10,114 |
JPMorgan Chase & Co., Series Z, junior subordinated 5.30% (undated) | 36,425 | 37,591 |
JPMorgan Chase & Co., Series S, junior subordinated 6.75% (undated) | 36,535 | 41,190 |
JPMorgan Chase & Co., Series I, junior subordinated 7.90% (undated) | 74,825 | 77,912 |
Keybank National Association 2.50% 2019 | 9,000 | 9,268 |
Kimco Realty Corp. 5.70% 2017 | 17,250 | 17,826 |
Kimco Realty Corp. 6.875% 2019 | 10,000 | 11,516 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Financials (continued) | Principal amount (000) | Value (000) |
Kimco Realty Corp. 3.40% 2022 | $5,460 | $5,758 |
Leucadia National Corp. 5.50% 2023 | 13,255 | 13,847 |
Liberty Mutual Group Inc. 4.25% 20235 | 4,400 | 4,716 |
Liberty Mutual Group Inc., Series A, 7.80% 20875 | 19,415 | 21,648 |
Lloyds Banking Group PLC 2.30% 2018 | 3,625 | 3,674 |
Lloyds Banking Group PLC 4.50% 2024 | 9,000 | 9,355 |
Lloyds Banking Group PLC 4.582% 20255 | 7,000 | 7,161 |
MetLife Capital Trust IV, junior subordinated 7.875% 20675 | 14,430 | 17,958 |
MetLife Capital Trust X, junior subordinated 9.25% 20685 | 500 | 716 |
MetLife Global Funding I 2.30% 20195 | 8,435 | 8,631 |
MetLife Global Funding I 2.00% 20205 | 5,135 | 5,205 |
MetLife Global Funding I 2.50% 20205 | 4,000 | 4,147 |
MetLife, Inc. 5.25% 2049 | 10,000 | 10,033 |
Morgan Stanley 2.50% 2021 | 13,625 | 13,801 |
Morgan Stanley 3.875% 2026 | 11,000 | 11,769 |
Morgan Stanley 3.125% 2026 | 19,156 | 19,398 |
Nationwide Mutual Insurance Co. 2.923% 20245,7 | 8,150 | 8,089 |
Navient Corp. 4.875% 2019 | 2,240 | 2,257 |
Navient Corp. 6.625% 2021 | 2,845 | 2,886 |
New York Life Global Funding 2.10% 20195 | 11,000 | 11,222 |
New York Life Global Funding 1.95% 20205 | 1,820 | 1,847 |
PNC Bank 2.40% 2019 | 7,825 | 8,065 |
PNC Financial Services Group, Inc. 2.854% 2022 | 8,395 | 8,649 |
PNC Financial Services Group, Inc. 3.90% 2024 | 3,000 | 3,269 |
PNC Financial Services Group, Inc., Series O, junior subordinated 6.75% (undated) | 10,250 | 11,531 |
PNC Preferred Funding Trust I, junior subordinated 2.303% (undated)5,7 | 23,800 | 22,223 |
Prologis, Inc. 3.35% 2021 | 1,950 | 2,071 |
Prologis, Inc. 4.25% 2023 | 25,000 | 27,929 |
Prologis, Inc. 3.75% 2025 | 1,520 | 1,650 |
Prudential Financial, Inc. 3.50% 2024 | 9,000 | 9,467 |
QBE Insurance Group Ltd. 2.40% 20185 | 16,910 | 17,050 |
Rabobank Nederland 2.25% 2019 | 8,000 | 8,164 |
Rabobank Nederland 2.50% 2021 | 6,525 | 6,740 |
Rabobank Nederland 4.625% 2023 | 8,000 | 8,598 |
Rabobank Nederland 4.375% 2025 | 9,000 | 9,517 |
RBS Capital Trust II 6.425% noncumulative trust (undated) | 6,005 | 6,275 |
Realogy Corp. 4.50% 20195 | 32,550 | 33,893 |
Realogy Corp. 5.25% 20215 | 27,600 | 28,980 |
Realogy Corp. 4.875% 20235 | 7,825 | 7,981 |
Royal Bank of Scotland Group PLC, junior subordinated 6.99% (undated)5 | 12,735 | 14,123 |
Scentre Group 2.375% 20215 | 4,575 | 4,646 |
Scentre Group 3.25% 20255 | 3,140 | 3,224 |
Scentre Group 3.50% 20255 | 10,455 | 10,945 |
Select Income REIT 3.60% 2020 | 5,775 | 5,886 |
Select Income REIT 4.15% 2022 | 3,300 | 3,328 |
Select Income REIT 4.50% 2025 | 2,540 | 2,526 |
Skandinaviska Enskilda 2.625% 2021 | 10,500 | 10,903 |
SMFG Preferred Capital USD 3 Ltd., junior subordinated 9.50% 20495 | 67,890 | 77,819 |
Société Générale, junior subordinated 5.922% (undated)5 | 45,073 | 46,087 |
Synovus Financial Corp. 7.875% 2019 | 23,506 | 26,297 |
Travelers Companies, Inc. 3.75% 2046 | 700 | 758 |
UBS Group AG 2.95% 20205 | 10,000 | 10,303 |
UBS Group AG 4.125% 20255 | 4,425 | 4,675 |
Unum Group 7.125% 2016 | 6,740 | 6,804 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Financials (continued) | Principal amount (000) | Value (000) |
US Bancorp. 3.70% 2024 | $10,000 | $11,095 |
US Bancorp. 2.375% 2026 | 6,000 | 6,019 |
WEA Finance LLC 2.70% 20195 | 8,525 | 8,736 |
WEA Finance LLC 3.25% 20205 | 10,195 | 10,640 |
WEA Finance LLC 3.75% 20245 | 4,400 | 4,653 |
Wells Fargo & Co. 1.286% 20197 | 9,311 | 9,346 |
Wells Fargo & Co. 2.55% 2020 | 4,350 | 4,484 |
Wells Fargo & Co. 2.10% 2021 | 19,900 | 20,016 |
Wells Fargo & Co. 2.50% 2021 | 15,000 | 15,406 |
Wells Fargo & Co. 4.60% 2021 | 45,000 | 50,326 |
Wells Fargo & Co. 4.90% 2045 | 10,000 | 11,369 |
Wells Fargo & Co., Series K, junior subordinated 7.98% (undated) | 86,566 | 92,175 |
2,398,120 | ||
Consumer discretionary 2.20% | ||
21st Century Fox America, Inc. 4.95% 2045 | 415 | 495 |
Amazon.com, Inc. 4.80% 2034 | 12,000 | 14,399 |
American Honda Finance Corp. 2.25% 2019 | 8,500 | 8,768 |
American Honda Finance Corp. 1.20% 2019 | 11,000 | 11,014 |
American Honda Finance Corp. 1.65% 2021 | 8,850 | 8,890 |
Bayerische Motoren Werke AG 2.00% 20215 | 2,000 | 2,036 |
Boyd Gaming Corp. 9.00% 2020 | 33,000 | 34,768 |
Boyd Gaming Corp. 6.875% 2023 | 16,125 | 17,334 |
Burger King Corp. 4.625% 20225 | 9,000 | 9,293 |
Burger King Corp. 6.00% 20225 | 26,025 | 27,359 |
Cablevision Systems Corp. 7.75% 2018 | 20,800 | 22,334 |
Cablevision Systems Corp. 8.00% 2020 | 20,000 | 20,900 |
Cablevision Systems Corp. 6.75% 2021 | 21,499 | 22,896 |
Carnival Corp. 3.95% 2020 | 11,290 | 12,232 |
CBS Corp. 1.95% 2017 | 5,000 | 5,035 |
CBS Outdoor Americas Inc. 5.25% 20221 | 29,500 | 30,569 |
CBS Outdoor Americas Inc. 5.625% 20241 | 3,396 | 3,596 |
CCO Holdings LLC and CCO Holdings Capital Corp. 3.579% 20205 | 11,045 | 11,636 |
CCO Holdings LLC and CCO Holdings Capital Corp. 4.464% 20225 | 9,715 | 10,565 |
CCO Holdings LLC and CCO Holdings Capital Corp. 6.625% 2022 | 1,400 | 1,482 |
CCO Holdings LLC and CCO Holdings Capital Corp. 4.908% 20255 | 40,510 | 44,825 |
CCO Holdings LLC and CCO Holdings Capital Corp. 5.50% 20265 | 14,350 | 15,014 |
CCO Holdings LLC and CCO Holdings Capital Corp. 5.75% 20265 | 68,675 | 72,624 |
CCO Holdings LLC and CCO Holdings Capital Corp. 6.384% 20355 | 5,750 | 6,790 |
CCO Holdings LLC and CCO Holdings Capital Corp. 6.484% 20455 | 4,475 | 5,392 |
Cengage Learning Acquisitions, Inc., Term Loan B, 5.25% 20237,8,9 | 4,949 | 4,946 |
Cengage Learning Acquisitions, Inc. 9.50% 20245 | 3,375 | 3,548 |
Clear Channel Worldwide Holdings, Inc. 7.625% 2020 | 51,735 | 51,735 |
Comcast Corp. 2.35% 2027 | 5,220 | 5,243 |
Comcast Corp. 6.45% 2037 | 25,000 | 35,303 |
Comcast Corp. 4.75% 2044 | 4,855 | 5,893 |
Cox Communications, Inc. 5.875% 20165 | 25,000 | 25,370 |
Cumulus Media Holdings Inc. 7.75% 2019 | 34,160 | 14,518 |
Cumulus Media Inc., Term Loan B, 4.25% 20207,8,9 | 10,624 | 7,550 |
DaimlerChrysler North America Holding Corp. 2.625% 20165 | 2,000 | 2,004 |
DaimlerChrysler North America Holding Corp. 1.375% 20175 | 8,585 | 8,578 |
DaimlerChrysler North America Holding Corp. 1.50% 20195 | 11,000 | 11,004 |
DaimlerChrysler North America Holding Corp. 2.25% 20195 | 14,000 | 14,317 |
DaimlerChrysler North America Holding Corp. 2.25% 20205 | 10,660 | 10,904 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Consumer discretionary (continued) | Principal amount (000) | Value (000) |
DaimlerChrysler North America Holding Corp. 2.00% 20215 | $10,600 | $10,671 |
DaimlerChrysler North America Holding Corp. 3.25% 20245 | 770 | 815 |
DaimlerChrysler North America Holding Corp. 3.30% 20255 | 2,000 | 2,127 |
DaimlerChrysler North America Holding Corp. 8.50% 2031 | 2,000 | 3,338 |
Delta 2 (Formula One), Term Loan B, 7.75% 20227,8,9 | 18,825 | 18,558 |
DISH DBS Corp. 4.625% 2017 | 23,825 | 24,421 |
DISH DBS Corp. 4.25% 2018 | 15,450 | 15,894 |
DISH DBS Corp. 7.875% 2019 | 1,425 | 1,578 |
Family Tree Escrow LLC 5.25% 20205 | 4,025 | 4,206 |
Family Tree Escrow LLC 5.75% 20235 | 16,550 | 17,957 |
Federated Department Stores, Inc. 6.90% 2029 | 7,925 | 8,924 |
Ford Motor Credit Co. 8.00% 2016 | 1,500 | 1,538 |
Ford Motor Credit Co. 2.145% 2018 | 8,170 | 8,240 |
Ford Motor Credit Co. 2.375% 2018 | 10,905 | 11,038 |
Ford Motor Credit Co. 2.597% 2019 | 7,270 | 7,435 |
Ford Motor Credit Co. 2.943% 2019 | 9,000 | 9,255 |
Ford Motor Credit Co. 3.157% 2020 | 10,000 | 10,336 |
Ford Motor Credit Co. 3.219% 2022 | 16,000 | 16,624 |
Ford Motor Credit Co. 4.375% 2023 | 8,850 | 9,674 |
Ford Motor Credit Co. 3.664% 2024 | 7,000 | 7,317 |
Ford Motor Credit Co. 4.134% 2025 | 5,000 | 5,361 |
Ford Motor Credit Co. 4.389% 2026 | 2,000 | 2,204 |
GameStop Corp. 6.75% 20215 | 5,625 | 5,695 |
Gannett Co., Inc. 5.125% 2019 | 7,925 | 8,202 |
Gannett Co., Inc. 4.875% 20215 | 9,235 | 9,604 |
Gannett Co., Inc. 5.50% 20245 | 6,500 | 6,833 |
General Motors Co. 4.00% 2025 | 5,740 | 5,940 |
General Motors Co. 6.60% 2036 | 13,260 | 16,458 |
General Motors Co. 5.20% 2045 | 8,000 | 8,618 |
General Motors Co. 6.75% 2046 | 14,185 | 18,511 |
General Motors Financial Co. 6.75% 2018 | 2,760 | 3,001 |
General Motors Financial Co. 3.50% 2019 | 8,795 | 9,104 |
General Motors Financial Co. 3.70% 2020 | 2,725 | 2,828 |
General Motors Financial Co. 3.20% 2021 | 10,250 | 10,420 |
General Motors Financial Co. 4.375% 2021 | 21,275 | 22,826 |
General Motors Financial Co. 3.45% 2022 | 33,990 | 34,736 |
General Motors Financial Co. 5.25% 2026 | 5,295 | 5,925 |
Goodyear Tire & Rubber Co. 5.00% 2026 | 9,625 | 10,166 |
Hilton Worldwide Finance LLC 5.625% 2021 | 9,565 | 9,917 |
Hilton Worldwide, Term Loan B, 3.50% 20207,8,9 | 14,579 | 14,634 |
Home Depot, Inc. 5.95% 2041 | 12,500 | 17,756 |
Hyundai Capital America 2.00% 20195 | 5,070 | 5,107 |
Hyundai Capital America 2.60% 20205 | 3,250 | 3,323 |
Hyundai Capital America 3.00% 20205 | 2,000 | 2,080 |
Hyundai Capital America 2.45% 20215 | 14,000 | 14,238 |
iHeartCommunications, Inc. 10.625% 2023 | 10,020 | 7,690 |
International Game Technology 6.25% 20225 | 14,000 | 14,735 |
Limited Brands, Inc. 8.50% 2019 | 16,105 | 18,883 |
Limited Brands, Inc. 7.00% 2020 | 21,271 | 24,568 |
Limited Brands, Inc. 6.625% 2021 | 23,754 | 27,377 |
Limited Brands, Inc. 6.875% 2035 | 19,625 | 20,910 |
Lowe’s Companies, Inc. 2.50% 2026 | 3,115 | 3,199 |
McClatchy Co. 9.00% 2022 | 9,850 | 10,121 |
McDonald’s Corp. 2.75% 2020 | 625 | 655 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Consumer discretionary (continued) | Principal amount (000) | Value (000) |
McDonald’s Corp. 3.70% 2026 | $1,355 | $1,489 |
McDonald’s Corp. 4.875% 2045 | 2,165 | 2,600 |
McGraw-Hill Global Education Holdings, LLC, Term Loan B, 5.00% 20227,8,9 | 14,940 | 15,037 |
McGraw-Hill Global Education Holdings, LLC 7.875% 20245 | 2,825 | 2,973 |
Mediacom Broadband LLC and Mediacom Broadband Corp. 5.50% 2021 | 17,225 | 17,806 |
Mediacom LLC and Mediacom Capital Corp. 7.25% 2022 | 7,775 | 8,193 |
MGM Growth Properties LLC 5.625% 20245 | 7,350 | 7,890 |
MGM Resorts International 8.625% 2019 | 10,000 | 11,375 |
MGM Resorts International 6.75% 2020 | 7,350 | 8,159 |
MGM Resorts International 7.75% 2022 | 17,000 | 19,642 |
Michaels Stores, Inc. 5.875% 20205 | 14,125 | 14,708 |
Mohegan Tribal Gaming Authority 11.00% 20185,6 | 4,318 | 4,330 |
Myriad International Holdings 6.375% 20175 | 12,500 | 12,985 |
Myriad International Holdings 6.375% 2017 | 2,500 | 2,597 |
Myriad International Holdings 6.00% 20205 | 45,655 | 50,332 |
Myriad International Holdings 6.00% 2020 | 25,705 | 28,338 |
Myriad International Holdings 5.50% 2025 | 6,140 | 6,574 |
NBC Universal Enterprise, Inc. 1.365% 20185,7 | 8,625 | 8,678 |
NBC Universal Enterprise, Inc. 5.25% 20495 | 37,105 | 39,072 |
NCL Corp. Ltd. 5.25% 20195 | 8,050 | 8,271 |
Needle Merger Sub Corp. 8.125% 20195 | 33,920 | 33,284 |
