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: 811-00572
American Mutual Fund
(Exact Name of Registrant as Specified in Charter)
333 South Hope Street
Los Angeles, California 90071
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (213) 486-9200
Date of fiscal year end: October 31
Date of reporting period: October 31, 2011
Vincent P. Corti
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
Copies to:
Eric A. S. Richards
O’Melveny & Myers LLP
400 South Hope Street, 10th Floor
Los Angeles, California 90071
(Counsel for the Registrant)
ITEM 1 – Reports to Stockholders
American Mutual Fund®
[photo of sunflowers - a tree in the background]
Special feature
Why dividends are even more important in today’s volatile market
u See page 6
Annual report for the year ended October 31, 2011
American Mutual Fund strives for the balanced accomplishment of three objectives — current income, growth of capital and conservation of principal — through investments in companies that participate in the growth of the American economy.
This fund is one of the 33 American Funds. American Funds is one of the nation’s largest mutual fund families. For 80 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended September 30, 2011 (the most recent calendar quarter-end): | ||||||||||||
Class A shares | 1 year | 5 years | 10 years | |||||||||
Reflecting 5.75% maximum sales charge | –4.29 | % | –0.67 | % | 3.56 | % |
The total annual fund operating expense ratio is 0.62% for Class A shares as of the prospectus dated January 1, 2012 (unaudited).
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 26 and 27 for details.
The fund’s 30-day yield for Class A shares as of November 30, 2011, calculated in accordance with the U.S. Securities and Exchange Commission formula, was 2.40%. The fund’s distribution rate for Class A shares as of that date was 2.33%. Both reflect the 5.75% maximum sales charge. The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the fund’s SEC yield and distribution rate may differ.
Results for other share classes can be found on page 32.
See the prospectus and the Risk Factors section of this report for more information on risks associated with investing in the fund.
Fellow investors:
Fiscal 2011 was a challenging, volatile year with both negative and positive developments. The stock market posted positive returns in the first six months but in the next five months, gave back all of its gains. However, the stock market, as represented by the Standard & Poor’s 500 Composite Index, gained 10.9% in October, its second-best monthly return in the past 20 years.
Widespread concerns about inadequate growth, high unemployment in the United States and federal, state and local government layoffs and cutbacks continued during the past 12 months. Many states and localities have had to cut spending or reduce the number of employees as they cope with lower revenues and unfunded liabilities. U.S. stock markets were also buffeted by a growing financial crisis in Europe.
On the positive side, private employment in the U.S. has expanded for 23 consecutive months. Many large U.S. corporations reported strong earnings with solid balance sheets, and a growing number of firms increased dividend payments to investors. The U.S. economy has grown for nine straight quarters and ended the third quarter with an estimated annual growth rate of 2.0%, up from 1.3% in the second quarter of 2011. Interest rates, core inflation and mortgage rates are very low. Much like corporate balance sheets, personal balance sheets are also improving.
The year was additionally impacted by a series of exogenous events including the Arab Spring uprisings in the Middle East and the downgrading of the U.S. debt with attendant fiscal and budgetary debates here at home. In March, Japan suffered a damaging earthquake, followed by a devastating tsunami that impacted global supply channels, especially in the automotive industry. All considered, it turned out to be a surprisingly challenging year for investors.
These developments, and others, led to increased volatility in the stock market. American Mutual Fund (AMF) posted a total return of 6.8% for the 12 months ended October 31, 2011, compared with 8.1% for the unmanaged S&P 500, a broad measure of large-company U.S. stocks.
AMF has continued to do better than the S&P 500 over longer periods such as the last five and 10 years, and for its lifetime. For the past 10-year period, which included two of the worst declines since the 1930s, the fund provided an average annual total return of 5.0%, compared with 3.7% by the S&P 500. Over its more than 61-year lifetime, AMF has had an average annual total return of 11.5%, compared with 10.9% for the S&P 500.
American Mutual Fund strives for the balanced accomplishment of three objectives — current income, growth of capital and conservation of principal. This conservative approach has served shareholders well over the long term, providing above-average returns with less volatility. However, the fund’s returns can lag during market surges, as we experienced in October.
The fund seeks to reduce risk by investing in high-quality companies and by investing primarily in companies that pay dividends. We are pleased that after suffering in the 2008 and 2009 market decline, dividends continued their recovery over the past 12 months. See the feature article on page 6 to find out why dividends can be even more important for investors in today’s volatile market.
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In this report | |
Special feature | |
6 | Why dividends are even more important in today’s volatile market |
Contents | |
1 | Letter to investors |
3 | The value of a long-term perspective |
13 | Summary investment portfolio |
17 | Financial statements |
33 | Board of trustees and other officers |
About the cover: | |
Beautiful wildflowers surround an old branch reaching toward a large oak tree and vibrant sunset beyond in Washington State. |
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[Begin Sidebar]
Dividends paid in calendar year 2011 | |
For tax purposes, here are the income dividends Class A shareholders received in calendar year 2011. | |
Income dividends per share: | $0.150 paid 3/21/11 |
$0.150 paid 6/20/11 | |
$0.155 paid 9/19/11 | |
$0.155 to be paid on 12/23/11 | |
The fund will pay a special dividend from accumulated, undistributed income on 12/23/11. | |
Form 1099-DIV, which provides the information you will need to prepare your federal income tax return for 2011, will be mailed to you with your American Funds Tax Guide in late January 2012. |
[End Sidebar]
Portfolio review
As of October 31, AMF had 88.5% in equity securities, 3.6% in corporate and government bonds and 7.6% in short-term securities including cash. The fund’s largest sectors were industrials (15.8%), consumer discretionary (12.3%), information technology (10.3%), health care (9.8%) and energy (8.7%).
What helped the fund? Six of the fund’s 10 largest stocks provided a total return greater than that of the S&P 500. They included IBM (+28.6%), Bristol-Myers Squibb (+17.4%), Home Depot (+15.9%), Verizon (+13.9%), Royal Dutch Shell (+9.7%) and Kraft Foods (+9.0%). Also, with below-market returns were Abbott Laboratories (+5.0%), United Technologies (+4.3%), AT&T (+2.8%) and Microsoft (–0.04%). Interestingly, the average dividend yield on these top 10 holdings was, at October 31, two-thirds above that of the S&P 500.
The road ahead
While we are hopeful that the U.S. economy will continue to expand, a number of problems remain. We will likely see continued volatility in the markets given these challenges. In the U.S., the unemployment rate remains stubbornly high, housing has not recovered and the lack of progress on the budget deficit is troubling. The European debt problems are far from being resolved and the austerity measures could push the region into recession.
We remain alert to the many challenges ahead but also see significant attractive investment opportunities that we will continue to pursue on your behalf. There are many high-quality, dividend-paying companies with solid prospects trading at very attractive valuations. In addition, any improvement in the situation around the world will lift all markets significantly.
We are pleased to report that AMF’s number of shareholder accounts increased 4.4% from a year ago.
We welcome our new shareholders and thank our long-term investors for their faith in our efforts on behalf of American Mutual Fund.
Cordially,
/s/ James K. Dunton
James K. Dunton
Vice Chairman
/s/ Joyce E. Gordon
Joyce E. Gordon
President
December 13, 2011
For current information about the fund, visit americanfunds.com.
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We are deeply saddened by the loss of Jon B. Lovelace Jr., chairman emeritus and former portfolio counselor of American Mutual Fund, chairman emeritus of Capital Research and Management Company and former chairman of The Capital Group Companies.
Nearly every aspect of The Capital Group bears some stamp of Jon’s leadership and service from 1951 until 2005. He was one of the principal architects of our Multiple Portfolio Counselor System, an early proponent of international investing, the founder of New Perspective Fund and Capital Income Builder and a standard-bearer of The Capital Group’s mission to serve investors.
Though he never sought the spotlight, his accomplishments in life, work and philanthropy will long be remembered.
[End Sidebar]
The value of a long-term perspective
Results of a $10,000 investment in American Mutual Fund
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.
For more than 61 years, American Mutual Fund has been providing investors with an opportunity to achieve their financial goals. A meaningful way to compare the fund’s results with the return on other investments is through its total return.
Total return is a combination of income return and capital return. This chart illustrates an assumed $10,000 investment in American Mutual Fund from February 21, 1950 — when the fund began operations — through October 31, 2011. The table beneath the chart shows the fund’s total return in each of the 61 fiscal years, broken down into its income and capital components.
As you can see, during this period a $10,000 investment in the fund, with all dividends reinvested, would have grown to $7,841,531.3
Use the table below to estimate the growth of your investment. Let’s say that you have been reinvesting all your dividends and want to know how your investment has done since the end of fiscal 2001. As the table shows, the value of the investment illustrated here was $4.8 million. Since then, it has grown to $7.8 million. Thus, in the same period, the value of your 2001 investment — regardless of its size — also has grown.
Average annual total returns based on a $1,000 investment (for periods ended October 31, 2011)* | ||||||||||||
1 year | 5 years | 10 years | ||||||||||
Class A shares | 0.69 | % | 0.22 | % | 4.38 | % | ||||||
*Assumes reinvestment of all distributions and payment of the maximum 5.75% sales charge. |
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 26 and 27 for details.
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Value added by reinvestment of dividends
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Date | American Mutual Fund with dividends reinvested3 | American Mutual Fund with dividends excluded5 | ||||||
02/21/50 | 9,426 | 9,426 | ||||||
07/13/50 | 9,004 | 8,918 | ||||||
10/07/50 | 10,274 | 10,075 | ||||||
10/31/50 | 10,018 | 9,708 | ||||||
10/31/51 | 12,234 | 11,334 | ||||||
07/16/52 | 13,421 | 12,181 | ||||||
10/31/52 | 13,164 | 11,710 | ||||||
03/19/53 | 14,577 | 12,882 | ||||||
09/14/53 | 13,004 | 11,256 | ||||||
10/31/53 | 14,076 | 12,009 | ||||||
10/31/54 | 19,261 | 15,876 | ||||||
09/23/55 | 26,727 | 21,627 | ||||||
10/31/55 | 25,050 | 20,087 | ||||||
08/02/56 | 31,861 | 25,028 | ||||||
10/31/56 | 29,652 | 23,142 | ||||||
12/31/56 | 30,831 | 24,062 | ||||||
10/22/57 | 26,773 | 20,267 | ||||||
10/31/57 | 28,050 | 21,241 | ||||||
01/02/58 | 27,933 | 20,944 | ||||||
09/30/58 | 34,818 | 25,718 | ||||||
10/31/58 | 36,140 | 26,511 | ||||||
08/03/59 | 43,480 | 31,294 | ||||||
10/31/59 | 41,489 | 29,668 | ||||||
12/31/59 | 43,319 | 30,977 | ||||||
09/28/60 | 40,277 | 27,959 | ||||||
10/31/60 | 40,865 | 28,371 | ||||||
10/31/61 | 54,348 | 36,806 | ||||||
12/12/61 | 57,113 | 38,678 | ||||||
06/25/62 | 42,687 | 28,545 | ||||||
10/31/62 | 46,572 | 30,677 | ||||||
10/31/63 | 61,289 | 39,309 | ||||||
10/31/64 | 71,355 | 44,625 | ||||||
06/28/65 | 70,430 | 43,509 | ||||||
10/31/65 | 79,919 | 48,769 | ||||||
12/17/65 | 82,334 | 50,242 | ||||||
10/07/66 | 71,747 | 42,538 | ||||||
10/31/66 | 77,646 | 46,067 | ||||||
01/04/67 | 79,886 | 47,052 | ||||||
09/25/67 | 98,623 | 57,321 | ||||||
10/31/67 | 92,836 | 53,558 | ||||||
03/25/68 | 89,187 | 51,057 | ||||||
10/31/68 | 109,586 | 61,257 | ||||||
11/29/68 | 115,011 | 64,289 | ||||||
10/09/69 | 98,399 | 53,023 | ||||||
10/31/69 | 103,216 | 55,651 | ||||||
05/26/70 | 78,408 | 41,363 | ||||||
10/31/70 | 93,358 | 48,100 | ||||||
04/29/71 | 120,955 | 61,139 | ||||||
10/31/71 | 112,886 | 55,961 | ||||||
11/23/71 | 106,468 | 52,779 | ||||||
08/23/72 | 128,118 | 61,708 | ||||||
10/31/72 | 125,226 | 59,737 | ||||||
12/11/72 | 136,043 | 64,897 | ||||||
08/22/73 | 112,151 | 51,865 | ||||||
10/31/73 | 124,800 | 57,130 | ||||||
03/14/74 | 126,331 | 57,130 | ||||||
10/03/74 | 91,007 | 38,810 | ||||||
10/31/74 | 105,122 | 44,985 | ||||||
12/06/74 | 96,877 | 41,457 | ||||||
07/15/75 | 138,200 | 56,926 | ||||||
10/31/75 | 132,196 | 53,330 | ||||||
12/05/75 | 130,346 | 52,584 | ||||||
09/21/76 | 174,044 | 67,986 | ||||||
10/31/76 | 167,379 | 64,276 | ||||||
12/31/76 | 182,661 | 70,144 | ||||||
10/31/77 | 176,434 | 64,554 | ||||||
01/26/78 | 175,846 | 63,480 | ||||||
09/12/78 | 229,322 | 80,818 | ||||||
10/31/78 | 198,947 | 69,119 | ||||||
10/05/79 | 257,885 | 86,418 | ||||||
10/31/79 | 232,805 | 76,959 | ||||||
10/15/80 | 315,866 | 100,651 | ||||||
10/31/80 | 303,585 | 95,432 | ||||||
06/23/81 | 350,366 | 107,612 | ||||||
09/25/81 | 317,838 | 96,442 | ||||||
10/31/81 | 334,117 | 99,943 | ||||||
08/10/82 | 334,437 | 93,802 | ||||||
10/22/82 | 434,703 | 120,458 | ||||||
10/31/82 | 426,438 | 118,168 | ||||||
01/03/83 | 444,289 | 120,550 | ||||||
10/10/83 | 562,833 | 149,553 | ||||||
10/31/83 | 544,917 | 143,286 | ||||||
11/29/83 | 564,778 | 148,509 | ||||||
07/24/84 | 507,745 | 128,657 | ||||||
10/31/84 | 577,161 | 144,417 | ||||||
01/04/85 | 583,499 | 144,219 | ||||||
07/17/85 | 704,992 | 170,303 | ||||||
10/31/85 | 701,836 | 167,598 | ||||||
09/04/86 | 936,477 | 216,971 | ||||||
10/31/86 | 913,072 | 209,413 | ||||||
08/25/87 | 1,136,870 | 253,230 | ||||||
10/19/87 | 886,283 | 195,646 | ||||||
10/31/87 | 960,889 | 212,116 | ||||||
12/04/87 | 893,638 | 197,270 | ||||||
06/22/88 | 1,071,388 | 229,884 | ||||||
