American Mutual Fund®
[photo of sunflowers - a tree in the background]
Semi-annual report for the six months ended April 30, 2012
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 American Funds. American Funds is one of the nation’s largest mutual fund families. For more than 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 March 31, 2012 (the most recent calendar quarter-end): |
| | | | | | | | | | |
| Class A shares | | 1 year | | | 5 years | | | 10 years | |
| Reflecting 5.75% maximum sales charge | | | 1.13 | % | | | 1.19 | % | | | 4.30 | % |
The total annual fund operating expense ratio was 0.62% for Class A shares as of the prospectus dated January 1, 2012.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers, without which results would have been lower. Visit americanfunds.com for more information.
The fund’s 30-day yield for Class A shares as of May 31, 2012, calculated in accordance with the U.S. Securities and Exchange Commission (SEC) formula, was 2.27%. 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 35.
Refer to the fund prospectus and the Risk Factors section of this report for more information on risks associated with investing in the fund.
Fellow investors:
[photo of sunflowers]
Spurred by the slow but steady growth of the U.S. economy, stocks rose during the six months ended April 30, 2012. U.S. companies continued to produce good results and a growing number of companies increased their dividends. The market temporarily ignored some of the longer-term issues we face: relatively high unemployment in the U.S.; federal, state and local spending cuts; and the growing European financial crisis.
With the market moving up significantly during the six-month period, American Mutual Fund (AMF) posted a total return of 10.7%. This trailed the 12.8% return of the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of the U.S. stock market. In a strong stock market, AMF typically lags the S&P 500, but it tends to do relatively better than the market when stocks decline because its dividend-paying stock holdings are typically less volatile than the overall market.
Over longer periods of time, however, AMF continued to do better than the S&P 500. For the past 10 years, the fund had an average annual total return of 5.2% compared with the S&P 500’s 4.7% return. For the fund’s 62-year lifetime AMF has had an average annual total return of 11.6% compared with 11.1% for the S&P 500.
AMF strives for the balanced accomplishment of three objectives: current income, growth of capital and conservation of principal. As a part of its overall approach, the fund seeks to reduce risk by investing primarily in companies that pay dividends.
Portfolio review
As of April 30, AMF had 87.5% of its total assets in common and preferred stocks, 0.2% in convertible securities, 3.2% in bonds and notes and 9.1% in short-term securities including cash. The fund’s largest industry sectors were industrials, 15.0%; consumer discretionary, 13.6%; health care, 11.0%; information technology, 8.3%; and energy, 8.2%.
What helped the fund? Seven of the fund’s 10 largest stocks provided returns that were greater than that of the S&P 500. Of that group, Home Depot (+44.7%), the fund’s third-largest holding, did best. Media companies such as Comcast (+29.4%) and Time Warner Cable (+26.3%) also helped results. Health care stocks including Amgen (+24.2%) and Abbott Laboratories (+15.2%) made solid contributions. AT&T (+12.3%), Verizon (+9.2%) and United Technologies (+4.7%) appreciated during the period but went up less than the overall market.
Dividend news continues to be positive. Standard & Poor’s estimates that dividend payments by companies in the S&P 500 will increase 15% from last year to $277 billion in 2012. This amount would exceed the previous record set in 2008 of $248 billion. Three-quarters of the S&P 500’s dividend-paying companies are making higher payments than they did last year, according to Standard & Poor’s. In March, 15 major banks got permission from the Federal Reserve to increase their dividends and also take other steps that will make their stocks more attractive to investors.
Looking ahead
Tax laws affecting dividends are set to expire at the end of 2012, and tax rates may rise for dividends in 2013. At this time, however, it is uncertain how dividends will be taxed next year. It is important to keep in mind that many investors hold their mutual funds inside a retirement plan, which means any gains won’t be taxed until the money in the plan is withdrawn.
On June 30, 2012, James Dunton, who served AMF for 42 years as portfolio counselor, president and vice chairman, will retire from Capital Research and Management Company. We thank him for his long and dedicated service. Joyce Gordon, president of AMF, has been elected vice chairman and continues as principal investment officer. Paul Roye, senior vice president of AMF, was elected as president of the fund.
We are pleased to report that the number of shareholder accounts in AMF has increased by 7.3%. We welcome our new investors and thank our long-term investors for their continued support.