Neiman Marcus Group LTD Inc. 8.00% 20215 | 49,730 | 42,400 |
Neiman Marcus Group LTD Inc. 8.75% 20215,6 | 14,555 | 11,571 |
Neiman Marcus, Term Loan B, 4.25% 20207,8,9 | 36,520 | 34,463 |
Newell Rubbermaid Inc. 2.60% 2019 | 6,450 | 6,638 |
Newell Rubbermaid Inc. 3.15% 2021 | 22,180 | 23,299 |
Newell Rubbermaid Inc. 3.85% 2023 | 11,335 | 12,135 |
Newell Rubbermaid Inc. 4.20% 2026 | 23,990 | 26,257 |
Newell Rubbermaid Inc. 5.50% 2046 | 50,690 | 63,150 |
PETCO Animal Supplies, Inc., Term Loan B-1, 5.00% 20237,8,9 | 6,666 | 6,705 |
PETsMART, Inc. 7.125% 20235 | 29,025 | 30,440 |
Playa Resorts Holding BV 8.00% 20205 | 24,490 | 25,010 |
Playa Resorts Holding BV, Term Loan B, 4.00% 20197,8,9 | 5,346 | 5,324 |
President & Fellows of Harvard College 3.619% 2037 | 10,000 | 11,183 |
RCI Banque 3.50% 20185 | 13,150 | 13,544 |
Sally Holdings LLC and Sally Capital Inc. 5.625% 2025 | 11,325 | 12,231 |
Schaeffler Finance BV 4.75% 20215 | 2,626 | 2,728 |
Schaeffler Finance BV 4.25% 20215 | 7,070 | 7,282 |
Schaeffler Holding Finance BV 7.625% 20185,6 | 2,186 | 2,238 |
Schaeffler Holding Finance BV 6.25% 20195,6 | 11,735 | 12,234 |
Seminole Tribe of Florida 6.535% 20205,9 | 7,580 | 7,618 |
Sotheby’s Holdings, Inc. 5.25% 20225 | 7,775 | 7,425 |
Standard Pacific Corp. 8.375% 2021 | 2,475 | 2,937 |
Starbucks Corp. 2.10% 2021 | 1,100 | 1,134 |
Starbucks Corp. 2.70% 2022 | 2,140 | 2,262 |
Starbucks Corp. 4.30% 2045 | 3,120 | 3,790 |
TEGNA Inc. 5.125% 2020 | 1,936 | 2,014 |
Tenneco Inc. 5.00% 2026 | 5,050 | 5,176 |
Thomson Reuters Corp. 1.30% 2017 | 1,510 | 1,511 |
Thomson Reuters Corp. 1.65% 2017 | 4,350 | 4,368 |
Thomson Reuters Corp. 4.30% 2023 | 1,285 | 1,416 |
Thomson Reuters Corp. 5.65% 2043 | 1,425 | 1,726 |
TI Automotive Ltd. 8.75% 20235 | 9,785 | 10,103 |
Time Warner Cable Inc. 6.75% 2018 | 18,630 | 20,438 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Consumer discretionary (continued) | Principal amount (000) | Value (000) |
Time Warner Cable Inc. 5.00% 2020 | $35,000 | $38,308 |
Time Warner Inc. 4.75% 2021 | 15,000 | 16,916 |
Time Warner Inc. 3.60% 2025 | 14,500 | 15,669 |
Toyota Motor Credit Corp. 1.45% 2018 | 2,000 | 2,011 |
Toyota Motor Credit Corp. 1.70% 2019 | 2,000 | 2,029 |
Toyota Motor Credit Corp. 2.15% 2020 | 15,000 | 15,404 |
Univision Communications Inc. 8.50% 20215 | 7,190 | 7,548 |
Univision Communications Inc. 6.75% 20225 | 6,530 | 7,003 |
Univision Communications Inc. 5.125% 20235 | 1,250 | 1,291 |
Univision Communications Inc. 5.125% 20255 | 1,305 | 1,347 |
Univision Communications Inc., Term Loan C3, 4.00% 20207,8,9 | 16,872 | 16,887 |
Virgin Media Secured Finance PLC 5.375% 20215,9 | 15,840 | 16,533 |
Volkswagen International Finance NV 2.375% 20175 | 14,500 | 14,597 |
Warner Music Group 6.00% 20215 | 15,146 | 15,809 |
Warner Music Group 5.625% 20225 | 11,887 | 12,348 |
Warner Music Group 6.75% 20225 | 8,000 | 8,440 |
Warner Music Group 5.00% 20235 | 3,250 | 3,307 |
WPP Finance 2010 3.75% 2024 | 2,000 | 2,144 |
Wynn Las Vegas, LLC and Wynn Capital Corp. 5.375% 2022 | 6,725 | 6,923 |
Wynn Las Vegas, LLC and Wynn Capital Corp. 4.25% 20235 | 8,225 | 7,886 |
Wynn Las Vegas, LLC and Wynn Capital Corp. 5.50% 20255 | 5,000 | 5,044 |
Wynn Macau, Ltd. 5.25% 20215 | 35,025 | 35,375 |
YUM! Brands, Inc. 5.00% 20245 | 9,945 | 10,417 |
YUM! Brands, Inc. 5.25% 20265 | 4,975 | 5,277 |
ZF Friedrichshafen AG 4.00% 20205 | 5,065 | 5,293 |
ZF Friedrichshafen AG 4.50% 20225 | 16,795 | 17,488 |
ZF Friedrichshafen AG 4.75% 20255 | 21,530 | 22,580 |
2,231,687 | ||
Energy 2.11% | ||
American Energy (Marcellus), Term Loan B, 5.25% 20207,8,9 | 30,600 | 15,491 |
American Energy (Marcellus), Term Loan A, 8.50% 20217,8,9 | 29,602 | 3,478 |
American Energy (Permian Basin), 7.119% 20195,7 | 10,000 | 5,925 |
American Energy (Permian Basin) 7.125% 20205 | 33,860 | 20,062 |
American Energy (Permian Basin) 7.375% 20215 | 11,835 | 7,012 |
Anadarko Petroleum Corp. 6.375% 2017 | 1,264 | 1,326 |
Anadarko Petroleum Corp. 5.55% 2026 | 15,605 | 17,073 |
Anadarko Petroleum Corp. 6.45% 2036 | 1,095 | 1,228 |
Anadarko Petroleum Corp. 6.60% 2046 | 4,320 | 4,998 |
APT Pipelines Ltd. 4.20% 20255 | 11,000 | 11,347 |
Ascent Resources Utica, LLC, 15.00% 20193,6,7,8,9 | 14,537 | 5,597 |
Baytex Energy Corp. 5.125% 20215 | 10,050 | 8,191 |
Baytex Energy Corp. 5.625% 20245 | 3,450 | 2,743 |
BG Energy Capital PLC 2.875% 20165 | 7,395 | 7,421 |
Blue Racer Midstream LLC / Blue Racer Finance Corp. 6.125% 20225 | 9,810 | 9,270 |
Boardwalk Pipeline Partners 3.375% 2023 | 3,000 | 2,796 |
Boardwalk Pipelines, LP 4.95% 2024 | 6,705 | 6,646 |
Canadian Natural Resources Ltd. 5.70% 2017 | 7,350 | 7,563 |
Canadian Natural Resources Ltd. 3.80% 2024 | 1,440 | 1,423 |
Canadian Natural Resources Ltd. 6.50% 2037 | 1,000 | 1,084 |
Cenovus Energy Inc. 3.00% 2022 | 5,970 | 5,614 |
Cenovus Energy Inc. 3.80% 2023 | 19,005 | 18,324 |
Cheniere Energy, Inc. 7.00% 20245 | 16,400 | 17,200 |
Chesapeake Energy Corp. 3.878% 20197 | 10,075 | 8,463 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Energy (continued) | Principal amount (000) | Value (000) |
Chesapeake Energy Corp. 4.875% 2022 | $13,025 | $8,531 |
Chevron Corp. 2.954% 2026 | 10,215 | 10,548 |
Concho Resources Inc. 5.50% 2023 | 7,000 | 6,948 |
ConocoPhillips 4.20% 2021 | 6,520 | 6,962 |
ConocoPhillips 4.95% 2026 | 4,025 | 4,490 |
ConocoPhillips 5.95% 2046 | 10,035 | 12,157 |
CONSOL Energy Inc. 5.875% 2022 | 42,650 | 39,131 |
DCP Midstream Operating LP 4.95% 2022 | 13,815 | 13,815 |
Denbury Resources Inc. 9.00% 20215 | 7,713 | 7,752 |
Devon Energy Corp. 2.25% 2018 | 3,600 | 3,602 |
Devon Energy Corp. 5.00% 2045 | 7,815 | 7,237 |
Diamond Offshore Drilling, Inc. 4.875% 2043 | 42,920 | 30,902 |
Ecopetrol SA 5.875% 2023 | 2,820 | 2,954 |
Ecopetrol SA 5.375% 2026 | 10,935 | 10,822 |
Ecopetrol SA 5.875% 2045 | 2,115 | 1,880 |
El Paso Pipeline Partners Operating Co., LLC 5.00% 2021 | 5,000 | 5,390 |
El Paso Pipeline Partners Operating Co., LLC 4.70% 2042 | 33,265 | 30,044 |
Enbridge Energy Partners, LP 9.875% 2019 | 10,500 | 12,258 |
Enbridge Energy Partners, LP 4.375% 2020 | 16,770 | 17,510 |
Enbridge Energy Partners, LP 5.875% 2025 | 23,370 | 25,762 |
Enbridge Energy Partners, LP 5.50% 2040 | 1,200 | 1,214 |
Enbridge Energy Partners, LP 7.375% 2045 | 36,315 | 44,286 |
Enbridge Energy Partners, LP, Series B, 6.50% 2018 | 5,225 | 5,541 |
Enbridge Energy Partners, LP, Series B, 7.50% 2038 | 6,000 | 7,340 |
Enbridge Inc. 5.60% 2017 | 20,067 | 20,565 |
Enbridge Inc. 4.00% 2023 | 25,525 | 25,650 |
Enbridge Inc. 3.50% 2024 | 515 | 496 |
Energy Transfer Partners, LP 4.15% 2020 | 5,000 | 5,196 |
Energy Transfer Partners, LP 7.50% 2020 | 9,250 | 10,013 |
Energy Transfer Partners, LP 5.875% 2024 | 11,800 | 11,895 |
Energy Transfer Partners, LP 4.75% 2026 | 9,350 | 9,539 |
Energy Transfer Partners, LP 5.50% 2027 | 15,480 | 15,122 |
Energy Transfer Partners, LP 6.125% 2045 | 7,325 | 7,672 |
EnLink Midstream Partners, LP 2.70% 2019 | 1,660 | 1,627 |
EnLink Midstream Partners, LP 4.40% 2024 | 7,310 | 7,134 |
EnLink Midstream Partners, LP 4.15% 2025 | 11,760 | 11,059 |
EnLink Midstream Partners, LP 5.05% 2045 | 9,810 | 7,922 |
Ensco PLC 5.20% 2025 | 11,300 | 7,698 |
Ensco PLC 5.75% 2044 | 20,970 | 12,294 |
Enterprise Products Operating LLC 5.20% 2020 | 3,910 | 4,422 |
Enterprise Products Operating LLC 2.85% 2021 | 4,805 | 4,974 |
Enterprise Products Operating LLC 3.95% 2027 | 2,255 | 2,382 |
Enterprise Products Operating LLC 4.90% 2046 | 1,040 | 1,108 |
EOG Resources, Inc. 4.15% 2026 | 3,830 | 4,204 |
EP Energy Corp. 9.375% 2020 | 5,750 | 3,306 |
EP Energy Corp. 6.375% 2023 | 8,200 | 4,141 |
Extraction Oil & Gas Holdings LLC 7.875% 20215 | 2,900 | 2,907 |
Genesis Energy, LP 6.75% 2022 | 13,050 | 13,213 |
Halliburton Co. 3.80% 2025 | 10,395 | 10,754 |
Halliburton Co. 4.85% 2035 | 1,115 | 1,219 |
Halliburton Co. 5.00% 2045 | 1,860 | 2,038 |
Jupiter Resources Inc. 8.50% 20225 | 37,250 | 28,124 |
Kinder Morgan Energy Partners, LP 2.65% 2019 | 1,890 | 1,912 |
Kinder Morgan Energy Partners, LP 9.00% 2019 | 1,660 | 1,904 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Energy (continued) | Principal amount (000) | Value (000) |
Kinder Morgan Energy Partners, LP 4.15% 2022 | $12,145 | $12,687 |
Kinder Morgan Energy Partners, LP 3.45% 2023 | 7,500 | 7,445 |
Kinder Morgan Energy Partners, LP 3.50% 2023 | 4,850 | 4,835 |
Kinder Morgan Energy Partners, LP 4.25% 2024 | 8,265 | 8,474 |
Kinder Morgan Energy Partners, LP 6.95% 2038 | 460 | 525 |
Kinder Morgan Energy Partners, LP 5.00% 2043 | 20,000 | 19,086 |
Kinder Morgan Energy Partners, LP 5.40% 2044 | 9,660 | 9,312 |
Kinder Morgan Energy Partners, LP 5.50% 2044 | 7,206 | 7,403 |
Kinder Morgan, Inc. 3.05% 2019 | 8,070 | 8,282 |
Kinder Morgan, Inc. 4.30% 2025 | 23,890 | 24,788 |
Kinder Morgan, Inc. 5.55% 2045 | 6,160 | 6,202 |
Matador Resources Co. 6.875% 2023 | 1,400 | 1,446 |
NGL Energy Partners LP 5.125% 2019 | 8,390 | 7,782 |
NGL Energy Partners LP 6.875% 2021 | 20,105 | 18,220 |
NGPL PipeCo LLC 7.119% 20175 | 58,790 | 61,730 |
NGPL PipeCo LLC 9.625% 20195 | 66,700 | 70,035 |
NGPL PipeCo LLC, Term Loan B, 6.75% 20177,8,9 | 126 | 126 |
Noble Corp. PLC 5.00% 2018 | 7,555 | 7,297 |
Noble Corp. PLC 6.95% 2025 | 23,605 | 19,297 |
Noble Corp. PLC 7.95% 2045 | 25,605 | 18,820 |
Oasis Petroleum Inc. 6.875% 2022 | 3,650 | 3,203 |
Odebrecht Drilling Norbe VIII/IX Ltd 6.35% 20215,9 | 1,395 | 382 |
Odebrecht Offshore Drilling Finance Ltd. 6.75% 20225,9 | 4,220 | 717 |
PDC Energy Inc. 7.75% 2022 | 44,830 | 46,511 |
Peabody Energy Corp., Term Loan, 10.00% 20177,8,9 | 7,000 | 7,254 |
Peabody Energy Corp. 6.00% 201810 | 123,645 | 19,783 |
Peabody Energy Corp. 6.50% 202010 | 4,500 | 720 |
Peabody Energy Corp. 6.25% 202110 | 32,150 | 5,144 |
Petrobras Global Finance Co. 6.85% 2115 | 2,775 | 2,133 |
Petrobras International Finance Co. 5.75% 2020 | 6,535 | 6,539 |
Petrobras International Finance Co. 5.375% 2021 | 28,655 | 27,258 |
Petróleos Mexicanos 3.50% 2018 | 14,280 | 14,537 |
Petróleos Mexicanos 5.50% 20195 | 13,925 | 14,761 |
Petróleos Mexicanos 6.375% 20215 | 5,935 | 6,527 |
Petróleos Mexicanos 3.50% 2023 | 11,000 | 10,450 |
Petróleos Mexicanos 4.50% 2026 | 8,775 | 8,507 |
Petróleos Mexicanos 6.875% 20265 | 8,550 | 9,619 |
Petróleos Mexicanos 5.625% 2046 | 7,290 | 6,706 |
Phillips 66 Partners LP 3.605% 2025 | 1,640 | 1,609 |
Phillips 66 Partners LP 4.68% 2045 | 245 | 235 |
Pioneer Natural Resources Co. 3.45% 2021 | 7,015 | 7,247 |
QGOG Atlantic/Alaskan Rigs Ltd. 5.25% 20195,9 | 8,562 | 6,978 |
Range Resources Corp. 4.875% 2025 | 20,650 | 19,721 |
Ras Laffan Liquefied Natural Gas II 5.298% 20205,9 | 14,858 | 16,062 |
Ras Laffan Liquefied Natural Gas III 6.75% 2019 | 4,000 | 4,593 |
Ras Laffan Liquefied Natural Gas III 6.75% 20195 | 1,000 | 1,148 |
Ras Laffan Liquefied Natural Gas III 5.838% 20275,9 | 10,325 | 11,680 |
Regency Energy Partners LP and Regency Energy Finance Corp. 6.50% 2021 | 14,855 | 15,353 |
Regency Energy Partners LP and Regency Energy Finance Corp. 5.00% 2022 | 35 | 37 |
Regency Energy Partners LP and Regency Energy Finance Corp. 5.50% 2023 | 10,875 | 11,281 |
Rice Energy Inc. 6.25% 2022 | 16,125 | 15,803 |
Rice Energy Inc. 7.25% 2023 | 1,350 | 1,360 |
Sabine Pass Liquefaction, LLC 5.625% 2021 | 40,425 | 41,941 |