10/31/88 | 1,081,202 | 227,085 | ||||||
01/03/89 | 1,071,656 | 220,598 | ||||||
10/31/89 | 1,299,788 | 259,386 | ||||||
12/13/89 | 1,346,639 | 268,736 | ||||||
10/31/90 | 1,239,346 | 235,204 | ||||||
01/09/91 | 1,280,467 | 238,543 | ||||||
08/28/91 | 1,533,066 | 279,429 | ||||||
10/31/91 | 1,544,414 | 278,500 | ||||||
12/10/91 | 1,500,849 | 267,729 | ||||||
08/03/92 | 1,715,846 | 299,703 | ||||||
10/31/92 | 1,690,017 | 292,156 | ||||||
12/04/92 | 1,720,976 | 294,489 | ||||||
10/15/93 | 2,018,685 | 335,881 | ||||||
10/31/93 | 2,004,864 | 333,581 | ||||||
11/01/93 | 2,003,137 | 333,294 | ||||||
04/04/94 | 1,902,057 | 313,572 | ||||||
10/31/94 | 2,039,874 | 326,417 | ||||||
12/08/94 | 1,968,379 | 311,824 | ||||||
10/19/95 | 2,505,170 | 386,113 | ||||||
10/31/95 | 2,473,446 | 381,224 | ||||||
01/10/96 | 2,579,741 | 394,322 | ||||||
10/21/96 | 2,965,119 | 442,248 | ||||||
10/31/96 | 2,940,742 | 438,613 | ||||||
12/16/96 | 2,977,645 | 440,717 | ||||||
10/07/97 | 3,809,732 | 552,257 | ||||||
10/31/97 | 3,652,205 | 529,422 | ||||||
01/09/98 | 3,718,525 | 535,657 | ||||||
04/17/98 | 4,289,166 | 613,976 | ||||||
10/31/98 | 4,205,471 | 594,159 | ||||||
11/23/98 | 4,395,647 | 621,027 | ||||||
12/14/98 | 4,240,060 | 595,287 | ||||||
10/31/99 | 4,584,199 | 631,823 | ||||||
11/16/99 | 4,643,616 | 640,013 | ||||||
03/07/00 | 3,918,147 | 536,579 | ||||||
10/31/00 | 4,639,429 | 620,069 | ||||||
05/21/01 | 5,217,427 | 686,711 | ||||||
09/21/01 | 4,560,805 | 591,103 | ||||||
10/31/01 | 4,811,535 | 623,599 | ||||||
03/19/02 | 5,400,265 | 694,828 | ||||||
10/09/02 | 3,957,009 | 500,364 | ||||||
10/31/02 | 4,406,372 | 557,186 | ||||||
03/11/03 | 4,149,192 | 521,398 | ||||||
10/31/03 | 5,257,312 | 648,807 | ||||||
11/18/03 | 5,200,587 | 641,807 | ||||||
10/06/04 | 5,895,199 | 713,980 | ||||||
10/31/04 | 5,825,570 | 705,547 | ||||||
11/02/04 | 5,823,249 | 705,266 | ||||||
08/03/05 | 6,444,871 | 770,270 | ||||||
10/31/05 | 6,279,702 | 746,895 | ||||||
12/31/05 | 6,489,117 | 768,159 | ||||||
10/26/06 | 7,359,693 | 857,928 | ||||||
10/31/06 | 7,309,525 | 852,080 | ||||||
03/05/07 | 7,416,422 | 860,226 | ||||||
07/19/07 | 8,390,997 | 963,860 | ||||||
10/31/07 | 8,200,608 | 937,203 | ||||||
11/06/07 | 8,072,187 | 922,526 | ||||||
10/27/08 | 5,106,324 | 569,630 | ||||||
10/31/08 | 5,670,574 | 632,574 | ||||||
03/09/09 | 4,303,671 | 473,029 | ||||||
10/19/09 | 6,619,809 | 710,800 | ||||||
10/31/09 | 6,309,734 | 677,506 | ||||||
04/23/10 | 7,316,238 | 773,306 | ||||||
07/02/10 | 6,436,566 | 675,936 | ||||||
10/31/10 | 7,338,907 | 765,767 | ||||||
05/10/11 | 8,305,593 | 855,599 | ||||||
10/03/11 | 7,088,546 | 721,480 | ||||||
10/31/11 | 7,841,531 | 798,119 |
Date | Standard & Poor’s 500 Composite Index with dividends reinvested4 | |||
02/21/50 | 10,000 | |||
3/9/1950 | 9,980 | |||
10/24/1950 | 12,242 | |||
10/31/1950 | 12,023 | |||
12/4/1950 | 11,810 | |||
10/15/1951 | 15,620 | |||
10/31/1951 | 15,125 | |||
11/24/1951 | 14,703 | |||
8/8/1952 | 17,629 | |||
10/31/1952 | 17,157 | |||
1/5/1953 | 18,855 | |||
9/14/1953 | 16,653 | |||
10/31/1953 | 18,185 | |||
11/17/1953 | 17,970 | |||
10/6/1954 | 25,456 | |||
10/31/1954 | 24,752 | |||
11/1/1954 | 24,838 | |||
9/23/1955 | 36,907 | |||
10/31/1955 | 34,492 | |||
11/1/1955 | 34,443 | |||
8/2/1956 | 41,741 | |||
10/31/1956 | 38,605 | |||
7/15/1957 | 42,684 | |||
10/22/1957 | 34,205 | |||
10/31/1957 | 36,167 | |||
12/18/1957 | 34,818 | |||
10/13/1958 | 47,125 | |||
10/31/1958 | 47,009 | |||
11/25/1958 | 46,725 | |||
8/3/1959 | 56,925 | |||
10/31/1959 | 54,385 | |||
1/5/1960 | 57,427 | |||
10/25/1960 | 51,038 | |||
10/31/1960 | 52,268 | |||
11/1/1960 | 52,806 | |||
10/31/1961 | 69,287 | |||
12/12/1961 | 73,541 | |||
6/26/1962 | 53,780 | |||
10/31/1962 | 59,004 | |||
11/1/1962 | 59,630 | |||
10/28/1963 | 80,093 | |||
10/31/1963 | 79,835 | |||
11/22/1963 | 75,088 | |||
10/12/1964 | 94,552 | |||
10/31/1964 | 94,408 | |||
6/28/1965 | 92,427 | |||
10/27/1965 | 105,817 | |||
10/31/1965 | 106,023 | |||
2/9/1966 | 108,804 | |||
10/7/1966 | 86,547 | |||
10/31/1966 | 95,134 | |||
11/22/1966 | 94,505 | |||
9/25/1967 | 118,979 | |||
10/31/1967 | 115,082 | |||
3/5/1968 | 108,692 | |||
10/21/1968 | 132,432 | |||
10/31/1968 | 130,788 | |||
11/29/1968 | 137,411 | |||
7/29/1969 | 115,515 | |||
10/31/1969 | 126,935 | |||
11/10/1969 | 128,357 | |||
5/26/1970 | 92,108 | |||
10/31/1970 | 112,877 | |||
11/18/1970 | 112,254 | |||
4/28/1971 | 143,982 | |||
10/31/1971 | 131,895 | |||
11/23/1971 | 126,198 | |||
8/14/1972 | 161,027 | |||
10/31/1972 | 160,791 | |||
1/11/1973 | 174,099 | |||
8/22/1973 | 148,093 | |||
10/31/1973 | 160,825 | |||
11/1/1973 | 159,934 | |||
10/3/1974 | 96,094 | |||
10/31/1974 | 114,517 | |||
12/6/1974 | 101,201 | |||
7/15/1975 | 152,757 | |||
10/31/1975 | 144,279 | |||
12/5/1975 | 141,160 | |||
9/21/1976 | 180,440 | |||
10/31/1976 | 173,368 | |||
12/31/1976 | 182,351 | |||
10/25/1977 | 159,782 | |||
10/31/1977 | 162,890 | |||
3/6/1978 | 156,091 | |||
9/12/1978 | 197,202 | |||
10/31/1978 | 173,229 | |||
11/14/1978 | 172,001 | |||
10/5/1979 | 217,506 | |||
10/31/1979 | 200,011 | |||
3/27/1980 | 196,407 | |||
10/15/1980 | 275,888 | |||
10/31/1980 | 264,126 | |||
11/28/1980 | 292,265 | |||
9/25/1981 | 243,451 | |||
10/31/1981 | 265,623 | |||
8/12/1982 | 233,339 | |||
10/20/1982 | 320,276 | |||
10/31/1982 | 308,890 | |||
11/23/1982 | 307,088 | |||
10/10/1983 | 415,677 | |||
10/31/1983 | 395,213 | |||
1/6/1984 | 412,027 | |||
7/24/1984 | 368,402 | |||
10/31/1984 | 420,380 | |||
12/13/1984 | 411,175 | |||
7/17/1985 | 509,869 | |||
10/31/1985 | 501,639 | |||
11/4/1985 | 505,418 | |||
9/4/1986 | 691,048 | |||
10/31/1986 | 668,098 | |||
8/25/1987 | 943,691 | |||
10/19/1987 | 632,928 | |||
10/31/1987 | 710,847 | |||
12/4/1987 | 634,197 | |||
10/21/1988 | 827,986 | |||
10/31/1988 | 815,773 | |||
11/16/1988 | 771,471 | |||
10/9/1989 | 1,087,429 | |||
10/31/1989 | 1,030,770 | |||
7/16/1990 | 1,143,973 | |||
10/11/1990 | 924,581 | |||
10/31/1990 | 953,671 | |||
11/7/1990 | 959,977 | |||
8/28/1991 | 1,275,819 | |||
10/31/1991 | 1,272,350 | |||
11/29/1991 | 1,221,224 | |||
9/14/1992 | 1,415,354 | |||
10/31/1992 | 1,398,929 | |||
11/4/1992 | 1,393,683 | |||
10/15/1993 | 1,611,215 | |||
10/31/1993 | 1,607,499 | |||
2/2/1994 | 1,667,508 | |||
4/4/1994 | 1,526,617 | |||
10/31/1994 | 1,669,519 | |||
12/8/1994 | 1,579,580 | |||
10/19/1995 | 2,140,536 | |||
10/31/1995 | 2,110,427 | |||
11/1/1995 | 2,120,298 | |||
10/18/1996 | 2,635,548 | |||
10/31/1996 | 2,618,637 | |||
11/1/1996 | 2,613,067 | |||
10/7/1997 | 3,713,963 | |||
10/31/1997 | 3,459,189 | |||
11/12/1997 | 3,426,436 | |||
7/17/1998 | 4,535,102 | |||
10/31/1998 | 4,219,865 | |||
11/3/1998 | 4,266,609 | |||
7/16/1999 | 5,497,678 | |||
10/31/1999 | 5,302,788 | |||
3/24/2000 | 5,967,503 | |||
10/12/2000 | 5,229,586 | |||
10/31/2000 | 5,625,358 | |||
11/6/2000 | 5,636,338 | |||
9/21/2001 | 3,842,757 | |||
10/31/2001 | 4,225,243 | |||
1/4/2002 | 4,686,796 | |||
10/9/2002 | 3,141,633 | |||
10/31/2002 | 3,587,381 | |||
03/11/03 | 3,264,697 | |||
10/31/03 | 4,333,074 | |||
11/20/2003 | 4,262,720 | |||
2/11/2004 | 4,794,947 | |||
10/31/2004 | 4,740,913 | |||
11/1/2004 | 4,742,213 | |||
8/3/2005 | 5,293,460 | |||
10/31/2005 | 5,154,100 | |||
11/1/2005 | 5,135,952 | |||
10/26/2006 | 6,037,882 | |||
10/31/2006 | 5,995,606 | |||
11/3/2006 | 5,936,256 | |||
10/9/2007 | 6,930,573 | |||
10/31/2007 | 6,868,057 | |||
11/6/2007 | 6,739,019 | |||
10/27/2008 | 3,840,047 | |||
10/31/2008 | 4,389,986 | |||
3/9/2009 | 3,102,365 | |||
10/19/2009 | 5,101,006 | |||
10/31/2009 | 4,820,186 | |||
4/23/2010 | 5,712,926 | |||
7/2/2010 | 4,823,764 | |||
10/31/2010 | 5,617,209 | |||
4/29/2011 | 6,535,854 | |||
10/3/2011 | 5,317,053 | |||
10/31/2011 | 6,070,369 |
YEAR | Month | Consumer Price Index6 | |||||
28-Feb | 10,000 | ||||||
1950 | 28-Feb | 10,000 | |||||
31-Oct | 10,468 | ||||||
1951 | 11/50 | 10,511 | |||||
31-Oct | 11,149 | ||||||
1952 | 28-Feb | 11,191 | |||||
31-Aug | 11,362 | ||||||
31-Oct | 11,362 | ||||||
1953 | 28-Feb | 11,277 | |||||
31-Oct | 11,489 | ||||||
1954 | 31-Jan | 11,447 | |||||
30-Apr | 11,404 | ||||||
31-Oct | 11,404 | ||||||
1955 | 12/54 | 11,362 | |||||
30-Sep | 11,447 | ||||||
31-Oct | 11,447 | ||||||
1956 | 12/55 | 11,404 | |||||
31-Oct | 11,702 | ||||||
1957 | 11/56 | 11,702 | |||||
31-Jul | 12,043 | ||||||
31-Oct | 12,043 | ||||||
1958 | 11/57 | 12,085 | |||||
31-Jul | 12,340 | ||||||
31-Oct | 12,298 | ||||||
1959 | 12/58 | 12,298 | |||||
31-Oct | 12,511 | ||||||
1960 | 31-Jan | 12,468 | |||||
31-Oct | 12,681 | ||||||
1961 | 11/60 | 12,681 | |||||
31-Jul | 12,766 | ||||||
31-Oct | 12,766 | ||||||
1962 | 11/61 | 12,766 | |||||
30-Sep | 12,936 | ||||||
31-Oct | 12,936 | ||||||
1963 | 11/62 | 12,936 | |||||
31-Oct | 13,106 | ||||||
1964 | 11/63 | 13,106 | |||||
31-Jul | 13,234 | ||||||
31-Oct | 13,234 | ||||||
1965 | 11/64 | 13,277 | |||||
31-Oct | 13,489 | ||||||
1966 | 11/65 | 13,489 | |||||
31-Oct | 14,000 | ||||||
1967 | 11/66 | 14,000 | |||||
31-Oct | 14,340 | ||||||
1968 | 11/67 | 14,383 | |||||
31-Oct | 15,021 | ||||||
1969 | 11/68 | 15,064 | |||||
31-Oct | 15,872 | ||||||
1970 | 11/69 | 15,957 | |||||
31-Oct | 16,766 | ||||||
1971 | 11/70 | 16,851 | |||||
31-Oct | 17,404 | ||||||
1972 | 11/71 | 17,404 | |||||
31-Oct | 18,000 | ||||||
1973 | 11/72 | 18,043 | |||||
31-Oct | 19,404 | ||||||
1974 | 11/73 | 19,532 | |||||
31-Oct | 21,745 | ||||||
1975 | 11/74 | 21,915 | |||||
31-Oct | 23,362 | ||||||
1976 | 11/75 | 23,532 | |||||
31-Oct | 24,638 | ||||||
1977 | 11/76 | 24,681 | |||||
31-Oct | 26,213 | ||||||
1978 | 11/77 | 26,340 | |||||
31-Oct | 28,553 | ||||||
1979 | 11/78 | 28,681 | |||||
31-Oct | 32,000 | ||||||
1980 | 11/79 | 32,298 | |||||
31-Oct | 36,085 | ||||||
1981 | 11/80 | 36,383 | |||||
31-Oct | 39,745 | ||||||
1982 | 11/81 | 39,872 | |||||
31-Oct | 41,787 | ||||||
1983 | 12/82 | 41,532 | |||||
31-Oct | 42,979 | ||||||
1984 | 11/83 | 43,064 | |||||
31-Oct | 44,809 | ||||||
1985 | 11/84 | 44,809 | |||||
31-Oct | 46,255 | ||||||
1986 | 4 | 46,213 | |||||
31-Oct | 46,936 | ||||||
1987 | 11/86 | 46,979 | |||||
31-Oct | 49,064 | ||||||
1988 | 11/87 | 49,106 | |||||
31-Oct | 51,149 | ||||||
1989 | 11/88 | 51,191 | |||||
31-Oct | 53,447 | ||||||
1990 | 11/89 | 53,574 | |||||
31-Oct | 56,809 | ||||||
1991 | 11/90 | 56,936 | |||||
31-Oct | 58,468 | ||||||
1992 | 11/91 | 58,638 | |||||
31-Oct | 60,340 | ||||||
1993 | 12/92 | 60,383 | |||||
31-Oct | 62,000 | ||||||
1994 | 11/93 | 62,043 | |||||
31-Oct | 63,617 | ||||||
1995 | 11/94 | 63,702 | |||||
31-Oct | 65,404 | ||||||
1996 | 12/95 | 65,319 | |||||
31-Oct | 67,362 | ||||||
1997 | 11/96 | 67,489 | |||||
31-Oct | 68,766 | ||||||
1998 | 12/97 | 68,638 | |||||
31-Oct | 69,787 | ||||||
1999 | 12/98 | 69,745 | |||||
31-Oct | 71,574 | ||||||
2000 | 11/99 | 71,617 | |||||
31-Oct | 74,043 | ||||||
2001 | 12/00 | 74,043 | |||||
9/01 | 75,872 | ||||||
31-Oct | 75,617 | ||||||
2002 | 12/01 | 75,192 | |||||
31-Oct | 77,149 | ||||||
2003 | 12/02 | 76,979 | |||||
9/03 | 78,809 | ||||||
31-Oct | 78,723 | ||||||
2004 | 16-Dec | 78,426 | |||||
10/31/2004 | 81,234 | ||||||
2005 | 12/16/2004 | 80,979 | |||||
10/31/2005 | 84,766 | ||||||
2006 | 12/16/2005 | 83,745 | |||||
8/16/2006 | 86,766 | ||||||
10/31/2006 | 85,872 | ||||||
2007 | 11/16/2006 | 85,745 | |||||
10/16/2007 | 88,909 | ||||||
10/31/2007 | 88,909 | ||||||
2008 | 11/1/2007 | 88,909 | |||||
7/16/2008 | 93,602 | ||||||
10/31/2008 | 92,159 | ||||||
2009 | 11/3/2008 | 92,159 | |||||
12/16/2008 | 89,459 | ||||||
10/31/2009 | 91,990 | ||||||
2010 | 12/16/2009 | 91,893 | |||||
9/16/2010 | 92,953 | ||||||
10/31/2010 | 93,069 | ||||||
2010 | 12/16/2009 | 91,893 | |||||
9/16/2010 | 92,953 | ||||||
10/31/2010 | 93,069 | ||||||
2011 | 11/1/2010 | 93,068 | |||||
9/16/2011 | 96,549 | ||||||
10/31/2011 | 96,349 |
[end mountain chart]
Year ended | 19507 | 1951 | 1952 | 1953 | 1954 | 1955 | 1956 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | $0.3 | 0.5 | 0.5 | 0.6 | 0.6 | 0.7 | 0.8 |
Value at year-end | $10.0 | 12.2 | 13.2 | 14.1 | 19.3 | 25.1 | 29.7 |
Dividends excluded9 | $0.3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.6 |
Value at year-end | $9.7 | 11.3 | 11.7 | 12.0 | 15.9 | 20.1 | 23.1 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 3.1% | 5.3 | 4.3 | 4.4 | 4.4 | 3.5 | 3.2 |
Capital return | (2.9) | 16.8 | 3.3 | 2.5 | 32.4 | 26.6 | 15.2 |
AMF total return | 0.2 | 22.1 | 7.6 | 6.9 | 36.8 | 30.1 | 18.4 |
Year ended | 1957 | 1958 | 1959 | 1960 | 1961 | 1962 | 1963 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 0.9 | 1.0 | 1.0 | 1.2 | 1.3 | 1.4 | 1.5 |
Value at year-end | 28.1 | 36.1 | 41.5 | 40.9 | 54.3 | 46.6 | 61.3 |
Dividends excluded9 | 0.7 | 0.8 | 0.8 | 0.9 | 0.9 | 0.9 | 1.0 |
Value at year-end | 21.2 | 26.5 | 29.7 | 28.4 | 36.8 | 30.7 | 39.3 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 3.1 | 3.6 | 2.9 | 2.9 | 3.1 | 2.5 | 3.3 |
Capital return | (8.5) | 25.2 | 11.9 | (4.4) | 29.9 | (16.8) | 28.3 |
AMF total return | (5.4) | 28.8 | 14.8 | (1.5) | 33.0 | (14.3) | 31.6 |
Year ended | 1964 | 1965 | 1966 | 1967 | 1968 | 1969 | 1970 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 1.7 | 1.8 | 2.3 | 2.6 | 3.2 | 3.8 | 4.2 |
Value at year-end | 71.4 | 79.9 | 77.6 | 92.8 | 109.6 | 103.2 | 93.4 |
Dividends excluded9 | 1.1 | 1.1 | 1.4 | 1.5 | 1.8 | 2.1 | 2.2 |
Value at year-end | 44.6 | 48.8 | 46.1 | 53.6 | 61.3 | 55.7 | 48.1 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 2.8 | 2.6 | 2.8 | 3.3 | 3.4 | 3.4 | 4.0 |
Capital return | 13.6 | 9.4 | (5.6) | 16.3 | 14.6 | (9.2) | (13.6) |
AMF total return | 16.4 | 12.0 | (2.8) | 19.6 | 18.0 | (5.8) | (9.6) |
Year ended | 1971 | 1972 | 1973 | 1974 | 1975 | 1976 | 1977 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 4.4 | 4.7 | 5.1 | 7.3 | 7.3 | 7.9 | 8.6 |
Value at year-end | 112.9 | 125.2 | 124.8 | 105.1 | 132.2 | 167.4 | 176.4 |
Dividends excluded9 | 2.2 | 2.3 | 2.4 | 3.3 | 3.1 | 3.1 | 3.2 |
Value at year-end | 56.0 | 59.7 | 57.1 | 45.0 | 53.3 | 64.3 | 64.6 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 4.7 | 4.2 | 4.0 | 5.8 | 6.9 | 6.0 | 5.1 |
Capital return | 16.2 | 6.7 | (4.3) | (21.6) | 18.9 | 20.6 | 0.3 |
AMF total return | 20.9 | 10.9 | (0.3) | (15.8) | 25.8 | 26.6 | 5.4 |
Year ended | 1978 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 10.0 | 11.3 | 13.9 | 16.4 | 26.8 | 26.2 | 26.6 |
Value at year-end | 198.9 | 232.8 | 303.6 | 334.1 | 426.4 | 544.9 | 577.2 |
Dividends excluded9 | 3.6 | 3.9 | 4.5 | 5.0 | 7.8 | 7.1 | 6.9 |
Value at year-end | 69.1 | 77.0 | 95.4 | 99.9 | 118.2 | 143.3 | 144.4 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 5.7 | 5.7 | 6.0 | 5.4 | 8.0 | 6.2 | 4.9 |
Capital return | 7.1 | 11.3 | 24.4 | 4.7 | 19.6 | 21.6 | 1.0 |
AMF total return | 12.8 | 17.0 | 30.4 | 10.1 | 27.6 | 27.8 | 5.9 |
Year ended | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 30.1 | 34.1 | 39.3 | 50.0 | 59.9 | 66.1 | 71.8 |
Value at year-end | 701.8 | 913.1 | 960.9 | 1,081.2 | 1,299.8 | 1,239.3 | 1,544.4 |
Dividends excluded9 | 7.4 | 8.0 | 8.9 | 10.8 | 12.3 | 13.0 | 13.4 |