Cordially,
/s/ Joyce E. Gordon
Joyce E. Gordon
Vice Chairman
/s/ Paul F. Roye
Paul F. Roye
President
June 8, 2012
For current information about the fund, visit americanfunds.com
Notes to financial statements
unaudited
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.
The fund has 16 share classes consisting of five retail share classes (Classes A, B and C, as well as two F share classes, F-1 and F-2), five 529 college savings plan share classes (Classes 529-A, 529-B, 529-C, 529-E and 529-F-1) and six retirement plan share classes (Classes R-1, R-2, R-3, R-4, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education. The retirement plan share classes are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are further 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 supplied by one or more pricing vendors on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. 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.
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by accounting principles generally accepted in the United States of America. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs – The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.
Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including short-term securities 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 |
When the fund’s 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 ask prices that are reasonably and timely available (or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the fund’s 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 fund’s investment adviser are fair valued as determined in good faith under fair value guidelines adopted by authority of the fund’s board of trustees as further described below. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission (“SEC”) rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.
Processes and structure– The fund’s board of trustees has delegated authority to the fund’s investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation teams. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees with supplemental information to support the changes. The fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.
The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control self-evaluation program facilitated by the investment adviser’s compliance group.
Classifications – The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of April 30, 2012 (dollars in thousands):
| | | Investment securities | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | |
| Common stocks: | | | | | | | | | | | | |
| Energy | | $ | 1,762,669 | | | $ | - | | | $ | - | | | $ | 1,762,669 | |
| Materials | | | 1,009,886 | | | | - | | | | - | | | | 1,009,886 | |
| Industrials | | | 3,228,827 | | | | - | | | | - | | | | 3,228,827 | |
| Consumer discretionary | | | 2,934,691 | | | | - | | | | - | | | | 2,934,691 | |
| Consumer staples | | | 1,182,288 | | | | - | | | | - | | | | 1,182,288 | |
| Health care | | | 2,372,634 | | | | - | | | | - | | | | 2,372,634 | |
| Financials | | | 1,304,993 | | | | - | | | | - | | | | 1,304,993 | |
| Information technology | | | 1,787,029 | | | | - | | | | - | | | | 1,787,029 | |
| Telecommunication services | | | 1,145,358 | | | | - | | | | - | | | | 1,145,358 | |
| Utilities | | | 1,611,504 | | | | - | | | | - | | | | 1,611,504 | |
| Miscellaneous | | | 510,092 | | | | - | | | | - | | | | 510,092 | |
| Preferred stocks | | | 10,472 | | | | - | | | | - | | | | 10,472 | |
| Convertible securities | | | 32,034 | | | | - | | | | - | | | | 32,034 | |
| Bonds & notes | | | - | | | | 696,103 | | | | - | | | | 696,103 | |
| Short-term securities | | | - | | | | 1,889,311 | | | | - | | | | 1,889,311 | |
| Total | | $ | 18,892,477 | | | $ | 2,585,414 | | | $ | - | | | $ | 21,477,891 | |
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 April 30, 2012, 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 or state tax authorities for tax years before 2007.
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; and net capital losses. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.
The components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of October 31, 2011, the components of distributable earnings on a tax basis were as follows:
| (dollars in thousands) | |
| Undistributed ordinary income | | $ | 66,393 | |
| Capital loss carryforward expiring 2017* | | | (663,964 | ) |
| | |
| *The capital loss carryforward will be used to offset any capital gains realized by the fund in the current year or in subsequent 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.
As of April 30, 2012, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:
| (dollars in thousands) | |
| Gross unrealized appreciation on investment securities | | $ | 4,275,710 | |
| Gross unrealized depreciation on investment securities | | | (346,629 | ) |
| Net unrealized appreciation on investment securities | | | 3,929,081 | |
| Cost of investment securities | | | 17,548,810 | |
Tax-basis distributions paid to shareholders from ordinary income were as follows (dollars in thousands):
| Share class | | Six months ended April 30, 2012 | | | Year ended October 31, 2011 | |
| Class A | | $ | 189,519 | | | $ | 338,966 | |
| Class B | | | 2,456 | | | | 5,644 | |
| Class C | | | 7,356 | | | | 12,517 | |
| Class F-1 | | | 10,669 | | | | 16,955 | |
| Class F-2 | | | 10,790 | | | | 11,932 | |
| Class 529-A | | | 5,210 | | | | 8,386 | |
| Class 529-B | | | 209 | | | | 471 | |
| Class 529-C | | | 991 | | | | 1,578 | |
| Class 529-E | | | 253 | | | | 395 | |
| Class 529-F-1 | | | 347 | | | | 486 | |
| Class R-1 | | | 361 | | | | 568 | |
| Class R-2 | | | 1,675 | | | | 2,748 | |
| Class R-3 | | | 5,214 | | | | 7,889 | |
| Class R-4 | | | 4,120 | | | | 5,939 | |
| Class R-5 | | | 4,105 | | | | 6,037 | |
| Class R-6 | | | 16,740 | | | | 25,956 | |
| Total | | $ | 260,015 | | | $ | 446,467 | |
| 6. | Fees and transactions with related parties |
CRMC, the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares, and American Funds Service Company® ("AFS"), the fund’s transfer agent.