Sabine Pass Liquefaction, LLC 6.25% 2022 | 7,000 | 7,359 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Energy (continued) | Principal amount (000) | Value (000) |
Sabine Pass Liquefaction, LLC 5.625% 2023 | $5,000 | $5,125 |
Sabine Pass Liquefaction, LLC 5.75% 2024 | 8,860 | 9,126 |
Sabine Pass Liquefaction, LLC 5.625% 2025 | 23,905 | 24,495 |
Schlumberger BV 3.00% 20205 | 6,645 | 6,978 |
Schlumberger BV 3.625% 20225 | 7,065 | 7,571 |
Schlumberger BV 4.00% 20255 | 11,385 | 12,414 |
Seven Generations Energy Ltd. 6.75% 20235 | 15,485 | 15,717 |
Shell International Finance BV 1.875% 2021 | 20,205 | 20,337 |
Shell International Finance BV 2.875% 2026 | 4,635 | 4,734 |
Shell International Finance BV 4.00% 2046 | 2,900 | 2,993 |
SM Energy Co. 5.625% 2025 | 21,975 | 18,349 |
Southwestern Energy Co. 4.10% 2022 | 25,305 | 22,521 |
Southwestern Energy Co. 6.70% 2025 | 44,150 | 43,046 |
Spectra Energy Partners, LP 4.75% 2024 | 3,250 | 3,640 |
Statoil ASA 3.125% 2017 | 10,000 | 10,211 |
Statoil ASA 2.75% 2021 | 3,085 | 3,214 |
Statoil ASA 3.25% 2024 | 850 | 914 |
Statoil ASA 4.25% 2041 | 3,000 | 3,300 |
StatoilHydro ASA 1.80% 2016 | 10,000 | 10,029 |
Sunoco LP 6.25% 20215 | 33,230 | 33,978 |
Targa Resources Corp. 4.125% 2019 | 14,955 | 14,974 |
Targa Resources Partners LP 6.75% 20245 | 10,705 | 11,214 |
TC PipeLines, LP 4.375% 2025 | 11,815 | 11,850 |
Teekay Corp. 8.50% 20205 | 38,825 | 33,584 |
Teekay Corp. 8.50% 2020 | 32,741 | 28,321 |
Tesoro Logistics LP 5.50% 2019 | 15,700 | 16,760 |
Tesoro Logistics LP 6.125% 2021 | 1,080 | 1,127 |
Tesoro Logistics LP 6.25% 2022 | 7,900 | 8,256 |
Tesoro Logistics LP 6.375% 2024 | 1,220 | 1,292 |
TransCanada PipeLines Ltd. 7.625% 2039 | 10,750 | 15,700 |
TransCanada PipeLines Ltd., junior subordinated 6.35% 2067 | 46,150 | 34,849 |
TransCanada PipeLines Ltd., junior subordinated 5.625% 2075 | 2,820 | 2,735 |
Transocean Inc. 6.80% 2016 | 18,395 | 18,510 |
Transocean Inc. 8.125% 2021 | 20,000 | 16,800 |
Transocean Inc. 9.00% 20235 | 7,050 | 6,627 |
Weatherford International PLC 7.75% 2021 | 9,700 | 9,200 |
Weatherford International PLC 4.50% 2022 | 32,155 | 26,689 |
Weatherford International PLC 8.25% 2023 | 33,250 | 31,089 |
Weatherford International PLC 7.00% 2038 | 39,545 | 29,461 |
Weatherford International PLC 6.75% 2040 | 69,655 | 50,500 |
Weatherford International PLC 5.95% 2042 | 5,000 | 3,475 |
Western Gas Partners LP 2.60% 2018 | 1,150 | 1,148 |
Western Gas Partners LP 3.95% 2025 | 3,045 | 2,993 |
Western Gas Partners LP 4.65% 2026 | 2,275 | 2,296 |
Williams Companies, Inc. 3.70% 2023 | 19,130 | 17,552 |
Williams Partners LP 5.25% 2020 | 1,960 | 2,067 |
Williams Partners LP 4.00% 2021 | 2,900 | 2,945 |
Williams Partners LP 3.60% 2022 | 4,920 | 4,798 |
Williams Partners LP 4.50% 2023 | 2,000 | 1,997 |
Williams Partners LP 4.30% 2024 | 7,670 | 7,581 |
Williams Partners LP 3.90% 2025 | 14,300 | 13,574 |
Williams Partners LP 4.00% 2025 | 14,725 | 14,072 |
Williams Partners LP 4.90% 2045 | 3,260 | 2,851 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Energy (continued) | Principal amount (000) | Value (000) |
Williams Partners LP 5.10% 2045 | $6,965 | $6,286 |
Woodside Finance Ltd. 4.60% 20215 | 18,935 | 20,307 |
2,146,963 | ||
Health care 1.95% | ||
AbbVie Inc. 2.30% 2021 | 14,335 | 14,613 |
AbbVie Inc. 2.90% 2022 | 7,200 | 7,460 |
AbbVie Inc. 3.20% 2022 | 2,675 | 2,813 |
AbbVie Inc. 2.85% 2023 | 4,700 | 4,807 |
AbbVie Inc. 3.60% 2025 | 10,000 | 10,628 |
AbbVie Inc. 3.20% 2026 | 15,275 | 15,705 |
AbbVie Inc. 4.50% 2035 | 5,705 | 6,220 |
AbbVie Inc. 4.30% 2036 | 1,080 | 1,135 |
AbbVie Inc. 4.45% 2046 | 18,440 | 19,712 |
Actavis Funding SCS 2.35% 2018 | 11,135 | 11,303 |
Actavis Funding SCS 3.00% 2020 | 16,590 | 17,279 |
Actavis Funding SCS 3.45% 2022 | 20,180 | 21,261 |
Actavis Funding SCS 3.80% 2025 | 35,940 | 38,276 |
Actavis Funding SCS 4.55% 2035 | 18,570 | 20,067 |
Actavis Funding SCS 4.75% 2045 | 20,990 | 23,366 |
Aetna Inc. 1.70% 2018 | 18,275 | 18,442 |
Aetna Inc. 1.90% 2019 | 21,000 | 21,293 |
Aetna Inc. 2.40% 2021 | 31,295 | 31,951 |
Aetna Inc. 2.80% 2023 | 1,575 | 1,624 |
Aetna Inc. 3.20% 2026 | 12,415 | 12,759 |
Aetna Inc. 4.25% 2036 | 7,000 | 7,277 |
Aetna Inc. 4.375% 2046 | 3,095 | 3,221 |
Amgen Inc. 2.70% 2022 | 5,100 | 5,292 |
AstraZeneca PLC 3.375% 2025 | 28,505 | 30,620 |
Baxalta Inc. 2.875% 2020 | 14,410 | 14,622 |
Baxalta Inc. 4.00% 2025 | 10,140 | 10,813 |
Bayer AG 2.375% 20195 | 4,810 | 4,917 |
Becton, Dickinson and Co. 2.675% 2019 | 3,600 | 3,737 |
Becton, Dickinson and Co. 4.685% 2044 | 3,800 | 4,421 |
Boston Scientific Corp. 2.85% 2020 | 7,875 | 8,154 |
Boston Scientific Corp. 6.00% 2020 | 5,375 | 6,120 |
Boston Scientific Corp. 3.375% 2022 | 14,300 | 14,979 |
Boston Scientific Corp. 3.85% 2025 | 11,200 | 12,062 |
Catholic Health Initiatives, Series 2012, 1.60% 2017 | 1,000 | 1,001 |
Celgene Corp. 3.625% 2024 | 7,000 | 7,450 |
Celgene Corp. 4.625% 2044 | 2,595 | 2,813 |
Celgene Corp. 5.00% 2045 | 9,185 | 10,740 |
Centene Corp. 5.75% 2017 | 10,060 | 10,400 |
Centene Corp. 5.625% 2021 | 31,317 | 33,157 |
Centene Corp. 4.75% 2022 | 47,963 | 49,642 |
Centene Corp. 6.125% 2024 | 8,012 | 8,628 |
Concordia Healthcare Corp. 9.50% 20225 | 12,485 | 11,455 |
Concordia Healthcare Corp. 7.00% 20235 | 4,030 | 3,345 |
ConvaTec Finance International SA 8.25% 20195,6 | 14,795 | 14,873 |
DaVita HealthCare Partners Inc. 5.125% 2024 | 1,775 | 1,836 |
DaVita HealthCare Partners Inc. 5.00% 2025 | 10,900 | 11,050 |
DENTSPLY International Inc. 2.75% 2016 | 5,620 | 5,623 |
DJO Finance LLC 10.75% 20205 | 13,253 | 11,066 |
DJO Finco Inc. 8.125% 20215 | 48,860 | 44,707 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Health care (continued) | Principal amount (000) | Value (000) |
EMD Finance LLC 1.70% 20185 | $18,900 | $18,974 |
EMD Finance LLC 2.40% 20205 | 22,050 | 22,426 |
EMD Finance LLC 2.95% 20225 | 18,600 | 19,216 |
EMD Finance LLC 3.25% 20255 | 29,900 | 31,119 |
Endo Finance LLC & Endo Finco Inc. 6.00% 20235 | 17,135 | 15,025 |
Endo Pharmaceuticals Holdings Inc. 5.75% 20225 | 6,700 | 6,064 |
Gilead Sciences, Inc. 3.05% 2016 | 10,265 | 10,344 |
HCA Inc. 3.75% 2019 | 16,657 | 17,323 |
HCA Inc. 6.50% 2020 | 24,800 | 27,373 |
HCA Inc. 4.75% 2023 | 580 | 606 |
HCA Inc. 5.00% 2024 | 2,080 | 2,189 |
HCA Inc. 5.375% 2025 | 50,000 | 52,156 |
HCA Inc. 5.25% 2026 | 13,750 | 14,609 |
Healthsouth Corp. 5.75% 2024 | 4,575 | 4,769 |
Healthsouth Corp. 5.75% 2025 | 11,892 | 12,339 |
Hologic, Inc. 5.25% 20225 | 5,920 | 6,297 |
Humana Inc. 3.85% 2024 | 4,400 | 4,735 |
Humana Inc. 4.95% 2044 | 12,800 | 14,540 |
inVentiv Health Inc. 9.00% 20185 | 39,285 | 40,660 |
inVentiv Health Inc. 10.00% 20185,6 | 71,002 | 72,467 |
inVentiv Health Inc. 10.00% 2018 | 22,533 | 22,420 |
inVentiv Health Inc. 10.00% 2018 | 13,010 | 12,961 |
inVentiv Health Inc., Term Loan B4, 7.75% 20187,8,9 | 18,315 | 18,389 |
Kindred Healthcare, Inc. 8.00% 2020 | 10,825 | 11,123 |
Kindred Healthcare, Inc. 8.75% 2023 | 8,865 | 8,965 |
Kinetic Concepts, Inc. 10.50% 2018 | 124,387 | 127,652 |
Kinetic Concepts, Inc. 12.50% 2019 | 40,540 | 39,831 |
Kinetic Concepts, Inc. 7.875% 20215 | 2,925 | 3,161 |
Laboratory Corporation of America Holdings 3.20% 2022 | 5,335 | 5,533 |
Laboratory Corporation of America Holdings 4.70% 2045 | 885 | 976 |
Mallinckrodt PLC 4.875% 20205 | 19,140 | 19,284 |
Mallinckrodt PLC 5.75% 20225 | 9,843 | 9,671 |
Mallinckrodt PLC 5.625% 20235 | 17,415 | 16,805 |
McKesson Corp. 2.284% 2019 | 5,875 | 6,008 |
McKesson Corp. 3.796% 2024 | 1,505 | 1,643 |
MEDNAX, Inc. 5.25% 20235 | 2,110 | 2,205 |
Medtronic, Inc. 2.50% 2020 | 9,480 | 9,877 |
Medtronic, Inc. 4.375% 2035 | 3,903 | 4,507 |
Medtronic, Inc. 4.625% 2045 | 11,035 | 13,546 |
Merck & Co., Inc. 1.10% 2018 | 6,710 | 6,739 |
Molina Healthcare, Inc. 5.375% 20225 | 43,428 | 44,514 |
Ortho-Clinical Diagnostics Inc. 6.625% 20225 | 7,345 | 6,280 |
Ortho-Clinical Diagnostics Inc., Term Loan B, 4.75% 20217,8,9 | 9,975 | 9,688 |
Pfizer Inc. 7.20% 2039 | 1,353 | 2,098 |
Quintiles Transnational Corp. 4.875% 20235 | 32,825 | 33,732 |
Roche Holdings, Inc. 2.875% 20215 | 15,000 | 15,959 |
Rotech Healthcare Inc., Term Loan, 13.00% 20201,3,6,7,8,9 | 23,163 | 20,378 |
Rotech Healthcare Inc., Term Loan A, 5.50% 20181,3,7,8,9 | 11,767 | 11,708 |
Rotech Healthcare Inc., Term Loan B, 10.00% 20191,3,7,8,9 | 9,200 | 9,154 |
St. Jude Medical, Inc. 2.80% 2020 | 9,100 | 9,448 |
Tenet Healthcare Corp. 4.375% 2021 | 10,720 | 10,747 |
Tenet Healthcare Corp. 8.125% 2022 | 1,684 | 1,747 |
Tenet Healthcare Corp. 6.75% 2023 | 11,236 | 10,857 |
Tenet Healthcare Corp., First Lien, 6.25% 2018 | 2,500 | 2,666 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Health care (continued) | Principal amount (000) | Value (000) |
Tenet Healthcare Corp., First Lien, 4.75% 2020 | $12,190 | $12,449 |
Tenet Healthcare Corp., First Lien, 6.00% 2020 | 33,055 | 35,121 |
Tenet Healthcare Corp., First Lien, 4.50% 2021 | 20,140 | 20,341 |
Teva Pharmaceutical Finance Company BV 1.40% 2018 | 15,425 | 15,477 |
Teva Pharmaceutical Finance Company BV 1.70% 2019 | 15,730 | 15,838 |
Teva Pharmaceutical Finance Company BV 2.20% 2021 | 18,990 | 19,123 |
Teva Pharmaceutical Finance Company BV 2.80% 2023 | 9,460 | 9,643 |
Teva Pharmaceutical Finance Company BV 3.15% 2026 | 15,400 | 15,771 |
Teva Pharmaceutical Finance Company BV 4.10% 2046 | 8,195 | 8,495 |
Thermo Fisher Scientific Inc. 2.40% 2019 | 6,000 | 6,139 |
Thermo Fisher Scientific Inc. 4.15% 2024 | 4,000 | 4,404 |
Thermo Fisher Scientific Inc. 5.30% 2044 | 365 | 447 |
UnitedHealth Group Inc. 1.40% 2017 | 6,500 | 6,544 |
UnitedHealth Group Inc. 6.00% 2017 | 12,430 | 12,963 |
UnitedHealth Group Inc. 3.35% 2022 | 7,030 | 7,569 |
UnitedHealth Group Inc. 3.75% 2025 | 10,710 | 11,934 |
UnitedHealth Group Inc. 4.625% 2035 | 1,080 | 1,287 |
UnitedHealth Group Inc. 4.75% 2045 | 1,800 | 2,252 |
VPI Escrow Corp. 6.75% 20185 | 38,060 | 37,489 |
VPI Escrow Corp. 6.375% 20205 | 49,563 | 44,978 |
VPI Escrow Corp. 7.50% 20215 | 3,575 | 3,343 |
VRX Escrow Corp. 5.375% 20205 | 33,820 | 30,332 |
VRX Escrow Corp. 5.875% 20235 | 14,545 | 12,181 |
VRX Escrow Corp. 6.125% 20255 | 17,320 | 14,419 |
WellPoint, Inc. 2.30% 2018 | 1,370 | 1,391 |
WellPoint, Inc. 2.25% 2019 | 12,500 | 12,746 |
Zimmer Holdings, Inc. 2.00% 2018 | 4,640 | 4,670 |
Zimmer Holdings, Inc. 2.70% 2020 | 13,770 | 14,078 |
Zimmer Holdings, Inc. 3.15% 2022 | 18,860 | 19,617 |
1,979,279 | ||
Telecommunication services 1.54% | ||
Altice Financing SA 6.625% 20235 | 22,550 | 22,677 |
Altice Finco SA 6.50% 20225 | 5,500 | 5,686 |
Altice Finco SA, First Lien, 7.75% 20225 | 12,550 | 12,778 |
Altice NV 5.50% 20265 | 3,775 | 3,917 |
AT&T Inc. 2.40% 2016 | 9,000 | 9,005 |
AT&T Inc. 2.80% 2021 | 8,685 | 8,993 |
AT&T Inc. 4.125% 2026 | 8,560 | 9,343 |
AT&T Inc. 8.25% 2031 | 3,804 | 5,648 |
AT&T Inc. 4.50% 2035 | 8,150 | 8,636 |
AT&T Inc. 4.75% 2046 | 6,250 | 6,650 |
CenturyLink, Inc. 7.50% 2024 | 13,425 | 14,365 |
CenturyLink, Inc., Series T, 5.80% 2022 | 1,524 | 1,564 |
Cequel Communications Holdings I, LLC and Cequel Capital Corp. 6.375% 20205 | 50,899 | 52,680 |
Clearwire Communications and Clearwire Finance, Inc. 14.75% 20165 | 6,125 | 6,393 |
Deutsche Telekom International Finance BV 9.25% 2032 | 8,420 | 13,780 |
France Télécom 2.75% 2016 | 9,000 | 9,019 |