Value at year-end | 167.6 | 209.4 | 212.1 | 227.1 | 259.4 | 235.2 | 278.5 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 5.2 | 4.9 | 4.3 | 5.2 | 5.5 | 5.1 | 5.8 |
Capital return | 16.4 | 25.2 | 0.9 | 7.3 | 14.7 | (9.8) | 18.8 |
AMF total return | 21.6 | 30.1 | 5.2 | 12.5 | 20.2 | (4.7) | 24.6 |
Year ended | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 67.5 | 70.9 | 76.5 | 83.2 | 90.2 | 95.0 | 104.1 |
Value at year-end | 1,690.0 | 2,004.9 | 2,039.9 | 2,473.4 | 2,940.7 | 3,652.2 | 4,205.5 |
Dividends excluded9 | 12.0 | 12.1 | 12.5 | 13.1 | 13.7 | 14.0 | 14.9 |
Value at year-end | 292.2 | 333.6 | 326.4 | 381.2 | 438.6 | 529.4 | 594.2 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 4.4 | 4.2 | 3.8 | 4.1 | 3.6 | 3.2 | 2.9 |
Capital return | 5.0 | 14.4 | (2.1) | 17.2 | 15.3 | 21.0 | 12.2 |
AMF total return | 9.4 | 18.6 | 1.7 | 21.3 | 18.9 | 24.2 | 15.1 |
Year ended | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 110.5 | 132.2 | 145.4 | 121.4 | 115.8 | 105.4 | 112.3 |
Value at year-end | 4,584.2 | 4,639.4 | 4,811.5 | 4,406.4 | 5,257.3 | 5,825.6 | 6,279.7 |
Dividends excluded9 | 15.5 | 18.0 | 19.2 | 15.6 | 14.5 | 12.9 | 13.5 |
Value at year-end | 631.8 | 620.1 | 623.6 | 557.2 | 648.8 | 705.5 | 746.9 |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 2.6 | 2.9 | 3.1 | 2.5 | 2.6 | 2.0 | 1.9 |
Capital return | 6.4 | (1.7) | 0.6 | (10.9) | 16.7 | 8.8 | 5.9 |
AMF total return | 9.0 | 1.2 | 3.7 | (8.4) | 19.3 | 10.8 | 7.8 |
Year ended | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |
October 31 | |||||||
Year-by-year summary of results (dollars in thousands) | |||||||
Dividends reinvested8 | 135.1 | 157.0 | 175.0 | 206.6 | 198.1 | 192.0 | |
Value at year-end | 7,309.5 | 8,200.6 | 5,670.6 | 6,309.7 | 7,338.9 | 7,841.5 | |
Dividends excluded9 | 15.9 | 18.2 | 19.8 | 22.7 | 21.0 | 19.9 | |
Value at year-end | 852.1 | 937.2 | 632.6 | 677.5 | 765.8 | 798.1 | |
Annual percentage returns assuming reinvestment of dividends | |||||||
Income return | 2.2 | 2.1 | 2.1 | 3.6 | 3.1 | 2.6 | |
Capital return | 14.2 | 10.1 | (33.0) | 7.7 | 13.2 | 4.2 | |
AMF total return | 16.4 | 12.2 | (30.9) | 11.3 | 16.3 | 6.8 |
[Begin Sidebar]
Average annual total return for AMF’s lifetime | ||||
Income return | 4.0 | % | ||
Capital return | 7.4 | % | ||
AMF total return | 11.4 | % |
[End Sidebar]
The results shown are before taxes on fund distributions and sale of fund shares.
1As 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. |
2The maximum initial sales charge was 8.5% prior to July 1, 1988. |
3Includes reinvested capital gain distributions totaling $3,756,770 in the years 1950–2011 and reinvested dividends. |
4The S&P 500 is unmanaged and, therefore, has no expenses. |
5Includes reinvested capital gain distributions taken in shares totaling $589,593 but does not reflect income dividends taken in cash. |
6Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics. It would take $96,349 to buy today what $10,000 bought when the fund began. |
7For the period February 21, 1950 (when the fund began operations), through October 31, 1950. |
8Includes special dividends of $1,691 in 1974, $989 in 1975, $7,524 in 1982, $3,967 in 1983, $6,064 in 1988, $9,850 in 1989, $9,497 in 1990, $8,996 in 1991, $32,002 in 2009 and $20,477 in 2010. |
9Includes special dividends of $746 in 1974, $407 in 1975, $2,251 in 1982, $1,099 in 1983, $1,339 in 1988, $2,069 in 1989, $1,895 in 1990, $1,707 in 1991, $3,570 in 2009 and $2,199 in 2010. |
Why dividends are even more important in today’s volatile market
[photo of yellow wildflowers]
[photo of a purple flower]
[photo of a yellow wildflower]
[photo of a red flower bud]
During much of the past 12 months, investors have been rattled by natural disasters, such as the rare East Coast earthquake that shook the Washington Monument, spring floods in the eastern and southern parts of the United States and a devastating earthquake and tsunami in Japan. Meanwhile, financial and economic problems such as the European debt crisis, high unemployment in the U.S. and perceived political gridlock in Washington shook investor confidence.
One of the few bright spots was the growing profits of large U.S. companies. Most reported solid earnings, repaired their balance sheets and increased dividends to investors. For the 12 months ended October 31, 2011, 339 of the 500 companies in the Standard & Poor’s 500 Composite Index either increased or initiated a dividend payment, up from 236 during the previous 12 months.
In September, Microsoft’s board raised the software giant’s quarterly dividend to 20 cents a share, boosting the yield to 3%. Lockheed Martin, aerospace defense manufacturer, raised its quarterly dividend to $1 a share from 75 cents a share, a 33% increase.
Investors gain by investing in dividend-paying companies
Investing primarily in companies that pay dividends has always played a key role in American Mutual Fund’s investment history. Choosing companies with a dividend record has given AMF investors several long-term benefits.
“The first is stability,” says Joyce Gordon, president of AMF. “When the stock market falls, dividend payments can cushion the blow for AMF investors, reducing the volatility of the portfolio.” As long as the underlying company is strong and likely to continue paying dividends, those dividends tend to put a floor under the price of its stock, keeping it from falling as much as a pure growth stock without a dividend.
“Dividends have been an important component of investors’ total return because they can be reinvested, and a stock’s unrealized appreciation cannot,” points out Jim Dunton, vice chairman of AMF.
[photo of field of wildflowers - the sunsetting in the background]
[photo of a yellow and purple flowers]
The payment of regular and/or growing dividends is also the clearest signal an investor can receive on the financial health of a company and the discipline of its management. “A dividend policy shows that a company is shareholder friendly and not using all of the company’s cash to reinvest or make acquisitions,” Joyce says. “The cash on the books is the shareholders’ money, not the management’s money. They are using it prudently and sharing it with the shareholders — the owners — of the company.”
“If predictions of a slower economic recovery in the U.S. persist, dividends could be even more important to shareholders if stock price gains are muted in the coming months,” Jim says.
A history of dividend contributions to stock market returns
“Even though dividends have fallen in and out of fashion depending on market conditions, dividend income has always been an important part of the total return of the stock market over the long term,” says Jim. From February 21, 1950, when AMF was founded, to October 31, 2011, reinvested dividends accounted for about 35% of the average annual total return of the stock market.
However, dividends’ popularity faded during the 1990s as more and more investors moved toward investing in rapidly growing Internet and technology companies, most of which paid no dividends. “The stock market’s yearly total return was up more than 20% in six of 10 calendar years in the 1990s,” Jim says. “In that kind of environment, almost any kind of dividend yield was of secondary importance to rising stock prices.” The strategy worked until 2000, when stocks suffered a sharp two-and-a-half-year decline led by Internet companies.
Over its lifetime, AMF has earned a higher income return than the S&P 500. Since its inception in 1950, AMF has provided an average annual income return of 4.0%, compared with 3.7% for the unmanaged S&P 500 through October 31. “AMF offers investors an opportunity to receive regular income while at the same time experiencing the possibility of gains in the underlying stocks,” says Jim.
[Begin Sidebar]
Generally higher yields over time — AMF vs. the S&P 500
American Mutual Fund typically has had a higher dividend yield than the S&P 500. One reason for this: Many companies in the S&P 500 don’t pay dividends, while AMF primarily invests in those that do.
Distribution rate (%) at net asset value
[begin bar chart]
AMF | S&P 500 | |||||||
10/31/1992 | 4.01 | % | 2.95 | % | ||||
10/31/1993 | 3.52 | % | 2.68 | % | ||||
10/31/1994 | 3.70 | % | 2.76 | % | ||||
10/31/1995 | 3.35 | % | 2.35 | % | ||||
10/31/1996 | 3.03 | % | 2.10 | % | ||||
10/31/1997 | 2.55 | % | 1.68 | % | ||||
10/31/1998 | 2.38 | % | 1.46 | % | ||||
10/31/1999 | 2.29 | % | 1.22 | % | ||||
10/31/2000 | 2.52 | % | 1.15 | % | ||||
10/31/2001 | 2.96 | % | 1.49 | % | ||||
10/31/2002 | 2.73 | % | 1.81 | % | ||||
10/31/2003 | 2.21 | % | 1.61 | % | ||||
10/31/2004 | 1.83 | % | 1.68 | % | ||||
10/31/2005 | 1.81 | % | 1.77 | % | ||||
10/31/2006 | 1.82 | % | 1.76 | % | ||||
10/31/2007 | 1.91 | % | 1.76 | % | ||||
10/31/2008 | 2.98 | % | 2.99 | % | ||||
10/31/2009 | 3.35 | % | 2.26 | % | ||||
10/31/2010 | 2.75 | % | 1.89 | % | ||||
10/31/2011 | 2.49 | % | 2.03 | % |
[End Sidebar]
Why dividends are less volatile than stock prices
Dividends are more dependable and less volatile than stock prices. “Dividends are not based on investors’ perceptions but on a company’s actual operations and available cash,” says Joyce. “Stock prices are an indication of how much investors think a company is worth at any given moment. But stock prices can be volatile as investors’ views can change quickly and radically. Dividends, on the other hand, are based on a company’s free cash flow after its capital spending, debt repayment and general expenses. As a result, dividends tend to change much less dramatically than stock prices. Companies are reluctant to cut dividends because that is often interpreted as a sign of weakness by investors and typically damages the stock price.” When a company consistently has enough cash left over to pass on to investors as dividends, it is a likely indicator of healthy cash flows and good management.
[Begin Sidebar]
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.
[End Sidebar]
[Begin Pull Quote]
“AMF offers investors an opportunity to receive regular income while at the same time experiencing the possibility of gains in the underlying stocks.”
— Jim Dunton
[End Pull Quote]
[Begin Sidebar]
How American Mutual Fund has fared during market declines*
Total returns for AMF and the S&P 500. (S&P 500 assumes monthly reinvestment of dividends.)
[begin bar chart]
Total returns (%) | ||||||||||||||
AMF | S&P 500 | |||||||||||||
Jan. 5, 1953 | - | Sept. 14, 1953 | Korean War ends; recession begins | (9.7 | ) | (11.7 | ) | |||||||
Aug. 2, 1956 | - | Oct. 22, 1957 | Egypt seizes Suez Canal | (16.0 | ) | (18.1 | ) | |||||||
Dec. 12, 1961 | - | June 26, 1962 | Kennedy confronts steel industry | (25.0 | ) | (26.9 | ) | |||||||
Feb. 9, 1966 | - | Oct. 7, 1966 | Economy overheats, interest rates rise | (15.1 | ) | (20.5 | ) | |||||||
Nov. 29, 1968 | - | May 26, 1970 | Vietnam War sparks civil unrest, recession | (31.8 | ) | (33.0 | ) | |||||||
Jan. 11, 1973 | - | Oct. 3, 1974 | OPEC oil embargo; Watergate scandal | (32.2 | ) | (44.8 | ) | |||||||
Sept. 21, 1976 | - | March 6, 1978 | Carter warns of energy crisis | 3.1 | (13.5 | ) | ||||||||
Nov. 28, 1980 | - | Aug. 12, 1982 | Record-high interest rates | 3.5 | (20.2 | ) | ||||||||
Aug. 25, 1987 | - | Dec. 4, 1987 | Overvalued stocks trigger market crash | (21.4 | ) | (32.8 | ) | |||||||
July 16, 1990 | - | Oct. 11, 1990 | Iraq invades Kuwait | (12.1 | ) | (19.2 | ) | |||||||
July 17, 1998 | - | Aug. 31, 1998 | “Asian flu” spreads to Russia | (12.1 | ) | (19.1 | ) | |||||||
Mar. 24, 2000 | - | Oct. 9, 2002 | Internet bubble bursts | (7.1 | ) | (47.4 | ) | |||||||
Oct. 9, 2007 | - | Mar. 9, 2009 | Global financial crisis | (48.3 | ) | (55.2 | ) | |||||||
Apr. 29, 2011 | - | Oct. 3, 2011 | U.S. and Europe debt crisis | (14.5 | ) | (18.6 | ) |
[end bar chart]
*Major stock market declines are defined as a decline in price of 15% or more without dividends reinvested. There have been periods in which the fund has lagged the S&P 500, particularly in strong markets. |
[End Sidebar]
[photo of wildflowers - a river in the background]
When the stock market has fallen, dividend payments have cushioned the blow for investors. “When dividends of solid companies provide above-average yields, their downside stock price risk is muted,” says Jim. “When the market starts going down, a dividend-paying stock’s yield starts rising. Very often the stock price of a solid company stops declining because the stock’s dividend yield itself has become sufficiently attractive to investors compared with alternative investments. When you put together a whole portfolio of solid, dividend-paying stocks, the entire portfolio can be similarly protected.” As the chart on pages 10–11 shows, AMF had better results than the stock market in all 14 stock market declines of 15% or more since the fund began operations in February 1950. Of course, there have been periods when the fund has lagged the S&P 500, particularly in strong markets.
“The discipline of dividends makes management more sensible,” Jim says. “It acts like a brake on management excess. Having to set aside money every year to pay dividends helps keep managements focused and keeps them away from pursuing marginal, less profitable projects simply because they have the money available.”
Especially useful for retirees’ income
“If you are retired and living off your income, your main financial danger is that you start eating into your principal for living expenses too soon and run out of money,” Jim says. “So the more you get a stream of income up front — like dividend payments — the less you have to worry about eating into your principal. Also, AMF’s strategy of investing in higher quality, less volatile companies has produced less of a loss of principal during market declines. So it’s the dividend income and the lower volatility that are helpful to retirees.”
Growing dividends are important. When you look at the S&P 500 stocks, dividends over the past 70 years have grown about 6% annually while inflation has risen by 4%, says Jim. “This was a good deal for retirees. It allowed their standard of living to go up and not down as they lived off the income.”
[Begin Sidebar]
American Mutual Fund’s portfolio counselors | |
American Mutual Fund’s six portfolio counselors have an average 26 years of investment experience.* Their knowledge and wisdom have helped them manage the fund through many stock market cycles. | |
Years of | |
investment | |
Portfolio counselor | experience* |
James K. Dunton | 49 |
Joyce E. Gordon | 30 |
James B. Lovelace | 29 |
Will Robbins | 18 |
James Terrile | 16 |
Dylan Yolles | 13 |
*Years of experience as of October 31, 2011. |
[End Sidebar]
[Begin Sidebar]
Above-average returns with less volatility
American Mutual Fund strives to meet its objectives. If we look back 10 years, as shown below, the fund has provided higher returns than those of its three benchmarks. It accomplished this with lower volatility.