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 six months ended April 30, 2012, the investment advisory services fee was $25,383,000, which was equivalent to an annualized rate of 0.256% 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 April 30, 2012, 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 shareholder services agreement with AFS under which the fund compensates AFS for providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.
During the period November 1, 2011, through December 31, 2011, only Class A and B shares were subject to the shareholder services agreement with AFS. During this period, AFS and other third parties were compensated for providing transfer agent services to Class C, F, R and 529 shares through the fees paid by the fund to CRMC under the fund’s administrative services agreement with CRMC as described in the administrative services section on the following page; CRMC paid for any transfer agent services expenses in excess of 0.10% of the respective average daily net assets of each of such share classes.
Effective January 1, 2012, the shareholder services agreement with AFS was modified to include Class C, F, R and 529 shares and payment for transfer agent services for such classes under the administrative services agreement terminated. Under this structure, transfer agent services expenses for some classes may exceed 0.10% of average daily net assets, resulting in an increase in expenses paid by some share classes.
For the six months ended April 30, 2012, the total transfer agent services fee paid under these agreements was $10,991,000, of which $10,475,000 was paid by the fund to AFS and $516,000 was paid by the fund to CRMC through its administrative services agreement with the fund. Amounts paid to CRMC by the fund were then paid by CRMC to AFS and other third parties.
Administrative services – The fund has an administrative services agreement with CRMC under which the fund compensates CRMC for providing administrative services to Class A, C, F, R and 529 shares. These services include, but are not limited to, coordinating, monitoring, assisting and overseeing third parties that provide services to fund shareholders.
During the period November 1, 2011, through December 31, 2011, the agreement applied only to Class C, F, R and 529 shares. The agreement also required CRMC to arrange for the provision of transfer agent services for such share classes, which paid CRMC annual fees up to 0.15% (0.10% for Class R-5 and 0.05% for Class R-6) of their respective average daily net assets. During this period, up to 0.05% of these fees were used to compensate CRMC for performing administrative services; all other amounts paid under this agreement were used to compensate AFS and other third parties for transfer agent services.
Effective January 1, 2012, the administrative services agreement with CRMC was modified to include Class A shares. Under the revised agreement, Class A shares pay an annual fee of 0.01% and Class C, F, R and 529 shares pay an annual fee of 0.05% of their respective average daily net assets to CRMC for administrative services. Fees for transfer agent services are no longer included as part of the administrative services fee paid by the fund to CRMC.
For the six months ended April 30, 2012, total fees paid to CRMC for performing administrative services were $1,818,000.
529 plan services – Each 529 share class is subject to service fees to compensate 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. The fee is included in other expenses on the accompanying financial statements. The Commonwealth of Virginia is not considered a related party.