France Télécom 4.125% 2021 | 15,000 | 16,635 |
France Télécom 9.00% 2031 | 5,000 | 7,959 |
Frontier Communications Corp. 8.125% 2018 | 1,217 | 1,343 |
Frontier Communications Corp. 8.875% 2020 | 6,450 | 6,956 |
Frontier Communications Corp. 9.25% 2021 | 22,395 | 24,455 |
Frontier Communications Corp. 8.75% 2022 | 1,000 | 1,040 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Telecommunication services (continued) | Principal amount (000) | Value (000) |
Frontier Communications Corp. 10.50% 2022 | $29,450 | $31,843 |
Frontier Communications Corp. 7.125% 2023 | 6,225 | 5,805 |
Frontier Communications Corp. 7.625% 2024 | 20,000 | 18,550 |
Frontier Communications Corp. 11.00% 2025 | 96,301 | 103,283 |
Inmarsat PLC 4.875% 20225 | 16,775 | 15,681 |
Intelsat Jackson Holding Co. 7.25% 2019 | 27,750 | 20,882 |
Intelsat Jackson Holding Co. 7.25% 2020 | 23,004 | 16,850 |
Ligado Networks, Term Loan, 9.75% 20206,7,8,9 | 140,809 | 125,124 |
MetroPCS Wireless, Inc. 6.25% 2021 | 52,775 | 55,414 |
MetroPCS Wireless, Inc. 6.625% 2023 | 46,600 | 50,191 |
Numericable Group SA 6.00% 20225 | 12,850 | 12,609 |
Numericable Group SA 7.375% 20265 | 4,375 | 4,375 |
Orange SA 5.50% 2044 | 3,000 | 3,879 |
Qwest Capital Funding, Inc. 7.625% 2021 | 3,900 | 4,089 |
SoftBank Corp. 4.50% 20205 | 53,420 | 55,557 |
Sprint Capital Corp. 6.90% 2019 | 5,025 | 4,994 |
Sprint Nextel Corp. 9.00% 20185 | 5,000 | 5,438 |
Sprint Nextel Corp. 7.00% 2020 | 43,350 | 41,391 |
Sprint Nextel Corp. 7.25% 2021 | 36,155 | 33,918 |
Sprint Nextel Corp. 11.50% 2021 | 11,130 | 12,299 |
Sprint Nextel Corp. 7.875% 2023 | 33,475 | 30,734 |
Sprint Nextel Corp. 7.125% 2024 | 14,000 | 12,530 |
Telefónica Emisiones, SAU 3.192% 2018 | 8,500 | 8,726 |
Telefónica Emisiones, SAU 5.134% 2020 | 7,950 | 8,833 |
T-Mobile US, Inc. 6.542% 2020 | 36,700 | 37,939 |
T-Mobile US, Inc. 6.731% 2022 | 3,695 | 3,884 |
T-Mobile US, Inc. 6.375% 2025 | 6,650 | 7,140 |
T-Mobile US, Inc. 6.50% 2026 | 61,150 | 66,455 |
Trilogy International Partners, LLC 13.375% 20195 | 61,800 | 62,418 |
Verizon Communications Inc. 2.183% 20167 | 34,729 | 34,797 |
Verizon Communications Inc. 1.375% 2019 | 7,000 | 7,009 |
Verizon Communications Inc. 1.75% 2021 | 4,280 | 4,286 |
Verizon Communications Inc. 3.00% 2021 | 2,516 | 2,664 |
Verizon Communications Inc. 2.625% 2026 | 8,320 | 8,336 |
Verizon Communications Inc. 4.272% 2036 | 62,006 | 65,078 |
Verizon Communications Inc. 6.00% 2041 | 28,000 | 35,724 |
Verizon Communications Inc. 4.125% 2046 | 35,646 | 36,192 |
Verizon Communications Inc. 4.522% 2048 | 78,900 | 84,442 |
Wind Acquisition SA 4.75% 20205 | 71,435 | 71,480 |
Wind Acquisition SA 7.375% 20215 | 67,200 | 67,032 |
Windstream Holdings, Inc. 7.75% 2021 | 28,150 | 26,883 |
Zayo Group Holdings, Inc. 6.00% 2023 | 5,050 | 5,277 |
Zayo Group Holdings, Inc. 6.375% 2025 | 575 | 604 |
1,560,157 | ||
Industrials 1.26% | ||
ABB Finance (USA) Inc. 1.625% 2017 | 1,000 | 1,005 |
ABB Finance (USA) Inc. 2.875% 2022 | 1,000 | 1,050 |
ABC Supply Co., Inc. 5.625% 20215 | 325 | 337 |
ADS Waste Escrow 8.25% 2020 | 4,675 | 4,862 |
AECOM Technology Corp. 5.875% 2024 | 7,400 | 7,973 |
AerCap Holdings NV 2.75% 2017 | 150 | 151 |
AerCap Holdings NV 3.75% 2019 | 3,400 | 3,528 |
American Airlines, Inc., 5.50% 20195 | 2,250 | 2,306 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Industrials (continued) | Principal amount (000) | Value (000) |
American Airlines, Inc., Series 2013-2, Class A, 4.95% 20249 | $7,472 | $8,200 |
American Builders & Contractors Supply Co. Inc. 5.75% 20235 | 1,400 | 1,477 |
ARAMARK Corp. 5.125% 2024 | 14,525 | 15,033 |
ARAMARK Corp. 5.125% 20245 | 5,000 | 5,175 |
Associated Materials, LLC and AMH New Finance, Inc. 9.125% 2017 | 77,855 | 73,184 |
Atlas Copco AB 5.60% 20175 | 5,500 | 5,626 |
Builders Firstsource 7.625% 20215 | 32,522 | 34,490 |
Builders Firstsource 10.75% 20235 | 5,135 | 5,726 |
Canadian National Railway Co. 3.20% 2046 | 2,305 | 2,306 |
CEVA Group PLC 7.00% 20211,5 | 2,250 | 1,896 |
CEVA Group PLC 9.00% 20211,5 | 1,050 | 830 |
CEVA Group PLC, Apollo Global Securities LLC LOC, 5.969% 20211,7,8,9 | 4,870 | 4,060 |
CEVA Logistics U.S. Holdings Inc., Term Loan B, 6.50% 20211,7,8,9 | 6,924 | 5,773 |
CEVA Logistics Holdings BV, Term Loan, 6.50% 20211,7,8,9 | 5,020 | 4,186 |
CEVA Logistics Canada, ULC, Term Loan, 6.50% 20211,7,8,9 | 866 | 722 |
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20189 | 429 | 443 |
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 20189 | 15 | 15 |
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20199 | 1,268 | 1,307 |
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20199 | 478 | 488 |
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20199 | 65 | 70 |
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20209 | 8,890 | 9,441 |
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20209 | 50 | 51 |
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20219 | 289 | 310 |
Continental Airlines, Inc., Series 1999-2, Class B, 7.566% 20219 | 60 | 60 |
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20229 | 1,240 | 1,320 |
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20229 | 6,831 | 7,194 |
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20229 | 1,627 | 1,777 |
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20229 | 2,749 | 3,078 |
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20229 | 6 | 6 |
Corporate Risk Holdings LLC 9.50% 20191,5 | 45,000 | 42,637 |
Corporate Risk Holdings LLC 13.50% 20201,3,5,6 | 14,211 | 14,629 |
DAE Aviation Holdings, Inc. 10.00% 20235 | 39,390 | 40,966 |
Deck Chassis Acquisition Inc. 10.00% 20235 | 24,975 | 26,286 |
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20249 | 4,413 | 5,053 |
ERAC USA Finance Co. 5.25% 20205 | 5,000 | 5,651 |
Euramax International, Inc. 12.00% 20205 | 23,375 | 23,726 |
European Aeronautic Defence and Space Company 2.70% 20235 | 885 | 923 |
Fortive Corp. 2.35% 20215 | 2,825 | 2,889 |
Gardner Denver, Inc. 6.875% 20215 | 9,425 | 8,789 |
Gardner Denver, Inc., Term Loan B, 4.25% 20207,8,9 | 25,660 | 24,465 |
Gates Global LLC 6.00% 20225 | 32,125 | 29,394 |
Gates Global LLC, Term Loan B, 4.25% 20217,8,9 | 6,180 | 6,069 |
General Electric Capital Corp. 2.342% 2020 | 13,195 | 13,696 |
General Electric Capital Corp., Series A, 6.00% 2019 | 2,577 | 2,945 |
General Electric Co. 2.70% 2022 | 7,750 | 8,174 |
General Electric Co. 4.125% 2042 | 11,000 | 12,427 |
General Electric Co. 5.00% (undated) | 197,849 | 213,059 |
Hardwoods Acquisition Inc 7.50% 20215 | 16,935 | 12,955 |
HD Supply, Inc. 7.50% 2020 | 8,475 | 8,867 |
HD Supply, Inc. 5.25% 20215 | 14,350 | 15,247 |
HDTFS Inc. 6.75% 2019 | 15,725 | 16,039 |
HDTFS Inc. 5.875% 2020 | 15,250 | 15,784 |
KLX Inc. 5.875% 20225 | 11,075 | 11,269 |
LMI Aerospace Inc. 7.375% 2019 | 15,600 | 15,951 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Industrials (continued) | Principal amount (000) | Value (000) |
Lockheed Martin Corp. 1.85% 2018 | $2,535 | $2,577 |
Lockheed Martin Corp. 2.50% 2020 | 6,250 | 6,502 |
Lockheed Martin Corp. 3.10% 2023 | 695 | 740 |
Lockheed Martin Corp. 3.55% 2026 | 3,480 | 3,833 |
Lockheed Martin Corp. 4.50% 2036 | 560 | 656 |
Lockheed Martin Corp. 4.70% 2046 | 9,560 | 11,673 |
Navios Maritime Acquisition Corp. and Navios Acquisition Finance (US) Inc. 8.125% 20215 | 29,500 | 22,862 |
Navios Maritime Holdings Inc. 7.375% 20225 | 27,165 | 13,345 |
Navios Maritime Holdings Inc. and Navios Maritime Finance II (US) Inc. 8.125% 2019 | 10,510 | 5,097 |
Nielsen Finance LLC and Nielsen Finance Co. 4.50% 2020 | 11,250 | 11,573 |
Nielsen Finance LLC and Nielsen Finance Co. 5.50% 20215 | 13,000 | 13,536 |
Nielsen Finance LLC and Nielsen Finance Co. 5.00% 20225 | 9,950 | 10,298 |
Nortek Inc. 8.50% 2021 | 35,772 | 37,570 |
Ply Gem Industries, Inc. 6.50% 2022 | 18,150 | 18,518 |
Ply Gem Industries, Inc. 6.50% 2022 | 13,400 | 13,420 |
PrimeSource Building Products Inc 9.00% 20235 | 1,645 | 1,641 |
R.R. Donnelley & Sons Co. 7.25% 20181 | 2,000 | 2,148 |
R.R. Donnelley & Sons Co. 8.25% 20191 | 2,475 | 2,732 |
R.R. Donnelley & Sons Co. 7.625% 20201 | 3,700 | 4,015 |
R.R. Donnelley & Sons Co. 7.875% 20211 | 23,445 | 25,555 |
R.R. Donnelley & Sons Co. 7.00% 20221 | 19,500 | 19,890 |
R.R. Donnelley & Sons Co. 6.50% 20231 | 14,280 | 14,137 |
Siemens AG 4.40% 20455 | 2,000 | 2,447 |
Silver II Borrower S.C.A./Silver II U.S. Holdings, LLC 7.75% 20205 | 59,515 | 50,290 |
TRAC Intermodal 11.00% 2019 | 8,475 | 8,952 |
TransDigm Inc. 5.50% 2020 | 27,125 | 27,939 |
TransDigm Inc. 6.00% 2022 | 5,000 | 5,200 |
TransDigm Inc. 6.50% 2024 | 49,700 | 51,871 |
TransDigm Inc. 6.50% 2025 | 16,650 | 17,462 |
United Air Lines, Inc., Series 2007-1, Class B, 7.336% 20215,9 | 3,377 | 3,546 |
United Air Lines, Inc., Series 2007-1, Class A, 6.636% 20249 | 5,551 | 5,961 |
United Rentals, Inc. 5.50% 2025 | 10,850 | 11,195 |
United Rentals, Inc. 5.875% 2026 | 7,400 | 7,724 |
Virgin Australia Holdings Ltd. 8.50% 20195 | 41,650 | 43,680 |
Watco Companies 6.375% 20235 | 10,670 | 10,723 |
1,282,654 | ||
Utilities 0.92% | ||
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 20175 | 2,000 | 2,112 |
Abu Dhabi National Energy Co. PJSC (TAQA) 3.625% 20235 | 2,000 | 2,055 |
AES Corp. 8.00% 2020 | 14,275 | 16,845 |
AES Corp. 7.375% 2021 | 26,500 | 30,210 |
AES Corp. 4.875% 2023 | 2,000 | 2,030 |
AES Corp. 5.50% 2024 | 8,500 | 8,829 |
AES Corp. 5.50% 2025 | 21,750 | 22,375 |
AES Corp. 6.00% 2026 | 7,725 | 8,150 |
American Electric Power Co. 2.95% 2022 | 12,065 | 12,615 |
Berkshire Hathaway Energy Co. 2.40% 2020 | 7,749 | 7,980 |
Calpine Corp. 6.00% 20225 | 8,475 | 8,878 |
Calpine Corp. 5.375% 2023 | 11,810 | 11,840 |
Calpine Corp. 7.875% 20235 | 5,712 | 6,069 |
Calpine Corp. 5.875% 20245 | 3,000 | 3,173 |
Calpine Corp. 5.25% 20265 | 1,970 | 2,004 |
CMS Energy Corp. 8.75% 2019 | 6,000 | 7,208 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Utilities (continued) | Principal amount (000) | Value (000) |
CMS Energy Corp. 6.25% 2020 | $13,480 | $15,473 |
CMS Energy Corp. 5.05% 2022 | 2,072 | 2,360 |
CMS Energy Corp. 3.875% 2024 | 7,500 | 8,262 |
CMS Energy Corp. 3.60% 2025 | 8,840 | 9,516 |
CMS Energy Corp. 3.00% 2026 | 8,498 | 8,814 |
CMS Energy Corp. 4.70% 2043 | 3,933 | 4,582 |
Colbun SA 6.00% 20205 | 2,000 | 2,233 |
Colbun SA 4.50% 20245 | 1,500 | 1,589 |
Comision Federal de Electricidad 4.875% 20245 | 2,000 | 2,150 |
Commonwealth Edison Company 3.65% 2046 | 7,425 | 7,836 |
Consumers Energy Co., First Mortgage Bonds, 6.70% 2019 | 13,400 | 15,614 |
Consumers Energy Co. 5.65% 2020 | 4,058 | 4,675 |
Consumers Energy Co. 3.375% 2023 | 360 | 390 |
Consumers Energy Co., First Mortgage Bonds, 3.125% 2024 | 2,520 | 2,679 |
Dominion Gas Holdings LLC 2.50% 2019 | 4,865 | 4,986 |
Dominion Resources, Inc. 2.962% 2019 | 3,000 | 3,083 |
Dominion Resources, Inc. 4.104% 2021 | 7,209 | 7,719 |
Duke Energy Corp. 0.613% 20177 | 1,000 | 1,000 |
Duke Energy Indiana, Inc. 4.90% 2043 | 14,785 | 18,336 |
Duke Energy Progress Inc. 4.15% 2044 | 3,935 | 4,451 |
Dynegy Finance Inc. 6.75% 2019 | 6,795 | 6,956 |
Dynegy Finance Inc. 7.375% 2022 | 15,980 | 15,780 |
Dynegy Finance Inc. 7.625% 2024 | 7,515 | 7,383 |
E.ON International Finance BV 5.80% 20185 | 15,000 | 16,049 |
EDP Finance BV 4.125% 20205 | 6,000 | 6,296 |
EDP Finance BV 5.25% 20215 | 22,500 | 24,576 |