For the 10-year period ended October 31, 2011
[information illustrated in graphic format and table format]
Average | ||||||||
annual | ||||||||
total return | Volatility | |||||||
AMF | 5.01 | % | 13.02 | |||||
S&P 500 | 3.69 | 16.01 | ||||||
Lipper Growth and Income Funds Index | 3.96 | 15.63 | ||||||
Lipper Large-Cap Core Funds Index | 2.89 | 15.50 |
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. Standard & Poor’s 500 Composite Index is an unmanaged index of 500 large-company stocks selected to represent the stock market. The Lipper Large-Cap Core Funds Index is an equally weighted index of the 30 largest mutual funds that invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s USDE large-cap floor. The Lipper Growth and Income Funds Index is an equally weighted index of the 30 largest mutual funds that combine a growth orientation with the pursuit of income.
[End Sidebar]
[photo of a field of wildflowers during sunset - a river and hills in the background]
The importance of research in finding quality, dividend-paying stocks
It’s not enough, however, to invest simply in companies with an impressive dividend yield. “You have to understand how sustainable a company’s dividend is,” Joyce says. “And that takes intense, on-the-ground research, a hallmark of Capital Research and Management Company, the fund’s adviser. We have to understand a company’s fundamentals and management philosophy. In addition to in-depth meetings with managements, our investment analysts round out their knowledge by talking to competitors, suppliers and customers. We have to come to a conclusion on whether a company’s management can deliver on their plans and will be able to keep their commitment to increase their dividend.”
American Mutual Fund has provided solid returns and lower volatility throughout its 61-year lifetime by investing in a select list of high-quality stocks, focusing on industry leaders and choosing only companies that pay dividends. Jim says dividends are also attractive considering the uncertain times in which we live. “Dividends can’t be faked. They are reliable. They are not dependent on what someone else wants to pay for your stock.” n
Summary investment portfolio October 31, 2011
The following summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.
[begin pie chart]
Industry sector diversification | Percent of net assets | |||
Industrials | 15.84 | % | ||
Consumer discretionary | 12.27 | |||
Information technology | 10.26 | |||
Health care | 9.75 | |||
Energy | 8.73 | |||
Other industries | 31.49 | |||
Convertible securities | 0.20 | |||
Bonds & notes | 3.60 | |||
Short-term securities & other assets less liabilities | 7.86 |
[end pie chart]
Percent | ||||||||||||
Value | of net | |||||||||||
Common stocks - 88.34% | Shares | (000 | ) | assets | ||||||||
Energy - 8.73% | ||||||||||||
Chevron Corp. | 2,098,911 | $ | 220,491 | 1.19 | % | |||||||
ConocoPhillips | 4,317,900 | 300,742 | 1.62 | |||||||||
Devon Energy Corp. | 1,925,000 | 125,029 | .67 | |||||||||
Royal Dutch Shell PLC, Class A (ADR) | 5,806,000 | 411,703 | ||||||||||
Royal Dutch Shell PLC, Class B (ADR) | 1,172,000 | 84,150 | 2.67 | |||||||||
Other securities | 479,321 | 2.58 | ||||||||||
1,621,436 | 8.73 | |||||||||||
Materials - 4.19% | ||||||||||||
Air Products and Chemicals, Inc. | 1,535,000 | 132,225 | .71 | |||||||||
Dow Chemical Co. | 10,826,400 | 301,840 | 1.63 | |||||||||
MeadWestvaco Corp. | 5,749,864 | 160,479 | .86 | |||||||||
Praxair, Inc. | 1,302,700 | 132,445 | .71 | |||||||||
Other securities | 51,302 | .28 | ||||||||||
778,291 | 4.19 | |||||||||||
Industrials - 15.84% | ||||||||||||
3M Co. | 3,135,000 | 247,728 | 1.33 | |||||||||
CSX Corp. | 11,272,500 | 250,362 | 1.35 | |||||||||
Emerson Electric Co. | 4,230,000 | 203,548 | 1.10 | |||||||||
General Electric Co. | 8,417,500 | 140,656 | .76 | |||||||||
Lockheed Martin Corp. | 1,845,000 | 140,036 | .75 | |||||||||
Union Pacific Corp. | 2,005,300 | 199,668 | 1.08 | |||||||||
United Parcel Service, Inc., Class B | 3,530,000 | 247,947 | 1.34 | |||||||||
United Technologies Corp. | 5,076,100 | 395,834 | 2.13 | |||||||||
W.W. Grainger, Inc. | 785,000 | 134,478 | .72 | |||||||||
Waste Management, Inc. | 4,845,400 | 159,559 | .86 | |||||||||
Other securities | 820,409 | 4.42 | ||||||||||
2,940,225 | 15.84 | |||||||||||
Consumer discretionary - 12.27% | ||||||||||||
Comcast Corp., Class A | 7,255,000 | 170,130 | ||||||||||
Comcast Corp., Class A, special nonvoting shares | 1,500,000 | 34,500 | 1.10 | |||||||||
Darden Restaurants, Inc. | 4,820,000 | 230,781 | 1.24 | |||||||||
Garmin Ltd. | 4,150,000 | 142,718 | .77 | |||||||||
Home Depot, Inc. | 10,950,000 | 392,010 | 2.11 | |||||||||
Mattel, Inc. | 4,950,000 | 139,788 | .75 | |||||||||
Staples, Inc. | 6,230,000 | 93,201 | .50 | |||||||||
Time Warner Cable Inc. | 2,593,937 | 165,208 | .89 | |||||||||
Time Warner Inc. | 4,169,333 | 145,885 | .79 | |||||||||
YUM! Brands, Inc. | 2,980,000 | 159,638 | .86 | |||||||||
Other securities | 604,420 | 3.26 | ||||||||||
2,278,279 | 12.27 | |||||||||||
Consumer staples - 6.13% | ||||||||||||
Kimberly-Clark Corp. | 2,140,000 | 149,179 | .80 | |||||||||
Kraft Foods Inc., Class A | 11,839,700 | 416,521 | 2.24 | |||||||||
PepsiCo, Inc. | 2,336,800 | 147,102 | .79 | |||||||||
Other securities | 425,443 | 2.30 | ||||||||||
1,138,245 | 6.13 | |||||||||||
Health care - 9.75% | ||||||||||||
Abbott Laboratories | 8,718,000 | 469,639 | 2.53 | |||||||||
Amgen Inc. | 3,105,000 | 177,823 | .96 | |||||||||
Bristol-Myers Squibb Co. | 12,012,500 | 379,475 | 2.04 | |||||||||
Merck & Co., Inc. | 6,718,302 | 231,782 | 1.25 | |||||||||
Pfizer Inc | 9,520,000 | 183,355 | .99 | |||||||||
Other securities | 367,091 | 1.98 | ||||||||||
1,809,165 | 9.75 | |||||||||||
Financials - 5.88% | ||||||||||||
JPMorgan Chase & Co. | 4,983,000 | 173,209 | .93 | |||||||||
Other securities | 918,285 | 4.95 | ||||||||||
1,091,494 | 5.88 | |||||||||||
Information technology - 10.26% | ||||||||||||
Intel Corp. | 5,818,000 | 142,774 | .77 | |||||||||
International Business Machines Corp. | 2,116,000 | 390,677 | 2.10 | |||||||||
Microsoft Corp. | 15,009,198 | 399,695 | 2.15 | |||||||||
Oracle Corp. | 3,985,000 | 130,588 | .70 | |||||||||
Texas Instruments Inc. | 5,120,000 | 157,338 | .85 | |||||||||
Other securities | 684,352 | 3.69 | ||||||||||
1,905,424 | 10.26 | |||||||||||
Telecommunication services - 6.89% | ||||||||||||
AT&T Inc. | 18,383,700 | 538,826 | 2.90 | |||||||||
BCE Inc. | 3,750,000 | 148,538 | .80 | |||||||||
Verizon Communications Inc. | 14,819,500 | 548,025 | 2.95 | |||||||||
Other securities | 44,627 | .24 | ||||||||||
1,280,016 | 6.89 | |||||||||||
Utilities - 6.57% | ||||||||||||
Duke Energy Corp. | 10,005,000 | 204,302 | 1.10 | |||||||||
Exelon Corp. | 3,093,720 | 137,330 | .74 | |||||||||
FirstEnergy Corp. | 3,927,728 | 176,591 | .95 | |||||||||
Other securities | 700,728 | 3.78 | ||||||||||
1,218,951 | 6.57 | |||||||||||
Miscellaneous - 1.83% | ||||||||||||
Other common stocks in initial period of acquisition | 339,492 | 1.83 | ||||||||||
Total common stocks (cost: $14,096,790,000) | 16,401,018 | 88.34 | ||||||||||
Percent | ||||||||||||
Value | of net | |||||||||||
Convertible securities - 0.20% | Shares | (000 | ) | assets | ||||||||
Other - 0.20% | ||||||||||||
Other securities | 37,629 | .20 | ||||||||||
Total convertible securities (cost: $32,049,000) | 37,629 | .20 | ||||||||||
Principal | Percent | |||||||||||
amount | Value | of net | ||||||||||
Bonds & notes - 3.60% | (000 | ) | (000 | ) | assets | |||||||
Consumer discretionary - 0.51% | ||||||||||||
Staples, Inc. 9.75% 2014 | $ | 81,450 | 94,054 | .51 | ||||||||
Financials - 2.11% | ||||||||||||
JPMorgan Chase & Co. 4.75% 2013 | 5,000 | 5,260 | ||||||||||
JPMorgan Chase & Co., Series I, junior subordinated 7.90% (undated) (1) | 114,579 | 123,789 | .69 | |||||||||
Wells Fargo & Co., Series K, junior subordinated 7.98% (undated) (1) | 118,466 | 127,351 | .69 | |||||||||
Other securities | 136,059 | .73 | ||||||||||
392,459 | 2.11 | |||||||||||
Telecommunication services - 0.14% | ||||||||||||
Verizon Communications Inc. 5.55%-8.50% 2014-2018 | 20,000 | 25,851 | .14 | |||||||||
Mortgage-backed obligations (2) - 0.16% | ||||||||||||
Fannie Mae 4.00%-4.50% 2024 | 27,986 | 29,639 | .16 | |||||||||
Bonds & notes of U.S. government agencies - 0.28% | ||||||||||||
Fannie Mae 2.50% 2014 | 25,775 | 27,073 | .14 | |||||||||
Freddie Mac 1.75% 2012 | 25,240 | 25,475 | .14 | |||||||||
52,548 | .28 | |||||||||||
Other - 0.40% | ||||||||||||
Other securities | 74,131 | .40 | ||||||||||
Total bonds & notes (cost: $584,911,000) | 668,682 | 3.60 | ||||||||||
Principal | Percent | |||||||||||
amount | Value | of net | ||||||||||
Short-term securities - 7.58% | (000 | ) | (000 | ) | assets | |||||||
Fannie Mae 0.04%-0.23% due 11/2/2011-7/16/2012 | 268,300 | 268,248 | 1.44 | |||||||||
Federal Home Loan Bank 0.15%-0.30% due 11/18/2011-6/15/2012 | 304,970 | 304,904 | 1.64 | |||||||||
Freddie Mac 0.12%-0.21% due 11/1/2011-8/14/2012 | 190,450 | 190,387 | 1.03 | |||||||||
General Electric Capital Corp. 0.16% due 11/4/2011 | 33,200 | 33,199 | ||||||||||
General Electric Capital Services, Inc. 0.23% due 1/26/2012 | 38,600 | 38,583 | .39 | |||||||||
IBM Corp. 0.05% due 11/8/2011 (3) | 37,700 | 37,700 | .20 | |||||||||
Other securities | 533,262 | 2.88 | ||||||||||
Total short-term securities (cost: $1,406,132,000) | 1,406,283 | 7.58 | ||||||||||
Total investment securities (cost: $16,119,882,000) | 18,513,612 | 99.72 | ||||||||||
Other assets less liabilities | 52,159 | .28 | ||||||||||
Net assets | $ | 18,565,771 | 100.00 | % |
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. One of these securities (with a total value of $3,519,000, which represented .02% of the net assets of the fund) was valued under fair value procedures adopted by authority of the board of trustees. |
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) Coupon rate may change periodically. |
(2) Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
(3) Acquired in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $406,749,000, which represented 2.19% of the net assets of the fund. |
Key to abbreviation |
ADR = American Depositary Receipts |
See Notes to Financial Statements |
Financial statements
Statement of assets and liabilities | ||||||||
at October 31, 2011 | (dollars in thousands) | |||||||
Assets: | ||||||||
Investment securities, at value (cost: $16,119,882) | $ | 18,513,612 | ||||||
Cash | 651 | |||||||
Receivables for: | ||||||||
Sales of investments | $ | 50,451 | ||||||
Sales of fund's shares | 27,812 | |||||||
Dividends and interest | 46,661 | 124,924 | ||||||
18,639,187 | ||||||||
Liabilities: | ||||||||
Payables for: | ||||||||
Purchases of investments | 33,170 | |||||||
Repurchases of fund's shares | 26,678 | |||||||
Investment advisory services | 3,960 | |||||||
Services provided by related parties | 7,748 | |||||||
Trustees' deferred compensation | 1,804 | |||||||
Other | 56 | 73,416 | ||||||
Net assets at October 31, 2011 | $ | 18,565,771 | ||||||
Net assets consist of: | ||||||||
Capital paid in on shares of beneficial interest | $ | 16,776,730 | ||||||
Undistributed net investment income | 63,853 | |||||||
Accumulated net realized loss | (668,548 | ) | ||||||
Net unrealized appreciation | 2,393,736 | |||||||
Net assets at October 31, 2011 | $ | 18,565,771 |
(dollars and shares in thousands, except per-share amounts) | ||||||||||||
Shares of beneficial interest issued and outstanding (no stated par value) - | ||||||||||||
unlimited shares authorized (731,432 total shares outstanding) | ||||||||||||
Net assets | Shares outstanding | Net asset value per share | ||||||||||
Class A | $ | 13,549,339 | 533,275 | 25.41 | ||||||||
Class B | 274,942 | 10,907 | 25.21 | |||||||||
Class C | 737,051 | 29,318 | 25.14 | |||||||||
Class F-1 | 743,956 | 29,372 | 25.33 | |||||||||
Class F-2 | 541,789 | 21,326 | 25.41 | |||||||||
Class 529-A | 373,156 | 14,711 | 25.37 | |||||||||
Class 529-B | 25,384 | 1,004 | 25.28 | |||||||||
Class 529-C | 101,762 | 4,029 | 25.26 | |||||||||
Class 529-E | 19,590 | 775 | 25.29 | |||||||||
Class 529-F-1 | 22,155 | 872 | 25.39 | |||||||||
Class R-1 | 34,613 | 1,372 | 25.22 | |||||||||
Class R-2 | 167,043 | 6,631 | 25.19 | |||||||||
Class R-3 | 409,944 | 16,228 | 25.26 | |||||||||
Class R-4 | 272,057 | 10,734 | 25.35 | |||||||||
Class R-5 | 255,263 | 10,046 | 25.41 | |||||||||
Class R-6 | 1,037,727 | 40,832 | 25.41 | |||||||||
See Notes to Financial Statements |
Statement of operations | ||||||||
for the year ended October 31, 2011 | (dollars in thousands) | |||||||
Investment income: | ||||||||
Income: | ||||||||
Dividends (net of non-U.S. taxes of $7,008) | $ | 534,986 | ||||||
Interest | 53,506 | $ | 588,492 | |||||
Fees and expenses*: | ||||||||
Investment advisory services | 47,647 | |||||||
Distribution services | 50,586 | |||||||
Transfer agent services | 15,438 | |||||||
Administrative services | 6,510 | |||||||
Reports to shareholders | 935 | |||||||
Registration statement and prospectus | 472 | |||||||
Trustees' compensation | 413 | |||||||
Auditing and legal | 122 | |||||||
Custodian | 109 | |||||||
State and local taxes | 135 | |||||||
Other | 768 | 123,135 | ||||||
Net investment income | 465,357 | |||||||
Net realized gain and unrealized appreciation | ||||||||
on investments and currency: | ||||||||
Net realized gain on: | ||||||||
Investments | 336,569 | |||||||
Currency transactions | 102 | 336,671 | ||||||
Net unrealized appreciation on: | ||||||||
Investments | 359,652 | |||||||
Currency translations | 6 | 359,658 | ||||||
Net realized gain and unrealized appreciation | ||||||||
on investments and currency | 696,329 | |||||||
Net increase in net assets resulting | ||||||||
from operations | $ | 1,161,686 | ||||||
(*) Additional information related to class-specific fees and expenses is included | ||||||||
in the Notes to Financial Statements. | ||||||||
See Notes to Financial Statements | ||||||||
Statements of changes in net assets | ||||||||
(dollars in thousands) | ||||||||
Year ended October 31 | ||||||||
2011 | 2010 | |||||||
Operations: | ||||||||
Net investment income | $ | 465,357 | $ | 416,911 | ||||
Net realized gain on investments and currency transactions | 336,671 | 360,866 | ||||||
Net unrealized appreciation on investments and currency translations | 359,658 | 1,604,214 | ||||||
Net increase in net assets resulting from operations | 1,161,686 | 2,381,991 | ||||||
Dividends paid to shareholders from net investment income | (446,467 | ) | (448,924 | ) | ||||
Net capital share transactions | 723,263 | 544,345 | ||||||
Total increase in net assets | 1,438,482 | 2,477,412 | ||||||
Net assets: | ||||||||
Beginning of year | 17,127,289 | 14,649,877 | ||||||
End of year (including undistributed and distributions in excess of | ||||||||
net investment income: $63,853 and $(4,994), respectively) | $ | 18,565,771 | $ | 17,127,289 | ||||
See Notes to Financial Statements |
Notes to financial statements
1. | Organization |
American Mutual Fund (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund strives for the balanced accomplishment of three objectives – current income, growth of capital and conservation of principal – through investments in companies that participate in the growth of the American economy. Effective January 1, 2011, the fund reorganized from a Maryland corporation to a Delaware statutory trust in accordance with a proposal approved by shareholders on November 24, 2009.