Electricité de France SA 1.15% 20175 | 2,000 | 2,000 |
Electricité de France SA 3.625% 20255 | 780 | 816 |
Electricité de France SA 6.95% 20395 | 8,000 | 10,959 |
Electricité de France SA 4.875% 20445 | 3,850 | 4,255 |
Electricité de France SA 5.25% 20495 | 29,005 | 28,389 |
Emera Inc. 6.75% 2076 | 45,000 | 48,589 |
Emera US Finance LP 2.15% 20195 | 5,975 | 6,064 |
Emera US Finance LP 2.70% 20215 | 10,505 | 10,770 |
Emera US Finance LP 3.55% 20265 | 3,300 | 3,473 |
Empresa Nacional de Electricidad SA 4.25% 2024 | 900 | 967 |
Enel Finance International SA 6.00% 20395 | 3,000 | 3,649 |
Enel Società per Azioni 8.75% 20735 | 12,000 | 13,995 |
Entergy Corp. 4.70% 2017 | 8,000 | 8,101 |
Eversource Energy 2.375% 2022 | 2,014 | 2,058 |
Eversource Energy 2.70% 2026 | 7,898 | 8,133 |
Exelon Corp. 2.45% 2021 | 2,919 | 2,983 |
Exelon Corp. 3.95% 2025 | 9,536 | 10,400 |
Exelon Corp. 3.40% 2026 | 8,490 | 8,953 |
Exelon Corp. 4.95% 2035 | 1,124 | 1,309 |
Exelon Corp. 4.45% 2046 | 2,590 | 2,864 |
FirstEnergy Corp. 7.375% 2031 | 684 | 885 |
FirstEnergy Corp., Series B, 4.25% 2023 | 36,953 | 39,324 |
Iberdrola Finance Ireland 5.00% 20195 | 1,060 | 1,170 |
Israel Electric Corp. Ltd. 8.10% 20965 | 4,905 | 5,776 |
MidAmerican Energy Co. 5.95% 2017 | 10,625 | 11,129 |
MidAmerican Energy Co. 2.40% 2019 | 9,000 | 9,288 |
MidAmerican Energy Holdings Co. 5.75% 2018 | 10,000 | 10,732 |
Mississippi Power Co. 4.25% 2042 | 1,853 | 1,744 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Utilities (continued) | Principal amount (000) | Value (000) |
Nevada Power Co., General and Refunding Mortgage Notes, Series V, 7.125% 2019 | $642 | $738 |
Niagara Mohawk Power Corp. 3.508% 20245 | 4,150 | 4,480 |
Niagara Mohawk Power Corp. 4.278% 20345 | 3,000 | 3,307 |
Northern States Power Co. 4.125% 2044 | 11,000 | 12,671 |
NRG Energy, Inc. 6.25% 2022 | 17,425 | 17,599 |
NRG Energy, Inc. 6.625% 2023 | 2,000 | 2,020 |
NRG Energy, Inc. 7.25% 20265 | 17,575 | 18,124 |
NRG Energy, Inc. 6.625% 20275 | 22,060 | 21,839 |
NV Energy, Inc 6.25% 2020 | 5,214 | 6,195 |
Ohio Power Co., Series G, 6.60% 2033 | 2,090 | 2,733 |
Ohio Power Co., Series D, 6.60% 2033 | 353 | 458 |
Pacific Gas and Electric Co. 3.25% 2021 | 2,000 | 2,144 |
Pacific Gas and Electric Co. 2.45% 2022 | 1,572 | 1,616 |
Pacific Gas and Electric Co. 3.25% 2023 | 2,695 | 2,887 |
Pacific Gas and Electric Co. 3.85% 2023 | 13,256 | 14,708 |
Pacific Gas and Electric Co. 3.40% 2024 | 8,106 | 8,810 |
Pacific Gas and Electric Co. 3.75% 2024 | 602 | 667 |
Pacific Gas and Electric Co. 2.95% 2026 | 640 | 673 |
Pacific Gas and Electric Co. 3.75% 2042 | 1,061 | 1,116 |
Pacific Gas and Electric Co. 4.30% 2045 | 1,900 | 2,204 |
Pacific Gas and Electric Co. 4.25% 2046 | 3,000 | 3,452 |
PacifiCorp., First Mortgage Bonds, 5.65% 2018 | 5,500 | 5,996 |
PPL Capital Funding, Inc. 3.10% 2026 | 10,000 | 10,229 |
Progress Energy, Inc. 7.05% 2019 | 250 | 284 |
Progress Energy, Inc. 7.00% 2031 | 5,148 | 7,018 |
Progress Energy, Inc. 7.75% 2031 | 9,026 | 12,823 |
Public Service Co. of Colorado 5.125% 2019 | 1,490 | 1,653 |
Puget Sound Energy, Inc., First Lien, 6.50% 2020 | 6,317 | 7,356 |
Puget Sound Energy, Inc., First Lien, 6.00% 2021 | 3,945 | 4,600 |
Puget Sound Energy, Inc., First Lien, 5.625% 2022 | 7,652 | 8,784 |
Puget Sound Energy Inc. 3.65% 2025 | 884 | 929 |
Sierra Pacific Power Co. 2.60% 20265 | 15,750 | 16,159 |
Southern California Edison Co. 1.845% 20229 | 7,136 | 7,131 |
Talen Energy Corp. 4.625% 20195 | 4,495 | 4,281 |
Tampa Electric Co. 2.60% 2022 | 911 | 943 |
Tampa Electric Co. 4.35% 2044 | 8,330 | 9,443 |
Teco Finance, Inc. 5.15% 2020 | 9,784 | 10,857 |
Texas Competitive Electric Holdings, Term Loan B, 5.00% 20237,8,9 | 29,090 | 29,227 |
Texas Competitive Electric Holdings, Term Loan C, 5.00% 20237,8,9 | 6,635 | 6,666 |
TXU, Term Loan, 4.65% 20177,8,9,10 | 26,204 | 8,818 |
TXU, Term Loan, 3.737% 20247,8,9,10 | 3,000 | 998 |
Veolia Environnement 6.75% 2038 | 500 | 680 |
Virginia Electric and Power Co. 3.45% 2024 | 560 | 609 |
Virginia Electric and Power Co. 3.10% 2025 | 2,625 | 2,802 |
Virginia Electric and Power Co., Series B, 5.95% 2017 | 4,500 | 4,745 |
Xcel Energy Inc 2.40% 2021 | 7,399 | 7,619 |
Xcel Energy Inc. 3.30% 2025 | 4,000 | 4,277 |
Xcel Energy Inc. 6.50% 2036 | 9,680 | 13,448 |
930,752 | ||
Materials 0.84% | ||
AK Steel Holding Corp. 7.50% 2023 | 1,825 | 1,930 |
Aleris International, Inc. 9.50% 20215 | 1,175 | 1,254 |
Anglo American Capital PLC 4.125% 20215 | 4,800 | 4,692 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Materials (continued) | Principal amount (000) | Value (000) |
ArcelorMittal 6.25% 2020 | $1,475 | $1,549 |
ArcelorMittal 7.25% 2022 | 22,385 | 24,623 |
ArcelorMittal 6.125% 2025 | 3,825 | 4,072 |
ArcelorMittal 7.75% 2041 | 46,355 | 47,718 |
Ashland Inc. 4.75% 2022 | 5,565 | 5,795 |
Ball Corp. 4.375% 2020 | 15,225 | 16,329 |
BHP Billiton Finance Ltd. 6.75% 20755 | 5,000 | 5,575 |
BlueScope Steel Ltd. 6.50% 20215 | 4,600 | 4,853 |
Chemours Co. 6.625% 2023 | 35,285 | 30,610 |
Chemours Co. 7.00% 2025 | 36,940 | 31,584 |
Cliffs Natural Resources Inc. 8.25% 20205 | 13,800 | 14,283 |
Cliffs Natural Resources Inc. 4.875% 2021 | 4,945 | 3,829 |
CRH America, Inc. 3.875% 20255 | 2,000 | 2,165 |
CRH America, Inc. 5.125% 20455 | 2,000 | 2,264 |
Dow Chemical Co. 5.25% 2041 | 4,000 | 4,547 |
Eastman Chemical Co. 2.70% 2020 | 12,000 | 12,409 |
Ecolab Inc. 3.00% 2016 | 7,455 | 7,510 |
First Quantum Minerals Ltd. 6.75% 20205 | 75,688 | 70,049 |
First Quantum Minerals Ltd. 7.00% 20215 | 78,287 | 70,247 |
First Quantum Minerals Ltd. 7.25% 20225 | 14,125 | 12,536 |
FMG Resources 4.25% 20197,8,9 | 6,132 | 6,018 |
FMG Resources 9.75% 20225 | 67,695 | 76,157 |
Freeport-McMoRan Copper & Gold Inc. 3.55% 2022 | 22,340 | 19,212 |
Georgia Gulf Corp. 4.625% 2021 | 24,475 | 25,301 |
Georgia-Pacific Corp. 2.539% 20195 | 12,000 | 12,309 |
Glencore Funding LLC 4.00% 20255 | 5,000 | 4,692 |
Glencore Xstrata LLC 4.625% 20245 | 7,000 | 6,851 |
Holcim Ltd. 6.00% 20195 | 1,607 | 1,801 |
Holcim Ltd. 5.15% 20235 | 12,595 | 14,163 |
Huntsman International LLC 4.875% 2020 | 17,950 | 18,309 |
INEOS Group Holdings SA 5.625% 20245 | 3,325 | 3,292 |
International Paper Co. 7.30% 2039 | 5,615 | 7,635 |
LSB Industries, Inc. 7.75% 2019 | 780 | 807 |
Monsanto Co. 4.40% 2044 | 13,090 | 13,501 |
Owens-Illinois, Inc. 5.00% 20225 | 3,360 | 3,520 |
Owens-Illinois, Inc. 5.875% 20235 | 12,780 | 13,762 |
Owens-Illinois, Inc. 5.375% 20255 | 2,515 | 2,622 |
Owens-Illinois, Inc. 6.375% 20255 | 5,225 | 5,741 |
Paperworks Industries Inc. 9.50% 20195 | 2,458 | 2,341 |
Platform Specialty Products Corp. 10.375% 20215 | 21,926 | 22,090 |
Platform Specialty Products Corp. 6.50% 20225 | 1,010 | 881 |
Praxair, Inc. 2.25% 2020 | 6,287 | 6,505 |
Rayonier Advanced Materials Inc. 5.50% 20245 | 30,565 | 26,649 |
Reynolds Group Inc. 5.75% 2020 | 38,460 | 39,806 |
Reynolds Group Inc. 6.875% 2021 | 5,000 | 5,200 |
Reynolds Group Inc. 5.125% 20235 | 3,300 | 3,407 |
Ryerson Inc. 11.25% 2018 | 5,863 | 5,716 |
Ryerson Inc. 11.00% 20225 | 59,827 | 65,361 |
Smurfit Capital Funding PLC 7.50% 2025 | 2,425 | 2,862 |
Summit Materials, Inc. 6.125% 2023 | 9,325 | 9,442 |
Teck Resources Ltd. 4.50% 2021 | 7,875 | 7,206 |
Teck Resources Ltd. 8.00% 20215 | 11,350 | 12,144 |
Tembec Industries Inc. 9.00% 20195 | 7,520 | 5,922 |
U.S. Coatings Acquisition Inc. (Flash Dutch 2 BV) 7.375% 20215 | 5,060 | 5,364 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Materials (continued) | Principal amount (000) | Value (000) |
United States Steel Corp. 8.375% 20215 | $6,850 | $7,492 |
Walter Energy, Inc. 9.50% 20193,5,10 | 15,913 | 40 |
Zekelman Industries Inc. 9.875% 20235 | 6,340 | 6,673 |
Zekelman Industries Inc., Term Loan B, 6.00% 20217,8,9 | 4,000 | 4,025 |
855,242 | ||
Information technology 0.51% | ||
Apple Inc. 1.55% 2021 | 13,040 | 13,066 |
Apple Inc. 2.25% 2021 | 10,250 | 10,605 |
Apple Inc. 2.45% 2026 | 9,000 | 8,996 |
Apple Inc. 3.85% 2046 | 9,950 | 10,090 |
Blackboard Inc., Term Loan B, 4.75% 20187,8,9 | 1,250 | 1,228 |
Dell Inc. 4.42% 20215 | 6,540 | 6,844 |
Dell Inc. 5.45% 20235 | 25,000 | 26,520 |
Dell Inc. 7.125% 20245 | 6,175 | 6,654 |
Dell Inc. 8.35% 20465 | 9,895 | 11,382 |
EchoStar Corp. 6.625% 20265 | 16,800 | 16,716 |
First Data Corp. 6.75% 20205 | 8,699 | 9,074 |
First Data Corp. 5.375% 20235 | 10,950 | 11,279 |
First Data Corp. 7.00% 20235 | 113,375 | 117,201 |
First Data Corp. 5.00% 20245 | 10,700 | 10,820 |
First Data Corp. 5.75% 20245 | 7,650 | 7,746 |
Gogo Inc. 12.50% 20225 | 39,325 | 39,079 |
Harris Corp. 2.70% 2020 | 1,315 | 1,348 |
Harris Corp. 3.832% 2025 | 740 | 799 |
Harris Corp. 4.854% 2035 | 2,775 | 3,112 |
Harris Corp. 5.054% 2045 | 5,735 | 6,828 |
Infor (US), Inc. 6.50% 2022 | 500 | 499 |
Infor Inc. 5.75% 20205 | 5,375 | 5,691 |
Jabil Circuit, Inc. 8.25% 2018 | 20,925 | 22,834 |
Jabil Circuit, Inc. 5.625% 2020 | 10,650 | 11,459 |
KLA-Tencor Corp. 4.65% 2024 | 5,000 | 5,526 |
Micron Technology, Inc. 7.50% 20235 | 5,050 | 5,534 |
Microsoft Corp. 2.65% 2022 | 6,000 | 6,292 |
Microsoft Corp. 4.20% 2035 | 6,000 | 6,846 |
NXP BV and NXP Funding LLC 4.125% 20205 | 21,000 | 21,683 |
NXP BV and NXP Funding LLC 4.125% 20215 | 15,300 | 15,874 |
Oracle Corp. 2.50% 2022 | 19,000 | 19,567 |
Qorvo, Inc. 7.00% 20255 | 16,650 | 18,128 |
Seagate Technology LLC 4.75% 2023 | 20,700 | 19,320 |
Visa Inc. 3.15% 2025 | 8,000 | 8,606 |
Western Digital Corp. 7.375% 20235 | 22,725 | 24,799 |
Western Digital Corp. 10.50% 20245 | 3,500 | 3,955 |
Western Digital Corp., Term Loan B, 6.25% 20237,8,9 | 5,000 | 5,059 |
521,059 | ||
Consumer staples 0.47% | ||
Altria Group, Inc. 9.25% 2019 | 18,542 | 22,811 |
Altria Group, Inc. 2.625% 2020 | 10,420 | 10,880 |
Altria Group, Inc. 4.00% 2024 | 1,500 | 1,696 |
Altria Group, Inc. 9.95% 2038 | 23,500 | 43,103 |
Altria Group, Inc. 4.25% 2042 | 20,000 | 22,946 |
Altria Group, Inc. 4.50% 2043 | 4,000 | 4,726 |
Altria Group, Inc. 5.375% 2044 | 2,595 | 3,433 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Consumer staples (continued) | Principal amount (000) | Value (000) |
Anheuser-Busch InBev NV 7.75% 2019 | $25,000 | $28,828 |
Anheuser-Busch InBev NV 2.65% 2021 | 2,875 | 2,983 |
Anheuser-Busch InBev NV 4.90% 2046 | 3,315 | 4,078 |
British American Tobacco International Finance PLC 9.50% 20185 | 8,705 | 10,247 |
British American Tobacco International Finance PLC 3.95% 20255 | 8,000 | 9,061 |
Coca-Cola Co. 1.80% 2016 | 10,000 | 10,011 |
Constellation Brands, Inc. 3.875% 2019 | 6,000 | 6,362 |
Constellation Brands, Inc. 6.00% 2022 | 2,825 | 3,294 |
Constellation Brands, Inc. 4.25% 2023 | 6,000 | 6,390 |
CVS Health Corp. 2.125% 2021 | 4,010 | 4,094 |
CVS Health Corp. 2.875% 2026 | 3,795 | 3,916 |
Imperial Tobacco Finance PLC 3.50% 20235 | 10,000 | 10,500 |
Kimberly-Clark Corp. 7.50% 2018 | 9,000 | 10,263 |
Kraft Foods Inc. 5.00% 2042 | 30,000 | 35,294 |
Kraft Heinz Co. 4.375% 20465 | 5,420 | 5,926 |
Molson Coors Brewing Co. 1.45% 2019 | 4,245 | 4,273 |
Molson Coors Brewing Co. 2.10% 2021 | 5,475 | 5,558 |
Molson Coors Brewing Co. 3.00% 2026 | 4,755 | 4,867 |
Molson Coors Brewing Co. 4.20% 2046 | 4,200 | 4,438 |
Pernod Ricard SA 2.95% 20175 | 20,000 | 20,139 |
Pernod Ricard SA 4.45% 20225 | 9,500 | 10,520 |
Philip Morris International Inc. 1.875% 2021 | 1,830 | 1,860 |
Philip Morris International Inc. 3.60% 2023 | 7,245 | 8,063 |
Philip Morris International Inc. 2.75% 2026 | 1,505 | 1,572 |
Philip Morris International Inc. 4.25% 2044 | 2,000 | 2,273 |
Post Holdings, Inc. 5.00% 20265 | 7,670 | 7,665 |
Reynolds American Inc. 2.30% 2018 | 1,990 | 2,026 |
Reynolds American Inc. 3.25% 2020 | 5,510 | 5,833 |
Reynolds American Inc. 3.25% 2022 | 6,150 | 6,415 |
Reynolds American Inc. 4.00% 2022 | 890 | 978 |
Reynolds American Inc. 4.45% 2025 | 22,110 | 25,008 |
Reynolds American Inc. 5.70% 2035 | 3,760 | 4,754 |
Reynolds American Inc. 6.15% 2043 | 1,820 | 2,457 |
Reynolds American Inc. 5.85% 2045 | 10,200 | 13,527 |
SABMiller Holdings Inc. 4.95% 20425 | 7,000 | 8,407 |
The JM Smucker Co. 3.00% 2022 | 2,850 | 3,011 |
Walgreens Boots Alliance, Inc. 2.60% 2021 | 16,805 | 17,254 |
Walgreens Boots Alliance, Inc. 3.30% 2021 | 13,000 | 13,816 |
Walgreens Boots Alliance, Inc. 3.10% 2023 | 900 | 931 |
Walgreens Boots Alliance, Inc. 3.45% 2026 | 1,770 | 1,858 |
Walgreens Boots Alliance, Inc. 4.65% 2046 | 1,045 | 1,181 |
Wal-Mart Stores, Inc. 3.30% 2024 | 10,755 | 11,905 |
WM. Wrigley Jr. Co 2.40% 20185 | 1,200 | 1,225 |
WM. Wrigley Jr. Co 2.90% 20195 | 1,200 | 1,247 |
WM. Wrigley Jr. Co 3.375% 20205 | 22,500 | 24,051 |
477,954 | ||
Total corporate bonds & notes | 14,383,867 | |
U.S. Treasury bonds & notes 5.81% U.S. Treasury 5.37% | ||
U.S. Treasury 0.50% 2017 | 10,000 | 10,005 |
U.S. Treasury 0.875% 2017 | 40,000 | 40,105 |
U.S. Treasury 0.875% 2017 | 20,000 | 20,056 |
Bonds, notes & other debt instruments U.S. Treasury bonds & notes (continued) U.S. Treasury (continued) | Principal amount (000) | Value (000) |
U.S. Treasury 1.00% 201711 | $10,000 | $10,052 |
U.S. Treasury 0.625% 2018 | 120,000 | 119,948 |
U.S. Treasury 0.75% 201811 | 170,000 | 170,286 |
U.S. Treasury 0.75% 2018 | 18,000 | 18,029 |
U.S. Treasury 1.125% 2018 | 16,000 | 16,138 |
U.S. Treasury 1.25% 2018 | 86,000 | 87,082 |
U.S. Treasury 0.875% 2019 | 93,000 | 93,338 |
U.S. Treasury 1.00% 2019 | 25,000 | 25,180 |
U.S. Treasury 1.75% 2019 | 56,000 | 57,652 |
U.S. Treasury 3.625% 2019 | 90,000 | 97,710 |
U.S. Treasury 1.25% 2020 | 180,000 | 182,457 |
U.S. Treasury 1.375% 2020 | 85,000 | 86,448 |
U.S. Treasury 1.375% 2020 | 43,000 | 43,769 |
U.S. Treasury 1.375% 2020 | 40,000 | 40,691 |
U.S. Treasury 1.50% 2020 | 22,000 | 22,495 |
U.S. Treasury 1.625% 2020 | 121,800 | 125,190 |
U.S. Treasury 1.625% 2020 | 9,960 | 10,232 |
U.S. Treasury 1.125% 2021 | 51,990 | 52,246 |
U.S. Treasury 1.375% 2021 | 144,000 | 146,382 |
U.S. Treasury 1.375% 2021 | 75,835 | 77,117 |
U.S. Treasury 1.75% 2022 | 159,235 | 164,361 |
U.S. Treasury 2.00% 2022 | 104,000 | 108,855 |
U.S. Treasury 6.25% 2023 | 69,000 | 92,272 |
U.S. Treasury 2.25% 2024 | 29,450 | 31,461 |
U.S. Treasury 2.00% 2025 | 513,475 | 538,106 |
U.S. Treasury 1.625% 2026 | 167,066 | 169,592 |
U.S. Treasury 1.625% 2026 | 136,236 | 138,354 |
U.S. Treasury 5.50% 2028 | 52,000 | 74,531 |
U.S. Treasury 4.50% 2036 | 36,186 | 52,638 |
U.S. Treasury 4.625% 2040 | 15,150 | 22,609 |
U.S. Treasury 4.375% 2041 | 20,800 | 30,196 |
U.S. Treasury 4.75% 2041 | 30,900 | 47,113 |
U.S. Treasury 2.75% 2042 | 16,275 | 18,293 |
U.S. Treasury 2.75% 2042 | 10,900 | 12,268 |
U.S. Treasury 3.125% 2043 | 33,675 | 40,549 |
U.S. Treasury 3.00% 2044 | 161,350 | 189,657 |
U.S. Treasury 3.125% 2044 | 131,950 | 158,748 |
U.S. Treasury 3.375% 2044 | 148,415 | 186,846 |
U.S. Treasury 2.50% 2045 | 49,975 | 53,248 |
U.S. Treasury 2.875% 2045 | 929,150 | 1,066,608 |
U.S. Treasury 3.00% 2045 | 213,249 | 250,858 |
U.S. Treasury 3.00% 2045 | 51,200 | 60,166 |
U.S. Treasury 2.50% 2046 | 291,995 | 311,480 |
U.S. Treasury 2.50% 2046 | 84,650 | 90,470 |
5,461,887 | ||
U.S. Treasury inflation-protected securities 0.44% | ||
U.S. Treasury Inflation-Protected Security 0.625% 202412 | 61,768 | 64,775 |
U.S. Treasury Inflation-Protected Security 0.375% 202512 | 89,318 | 92,373 |
U.S. Treasury Inflation-Protected Security 0.625% 202612 | 46,461 | 49,040 |
U.S. Treasury Inflation-Protected Security 0.75% 204212 | 29,070 | 30,171 |
U.S. Treasury Inflation-Protected Security 1.375% 204412 | 101,340 | 121,179 |
Bonds, notes & other debt instruments U.S. Treasury bonds & notes (continued) U.S. Treasury inflation-protected securities (continued) | Principal amount (000) | Value (000) |
U.S. Treasury Inflation-Protected Security 0.75% 204512 | $8,517 | $8,878 |
U.S. Treasury Inflation-Protected Security 1.00% 204612 | 67,988 | 76,103 |
442,519 | ||
Total U.S. Treasury bonds & notes | 5,904,406 | |
Mortgage-backed obligations 1.81% | ||
Aventura Mall Trust, Series A, 3.867% 20325,7,9 | 4,900 | 5,299 |
Banc of America Commercial Mortgage Inc., Series 2007-3, Class A-4, 5.543% 20497,9 | 3,525 | 3,587 |
Bank of America Merrill Lynch Large Loan Inc., Series 2015-200P, Class A, 3.218% 20335,9 | 5,575 | 5,987 |
Bellemeade Re Ltd., Series 2015-1-A, Class M-1, 2.946% 20253,5,7,9 | 3,270 | 3,262 |
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 20489 | 2,482 | 2,480 |
COMM Mortgage Trust, Series 2014-277P, Class A, 3.732% 20495,7,9 | 6,500 | 7,201 |
Connecticut Avenue Securities, Series 2015-C01, Class 1-M-1, 1.953% 20257,9 | 1,225 | 1,229 |
Core Industrial Trust, Series 2015-CALW, Class A, 3.04% 20345,9 | 10,675 | 11,300 |
Countrywide Alternative Loan Trust, Series 2005-54CB, Class 2-A-5, 5.50% 20359 | 4,924 | 4,301 |
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 3-A-1, 2.985% 20477,9 | 3,425 | 2,476 |
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 20349 | 1,054 | 1,076 |
CS First Boston Mortgage Securities Corp., Series 2006-C5, Class A-M, 5.343% 20399 | 8,000 | 8,051 |
CS First Boston Mortgage Securities Corp., Series 2007-C5, Class A4, 5.695% 20407,9 | 9,586 | 9,868 |
CS First Boston Mortgage Securities Corp., Series 2007-C2, Class A-M, 5.603% 20497,9 | 10,000 | 10,158 |
DBUBS Mortgage Trust, Series 2011-LC1A, Class A1, 3.742% 20465,9 | 117 | 118 |
EQTY 2014-INNS Mortgage Trust Commercial Mortgage Pass-Through Certificates, Series 2014-A, 1.298% 20315,7,9 | 5,114 | 5,091 |
Fannie Mae 5.50% 20189 | 12 | 12 |
Fannie Mae 6.00% 20219 | 116 | 126 |
Fannie Mae 4.50% 20249 | 1,543 | 1,646 |
Fannie Mae 5.50% 20249 | 147 | 160 |
Fannie Mae 4.50% 20259 | 1,432 | 1,525 |
Fannie Mae 4.50% 20259 | 943 | 1,017 |
Fannie Mae 4.50% 20259 | 861 | 929 |
Fannie Mae 4.50% 20259 | 767 | 815 |
Fannie Mae 6.00% 20269 | 2,623 | 2,993 |
Fannie Mae 7.00% 20269 | 404 | 470 |
Fannie Mae 2.50% 20279 | 1,197 | 1,244 |
Fannie Mae 2.50% 20279 | 926 | 962 |
Fannie Mae 2.50% 20279 | 903 | 938 |
Fannie Mae 2.50% 20279 | 694 | 720 |
Fannie Mae 2.50% 20279 | 512 | 531 |
Fannie Mae 2.50% 20279 | 429 | 446 |
Fannie Mae 2.50% 20279 | 397 | 412 |
Fannie Mae 2.50% 20289 | 31,201 | 32,401 |
Fannie Mae 2.50% 20289 | 10,806 | 11,222 |
Fannie Mae 2.50% 20289 | 1,552 | 1,611 |
Fannie Mae 2.50% 20289 | 1,394 | 1,447 |
Fannie Mae 2.50% 20289 | 1,349 | 1,400 |
Fannie Mae 2.50% 20289 | 1,182 | 1,227 |
Fannie Mae 2.50% 20289 | 1,156 | 1,200 |
Fannie Mae 2.50% 20289 | 1,004 | 1,043 |
Fannie Mae 2.50% 20289 | 1,000 | 1,038 |
Fannie Mae 2.50% 20289 | 738 | 766 |
Fannie Mae 2.50% 20289 | 722 | 749 |
Fannie Mae 2.50% 20289 | 712 | 739 |
Fannie Mae 2.50% 20289 | 554 | 575 |
Bonds, notes & other debt instruments Mortgage-backed obligations (continued) | Principal amount (000) | Value (000) |
Fannie Mae 2.50% 20289 | $455 | $472 |
Fannie Mae 2.50% 20289 | 447 | 464 |
Fannie Mae 2.50% 20289 | 419 | 434 |
Fannie Mae 2.50% 20289 | 418 | 434 |
Fannie Mae 2.50% 20289 | 395 | 411 |
Fannie Mae 2.50% 20289 | 393 | 408 |
Fannie Mae 2.50% 20289 | 383 | 398 |
Fannie Mae 2.50% 20289 | 370 | 384 |
Fannie Mae 2.50% 20289 | 367 | 381 |
Fannie Mae 2.50% 20289 | 352 | 365 |
Fannie Mae 2.50% 20289 | 259 | 269 |
Fannie Mae 2.50% 20289 | 87 | 90 |
Fannie Mae 2.50% 20289 | 46 | 47 |
Fannie Mae 6.00% 20289 | 2,775 | 3,179 |
Fannie Mae 7.00% 20289 | 927 | 1,088 |
Fannie Mae 7.00% 20289 | 211 | 248 |
Fannie Mae 2.50% 20319,13 | 124,500 | 128,984 |
Fannie Mae 5.50% 20339 | 409 | 463 |
Fannie Mae 3.00% 20359 | 3,463 | 3,641 |
Fannie Mae 3.50% 20359 | 2,917 | 3,103 |
Fannie Mae 5.50% 20359 | 381 | 433 |
Fannie Mae 5.50% 20369 | 2,544 | 2,892 |
Fannie Mae 6.00% 20369 | 977 | 1,114 |
Fannie Mae 6.00% 20369 | 694 | 790 |
Fannie Mae 6.00% 20369 | 320 | 368 |
Fannie Mae 6.00% 20379 | 11,449 | 13,141 |
Fannie Mae 6.00% 20379 | 1,964 | 2,262 |
Fannie Mae 6.00% 20379 | 1,468 | 1,686 |
Fannie Mae 6.00% 20379 | 99 | 114 |
Fannie Mae 6.50% 20379 | 680 | 789 |
Fannie Mae 6.50% 20379 | 600 | 702 |
Fannie Mae 6.50% 20379 | 428 | 482 |
Fannie Mae 6.50% 20379 | 113 | 131 |
Fannie Mae 7.00% 20379 | 435 | 485 |
Fannie Mae 7.00% 20379 | 138 | 154 |
Fannie Mae 7.50% 20379 | 183 | 208 |
Fannie Mae 7.50% 20379 | 112 | 122 |
Fannie Mae 7.50% 20379 | 86 | 94 |
Fannie Mae 5.50% 20389 | 552 | 621 |
Fannie Mae 6.00% 20389 | 2,567 | 2,933 |
Fannie Mae 6.00% 20389 | 1,466 | 1,684 |
Fannie Mae 6.00% 20389 | 1,307 | 1,494 |
Fannie Mae 4.50% 20399 | 20,756 | 22,877 |
Fannie Mae 6.00% 20399 | 1,450 | 1,652 |
Fannie Mae 6.50% 20399 | 503 | 585 |
Fannie Mae 4.00% 20409 | 10,675 | 11,565 |
Fannie Mae 4.00% 20409 | 6,219 | 6,692 |
Fannie Mae 4.00% 20409 | 425 | 463 |
Fannie Mae 4.50% 20409 | 65 | 71 |
Fannie Mae 4.50% 20409 | 38 | 41 |
Fannie Mae 5.00% 20409 | 6,807 | 7,540 |
Fannie Mae 4.00% 20419 | 8,897 | 9,688 |
Fannie Mae 4.00% 20419 | 6,880 | 7,489 |
Fannie Mae 4.00% 20419 | 692 | 755 |
Fannie Mae 4.00% 20419 | 425 | 464 |
Bonds, notes & other debt instruments Mortgage-backed obligations (continued) | Principal amount (000) | Value (000) |
Fannie Mae 4.00% 20419 | $320 | $349 |
Fannie Mae 4.00% 20419 | 219 | 240 |
Fannie Mae 4.50% 20419 | 217 | 238 |
Fannie Mae 5.00% 20419 | 416 | 462 |
Fannie Mae 5.00% 20419 | 388 | 431 |
Fannie Mae 5.00% 20419 | 317 | 352 |
Fannie Mae 5.00% 20419 | 279 | 311 |
Fannie Mae 3.50% 20429 | 16,422 | 17,393 |
Fannie Mae 4.00% 20429 | 7,968 | 8,680 |
Fannie Mae 4.00% 20429 | 3,351 | 3,656 |
Fannie Mae 4.00% 20429 | 1,139 | 1,241 |
Fannie Mae 4.00% 20439 | 8,836 | 9,670 |
Fannie Mae 4.00% 20439 | 8,394 | 9,192 |
Fannie Mae 4.00% 20439 | 3,381 | 3,701 |
Fannie Mae 4.00% 20439 | 3,359 | 3,687 |
Fannie Mae 4.00% 20439 | 3,060 | 3,351 |
Fannie Mae 4.00% 20439 | 3,041 | 3,330 |
Fannie Mae 4.00% 20439 | 2,669 | 2,931 |
Fannie Mae 4.00% 20439 | 2,241 | 2,442 |
Fannie Mae 3.50% 20459 | 17,867 | 19,100 |
Fannie Mae 4.00% 20459 | 73,611 | 78,967 |
Fannie Mae 4.00% 20459 | 55,347 | 60,315 |
Fannie Mae 4.00% 20459 | 8,931 | 9,735 |
Fannie Mae 3.00% 20469,13 | 2,655 | 2,763 |
Fannie Mae 3.50% 20469,13 | 50,000 | 52,813 |
Fannie Mae 3.50% 20469 | 31,399 | 33,566 |
Fannie Mae 4.00% 20469 | 27,176 | 29,148 |
Fannie Mae 4.00% 20469,13 | 7,712 | 8,267 |
Fannie Mae 4.50% 20469 | 45,821 | 50,327 |
Fannie Mae 4.50% 20469 | 40,917 | 44,940 |
Fannie Mae 4.50% 20469 | 22,158 | 24,337 |
Fannie Mae 4.50% 20469 | 7,017 | 7,693 |
Fannie Mae 6.50% 20479 | 468 | 533 |
Fannie Mae 6.50% 20479 | 331 | 377 |
Fannie Mae 6.50% 20479 | 290 | 330 |
Fannie Mae 6.50% 20479 | 183 | 209 |
Fannie Mae 6.50% 20479 | 123 | 139 |
Fannie Mae 6.50% 20479 | 78 | 89 |
Fannie Mae 7.00% 20479 | 520 | 600 |
Fannie Mae 7.00% 20479 | 288 | 332 |
Fannie Mae 7.00% 20479 | 192 | 221 |
Fannie Mae 7.00% 20479 | 100 | 116 |