The fund has 16 share classes consisting of five retail share classes, five 529 college savings plan share classes and six retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The six retirement plan share classes (R-1, R-2, R-3, R-4, R-5 and R-6) are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described below:
Share class | Initial sales charge | Contingent deferred sales charge upon redemption | Conversion feature |
Classes A and 529-A | Up to 5.75% | None (except 1% for certain redemptions within one year of purchase without an initial sales charge) | None |
Classes B and 529-B* | None | Declines from 5% to 0% for redemptions within six years of purchase | Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years |
Class C | None | 1% for redemptions within one year of purchase | Class C converts to Class F-1 after 10 years |
Class 529-C | None | 1% for redemptions within one year of purchase | None |
Class 529-E | None | None | None |
Classes F-1, F-2 and 529-F-1 | None | None | None |
Classes R-1, R-2, R-3, R-4, R-5 and R-6 | None | None | None |
*Class B and 529-B shares of the fund are not available for purchase.
Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
2. | Significant accounting policies |
The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The fund follows the significant accounting policies described below, as well as the valuation policies described in the next section on valuation.
Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations – Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.
Dividends and distributions to shareholders – Dividends and distributions paid to shareholders are recorded on the ex-dividend date.
Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
3. | Valuation |
The fund’s investments are reported at fair value as defined by accounting principles generally accepted in the United States of America. The fund generally determines the net asset value of each share class as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs – The fund uses the following methods and inputs to establish the fair value of its assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.
Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are generally valued at prices obtained from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.
Fixed-income class | Examples of standard inputs |
All | Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”) |
Corporate bonds & notes; convertible securities | Standard inputs and underlying equity of the issuer |
Bonds & notes of governments & government agencies | Standard inputs and interest rate volatilities |
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 |
Where the investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income securities will be valued in good faith at the mean quoted bid and asked prices that are reasonably and timely available (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates fair value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under guidelines adopted by authority of the fund's board of trustees. Various inputs may be reviewed in order to make a good faith determination of a security’s fair value. These inputs include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.
Classifications – The fund classifies its assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of October 31, 2011 (dollars in thousands):
Investment securities: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common stocks: | ||||||||||||||||
Energy | $ | 1,621,436 | $ | - | $ | - | $ | 1,621,436 | ||||||||
Materials | 778,291 | - | - | 778,291 | ||||||||||||
Industrials | 2,940,225 | - | - | 2,940,225 | ||||||||||||
Consumer discretionary | 2,278,279 | - | - | 2,278,279 | ||||||||||||
Consumer staples | 1,138,245 | - | - | 1,138,245 | ||||||||||||
Health care | 1,809,165 | - | - | 1,809,165 | ||||||||||||
Financials | 1,091,494 | - | - | 1,091,494 | ||||||||||||
Information technology | 1,905,424 | - | - | 1,905,424 | ||||||||||||
Telecommunication services | 1,280,016 | - | - | 1,280,016 | ||||||||||||
Utilities | 1,218,951 | - | - | 1,218,951 | ||||||||||||
Miscellaneous | 339,492 | - | - | 339,492 | ||||||||||||
Convertible securities | 34,110 | 3,519 | - | 37,629 | ||||||||||||
Bonds & notes | - | 668,682 | - | 668,682 | ||||||||||||
Short-term securities | - | 1,406,283 | - | 1,406,283 | ||||||||||||
Total | $ | 16,435,128 | $ | 2,078,484 | $ | - | $ | 18,513,612 |
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 due to market conditions and other factors, including those directly involving the issuers of securities held by the fund.
Investing in growth-oriented stocks — Growth-oriented stocks may involve larger price swings and greater potential for loss than other types of investments.
Investing in income-oriented stocks — Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests.
Investing in bonds — Rising interest rates will generally cause the prices of bonds and other debt securities to fall. Longer maturity debt securities may be subject to greater price fluctuations than shorter maturity debt securities. In addition, falling interest rates may cause an issuer to redeem, call or refinance a security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities.
Bonds and other debt securities are subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. Lower quality debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality debt securities.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.
5. | Taxation and distributions |
Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
As of and during the period ended October 31, 2011, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2007 and by state tax authorities for tax years before 2006.
Non-U.S. taxation – Dividend income is recorded net of non-U.S. taxes paid.
Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized 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; deferred expenses; cost of investments sold; net capital losses; 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 October 31, 2011, the fund reclassified $49,982,000 from accumulated net realized loss to undistributed net investment income; $25,000 from undistributed net investment income to capital paid in on shares of beneficial interest; and $3,000 from capital paid in on shares of beneficial interest to accumulated net realized loss to align financial reporting with tax reporting.
As of October 31, 2011, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:
(dollars in thousands) | ||||
Undistributed ordinary income | $ | 66,393 | ||
Capital loss carryforward expiring 2017* | (663,964 | ) | ||
Gross unrealized appreciation on investment securities | 3,064,360 | |||
Gross unrealized depreciation on investment securities | (676,484 | ) | ||
Net unrealized appreciation on investment securities | 2,387,876 | |||
Cost of investment securities | 16,125,736 | |||
*Reflects the utilization of capital loss carryforwards of $306,896,000. The capital loss carryforward will be used to offset any capital gains realized by the fund in future years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains. |
Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after October 31, 2011, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.
Tax-basis distributions paid to shareholders from ordinary income were as follows (dollars in thousands):
Year ended October 31 | ||||||||
Share class | 2011 | 2010 | ||||||
Class A | $ | 338,966 | $ | 362,168 | ||||
Class B | 5,644 | 8,650 | ||||||
Class C | 12,517 | 13,738 | ||||||
Class F-1 | 16,955 | 13,672 | ||||||
Class F-2 | 11,932 | 6,279 | ||||||
Class 529-A | 8,386 | 7,448 | ||||||
Class 529-B | 471 | 701 | ||||||
Class 529-C | 1,578 | 1,524 | ||||||
Class 529-E | 395 | 357 | ||||||
Class 529-F-1 | 486 | 335 | ||||||
Class R-1 | 568 | 494 | ||||||
Class R-2 | 2,748 | 2,948 | ||||||
Class R-3 | 7,889 | 5,893 | ||||||
Class R-4 | 5,939 | 3,838 | ||||||
Class R-5 | 6,037 | 4,488 | ||||||
Class R-6 | 25,956 | 16,391 | ||||||
Total | $ | 446,467 | $ | 448,924 |
6. | Fees and transactions with related parties |
Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares, and American Funds Service Company® ("AFS"), the fund’s transfer agent.
Investment advisory services – The fund has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. These fees are based on a series of decreasing annual rates beginning with 0.384% on the first $1 billion of daily net assets and decreasing to 0.225% on such assets in excess of $21 billion. For the year ended October 31, 2011, the investment advisory services fee was $47,647,000, which was equivalent to an annualized rate of 0.258% of average daily net assets.
Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:
Distribution services – The fund has plans of distribution for all share classes, except Classes F-2, R-5 and R-6. Under the plans, the board of 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 below. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
For Classes A and 529-A, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of October 31, 2011, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.
Share class | Currently approved limits | Plan limits |
Class A | 0.25% | 0.25% |
Class 529-A | 0.25 | 0.50 |
Classes B and 529-B | 1.00 | 1.00 |
Classes C, 529-C and R-1 | 1.00 | 1.00 |
Class R-2 | 0.75 | 1.00 |
Classes 529-E and R-3 | 0.50 | 0.75 |
Classes F-1, 529-F-1 and R-4 | 0.25 | 0.50 |
Transfer agent services – The fund has a transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC as described below.
Administrative services – The fund has an administrative services agreement with CRMC for all share classes, except Classes A and B, to provide certain services, including transfer agent and recordkeeping services; coordinating, monitoring, assisting and overseeing third-party service providers; and educating advisers and shareholders about the impact of market-related events, tax laws affecting investments, retirement plan restrictions, exchange limitations and other related matters. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5 and 0.05% for Class R-6) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services.
Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.
Expenses under the agreements described above for the year ended October 31, 2011, were as follows (dollars in thousands):
Administrative services | ||||||||||||||||||||
Share class | Distribution services | Transfer agent services | CRMC administrative services | Transfer agent services | Commonwealth of Virginia administrative services | |||||||||||||||
Class A | $ | 31,928 | $ | 15,062 | Not applicable | Not applicable | Not applicable | |||||||||||||
Class B | 3,329 | 376 | Not applicable | Not applicable | Not applicable | |||||||||||||||
Class C | 7,446 | Included in administrative services | $ | 1,017 | $ | 151 | Not applicable | |||||||||||||
Class F-1 | 1,732 | 902 | 40 | Not applicable | ||||||||||||||||
Class F-2 | Not applicable | 653 | 16 | Not applicable | ||||||||||||||||
Class 529-A | 734 | 360 | 54 | $ | 351 | |||||||||||||||
Class 529-B | 299 | 30 | 9 | 30 | ||||||||||||||||
Class 529-C | 976 | 100 | 25 | 98 | ||||||||||||||||
Class 529-E | 93 | 17 | 3 | 18 | ||||||||||||||||
Class 529-F-1 | - | 19 | 3 | 19 | ||||||||||||||||
Class R-1 | 336 | 47 | 8 | Not applicable | ||||||||||||||||
Class R-2 | 1,238 | 247 | 469 | Not applicable | ||||||||||||||||
Class R-3 | 1,857 | 554 | 187 | Not applicable | ||||||||||||||||
Class R-4 | 618 | 366 | 9 | Not applicable | ||||||||||||||||
Class R-5 | Not applicable | 228 | 5 | Not applicable | ||||||||||||||||
Class R-6 | Not applicable | 472 | 3 | Not applicable | ||||||||||||||||
Total | $ | 50,586 | $ | 15,438 | $ | 5,012 | $ | 982 | $ | 516 |
Trustees’ deferred compensation –Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation of $413,000, shown on the accompanying financial statements, includes $472,000 in current fees (either paid in cash or deferred) and a net decrease of $59,000 in the value of the deferred amounts.
Affiliated officers and trustees – Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the fund.
7. | Capital share transactions |
Capital share transactions in the fund were as follows (dollars and shares in thousands):
Sales(*) | Reinvestments of dividends | Repurchases(*) | Net (decrease) increase | |||||||||||||||||||||||||||||
Share class | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||||||||
Year ended October 31, 2011 | ||||||||||||||||||||||||||||||||
Class A | $ | 1,785,225 | 69,986 | $ | 321,641 | 12,693 | $ | (2,159,138 | ) | (84,676 | ) | $ | (52,272 | ) | (1,997 | ) | ||||||||||||||||
Class B | 18,231 | 721 | 5,535 | 220 | (134,441 | ) | (5,305 | ) | (110,675 | ) | (4,364 | ) | ||||||||||||||||||||
Class C | 157,546 | 6,218 | 12,075 | 481 | (151,561 | ) | (6,016 | ) | 18,060 | 683 | ||||||||||||||||||||||
Class F-1 | 357,157 | 14,048 | 15,683 | 621 | (221,001 | ) | (8,726 | ) | 151,839 | 5,943 | ||||||||||||||||||||||
Class F-2 | 263,318 | 10,412 | 9,991 | 395 | (87,271 | ) | (3,431 | ) | 186,038 | 7,376 | ||||||||||||||||||||||
Class 529-A | 89,650 | 3,508 | 8,384 | 331 | (40,191 | ) | (1,574 | ) | 57,843 | 2,265 | ||||||||||||||||||||||
Class 529-B | 1,845 | 71 | 471 | 19 | (10,981 | ) | (432 | ) | (8,665 | ) | (342 | ) | ||||||||||||||||||||
Class 529-C | 26,821 | 1,054 | 1,578 | 63 | (14,628 | ) | (577 | ) | 13,771 | 540 | ||||||||||||||||||||||
Class 529-E | 4,634 | 182 | 395 | 16 | (2,224 | ) | (87 | ) | 2,805 | 111 | ||||||||||||||||||||||
Class 529-F-1 | 10,724 | 418 | 486 | 19 | (2,490 | ) | (98 | ) | 8,720 | 339 | ||||||||||||||||||||||
Class R-1 | 15,098 | 593 | 563 | 22 | (10,939 | ) | (435 | ) | 4,722 | 180 | ||||||||||||||||||||||
Class R-2 | 57,450 | 2,261 | 2,740 | 109 | (53,062 | ) | (2,087 | ) | 7,128 | 283 | ||||||||||||||||||||||
Class R-3 | 186,933 | 7,328 | 7,886 | 313 | (103,188 | ) | (4,058 | ) | 91,631 | 3,583 | ||||||||||||||||||||||
Class R-4 | 138,978 | 5,445 | 5,935 | 235 | (68,879 | ) | (2,707 | ) | 76,034 | 2,973 | ||||||||||||||||||||||
Class R-5 | 129,921 | 5,013 | 6,031 | 238 | (80,850 | ) | (3,215 | ) | 55,102 | 2,036 | ||||||||||||||||||||||
Class R-6 | 238,652 | 9,355 | 25,956 | 1,025 | (43,426 | ) | (1,696 | ) | 221,182 | 8,684 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 3,482,183 | 136,613 | $ | 425,350 | 16,800 | $ | (3,184,270 | ) | (125,120 | ) | $ | 723,263 | 28,293 | ||||||||||||||||||
Year ended October 31, 2010 | ||||||||||||||||||||||||||||||||
Class A | $ | 1,451,908 | 62,529 | $ | 338,218 | 14,510 | $ | (2,121,893 | ) | (91,666 | ) | $ | (331,767 | ) | (14,627 | ) | ||||||||||||||||
Class B | 17,406 | 756 | 8,432 | 364 | (131,839 | ) | (5,725 | ) | (106,001 | ) | (4,605 | ) | ||||||||||||||||||||
Class C | 121,571 | 5,287 | 12,883 | 558 | (132,169 | ) | (5,768 | ) | 2,285 | 77 | ||||||||||||||||||||||
Class F-1 | 212,615 | 9,199 | 12,348 | 532 | (116,139 | ) | (5,030 | ) | 108,824 | 4,701 | ||||||||||||||||||||||
Class F-2 | 212,772 | 9,226 | 4,958 | 213 | (34,775 | ) | (1,500 | ) | 182,955 | 7,939 | ||||||||||||||||||||||
Class 529-A | 67,442 | 2,908 | 7,446 | 320 | (31,772 | ) | (1,373 | ) | 43,116 | 1,855 | ||||||||||||||||||||||
Class 529-B | 1,423 | 62 | 701 | 30 | (8,020 | ) | (347 | ) | (5,896 | ) | (255 | ) | ||||||||||||||||||||
Class 529-C | 20,203 | 875 | 1,523 | 66 | (11,238 | ) | (489 | ) | 10,488 | 452 | ||||||||||||||||||||||
Class 529-E | 3,295 | 142 | 357 | 15 | (1,641 | ) | (72 | ) | 2,011 | 85 | ||||||||||||||||||||||
Class 529-F-1 | 4,163 | 180 | 335 | 14 | (1,894 | ) | (82 | ) | 2,604 | 112 | ||||||||||||||||||||||
Class R-1 | 14,669 | 639 | 492 | 21 | (5,934 | ) | (257 | ) | 9,227 | 403 | ||||||||||||||||||||||
Class R-2 | 43,095 | 1,872 | 2,938 | 127 | (41,857 | ) | (1,829 | ) | 4,176 | 170 | ||||||||||||||||||||||
Class R-3 | 158,539 | 6,919 | 5,856 | 253 | (67,586 | ) | (2,942 | ) | 96,809 | 4,230 | ||||||||||||||||||||||
Class R-4 | 131,443 | 5,669 | 3,835 | 165 | (36,696 | ) | (1,577 | ) | 98,582 | 4,257 | ||||||||||||||||||||||
Class R-5 | 106,831 | 4,616 | 4,465 | 192 | (42,079 | ) | (1,810 | ) | 69,217 | 2,998 | ||||||||||||||||||||||
Class R-6† | 373,172 | 16,240 | 16,390 | 703 | (31,847 | ) | (1,386 | ) | 357,715 | 15,557 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 2,940,547 | 127,119 | $ | 421,177 | 18,083 | $ | (2,817,379 | ) | (121,853 | ) | $ | 544,345 | 23,349 | ||||||||||||||||||
* Includes exchanges between share classes of the fund. |
8. | Investment transactions |
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $4,234,076,000 and $3,826,049,000, respectively, during the year ended October 31, 2011.