Fannie Mae, Series 2012-M14, Class A2, multifamily 2.301% 20227,9 | 4,285 | 4,400 |
Fannie Mae, Series 2012-M9, Class A2, multifamily 2.482% 20229 | 12,231 | 12,685 |
Fannie Mae, Series 2012-M5, Class A2, multifamily 2.715% 20229 | 7,000 | 7,341 |
Fannie Mae, Series 2013-M14, Class A2, multifamily 3.329% 20237,9 | 8,367 | 9,145 |
Fannie Mae, Series 2014-M2, Class A2, multifamily 3.513% 20237,9 | 9,215 | 10,274 |
Fannie Mae, Series 2014-M9, multifamily 3.103% 20247,9 | 7,990 | 8,608 |
Fannie Mae, Series 2014-M3, Class A2, multifamily 3.501% 20247,9 | 10,000 | 10,993 |
Fannie Mae, Series 2001-4, Class GA, 9.363% 20257,9 | 60 | 67 |
Fannie Mae, Series 2001-4, Class NA, 9.696% 20257,9 | 1 | 1 |
Fannie Mae, Series 2001-20, Class E, 9.584% 20317,9 | 64 | 69 |
Fannie Mae, Series 2007-33, Class HE, 5.50% 20379 | 4,003 | 4,528 |
Fannie Mae, Series 2007-24, Class P, 6.00% 20379 | 2,200 | 2,459 |
Fannie Mae, Series 2001-50, Class BA, 7.00% 20419 | 353 | 410 |
Bonds, notes & other debt instruments Mortgage-backed obligations (continued) | Principal amount (000) | Value (000) |
Fannie Mae, Series 2001-T10, Class A1, 7.00% 20419 | $335 | $397 |
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 20419 | 220 | 259 |
Fannie Mae, Series 2002-W1, Class 2A, 6.233% 20427,9 | 582 | 692 |
Financial Asset Securitization, Inc., Series 1997-NAM1, Class B-1, 7.75% 20279 | 7 | 7 |
Freddie Mac 5.00% 20239 | 1,746 | 1,887 |
Freddie Mac 5.00% 20239 | 1,693 | 1,829 |
Freddie Mac 5.00% 20239 | 1,604 | 1,736 |
Freddie Mac 5.00% 20239 | 594 | 646 |
Freddie Mac 3.50% 20349 | 30,381 | 32,346 |
Freddie Mac 3.00% 20359 | 13,506 | 14,200 |
Freddie Mac 3.50% 20359 | 30,693 | 32,684 |
Freddie Mac 3.50% 20359 | 28,115 | 29,939 |
Freddie Mac 3.50% 20359 | 3,724 | 3,967 |
Freddie Mac 4.50% 20359 | 11,853 | 12,949 |
Freddie Mac 5.50% 20379 | 438 | 489 |
Freddie Mac 5.50% 20389 | 1,444 | 1,626 |
Freddie Mac 6.50% 20389 | 1,558 | 1,788 |
Freddie Mac 4.50% 20399 | 1,081 | 1,183 |
Freddie Mac 5.00% 20399 | 2,759 | 3,088 |
Freddie Mac 5.00% 20399 | 1,710 | 1,882 |
Freddie Mac 5.00% 20399 | 1,074 | 1,183 |
Freddie Mac 5.50% 20399 | 699 | 782 |
Freddie Mac 4.50% 20409 | 25,799 | 28,190 |
Freddie Mac 4.00% 20419 | 1,915 | 2,061 |
Freddie Mac 4.50% 20419 | 2,370 | 2,583 |
Freddie Mac 4.50% 20419 | 1,940 | 2,123 |
Freddie Mac 4.50% 20419 | 1,881 | 2,061 |
Freddie Mac 5.00% 20419 | 174 | 193 |
Freddie Mac 4.50% 20429 | 4,126 | 4,516 |
Freddie Mac 4.50% 20429 | 2,445 | 2,670 |
Freddie Mac 4.00% 20439 | 6,020 | 6,580 |
Freddie Mac 4.00% 20439 | 5,988 | 6,524 |
Freddie Mac 4.00% 20439 | 4,699 | 5,146 |
Freddie Mac 4.00% 20439 | 3,394 | 3,710 |
Freddie Mac 4.00% 20439 | 2,987 | 3,289 |
Freddie Mac 4.00% 20439 | 2,697 | 2,938 |
Freddie Mac 3.50% 20459 | 33,721 | 36,163 |
Freddie Mac 4.00% 20459 | 33,898 | 36,912 |
Freddie Mac 3.50% 20469 | 46,577 | 49,313 |
Freddie Mac 3.50% 20469 | 14,961 | 15,801 |
Freddie Mac 4.00% 20469 | 59,505 | 63,973 |
Freddie Mac 4.00% 20469 | 15,000 | 16,064 |
Freddie Mac 4.50% 20469 | 16,080 | 17,610 |
Freddie Mac 4.50% 20469 | 6,403 | 7,012 |
Freddie Mac, Series 2890, Class KT, 4.50% 20199 | 8,504 | 8,779 |
Freddie Mac, Series K019, Class A2, multifamily 2.272% 20229 | 8,000 | 8,272 |
Freddie Mac, Series K021, Class A2, multifamily 2.396% 20229 | 8,280 | 8,620 |
Freddie Mac, Series K025, Class A2, multifamily 2.682% 20229 | 7,000 | 7,406 |
Freddie Mac, Series 2289, Class NB, 9.00% 20227,9 | 6 | 7 |
Freddie Mac, Series 2013-DN2, Class M-1, 1.903% 20237,9 | 1,700 | 1,711 |
Freddie Mac, Series K036, Class A1, multifamily 2.777% 20239 | 10,579 | 11,077 |
Freddie Mac, Series K028, Class A2, multifamily 3.111% 20239 | 9,800 | 10,629 |
Freddie Mac, Series K035, Class A2, multifamily 3.458% 20237,9 | 3,000 | 3,328 |
Freddie Mac, Series K036, Class A2, multifamily 3.527% 20237,9 | 9,150 | 10,196 |
Freddie Mac, Series 2013-DN1, Class M-1, 3.853% 20237,9 | 2,140 | 2,188 |
Bonds, notes & other debt instruments Mortgage-backed obligations (continued) | Principal amount (000) | Value (000) |
Freddie Mac, Series 2014-HQ2, Class M-1, 1.903% 20247,9 | $2,994 | $3,013 |
Freddie Mac, Series 2014-HQ2, Class M-2, 2.653% 20247,9 | 5,815 | 5,901 |
Freddie Mac, Series 2014-DN4, Class M-2, 2.853% 20247,9 | 3,626 | 3,661 |
Freddie Mac, Series K043, Class A2, multifamily 3.062% 20249 | 26,000 | 28,345 |
Freddie Mac, Series K041, Class A2, multifamily 3.171% 20249 | 1,300 | 1,426 |
Freddie Mac, Series 2015-HQ2, Class M-2, 2.403% 20257,9 | 3,600 | 3,636 |
Freddie Mac, Series 3257, Class PA, 5.50% 20369 | 4,506 | 5,137 |
Freddie Mac, Series 3286, Class JN, 5.50% 20379 | 3,631 | 4,110 |
Freddie Mac, Series 3318, Class JT, 5.50% 20379 | 1,973 | 2,235 |
Government National Mortgage Assn. 10.00% 20219 | 145 | 158 |
Government National Mortgage Assn. 10.00% 20259 | 117 | 126 |
Government National Mortgage Assn. 4.50% 20419 | 1,285 | 1,381 |
Government National Mortgage Assn. 4.00% 20459 | 7,078 | 7,559 |
Government National Mortgage Assn. 4.50% 20459 | 7,678 | 8,273 |
Government National Mortgage Assn. 3.50% 20469,13 | 6,000 | 6,377 |
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A-4, 5.444% 20399 | 8,327 | 8,402 |
Greenwich Capital Commercial Funding Corp., Series 2007-GG11, Class A-M, 5.867% 20497,9 | 7,879 | 8,123 |
GS Mortgage Securities Corp. II, Series 2015-GS-1, Class AAB, 3.553% 20489 | 4,000 | 4,365 |
GSR Mortgage Loan Trust, Series 2004-2F, Class VIIA-1, 4.50% 20199 | 332 | 331 |
Hilton USA Trust, Series 2013-HLF, Class AFX, 2.662% 20305,9 | 6,555 | 6,630 |
IndyMac INDX Mortgage Loan Trust, Series 2006-AR5, Class 2-A-1, 3.098% 20367,9 | 5,219 | 4,474 |
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2011-C3A, Class A-2, 3.673% 20465,9 | 153 | 154 |
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2007-CB19, Class A-1-A, 5.887% 20497,9 | 10,306 | 10,539 |
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2007-C1, Class A-4, 5.716% 20519 | 4,376 | 4,518 |
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2007-LD12, Class A-M, 6.207% 20517,9 | 20,950 | 21,636 |
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP9, Class A-M, 5.372% 20479 | 17,000 | 17,107 |
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2007-CB19, Class A-4, 5.699% 20497,9 | 14,985 | 15,289 |
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20265,9 | 4,498 | 4,889 |
LB-UBS Commercial Mortgage Trust, Series 2007-C2, Class A-1-A, 5.387% 20409 | 8,776 | 8,907 |
LB-UBS Commercial Mortgage Trust, Series 2007-C2, Class A-3, 5.43% 20409 | 9,708 | 9,830 |
LB-UBS Commercial Mortgage Trust, Series 2007-C2, Class A-M, 5.493% 20407,9 | 18,000 | 18,372 |
LB-UBS Commercial Mortgage Trust, Series 2007-C6, Class A-M, 6.114% 20407,9 | 10,035 | 10,348 |
Merrill Lynch Mortgage Trust, Series 2007-C1, Class A-4, 6.021% 20507,9 | 3,460 | 3,557 |
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A-3, 5.172% 20499 | 15,218 | 15,269 |
ML-CFC Commercial Mortgage Trust, Series 2007-8, Class A-3, 6.071% 20497,9 | 11,096 | 11,410 |
Morgan Stanley Capital I Trust, Series 2014-CPT, Class A, 3.35% 20295,9 | 8,745 | 9,339 |
Morgan Stanley Capital I Trust, Series 2011-C3, Class A-2, 3.224% 20499 | 297 | 297 |
National Australia Bank 1.25% 20185,9 | 5,000 | 5,003 |
Station Place Securitization Trust, Series 2016-3, Class A, 1.546% 20483,5,7,9 | 10,500 | 10,500 |
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 6-A, 4.482% 20367,9 | 3,419 | 2,784 |
Wachovia Bank Commercial Mortgage Trust, Series 2007-C30, Class A-5, 5.342% 20439 | 8,000 | 8,105 |
Wachovia Bank Commercial Mortgage Trust, Series 2007-C31, Class A-M, 5.591% 20477,9 | 19,050 | 19,410 |
Wachovia Bank Commercial Mortgage Trust, Series 2007-C32, Class A-3, 5.889% 20497,9 | 8,500 | 8,708 |
Wachovia Bank Commercial Mortgage Trust, Series 2007-C33, Class A-M, 6.147% 20517,9 | 8,500 | 8,725 |
1,838,809 | ||
Asset-backed obligations 0.32% | ||
Aesop Funding LLC, Series 2014-2A, Class A, 2.50% 20215,9 | 10,500 | 10,600 |
Aesop Funding LLC, Series 2015-1, Class A, 2.50% 20215,9 | 10,000 | 10,112 |
Aesop Funding LLC, Series 2015-2-A, Class A, 2.63% 20215,9 | 5,680 | 5,766 |
American Express Credit Account Master Trust, Series 2014-4, Class A, 1.43% 20209 | 7,155 | 7,192 |
AmeriCredit Automobile Receivables Trust, Series 2015-1, Class A-3, 1.26% 20199 | 6,130 | 6,131 |
AmeriCredit Automobile Receivables Trust, Series 2014-4, Class A-3, 1.27% 20199 | 4,810 | 4,812 |
AmeriCredit Automobile Receivables Trust, Series 2015-2, Class C, 2.40% 20219 | 6,000 | 6,090 |
Avant Loans Funding Trust, Series 2016-A, Class A, 4.11% 20195,9 | 4,313 | 4,312 |
Bonds, notes & other debt instruments Asset-backed obligations (continued) | Principal amount (000) | Value (000) |
Avant Loans Funding Trust, Series 2015-A, Class A, 4.00% 20215,9 | $1,380 | $1,391 |
Bank of the West Auto Trust, Series 2014-1, Class A-3, 1.09% 20195,9 | 2,243 | 2,243 |
Cabela’s Master Credit Card Trust, Series 2016-1, Class A1, 1.78% 20229 | 8,230 | 8,255 |
Capital One Multi-asset Execution Trust, Series 2014-A5, Class A, 1.48% 20209 | 8,000 | 8,038 |
CarMaxAuto Owner Trust, Series 2014-4, Class A-3, 1.25% 20199 | 6,600 | 6,601 |
Chesapeake Funding LLC, Series 2014-1-A, Class A, 0.885% 20265,7,9 | 2,916 | 2,907 |
Citibank Credit Card Issuance Trust, Series 2008-A-2, Class A2, 1.601% 20207,9 | 14,000 | 14,188 |
Conseco Finance Home Loan Trust, Series 1999-G, Class B-2, 10.96% 20299 | 13,630 | 958 |
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-3, AMBAC insured, 4.80% 20355,9 | 179 | 179 |
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-4, AMBAC insured, 5.20% 20355,7,9 | 1,145 | 1,181 |
CWHEQ Revolving Home Equity Loan Trust, Series 2006-I, Class 2-A, FSA insured, 0.621% 20377,9 | 1,496 | 1,325 |
CWHEQ Revolving Home Equity Loan Trust, Series 2007-B, Class A, FSA insured, 0.631% 20377,9 | 2,647 | 2,444 |
Drive Auto Receivables Trust, Series 2015-BA, Class C, 2.76% 20215,9 | 7,970 | 8,024 |
Drive Auto Receivables Trust, Series 2015-AA, Class C, 3.06% 20215,9 | 8,900 | 8,990 |
Drive Auto Receivables Trust, Series 2015-DA, Class C, 3.38% 20215,9 | 7,225 | 7,358 |
Drive Auto Receivables Trust, Series 2016-AA, Class C, 3.91% 20215,9 | 10,000 | 10,289 |
Enterprise Fleet Financing LLC, Series 2014-1, Class A2, 0.87% 20195,9 | 661 | 660 |
Fifth Third Auto Trust, Series 2014-3, Class A3, 0.96% 20199 | 3,226 | 3,225 |
Ford Credit Auto Owner Trust, Series 2014-1-A, 2.26% 20255,9 | 2,405 | 2,453 |
Ford Credit Auto Owner Trust, Series 2015-1 Class A, 2.12% 20265,9 | 6,300 | 6,395 |
Ford Credit Auto Owner Trust, Series 2014-2-A, 2.31% 20265,9 | 10,110 | 10,291 |
Ford Credit Auto Owner Trust, Series 2016-2, Class A, 2.03% 20275,9 | 10,500 | 10,606 |
Ford Credit Auto Owner Trust, Series 2016-1, Class A, 2.31% 20275,9 | 16,000 | 16,395 |
Ford Credit Auto Owner Trust, Series 2015-2, Class A, 2.44% 20275,9 | 17,160 | 17,659 |
Ford Credit Floorplan Master Owner Trust, Series 2015-2, Class A-1, 1.98% 20229 | 7,780 | 7,880 |
Hertz Fleet Lease Funding LP, Series 2014-1-A, 0.845% 20285,7,9 | 1,306 | 1,306 |
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2013-1A, Class A-1, 1.12% 20175,9 | 1,417 | 1,416 |
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2013-1A, Class A-2, 1.83% 20195,9 | 8,500 | 8,476 |
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2015-3A, Class A, 2.67% 20215,9 | 6,290 | 6,365 |
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2015-1, Class A, 2.73% 20215,9 | 7,518 | 7,671 |
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2015-1, Class A, 3.52% 20215,9 | 2,210 | 2,236 |
Home Equity Mortgage Trust, Series 2006-6, Class 2A-1, 0.653% 20377,9 | 12,944 | 1,312 |
Honda Auto Receivables Owner Trust, Series 2014-3, Class A-3, 0.88% 20189 | 5,215 | 5,214 |
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series 2007-H1, Class A-1, FSA insured, 0.648% 20377,9 | 1,529 | 1,345 |
RAMP Trust, Series 2003-RZ4, Class A-7, 5.29% 20337,9 | 108 | 112 |
Santander Drive Auto Receivables Trust, Series 2014-4, Class A3, 1.08% 20189 | 1,798 | 1,798 |
Santander Drive Auto Receivables Trust, Series 2012-6, Class C, 1.94% 20189 | 1,730 | 1,732 |
Santander Drive Auto Receivables Trust, Series 2014-5, Class A-3, 1.15% 20199 | 1,423 | 1,424 |
Santander Drive Auto Receivables Trust, Series 2014-4, Class B, 1.82% 20199 | 6,000 | 6,015 |
Santander Drive Auto Receivables Trust, Series 2014-2, Class C, 2.33% 20199 | 5,000 | 5,042 |
Santander Drive Auto Receivables Trust, Series 2015-2, Class C, 2.44% 20219 | 16,550 | 16,666 |
Santander Drive Auto Receivables Trust, Series 2015-1, Class C, 2.57% 20219 | 5,340 | 5,412 |
Santander Drive Auto Receivables Trust, Series 2016-2, Class C, 2.66% 20219 | 2,430 | 2,456 |
Santander Drive Auto Receivables Trust, Series 2015-5, Class C, 2.74% 20219 | 6,915 | 7,021 |
Social Professional Loan Program LLC, Series 2015-D, Class A-2, 2.72% 20365,9 | 7,926 | 8,078 |
Verizon Owner Trust, Series 2016-1A, Class A, 1.42% 20215,9 | 6,075 | 6,084 |
Volkswagen Auto Loan Enhanced Trust, Series 2014-2, Class A-3 0.95% 20199 | 8,656 | 8,651 |
World Omni Auto Receivables Trust, Series 2014-B, Class A-3, 1.14% 20209 | 4,365 | 4,370 |
325,152 | ||
Federal agency bonds & notes 0.07% | ||
CoBank, ACB 1.253% 20225,7 | 3,700 | 3,552 |
Fannie Mae 6.25% 2029 | 32,000 | 46,881 |
Fannie Mae 7.125% 2030 | 1,500 | 2,381 |
Bonds, notes & other debt instruments Federal agency bonds & notes (continued) | Principal amount (000) | Value (000) |
Federal Home Loan Bank 0.875% 2018 | $12,860 | $12,894 |
Tennessee Valley Authority, Series B, 3.50% 2042 | 500 | 565 |
66,273 | ||
Bonds & notes of governments & government agencies outside the U.S. 0.06% | ||
Hungary 6.25% 2020 | 3,410 | 3,805 |
Slovenia (Republic of) 5.50% 2022 | 9,000 | 10,298 |
Spain (Kingdom of) 4.00% 20185 | 31,765 | 33,058 |
United Mexican States 3.60% 2025 | 6,000 | 6,293 |
United Mexican States 4.125% 2026 | 6,900 | 7,511 |
United Mexican States 5.55% 2045 | 3,500 | 4,213 |
65,178 | ||
Municipals 0.04% | ||
State of California, Various Purpose G.O. Bonds, 6.20% 2019 | 24,675 | 27,750 |
State of New Jersey, Econ. Dev. Auth., School Facs. Construction Rev. Ref. Bonds, Series 2015-YY, 4.447% 2020 | 6,000 | 6,269 |
State of New Jersey, Transportation Trust Fund Auth., Transportation System Rev. Ref. Bonds, Series 2013-B, 1.758% 2018 | 8,500 | 8,376 |
42,395 | ||
Total bonds, notes & other debt instruments (cost: $21,794,167,000) | 22,626,080 | |
Short-term securities 6.85% | ||
3M Co. 0.42%–0.45% due 9/19/2016–9/26/20165 | 75,000 | 74,953 |
Air Products and Chemicals, Inc. 0.40% due 8/5/20165 | 37,000 | 36,997 |
Apple Inc. 0.43%–0.44% due 10/11/2016–10/20/20165 | 121,475 | 121,370 |
BNP Paribas Finance Inc. 0.30% due 8/1/2016 | 24,100 | 24,099 |
CAFCO, LLC 0.60%–0.88% due 8/22/2016–11/21/2016 | 140,000 | 139,822 |
Caterpillar Financial Services Corp. 0.45%–0.46% due 8/25/2016–9/6/2016 | 132,000 | 131,954 |
Caterpillar Inc. 0.50% due 8/26/20165 | 13,000 | 12,996 |
Chariot Funding, LLC 1.00% due 1/17/20175 | 25,000 | 24,875 |
Chevron Corp. 0.52% due 8/2/2016–8/16/20165 | 117,600 | 117,590 |
Ciesco LLC 0.57% due 8/1/2016 | 50,000 | 49,998 |
Coca-Cola Co. 0.56%–0.69% due 8/9/2016–1/12/20175 | 214,800 | 214,447 |
ExxonMobil Corp. 0.34%–0.44% due 8/16/2016–10/3/2016 | 157,000 | 156,925 |
Fannie Mae 0.38%–0.53% due 9/8/2016–1/5/2017 | 200,000 | 199,756 |
Federal Farm Credit Banks 0.44%–0.57% due 10/24/2016–5/25/2017 | 350,000 | 349,112 |
Federal Home Loan Bank 0.25%–0.63% due 8/9/2016–5/15/2017 | 2,950,792 | 2,947,750 |
Freddie Mac 0.33%–0.49% due 8/16/2016–2/2/2017 | 823,958 | 823,053 |
GE Capital Treasury Services (U.S.) LLC 0.40% due 8/31/2016 | 50,000 | 49,984 |
General Electric Co. 0.34% due 8/1/2016 | 40,700 | 40,699 |
Honeywell International Inc. 0.49% due 10/19/20165 | 50,000 | 49,939 |
IBM Corp. 0.45% due 9/26/20165 | 50,000 | 49,969 |
Intel Corp. 0.41% due 8/30/2016 | 18,800 | 18,794 |
Jupiter Securitization Co., LLC 0.45% due 8/25/20165 | 50,000 | 49,982 |
Kimberly-Clark Corp. 0.42% due 8/22/20165 | 50,000 | 49,987 |
Microsoft Corp. 0.42%–0.46% due 8/3/2016–9/14/20165 | 218,600 | 218,546 |
Paccar Financial Corp. 0.53% due 9/16/2016 | 20,100 | 20,088 |
PepsiCo Inc. 0.42% due 8/25/20165 | 85,000 | 84,977 |
Pfizer Inc. 0.47%–0.67% due 9/12/2016–10/18/20165 | 227,200 | 227,036 |
Private Export Funding Corp. 0.59% due 10/24/20165 | 40,000 | 39,950 |
Qualcomm Inc. 0.48%–0.49% due 8/2/2016–9/7/20165 | 88,500 | 88,481 |
Société Générale 0.29% due 8/1/20165 | 25,000 | 24,999 |
Short-term securities | Principal amount (000) | Value (000) |
U.S. Treasury Bills 0.36%–0.46% due 8/18/2016–12/8/2016 | $232,900 | $232,835 |
United Parcel Service Inc. 0.60% due 12/1/20165 | 50,000 | 49,909 |
Walt Disney Co. 0.45% due 8/10/20165 | 50,000 | 49,994 |
Wells Fargo Bank, N.A. 0.86%–1.05% due 11/3/2016–1/20/2017 | 190,000 | 190,000 |
Total short-term securities (cost: $6,960,868,000) | 6,961,866 | |
Total investment securities 99.95% (cost: $83,827,436,000) | 101,560,318 | |
Other assets less liabilities 0.05% | 49,705 | |
Net assets 100.00% | $101,610,023 |
Settlement date | Counterparty | Contract amount | Unrealized (depreciation) appreciation at 7/31/2016 (000) | ||
Receive (000) | Deliver (000) | ||||
Sales: | |||||
Australian dollars | 8/15/2016 | HSBC Bank | $134,377 | A$182,300 | $(4,079) |
Australian dollars | 9/9/2016 | JPMorgan Chase | $96,752 | A$130,000 | (1,899) |
British pounds | 8/19/2016 | Bank of America, N.A. | $37,778 | £26,550 | 2,629 |
British pounds | 8/19/2016 | JPMorgan Chase | $163,054 | £122,500 | 878 |
British pounds | 8/19/2016 | Barclays Bank PLC | $256,477 | £195,043 | (1,737) |
British pounds | 8/19/2016 | HSBC Bank | $256,403 | £195,043 | (1,812) |
British pounds | 8/22/2016 | HSBC Bank | $35,092 | £26,450 | 74 |
British pounds | 9/8/2016 | HSBC Bank | $30,100 | £22,900 | (228) |
Euros | 9/23/2016 | UBS AG | $84,824 | €76,900 | (1,360) |
$(7,534) |
1 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
2 | Acquired through a private placement transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale. Further details on these holdings appear below. |
3 | Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous,“ was $141,409,000, which represented .14% of the net assets of the fund. |
4 | Security did not produce income during the last 12 months. |
5 | 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 $6,655,197,000, which represented 6.55% of the net assets of the fund. |
6 | Payment in kind; the issuer has the option of paying additional securities in lieu of cash. |
7 | Coupon rate may change periodically. |
8 | Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $457,805,000, which represented .45% of the net assets of the fund. |
9 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
10 | Scheduled interest and/or principal payment was not received. |
11 | A portion of this security was pledged as collateral. The total value of pledged collateral was $2,963,000, which represented less than .01% of the net assets of the fund. |
12 | Index-linked bond whose principal amount moves with a government price index. |
13 | Purchased on a TBA basis. |
Private placement securities | Acquisition date | Cost (000) | Value (000) | Percent of net assets |
CEVA Group PLC, Series A-1, 3.68% convertible preferred | 4/3/2013 | $29,938 | $13,621 | .01% |
CEVA Group PLC | 11/24/2015 | 34,036 | 11,802 | .01 |
CEVA Group PLC, Series A-2, 2.68% convertible preferred | 5/2/2013 | 13,172 | 4,567 | — |
Total private placement securities | $ 77,146 | $ 29,990 | .02 % |
Key to abbreviations and symbols |
Auth. = Authority |
ADR = American Depositary Receipts |
A$ = Australian dollars |
£ = British pounds |
CAD = Canadian dollars |
Dev. = Development |
Econ. = Economic |
€ = Euros |
Facs. = Facilities |
FDR = Fiduciary Depositary Receipts |
G.O. = General Obligation |
LOC = Letter of Credit |
Ref. = Refunding |
Rev. = Revenue |
TBA = To be announced |
MFGEFPX-006-0916O-S54087 | The Income Fund of America — Page 36 of 36 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of
The Income Fund of America:
We have audited the accompanying statement of assets and liabilities of The Income Fund of America (the “Fund”), including the summary schedule of investments, as of July 31, 2016, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended (collectively, the “financial statements”), the financial highlights for each of the five years in the period then ended (the financial statements and financial highlights are included in Item 1 of this Form N-CSR), and the schedule of investments in securities as of July 31, 2016 (included in Item 6 of this Form N-CSR). These financial statements, financial highlights, and schedule of investments in securities are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements, financial highlights, and schedule of investments in securities based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements, financial highlights, and schedule of investments in securities are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and schedule of investments in securities, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2016, by correspondence with the custodian, brokers, and agent banks; where replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements, financial highlights, and schedule of investments in securities referred to above present fairly, in all material respects, the financial position of The Income Fund of America as of July 31, 2016, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Costa Mesa, California
September 8, 2016
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 10 – Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating and governance committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating and governance committee.
ITEM 11 – Controls and Procedures
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule. |
(b) | There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
ITEM 12 – Exhibits
(a)(1) | The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto. |
(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.
THE INCOME FUND OF AMERICA | |
By /s/ Hilda L. Applbaum | |
Hilda L. Applbaum, Vice Chairman and Principal Executive Officer | |
Date: September 30, 2016 |
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/ Hilda L. Applbaum |
Hilda L. Applbaum, Vice Chairman and Principal Executive Officer |
Date: September 30, 2016 |
By /s/ Kimberley H. Monasterio |
Kimberley H. Monasterio, Treasurer and Principal Financial Officer |
Date: September 30, 2016 |