Financial highlights
Income (loss) from investment operations(1) | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | Net investment income | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return(2) (3) | Net assets, end of period (in millions) | Ratio of expenses to average net assets before reimbursements/ waivers | Ratio of expenses to average net assets after reimbursements/ waivers(3) | Ratio of net income to average net assets(3) | ||||||||||||||||||||||||||||||||||||||||
Class A: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | $ | 24.38 | $ | .66 | $ | 1.00 | $ | 1.66 | $ | (.63 | ) | $ | - | $ | (.63 | ) | $ | 25.41 | 6.85 | % | $ | 13,549 | .62 | % | .62 | % | 2.57 | % | ||||||||||||||||||||||||
Year ended 10/31/2010 | 21.57 | .62 | 2.86 | 3.48 | (.67 | ) | - | (.67 | ) | 24.38 | 16.31 | 13,051 | .63 | .63 | 2.69 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.20 | .59 | 1.56 | 2.15 | (.72 | ) | (.06 | ) | (.78 | ) | 21.57 | 11.27 | 11,862 | .67 | .66 | 3.05 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.29 | .60 | (9.76 | ) | (9.16 | ) | (.64 | ) | (1.29 | ) | (1.93 | ) | 20.20 | (30.85 | ) | 11,499 | .60 | .57 | 2.28 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.14 | .64 | 2.83 | 3.47 | (.61 | ) | (.71 | ) | (1.32 | ) | 31.29 | 12.19 | 17,809 | .58 | .56 | 2.09 | ||||||||||||||||||||||||||||||||||||
Class B: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.19 | .46 | .99 | 1.45 | (.43 | ) | - | (.43 | ) | 25.21 | 6.01 | 275 | 1.39 | 1.39 | 1.81 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.41 | .44 | 2.83 | 3.27 | (.49 | ) | - | (.49 | ) | 24.19 | 15.40 | 369 | 1.40 | 1.40 | 1.93 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.05 | .44 | 1.56 | 2.00 | (.58 | ) | (.06 | ) | (.64 | ) | 21.41 | 10.45 | 426 | 1.45 | 1.44 | 2.29 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.06 | .40 | (9.69 | ) | (9.29 | ) | (.43 | ) | (1.29 | ) | (1.72 | ) | 20.05 | (31.37 | ) | 455 | 1.37 | 1.34 | 1.52 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 28.95 | .40 | 2.80 | 3.20 | (.38 | ) | (.71 | ) | (1.09 | ) | 31.06 | 11.28 | 756 | 1.36 | 1.33 | 1.32 | ||||||||||||||||||||||||||||||||||||
Class C: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.13 | .44 | 1.00 | 1.44 | (.43 | ) | - | (.43 | ) | 25.14 | 5.97 | 737 | 1.43 | 1.43 | 1.75 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.36 | .43 | 2.82 | 3.25 | (.48 | ) | - | (.48 | ) | 24.13 | 15.34 | 691 | 1.46 | 1.46 | 1.86 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.01 | .43 | 1.55 | 1.98 | (.57 | ) | (.06 | ) | (.63 | ) | 21.36 | 10.39 | 610 | 1.48 | 1.47 | 2.24 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.00 | .38 | (9.66 | ) | (9.28 | ) | (.42 | ) | (1.29 | ) | (1.71 | ) | 20.01 | (31.40 | ) | 578 | 1.42 | 1.39 | 1.47 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 28.89 | .38 | 2.80 | 3.18 | (.36 | ) | (.71 | ) | (1.07 | ) | 31.00 | 11.26 | 922 | 1.41 | 1.38 | 1.27 | ||||||||||||||||||||||||||||||||||||
Class F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.31 | .64 | 1.00 | 1.64 | (.62 | ) | - | (.62 | ) | 25.33 | 6.79 | 744 | .66 | .66 | 2.52 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.51 | .61 | 2.85 | 3.46 | (.66 | ) | - | (.66 | ) | 24.31 | 16.28 | 569 | .67 | .67 | 2.63 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.14 | .59 | 1.56 | 2.15 | (.72 | ) | (.06 | ) | (.78 | ) | 21.51 | 11.31 | 403 | .67 | .67 | �� | 3.03 | |||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.21 | .59 | (9.74 | ) | (9.15 | ) | (.63 | ) | (1.29 | ) | (1.92 | ) | 20.14 | (30.89 | ) | 347 | .64 | .61 | 2.25 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.07 | .62 | 2.83 | 3.45 | (.60 | ) | (.71 | ) | (1.31 | ) | 31.21 | 12.14 | 573 | .63 | .60 | 2.05 | ||||||||||||||||||||||||||||||||||||
Class F-2: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.38 | .70 | 1.01 | 1.71 | (.68 | ) | - | (.68 | ) | 25.41 | 7.07 | 542 | .42 | .42 | 2.75 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.57 | .65 | 2.88 | 3.53 | (.72 | ) | - | (.72 | ) | 24.38 | 16.57 | 340 | .41 | .41 | 2.81 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.20 | .58 | 1.63 | 2.21 | (.78 | ) | (.06 | ) | (.84 | ) | 21.57 | 11.58 | 130 | .43 | .43 | 2.86 | ||||||||||||||||||||||||||||||||||||
Period from 8/5/2008 to 10/31/2008 (4) | 25.64 | .12 | (5.39 | ) | (5.27 | ) | (.17 | ) | - | (.17 | ) | 20.20 | (20.69 | ) | 7 | .09 | .08 | .54 | ||||||||||||||||||||||||||||||||||
Class 529-A: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.34 | .63 | 1.01 | 1.64 | (.61 | ) | - | (.61 | ) | 25.37 | 6.77 | 373 | .70 | .70 | 2.48 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.54 | .60 | 2.85 | 3.45 | (.65 | ) | - | (.65 | ) | 24.34 | 16.20 | 303 | .71 | .71 | 2.59 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.17 | .57 | 1.57 | 2.14 | (.71 | ) | (.06 | ) | (.77 | ) | 21.54 | 11.22 | 228 | .74 | .74 | 2.95 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.25 | .57 | (9.74 | ) | (9.17 | ) | (.62 | ) | (1.29 | ) | (1.91 | ) | 20.17 | (30.93 | ) | 189 | .69 | .66 | 2.19 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.11 | .60 | 2.83 | 3.43 | (.58 | ) | (.71 | ) | (1.29 | ) | 31.25 | 12.07 | 259 | .68 | .65 | 1.99 | ||||||||||||||||||||||||||||||||||||
Class 529-B: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.25 | .43 | 1.00 | 1.43 | (.40 | ) | - | (.40 | ) | 25.28 | 5.87 | 25 | 1.50 | 1.50 | 1.70 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.46 | .42 | 2.84 | 3.26 | (.47 | ) | - | (.47 | ) | 24.25 | 15.29 | 33 | 1.51 | 1.51 | 1.82 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.10 | .42 | 1.56 | 1.98 | (.56 | ) | (.06 | ) | (.62 | ) | 21.46 | 10.31 | 34 | 1.55 | 1.55 | 2.16 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.14 | .36 | (9.71 | ) | (9.35 | ) | (.40 | ) | (1.29 | ) | (1.69 | ) | 20.10 | (31.47 | ) | 32 | 1.49 | 1.46 | 1.39 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.01 | .36 | 2.82 | 3.18 | (.34 | ) | (.71 | ) | (1.05 | ) | 31.14 | 11.19 | 46 | 1.48 | 1.46 | 1.19 | ||||||||||||||||||||||||||||||||||||
Class 529-C: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.24 | .43 | 1.00 | 1.43 | (.41 | ) | - | (.41 | ) | 25.26 | 5.92 | 102 | 1.50 | 1.50 | 1.68 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.46 | .41 | 2.84 | 3.25 | (.47 | ) | - | (.47 | ) | 24.24 | 15.27 | 85 | 1.50 | 1.50 | 1.80 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.10 | .42 | 1.56 | 1.98 | (.56 | ) | (.06 | ) | (.62 | ) | 21.46 | 10.33 | 65 | 1.54 | 1.54 | 2.15 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.13 | .36 | (9.70 | ) | (9.34 | ) | (.40 | ) | (1.29 | ) | (1.69 | ) | 20.10 | (31.45 | ) | 54 | 1.48 | 1.46 | 1.40 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.01 | .36 | 2.81 | 3.17 | (.34 | ) | (.71 | ) | (1.05 | ) | 31.13 | 11.17 | 77 | 1.48 | 1.45 | 1.19 | ||||||||||||||||||||||||||||||||||||
Class 529-E: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.27 | .56 | 1.00 | 1.56 | (.54 | ) | - | (.54 | ) | 25.29 | 6.45 | 20 | .98 | .98 | 2.20 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.48 | .53 | 2.85 | 3.38 | (.59 | ) | - | (.59 | ) | 24.27 | 15.87 | 16 | 1.00 | 1.00 | 2.30 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.12 | .51 | 1.57 | 2.08 | (.66 | ) | (.06 | ) | (.72 | ) | 21.48 | 10.88 | 12 | 1.04 | 1.03 | 2.66 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.17 | .50 | (9.72 | ) | (9.22 | ) | (.54 | ) | (1.29 | ) | (1.83 | ) | 20.12 | (31.11 | ) | 10 | .97 | .95 | 1.91 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.04 | .51 | 2.82 | 3.33 | (.49 | ) | (.71 | ) | (1.20 | ) | 31.17 | 11.74 | 14 | .97 | .95 | 1.70 | ||||||||||||||||||||||||||||||||||||
Class 529-F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | $ | 24.37 | $ | .68 | $ | 1.01 | $ | 1.69 | $ | (.67 | ) | $ | - | $ | (.67 | ) | $ | 25.39 | 6.96 | % | $ | 22 | .49 | % | .49 | % | 2.67 | % | ||||||||||||||||||||||||
Year ended 10/31/2010 | 21.56 | .65 | 2.86 | 3.51 | (.70 | ) | - | (.70 | ) | 24.37 | 16.47 | 13 | .50 | .50 | 2.79 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.19 | .61 | 1.57 | 2.18 | (.75 | ) | (.06 | ) | (.81 | ) | 21.56 | 11.44 | 9 | .54 | .53 | 3.14 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.28 | .63 | (9.76 | ) | (9.13 | ) | (.67 | ) | (1.29 | ) | (1.96 | ) | 20.19 | (30.78 | ) | 6 | .47 | .45 | 2.41 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.13 | .66 | 2.84 | 3.50 | (.64 | ) | (.71 | ) | (1.35 | ) | 31.28 | 12.32 | 8 | .47 | .45 | 2.19 | ||||||||||||||||||||||||||||||||||||
Class R-1: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.21 | .44 | 1.00 | 1.44 | (.43 | ) | - | (.43 | ) | 25.22 | 5.96 | 35 | 1.43 | 1.43 | 1.75 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.43 | .42 | 2.85 | 3.27 | (.49 | ) | - | (.49 | ) | 24.21 | 15.38 | 29 | 1.45 | 1.45 | 1.84 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.07 | .43 | 1.57 | 2.00 | (.58 | ) | (.06 | ) | (.64 | ) | 21.43 | 10.43 | 17 | 1.48 | 1.47 | 2.22 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.10 | .38 | (9.70 | ) | (9.32 | ) | (.42 | ) | (1.29 | ) | (1.71 | ) | 20.07 | (31.41 | ) | 13 | 1.41 | 1.38 | 1.47 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 28.97 | .37 | 2.80 | 3.17 | (.33 | ) | (.71 | ) | (1.04 | ) | 31.10 | 11.18 | 14 | 1.45 | 1.43 | 1.22 | ||||||||||||||||||||||||||||||||||||
Class R-2: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.18 | .44 | .99 | 1.43 | (.42 | ) | - | (.42 | ) | 25.19 | 5.94 | 167 | 1.45 | 1.45 | 1.73 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.40 | .42 | 2.83 | 3.25 | (.47 | ) | - | (.47 | ) | 24.18 | 15.32 | 153 | 1.48 | 1.48 | 1.83 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.05 | .40 | 1.56 | 1.96 | (.55 | ) | (.06 | ) | (.61 | ) | 21.40 | 10.22 | 132 | 1.62 | 1.62 | 2.08 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.06 | .36 | (9.69 | ) | (9.33 | ) | (.39 | ) | (1.29 | ) | (1.68 | ) | 20.05 | (31.47 | ) | 110 | 1.51 | 1.48 | 1.37 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 28.94 | .38 | 2.81 | 3.19 | (.36 | ) | (.71 | ) | (1.07 | ) | 31.06 | 11.24 | 161 | 1.49 | 1.41 | 1.24 | ||||||||||||||||||||||||||||||||||||
Class R-3: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.25 | .56 | 1.00 | 1.56 | (.55 | ) | - | (.55 | ) | 25.26 | 6.43 | 410 | .97 | .97 | 2.21 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.46 | .53 | 2.85 | 3.38 | (.59 | ) | - | (.59 | ) | 24.25 | 15.90 | 307 | .99 | .99 | 2.29 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.10 | .51 | 1.57 | 2.08 | (.66 | ) | (.06 | ) | (.72 | ) | 21.46 | 10.89 | 181 | 1.03 | 1.03 | 2.66 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.14 | .50 | (9.71 | ) | (9.21 | ) | (.54 | ) | (1.29 | ) | (1.83 | ) | 20.10 | (31.10 | ) | 149 | .96 | .94 | 1.92 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.01 | .52 | 2.81 | 3.33 | (.49 | ) | (.71 | ) | (1.20 | ) | 31.14 | 11.76 | 228 | .97 | .95 | 1.71 | ||||||||||||||||||||||||||||||||||||
Class R-4: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.32 | .64 | 1.01 | 1.65 | (.62 | ) | - | (.62 | ) | 25.35 | 6.81 | 272 | .67 | .67 | 2.50 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.53 | .60 | 2.85 | 3.45 | (.66 | ) | - | (.66 | ) | 24.32 | 16.21 | 189 | .68 | .68 | 2.58 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.16 | .57 | 1.58 | 2.15 | (.72 | ) | (.06 | ) | (.78 | ) | 21.53 | 11.26 | 75 | .71 | .71 | 2.96 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.23 | .58 | (9.74 | ) | (9.16 | ) | (.62 | ) | (1.29 | ) | (1.91 | ) | 20.16 | (30.90 | ) | 54 | .66 | .64 | 2.21 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.09 | .61 | 2.82 | 3.43 | (.58 | ) | (.71 | ) | (1.29 | ) | 31.23 | 12.08 | 70 | .67 | .65 | 2.00 | ||||||||||||||||||||||||||||||||||||
Class R-5: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.38 | .72 | 1.00 | 1.72 | (.69 | ) | - | (.69 | ) | 25.41 | 7.11 | 255 | .37 | .37 | 2.81 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.57 | .67 | 2.87 | 3.54 | (.73 | ) | - | (.73 | ) | 24.38 | 16.59 | 195 | .38 | .38 | 2.90 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2009 | 20.20 | .65 | 1.55 | 2.20 | (.77 | ) | (.06 | ) | (.83 | ) | 21.57 | 11.55 | 108 | .40 | .39 | 3.47 | ||||||||||||||||||||||||||||||||||||
Year ended 10/31/2008 | 31.29 | .65 | (9.75 | ) | (9.10 | ) | (.70 | ) | (1.29 | ) | (1.99 | ) | 20.20 | (30.69 | ) | 279 | .36 | .34 | 2.52 | |||||||||||||||||||||||||||||||||
Year ended 10/31/2007 | 29.14 | .71 | 2.82 | 3.53 | (.67 | ) | (.71 | ) | (1.38 | ) | 31.29 | 12.42 | 283 | .37 | .35 | 2.32 | ||||||||||||||||||||||||||||||||||||
Class R-6: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 10/31/2011 | 24.39 | .73 | 1.00 | 1.73 | (.71 | ) | - | (.71 | ) | 25.41 | 7.12 | 1,038 | .32 | .32 | 2.86 | |||||||||||||||||||||||||||||||||||||
Year ended 10/31/2010 | 21.58 | .68 | 2.87 | 3.55 | (.74 | ) | - | (.74 | ) | 24.39 | 16.64 | 784 | .33 | .33 | 2.92 | |||||||||||||||||||||||||||||||||||||
Six months ended 10/31/2009(4) | 18.74 | .31 | 2.86 | 3.17 | (.33 | ) | - | (.33 | ) | 21.58 | 16.99 | 358 | .36 | (5) | .36 | (5) | 3.03 | (5) |
Year ended October 31 | ||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
Portfolio turnover rate for all share classes | 23 | % | 20 | % | 27 | % | 23 | % | 19 | % |
(1)Based on average shares outstanding. | |||||||||||||
(2)Total returns exclude any applicable sales charges, including contingent deferred sales charges. | |||||||||||||
(3)This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes. | |||||||||||||
(4)Based on operations for the periods shown and, accordingly, is not representative of a full year. | |||||||||||||
(5)Annualized. | |||||||||||||
See Notes to Financial Statements |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of American Mutual Fund:
We have audited the accompanying statement of assets and liabilities of American Mutual Fund (the “Fund”), including the summary investment portfolio, as of October 31, 2011, 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 October 31, 2011, by correspondence with the custodian and brokers; where replies were not received from brokers, 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 American Mutual Fund as of October 31, 2011, 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
December 13, 2011
Tax information
unaudited
We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended October 31, 2011:
Qualified dividend income | 100 | % | ||
Corporate dividends received deduction | 100 | % | ||
U.S. government income that may be exempt from state taxation | $ | 869,000 |
Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2012, to determine the calendar year amounts to be included on their 2011 tax returns. Shareholders should consult their tax advisers.
Expense example
unaudited
As a shareholder of the fund, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period (May 1, 2011, through October 31, 2011).
Actual expenses:
The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Notes:
There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually), that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.
Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning account value 5/1/2011 | Ending account value 10/31/2011 | Expenses paid during period* | Annualized expense ratio | |||||||||||||
Class A -- actual return | $ | 1,000.00 | $ | 945.53 | $ | 2.99 | .61 | % | ||||||||
Class A -- assumed 5% return | 1,000.00 | 1,022.13 | 3.11 | .61 | ||||||||||||
Class B -- actual return | 1,000.00 | 941.62 | 6.75 | 1.38 | ||||||||||||
Class B -- assumed 5% return | 1,000.00 | 1,018.25 | 7.02 | 1.38 | ||||||||||||
Class C -- actual return | 1,000.00 | 941.42 | 6.95 | 1.42 | ||||||||||||
Class C -- assumed 5% return | 1,000.00 | 1,018.05 | 7.22 | 1.42 | ||||||||||||
Class F-1 -- actual return | 1,000.00 | 945.19 | 3.19 | .65 | ||||||||||||
Class F-1 -- assumed 5% return | 1,000.00 | 1,021.93 | 3.31 | .65 | ||||||||||||
Class F-2 -- actual return | 1,000.00 | 946.45 | 2.06 | .42 | ||||||||||||
Class F-2 -- assumed 5% return | 1,000.00 | 1,023.09 | 2.14 | .42 | ||||||||||||
Class 529-A -- actual return | 1,000.00 | 945.03 | 3.43 | .70 | ||||||||||||
Class 529-A -- assumed 5% return | 1,000.00 | 1,021.68 | 3.57 | .70 | ||||||||||||
Class 529-B -- actual return | 1,000.00 | 940.80 | 7.39 | 1.51 | ||||||||||||
Class 529-B -- assumed 5% return | 1,000.00 | 1,017.59 | 7.68 | 1.51 | ||||||||||||
Class 529-C -- actual return | 1,000.00 | 940.99 | 7.34 | 1.50 | ||||||||||||
Class 529-C -- assumed 5% return | 1,000.00 | 1,017.64 | 7.63 | 1.50 | ||||||||||||
Class 529-E -- actual return | 1,000.00 | 943.52 | 4.75 | .97 | ||||||||||||
Class 529-E -- assumed 5% return | 1,000.00 | 1,020.32 | 4.94 | .97 | ||||||||||||
Class 529-F-1 -- actual return | 1,000.00 | 945.70 | 2.40 | .49 | ||||||||||||
Class 529-F-1 -- assumed 5% return | 1,000.00 | 1,022.74 | 2.50 | .49 | ||||||||||||
Class R-1 -- actual return | 1,000.00 | 941.59 | 7.00 | 1.43 | ||||||||||||
Class R-1 -- assumed 5% return | 1,000.00 | 1,018.00 | 7.27 | 1.43 | ||||||||||||
Class R-2 -- actual return | 1,000.00 | 941.05 | 7.09 | 1.45 | ||||||||||||
Class R-2 -- assumed 5% return | 1,000.00 | 1,017.90 | 7.38 | 1.45 | ||||||||||||
Class R-3 -- actual return | 1,000.00 | 943.59 | 4.75 | .97 | ||||||||||||
Class R-3 -- assumed 5% return | 1,000.00 | 1,020.32 | 4.94 | .97 | ||||||||||||
Class R-4 -- actual return | 1,000.00 | 945.15 | 3.28 | .67 | ||||||||||||
Class R-4 -- assumed 5% return | 1,000.00 | 1,021.83 | 3.41 | .67 | ||||||||||||
Class R-5 -- actual return | 1,000.00 | 946.32 | 1.82 | .37 | ||||||||||||
Class R-5 -- assumed 5% return | 1,000.00 | 1,023.34 | 1.89 | .37 | ||||||||||||
Class R-6 -- actual return | 1,000.00 | 946.57 | 1.52 | .31 | ||||||||||||
Class R-6 -- assumed 5% return | 1,000.00 | 1,023.64 | 1.58 | .31 | ||||||||||||
*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period). |
Other share class results
unaudited
Classes B, C, F and 529
Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
Average annual total returns for periods ended September 30, 2011 (the most recent calendar quarter-end): | ||||||||||||
10 years1/ | ||||||||||||
1 year | 5 years | Life of class | ||||||||||
Class B shares2 | ||||||||||||
Reflecting applicable contingent deferred sales charge | ||||||||||||
(CDSC), maximum of 5%, payable only if shares | ||||||||||||
are sold within six years of purchase | –4.14 | % | –0.60 | % | 3.53 | % | ||||||
Not reflecting CDSC | 0.81 | –0.26 | 3.53 | |||||||||
Class C shares | ||||||||||||
Reflecting CDSC, maximum of 1%, payable only | ||||||||||||
if shares are sold within one year of purchase | –0.28 | –0.31 | 3.30 | |||||||||
Not reflecting CDSC | 0.71 | –0.31 | 3.30 | |||||||||
Class F-1 shares3 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | 1.49 | 0.47 | 4.11 | |||||||||
Class F-2 shares3 — first sold 8/5/08 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | 1.77 | — | 0.62 | |||||||||
Class 529-A shares4 — first sold 2/19/02 | ||||||||||||
Reflecting 5.75% maximum sales charge | –4.34 | –0.75 | 3.21 | |||||||||
Not reflecting maximum sales charge | 1.49 | 0.43 | 3.84 | |||||||||
Class 529-B shares2,4 — first sold 2/19/02 | ||||||||||||
Reflecting applicable CDSC, maximum of 5%, payable | ||||||||||||
only if shares are sold within six years of purchase | –4.31 | –0.72 | 3.11 | |||||||||
Not reflecting CDSC | 0.65 | –0.38 | 3.11 | |||||||||
Class 529-C shares4 — first sold 2/20/02 | ||||||||||||
Reflecting CDSC, maximum of 1%, payable only | ||||||||||||
if shares are sold within one year of purchase | –0.30 | –0.37 | 2.88 | |||||||||
Not reflecting CDSC | 0.69 | –0.37 | 2.88 | |||||||||
Class 529-E shares3,4 — first sold 3/7/02 | 1.21 | 0.14 | 2.81 | |||||||||
Class 529-F-1 shares3,4 — first sold 9/17/02 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | 1.70 | 0.64 | 5.51 |
1Applicable to Classes B, C and F-1 shares only. All other share classes reflect results for the life of the class. |
2These shares are not available for purchase. |
3These shares are sold without any initial or contingent deferred sales charge. |
4Results shown do not reflect the $10 account setup fee and an annual $10 account maintenance fee. |
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 26 and 27 for details that include expense ratios for all share classes.
For information regarding the differences among the various share classes, refer to the fund’s prospectus.
Board of trustees and other officers
“Independent” trustees1 | ||
Year first | ||
elected a | ||
trustee of | ||
Name and age | the fund2 | Principal occupation(s) during past five years |
Louise H. Bryson, 67 | 2010 | Chair Emerita of the Board of Trustees, J. Paul Getty |
Trust; former President, Distribution, Lifetime | ||
Entertainment Network; former Executive Vice | ||
President and General Manager, Lifetime Movie | ||
Network | ||
Mary Anne Dolan, 64 | 1993 | Founder and President, MAD Ink (communications |
Chairman of the Board | company) | |
(Independent and | ||
Non-Executive) | ||
James G. Ellis, 64 | 2010 | Dean and Professor of Marketing, Marshall School of |
Business, University of Southern California | ||
Leonard R. Fuller, 65 | 2010 | President and CEO, Fuller Consulting (financial |
management consulting firm) | ||
William D. Jones, 56 | 2006 | Real estate developer/owner, President and CEO, |
CityLink Investment Corporation (acquires, develops | ||
and manages real estate ventures in selected urban | ||
communities) and City Scene Management Company | ||
(provides commercial asset and property | ||
management services) | ||
L. Daniel Jorndt, 70 | 2010 | Retired |
William H. Kling, 69 | 2006 | President Emeritus, American Public Media |
John C. Mazziotta, M.D., Ph.D., | 2011 | Physician; Chair, Department of Neurology, University |
62 | of California at Los Angeles; Associate Director, | |
Semel Institute, UCLA; Director, Brain Mapping | ||
Center, UCLA | ||
John G. McDonald, 74 | 2010 | Stanford Investors Professor, Graduate School of |
Business, Stanford University | ||
Bailey Morris-Eck, 67 | 1999 | Director and Programming Chair, WYPR |
Baltimore/Washington (public radio station); Senior | ||
Adviser, Financial News (London); Senior Fellow, | ||
Institute for International Economics | ||
Steven B. Sample, Ph.D., 71 | 1999 | President Emeritus, University of Southern California |
“Independent” trustees1 | ||
Number of | ||
portfolios | ||
in fund | ||
complex3 | ||
overseen by | ||
Name and age | trustee | Other directorships4 held by trustee |
Louise H. Bryson, 67 | 7 | None |
Mary Anne Dolan, 64 | 10 | None |
Chairman of the Board | ||
(Independent and | ||
Non-Executive) | ||
James G. Ellis, 64 | 46 | Quiksilver, Inc. |
Leonard R. Fuller, 65 | 46 | None |
William D. Jones, 56 | 7 | Sempra Energy |
L. Daniel Jorndt, 70 | 4 | None |
William H. Kling, 69 | 10 | None |
John C. Mazziotta, M.D., Ph.D., | 4 | None |
62 | ||
John G. McDonald, 74 | 13 | iStar Financial, Inc.; Plum Creek Timber Co.; |
QuinStreet, Inc.; Scholastic Corporation | ||
Bailey Morris-Eck, 67 | 4 | None |
Steven B. Sample, Ph.D., 71 | 4 | Intermec, Inc. |
“Interested” trustees5 | ||
Year first | ||
elected a | ||
trustee or | Principal occupation(s) during past five years and | |
Name, age and | officer of | positions held with affiliated entities or the |
position with fund | the fund2 | principal underwriter of the fund |
James K. Dunton, 73 | 1984 | Senior Vice President — Capital Research Global |
Vice Chairman of the Board | Investors, Capital Research and Management | |
Company; Director, Capital Research and | ||
Management Company; Director, Capital Strategy | ||
Research, Inc.6 | ||
Joyce E. Gordon, 55 | 1996–2001 | Senior Vice President — Capital Research Global |
President | 2005 | Investors, Capital Research and Management |
Company; Director, The Capital Group Companies, | ||
Inc.6 | ||
“Interested” trustees5 | ||
Number of | ||
portfolios | ||
in fund | ||
complex3 | ||
Name, age and | overseen by | |
position with fund | trustee | Other directorships4 held by trustee |
James K. Dunton, 73 | 19 | None |
Vice Chairman of the Board | ||
Joyce E. Gordon, 55 | 2 | None |
President |
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 800/421-0180 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 34 for footnotes.
Other officers | ||
Year first | ||
elected | Principal occupation(s) during past five years | |
Name, age and | an officer | and positions held with affiliated entities or the |
position with fund | of the fund2 | principal underwriter of the fund |
James B. Lovelace, 55 | 2006 | Senior Vice President — Capital Research Global |
Senior Vice President | Investors, Capital Research and Management | |
Company; Director, The Capital Group Companies, | ||
Inc.6 | ||
William L. Robbins, 43 | 2004 | Senior Vice President — Capital Research Global |
Senior Vice President | Investors, Capital Research Company;6 Director and | |
Co-President, Capital Research Company;6 Director, | ||
The Capital Group Companies, Inc.6 | ||
Paul F. Roye, 58 | 2007 | Senior Vice President — Fund Business Management |
Senior Vice President | Group, Capital Research and Management Company; | |
Director, American Funds Service Company;6 former | ||
Director, Division of Investment Management, United | ||
States Securities and Exchange Commission | ||
J. Thomas Bevan, 45 | 2010 | Vice President — Capital Research Global Investors, |
Vice President | Capital Research Company6 | |
Christopher D. Buchbinder, 40 | 2006 | Senior Vice President — Capital Research Global |
Vice President | Investors, Capital Research Company;6 Director, | |
Capital Research Company6 | ||
James Terrile, 46 | 2007 | Senior Vice President — Capital Research Global |
Vice President | Investors, Capital Research Company6 | |
Vincent P. Corti, 55 | 1994 | Vice President — Fund Business Management |
Secretary | Group, Capital Research and Management Company | |
Karl C. Grauman, 43 | 2006 | Vice President — Fund Business Management |
Treasurer | Group, Capital Research and Management Company | |
Raymond F. Sullivan, Jr., 54 | 2011 | Vice President — Fund Business Management |
Assistant Secretary | Group, Capital Research and Management Company | |
Dori Laskin, 60 | 2011 | Vice President — Fund Business Management |
Assistant Treasurer | Group, Capital Research and Management Company | |
Ari M. Vinocor, 37 | 2010 | Vice President — Fund Business Management |
Assistant Treasurer | Group, Capital Research and Management Company |
1The term “independent” trustee refers to a director who is not an “interested person” of the fund within the meaning of the Investment Company Act of 1940. |
2Trustees and officers of the fund serve until their resignation, removal or retirement. |
3Capital Research and Management Company manages the American Funds, consisting of 33 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which is composed of 18 funds and serves as the underlying investment vehicle for certain variable insurance contracts; and American Funds Target Date Retirement Series,® which is composed of 10 funds and is available through tax-deferred retirement plans and IRAs. |
4This includes all directorships (other than those in the American Funds or other funds managed by Capital Research and Management Company) that are held by each trustee as a trustee or director of a public company or a registered investment company. |
5“Interested persons” 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). |
6Company affiliated with Capital Research and Management Company. |
Offices
Offices of the fund and of the investment adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
6455 Irvine Center Drive
Irvine, CA 92618
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
O’Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071-2899
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.
“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.
A complete October 31, 2011, portfolio of American Mutual Fund’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
American Mutual Fund files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at 800/SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.
This report is for the information of shareholders of American Mutual Fund, but it also may be used as sales literature when preceded or accompanied by the current prospectus or summary prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after December 31, 2011, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
The American Funds difference
Since 1931, American Funds has helped investors pursue long-term investment success. Our consistent approach — in combination with a proven system — has resulted in a superior long-term track record.
Consistent approach
We base our decisions on a long-term perspective because we believe it is the best way to achieve superior long-term investment results. Our portfolio counselors average 27 years of investment experience, including 22 years at our company, reflecting a career commitment to our long-term approach.
Proven system
Our system combines individual accountability with teamwork. Each fund is divided into portions that are managed by investment professionals with varied backgrounds, ages and investment styles. 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 89% of 10-year periods and 96% of 20-year periods. Our fixed-income funds have beaten their Lipper indexes in 65% of 10-year periods and 75% of 20-year periods.* Our fund management fees have consistently been among the lowest in the industry.†
*Based on Class A share results for periods through 12/31/10. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date. |
†Based on management fees for the 20-year period ended 12/31/10 versus comparable Lipper categories, excluding funds of funds. |
American Funds span a range of investment objectives
•Growth funds |
Emphasis on long-term growth through stocks |
AMCAP Fund® |
EuroPacific Growth Fund® |
The Growth Fund of America® |
The New Economy Fund® |
New Perspective Fund® |
New World Fund® |
SMALLCAP World Fund® |
•Growth-and-income funds |
Emphasis on long-term growth and dividends through stocks |
American Mutual Fund® |
Capital World Growth and Income Fund® |
Fundamental InvestorsSM |
International Growth and Income FundSM |
The Investment Company of America® |
Washington Mutual Investors FundSM |
•Equity-income funds |
Emphasis on above-average income and growth through stocks and/or bonds |
Capital Income Builder® |
The Income Fund of America® |
•Balanced funds |
Emphasis on long-term growth and current income through stocks and bonds |
American Balanced Fund® |
American Funds Global Balanced FundSM |
•Bond funds |
Emphasis on current income through bonds |
American Funds Mortgage FundSM |
American High-Income TrustSM |
The Bond Fund of AmericaSM |
Capital World Bond Fund® |
Intermediate Bond Fund of America® |
Short-Term Bond Fund of AmericaSM |
U.S. Government Securities FundSM |
•Tax-exempt bond funds |
Emphasis on tax-exempt current income through municipal bonds |
American Funds Short-Term Tax-Exempt Bond FundSM |
American High-Income Municipal Bond Fund® |
Limited Term Tax-Exempt Bond Fund of AmericaSM |
The Tax-Exempt Bond Fund of America® |
State-specific tax-exempt funds |
American Funds Tax-Exempt Fund of New YorkSM |
The Tax-Exempt Fund of California® |
The Tax-Exempt Fund of Maryland® |
The Tax-Exempt Fund of Virginia® |
•Money market fund |
American Funds Money Market Fund® |
•American Funds Target Date Retirement Series® |
The Capital Group Companies
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust
Lit. No. MFGEAR-903-1211P
Litho in USA BBC/RRD/8052-S28691
Printed on paper containing 10% post-consumer waste
Printed with inks containing soy and/or vegetable oil
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 800/421-0180 or to the Secretary of the Registrant, 333 South Hope Street, Los Angeles, California 90071.
ITEM 3 – Audit Committee Financial Expert
The Registrant’s board has determined that James G. Ellis, 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: | ||||
2010 | $76,000 | |||
2011 | $77,000 | |||
b) Audit-Related Fees: | ||||
2010 | $5,000 | |||
2011 | $5,000 | |||
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 (which replaced Statement on Auditing Standards Number 70) issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2010 | $7,000 | |||
2011 | $7,000 | |||
The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns. | ||||
d) All Other Fees: | ||||
2010 | None | |||
2011 | 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: | ||||
2010 | $999,000 | |||
2011 | $1,005,000 | |||
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 (which replaced Statement on Auditing Standards Number 70) issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2010 | $13,000 | |||
2011 | $36,000 | |||
The tax fees consist of consulting services relating to the Registrant’s investments. | ||||
d) All Other Fees: | ||||
2010 | $2,000 | |||
2011 | $2,000 | |||
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 $1,426,000 for fiscal year 2010 and $1,615,000 for fiscal year 2011. 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
American Mutual Fund®
Investment portfolio
October 31, 2011
Common stocks — 88.34% | Shares | Value (000) | ||||||
ENERGY — 8.73% | ||||||||
Apache Corp. | 733,400 | $ | 73,069 | |||||
Baker Hughes Inc. | 775,000 | 44,942 | ||||||
Chevron Corp. | 2,098,911 | 220,491 | ||||||
ConocoPhillips | 4,317,900 | 300,742 | ||||||
Devon Energy Corp. | 1,925,000 | 125,029 | ||||||
EnCana Corp. | 4,245,000 | 92,116 | ||||||
EOG Resources, Inc. | 926,600 | 82,866 | ||||||
Marathon Oil Corp. | 2,000,000 | 52,060 | ||||||
Royal Dutch Shell PLC, Class A (ADR) | 5,806,000 | 411,703 | ||||||
Royal Dutch Shell PLC, Class B (ADR) | 1,172,000 | 84,150 | ||||||
Schlumberger Ltd. | 880,400 | 64,683 | ||||||
Spectra Energy Corp | 2,430,500 | 69,585 | ||||||
1,621,436 | ||||||||
MATERIALS — 4.19% | ||||||||
Air Products and Chemicals, Inc. | 1,535,000 | 132,225 | ||||||
CRH PLC (ADR) | 985,000 | 18,134 | ||||||
Dow Chemical Co. | 10,826,400 | 301,840 | ||||||
E.I. du Pont de Nemours and Co. | 690,000 | 33,168 | ||||||
MeadWestvaco Corp. | 5,749,864 | 160,479 | ||||||
Praxair, Inc. | 1,302,700 | 132,445 | ||||||
778,291 | ||||||||
INDUSTRIALS — 15.84% | ||||||||
3M Co. | 3,135,000 | 247,728 | ||||||
Avery Dennison Corp. | 805,000 | 21,413 | ||||||
Boeing Co. | 610,000 | 40,132 | ||||||
CSX Corp. | 11,272,500 | 250,362 | ||||||
Eaton Corp. | 800,000 | 35,856 | ||||||
Emerson Electric Co. | 4,230,000 | 203,548 | ||||||
General Dynamics Corp. | 1,481,000 | 95,065 | ||||||
General Electric Co. | 8,417,500 | 140,656 | ||||||
Illinois Tool Works Inc. | 850,000 | 41,336 | ||||||
Lockheed Martin Corp. | 1,845,000 | 140,036 | ||||||
Norfolk Southern Corp. | 700,000 | 51,793 | ||||||
Pentair, Inc. | 1,800,000 | 64,710 | ||||||
Pitney Bowes Inc. | 4,044,900 | 82,435 | ||||||
Precision Castparts Corp. | 314,000 | 51,229 | ||||||
R.R. Donnelley & Sons Co. | 7,567,657 | 123,353 | ||||||
Republic Services, Inc. | 3,550,000 | 101,033 | ||||||
Rockwell Automation | 900,000 | 60,885 | ||||||
Siemens AG (ADR) | 125,000 | 13,121 | ||||||
Southwest Airlines Co. | 4,450,000 | 38,048 | ||||||
Union Pacific Corp. | 2,005,300 | 199,668 | ||||||
United Parcel Service, Inc., Class B | 3,530,000 | 247,947 | ||||||
United Technologies Corp. | 5,076,100 | 395,834 | ||||||
W.W. Grainger, Inc. | 785,000 | 134,478 | ||||||
Waste Management, Inc. | 4,845,400 | 159,559 | ||||||
2,940,225 | ||||||||
CONSUMER DISCRETIONARY — 12.27% | ||||||||
Carnival Corp., units | 1,770,000 | 62,322 | ||||||
Comcast Corp., Class A | 7,255,000 | 170,130 | ||||||
Comcast Corp., Class A, special nonvoting shares | 1,500,000 | 34,500 | ||||||
Darden Restaurants, Inc. | 4,820,000 | 230,781 | ||||||
Garmin Ltd. | 4,150,000 | 142,718 | ||||||
Harley-Davidson, Inc. | 2,886,400 | 112,281 | ||||||
Home Depot, Inc. | 10,950,000 | 392,010 | ||||||
Johnson Controls, Inc. | 3,175,000 | 104,553 | ||||||
Kohl’s Corp. | 1,200,000 | 63,612 | ||||||
Mattel, Inc. | 4,950,000 | 139,788 | ||||||
McDonald’s Corp. | 1,200,000 | 111,420 | ||||||
McGraw-Hill Companies, Inc. | 321,643 | 13,670 | ||||||
News Corp., Class A | 3,850,000 | 67,452 | ||||||
Staples, Inc. | 6,230,000 | 93,201 | ||||||
Time Warner Cable Inc. | 2,593,937 | 165,208 | ||||||
Time Warner Inc. | 4,169,333 | 145,885 | ||||||
VF Corp. | 500,000 | 69,110 | ||||||
YUM! Brands, Inc. | 2,980,000 | 159,638 | ||||||
2,278,279 | ||||||||
CONSUMER STAPLES — 6.13% | ||||||||
Avon Products, Inc. | 1,905,000 | 34,823 | ||||||
Coca-Cola Co. | 850,000 | 58,072 | ||||||
Colgate-Palmolive Co. | 1,024,500 | 92,584 | ||||||
ConAgra Foods, Inc. | 950,000 | 24,064 | ||||||
General Mills, Inc. | 1,500,000 | 57,795 | ||||||
H.J. Heinz Co. | 600,000 | 32,064 | ||||||
Kellogg Co. | 900,000 | 48,789 | ||||||
Kimberly-Clark Corp. | 2,140,000 | 149,179 | ||||||
Kraft Foods Inc., Class A | 11,839,700 | 416,521 | ||||||
PepsiCo, Inc. | 2,336,800 | 147,102 | ||||||
Procter & Gamble Co. | 790,000 | 50,552 | ||||||
Sara Lee Corp. | 1,500,000 | 26,700 | ||||||
1,138,245 | ||||||||
HEALTH CARE — 9.75% | ||||||||
Abbott Laboratories | 8,718,000 | 469,639 | ||||||
Amgen Inc. | 3,105,000 | 177,823 | ||||||
Bristol-Myers Squibb Co. | 12,012,500 | 379,475 | ||||||
Cardinal Health, Inc. | 1,305,000 | 57,772 | ||||||
Eli Lilly and Co. | 3,125,000 | 116,125 | ||||||
Johnson & Johnson | 600,000 | 38,634 | ||||||
Medtronic, Inc. | 1,607,000 | 55,827 | ||||||
Merck & Co., Inc. | 6,718,302 | 231,782 | ||||||
Novartis AG (ADR) | 900,000 | 50,823 | ||||||
Pfizer Inc | 9,520,000 | 183,355 | ||||||
Stryker Corp. | 1,000,000 | 47,910 | ||||||
1,809,165 | ||||||||
FINANCIALS — 5.88% | ||||||||
Allstate Corp. | 700,000 | 18,438 | ||||||
American Express Co. | 1,250,000 | 63,275 | ||||||
Arthur J. Gallagher & Co. | 2,623,427 | 81,064 | ||||||
Bank of New York Mellon Corp. | 4,015,100 | 85,441 | ||||||
Bank of Nova Scotia | 2,250,000 | 118,373 | ||||||
BB&T Corp. | 680,000 | 15,871 | ||||||
Comerica Inc. | 411,400 | 10,511 | ||||||
Cullen/Frost Bankers, Inc. | 175,000 | 8,582 | ||||||
Hudson City Bancorp, Inc. | 9,846,000 | 61,538 | ||||||
JPMorgan Chase & Co. | 4,983,000 | 173,209 | ||||||
Lincoln National Corp. | 413,300 | 7,873 | ||||||
Marsh & McLennan Companies, Inc. | 2,224,423 | 68,112 | ||||||
NYSE Euronext | 2,512,246 | 66,750 | ||||||
Old Republic International Corp. | 6,200,000 | 54,808 | ||||||
Royal Bank of Canada | 1,196,500 | 58,533 | ||||||
State Street Corp. | 2,439,700 | 98,539 | ||||||
Toronto-Dominion Bank | 584,000 | 43,964 | ||||||
Wells Fargo & Co. | 2,185,000 | 56,613 | ||||||
1,091,494 | ||||||||
INFORMATION TECHNOLOGY — 10.26% | ||||||||
Analog Devices, Inc. | 1,222,500 | 44,707 | ||||||
Applied Materials, Inc. | 4,070,000 | 50,142 | ||||||
Automatic Data Processing, Inc. | 2,000,000 | 104,660 | ||||||
Canon, Inc. (ADR) | 495,000 | 22,547 | ||||||
Hewlett-Packard Co. | 3,020,000 | 80,362 | ||||||
Intel Corp. | 5,818,000 | 142,774 | ||||||
International Business Machines Corp. | 2,116,000 | 390,677 | ||||||
KLA-Tencor Corp. | 1,322,000 | 62,253 | ||||||
Linear Technology Corp. | 3,300,000 | 106,623 | ||||||
Maxim Integrated Products, Inc. | 2,370,000 | 61,999 | ||||||
Microchip Technology Inc. | 1,500,000 | 54,240 | ||||||
Microsoft Corp. | 15,009,198 | 399,695 | ||||||
Nokia Corp. (ADR) | 500,000 | 3,365 | ||||||
Oracle Corp. | 3,985,000 | 130,588 | ||||||
Paychex, Inc. | 1,000,000 | 29,140 | ||||||
QUALCOMM Inc. | 800,000 | 41,280 | ||||||
Texas Instruments Inc. | 5,120,000 | 157,338 | ||||||
Xilinx, Inc. | 688,400 | 23,034 | ||||||
1,905,424 | ||||||||
TELECOMMUNICATION SERVICES — 6.89% | ||||||||
AT&T Inc. | 18,383,700 | 538,826 | ||||||
BCE Inc. | 3,750,000 | 148,538 | ||||||
CenturyLink, Inc. | 1,265,650 | 44,627 | ||||||
Verizon Communications Inc. | 14,819,500 | 548,025 | ||||||
1,280,016 | ||||||||
UTILITIES — 6.57% | ||||||||
Ameren Corp. | 2,243,680 | 71,529 | ||||||
American Electric Power Co., Inc. | 1,435,000 | 56,367 | ||||||
Dominion Resources, Inc. | 1,500,000 | 77,385 | ||||||
DTE Energy Co. | 750,000 | 39,083 | ||||||
Duke Energy Corp. | 10,005,000 | 204,302 | ||||||
Exelon Corp. | 3,093,720 | 137,330 | ||||||
FirstEnergy Corp. | 3,927,728 | 176,591 | ||||||
PPL Corp. | 1,027,000 | 30,163 | ||||||
Progress Energy, Inc. | 2,346,900 | 122,273 | ||||||
Public Service Enterprise Group Inc. | 2,575,000 | 86,777 | ||||||
Questar Corp. | 420,000 | 8,093 | ||||||
Southern Co. | 2,000,000 | 86,400 | ||||||
Xcel Energy Inc. | 4,745,000 | 122,658 | ||||||
1,218,951 | ||||||||
MISCELLANEOUS — 1.83% | ||||||||
Other common stocks in initial period of acquisition | 339,492 | |||||||
Total common stocks (cost: $14,096,790,000) | 16,401,018 | |||||||
Convertible securities — 0.20% | ||||||||
CONSUMER DISCRETIONARY — 0.02% | ||||||||
Johnson Controls, Inc. 11.50% convertible preferred 2012, units1 | 22,000 | 3,519 | ||||||
UTILITIES — 0.18% | ||||||||
PPL Corp. 9.50% convertible preferred 2013, units | 600,000 | 34,110 | ||||||
Total convertible securities (cost: $32,049,000) | 37,629 | |||||||
Principal amount | ||||||||
Bonds & notes — 3.60% | (000 | ) | ||||||
ENERGY — 0.03% | ||||||||
Enbridge Energy Partners, LP 5.35% 2014 | $ | 5,075 | 5,565 | |||||
INDUSTRIALS — 0.14% | ||||||||
Black & Decker Corp. 8.95% 2014 | 18,000 | 21,001 | ||||||
PACCAR Inc, Series A, 6.375% 2012 | 5,000 | 5,076 | ||||||
26,077 | ||||||||
CONSUMER DISCRETIONARY — 0.51% | ||||||||
Staples, Inc. 9.75% 2014 | 81,450 | 94,054 | ||||||
HEALTH CARE — 0.02% | ||||||||
Cardinal Health, Inc. 5.65% 2012 | 2,800 | 2,880 | ||||||
FINANCIALS — 2.11% | ||||||||
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013 | 5,000 | 5,322 | ||||||
American Express Bank 5.55% 2012 | 28,250 | 29,447 | ||||||
American Express Centurion Bank 5.55% 2012 | 18,870 | 19,652 | ||||||
BAC Capital Trust VI 5.625% 2035 | 335 | 264 | ||||||
Bank of America Corp., Series K, junior subordinated 8.00% noncumulative2 | 1,665 | 1,551 | ||||||
Bank of America Corp., Series M, junior subordinated 8.125% noncumulative (undated)2 | 1,665 | 1,551 | ||||||
Citigroup Inc. 6.125% 2017 | 5,000 | 5,522 | ||||||
ERP Operating LP 5.125% 2016 | 2,400 | 2,617 | ||||||
ERP Operating LP 5.375% 2016 | 6,455 | 7,120 | ||||||
ERP Operating LP 5.75% 2017 | 39,855 | 44,658 | ||||||
ERP Operating LP 6.584% 2015 | 3,500 | 3,928 | ||||||
ERP Operating LP 7.125% 2017 | 5,000 | 5,833 | ||||||
JPMorgan Chase & Co. 4.75% 2013 | 5,000 | 5,260 | ||||||
JPMorgan Chase & Co., Series I, junior subordinated 7.90% (undated)2 | 114,579 | 123,789 | ||||||
MetLife Global Funding I 5.125% 20143 | 3,000 | 3,246 | ||||||
UDR, Inc., Series A, 5.25% 2015 | 5,000 | 5,348 | ||||||
Wells Fargo & Co., Series K, junior subordinated 7.98% (undated)2 | 118,466 | 127,351 | ||||||
392,459 | ||||||||
INFORMATION TECHNOLOGY — 0.08% | ||||||||
KLA-Tencor Corp. 6.90% 2018 | 13,700 | 15,651 | ||||||
TELECOMMUNICATION SERVICES — 0.14% | ||||||||
Verizon Communications Inc. 5.55% 2014 | 5,000 | 5,495 | ||||||
Verizon Communications Inc. 8.50% 2018 | 15,000 | 20,356 | ||||||
25,851 | ||||||||
UTILITIES — 0.13% | ||||||||
FPL Group Capital, Inc. 7.875% 2015 | 20,000 | 23,958 | ||||||
MORTGAGE-BACKED OBLIGATIONS4 — 0.16% | ||||||||
Fannie Mae 4.00% 2024 | 14,173 | 14,929 | ||||||
Fannie Mae 4.50% 2024 | 13,813 | 14,710 | ||||||
29,639 | ||||||||
BONDS & NOTES OF U.S. GOVERNMENT AGENCIES — 0.28% | ||||||||
Fannie Mae 2.50% 2014 | 25,775 | 27,073 | ||||||
Freddie Mac 1.75% 2012 | 25,240 | 25,475 | ||||||
52,548 | ||||||||
Total bonds & notes (cost: $584,911,000) | 668,682 | |||||||
Short-term securities — 7.58% | ||||||||
Ciesco LLC 0.25% due 11/28/2011 | 30,000 | 29,997 | ||||||
Coca-Cola Co. 0.13%–0.16% due 11/3/2011–1/18/20123 | 103,200 | 103,187 | ||||||
eBay Inc. 0.16% due 1/11/20123 | 25,700 | 25,684 | ||||||
ExxonMobil Corp. 0.05% due 11/14/2011 | 20,000 | 20,000 | ||||||
Fannie Mae 0.04%–0.23% due 11/2/2011–7/16/2012 | 268,300 | 268,248 | ||||||
Federal Farm Credit Banks 0.17% due 10/2/2012 | 15,000 | 14,981 | ||||||
Federal Home Loan Bank 0.15%–0.30% due 11/18/2011–6/15/2012 | 304,970 | 304,904 | ||||||
Freddie Mac 0.12%–0.21% due 11/1/2011–8/14/2012 | 190,450 | 190,387 | ||||||
General Electric Capital Corp. 0.16% due 11/4/2011 | 33,200 | 33,199 | ||||||
General Electric Capital Services, Inc. 0.23% due 1/26/2012 | 38,600 | 38,583 | ||||||
Google Inc. 0.05% due 11/29/20113 | 26,200 | 26,199 | ||||||
IBM Corp. 0.05% due 11/8/20113 | 37,700 | 37,700 | ||||||
Medtronic Inc. 0.09% due 1/24/20123 | 51,500 | 51,482 | ||||||
NetJets Inc. 0.08% due 12/13/20113 | 30,000 | 29,991 | ||||||
Private Export Funding Corp. 0.08% due 12/12/20113 | 22,000 | 21,998 | ||||||
Procter & Gamble Co. 0.10%–0.17% due 1/4–4/11/20123 | 80,000 | 79,966 | ||||||
Straight-A Funding LLC 0.15% due 12/27/20113 | 11,300 | 11,297 | ||||||
U.S. Treasury Bills 0.215%–0.257% due 11/17/2011–1/12/2012 | 102,480 | 102,481 | ||||||
Wal-Mart Stores, Inc. 0.07% due 12/5/20113 | 16,000 | 15,999 | ||||||
Total short-term securities (cost: $1,406,132,000) | 1,406,283 | |||||||
Total investment securities (cost: $16,119,882,000) | $ | 18,513,612 | ||||||
Other assets less liabilities | 52,159 | |||||||
Net assets | $ | 18,565,771 |
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.
1Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities was $3,519,000, which represented .02% of the net assets of the fund.
2Coupon rate may change periodically.
3Acquired in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $406,749,000, which represented 2.19% of the net assets of the fund.
4Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
Key to abbreviation
ADR = American Depositary Receipts
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.
MFGEFP-903-1211O-S29416
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO
To the Shareholders and Board of Trustees of
American Mutual Fund:
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of American Mutual Fund (the “Fund”) as of October 31, 2011, and for the year then ended and have issued our report thereon dated December 13, 2011, which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR. Our audit also included the Fund’s investment portfolio (the “Schedule”) as of October 31, 2011, appearing in Item 6 of this Form N-CSR. This Schedule is the responsibility of the Fund’s management. Our responsibility is to express an opinion based on our audit. In our opinion, the Schedule referred to above, when considered in relation to the basic financial statements taken as a whole of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.
DELOITTE & TOUCHE LLP
Costa Mesa, California
December 13, 2011
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.
AMERICAN MUTUAL FUND | |
By /s/ James K. Dunton | |
James K. Dunton, Vice Chairman and Principal Executive Officer | |
Date: December 30, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By /s/ James K. Dunton |
James K. Dunton, Vice Chairman and Principal Executive Officer |
Date: December 30, 2011 |
By /s/ Karl C. Grauman |
Karl C. Grauman, Treasurer and Principal Financial Officer |
Date: December 30, 2011 |