Class-specific expenses under the agreements described above for the six months ended April 30, 2012, were as follows (dollars in thousands):
| Share class | | Distribution services | | | Transfer agent services | | | Administrative services | | | 529 plan services | |
| Class A | | $ | 16,603 | | | $ | 8,505 | | | $ | 486 | | | Not applicable | |
| Class B | | | 1,294 | | | | 160 | | | Not applicable | | | Not applicable | |
| Class C | | | 3,862 | | | | 454 | | | | 181 | | | Not applicable | |
| Class F-1 | | | 1,014 | | | | 373 | | | | 200 | | | Not applicable | |
| Class F-2 | | Not applicable | | | | 415 | | | | 191 | | | Not applicable | |
| Class 529-A | | | 424 | | | | 187 | | | | 97 | | | $ | 202 | |
| Class 529-B | | | 119 | | | | 13 | | | | 6 | | | | 12 | |
| Class 529-C | | | 545 | | | | 56 | | | | 26 | | | | 55 | |
| Class 529-E | | | 55 | | | | 7 | | | | 5 | | | | 11 | |
| Class 529-F-1 | | | - | | | | 12 | | | | 6 | | | | 12 | |
| Class R-1 | | | 190 | | | | 19 | | | | 10 | | | Not applicable | |
| Class R-2 | | | 657 | | | | 311 | | | | 47 | | | Not applicable | |
| Class R-3 | | | 1,108 | | | | 289 | | | | 119 | | | Not applicable | |
| Class R-4 | | | 407 | | | | 126 | | | | 87 | | | Not applicable | |
| Class R-5 | | Not applicable | | | | 61 | | | | 73 | | | Not applicable | |
| Class R-6 | | Not applicable | | | | 3 | | | | 284 | | | Not applicable | |
| Total class-specific expenses | | $ | 26,278 | | | $ | 10,991 | | | $ | 1,818 | | | $ | 292 | |
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 $549,000, shown on the accompanying financial statements, includes $218,000 in current fees (either paid in cash or deferred) and a net increase of $331,000 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 increase (decrease) | |
| Share class | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
| Six months ended April 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 1,179,397 | | | | 44,490 | | | $ | 181,092 | | | | 6,841 | | | $ | (951,458 | ) | | | (35,955 | ) | | $ | 409,031 | | | | 15,376 | |
| Class B | | | 9,727 | | | | 372 | | | | 2,425 | | | | 93 | | | | (67,517 | ) | | | (2,573 | ) | | | (55,365 | ) | | | (2,108 | ) |
| Class C | | | 103,231 | | | | 3,928 | | | | 7,133 | | | | 273 | | | | (86,326 | ) | | | (3,296 | ) | | | 24,038 | | | | 905 | |
| Class F-1 | | | 193,451 | | | | 7,295 | | | | 10,452 | | | | 396 | | | | (102,910 | ) | | | (3,906 | ) | | | 100,993 | | | | 3,785 | |
| Class F-2 | | | 429,240 | | | | 16,393 | | | | 9,935 | | | | 373 | | | | (82,394 | ) | | | (3,111 | ) | | | 356,781 | | | | 13,655 | |
| Class 529-A | | | 55,317 | | | | 2,096 | | | | 5,209 | | | | 197 | | | | (24,439 | ) | | | (931 | ) | | | 36,087 | | | | 1,362 | |
| Class 529-B | | | 1,046 | | | | 40 | | | | 209 | | | | 8 | | | | (5,477 | ) | | | (209 | ) | | | (4,222 | ) | | | (161 | ) |
| Class 529-C | | | 17,207 | | | | 653 | | | | 991 | | | | 38 | | | | (9,316 | ) | | | (355 | ) | | | 8,882 | | | | 336 | |
| Class 529-E | | | 4,049 | | | | 155 | | | | 252 | | | | 9 | | | | (1,642 | ) | | | (62 | ) | | | 2,659 | | | | 102 | |
| Class 529-F-1 | | | 5,258 | | | | 199 | | | | 347 | | | | 13 | | | | (1,455 | ) | | | (55 | ) | | | 4,150 | | | | 157 | |
| Class R-1 | | | 9,040 | | | | 341 | | | | 359 | | | | 14 | | | | (3,887 | ) | | | (148 | ) | | | 5,512 | | | | 207 | |
| Class R-2 | | | 33,341 | | | | 1,270 | | | | 1,669 | | | | 64 | | | | (27,669 | ) | | | (1,055 | ) | | | 7,341 | | | | 279 | |
| Class R-3 | | | 103,454 | | | | 3,924 | | | | 5,212 | | | | 198 | | | | (64,922 | ) | | | (2,472 | ) | | | 43,744 | | | | 1,650 | |
| Class R-4 | | | 162,505 | | | | 6,116 | | | | 4,118 | | | | 155 | | | | (52,401 | ) | | | (1,979 | ) | | | 114,222 | | | | 4,292 | |
| Class R-5 | | | 73,604 | | | | 2,759 | | | | 4,101 | | | | 155 | | | | (33,970 | ) | | | (1,274 | ) | | | 43,735 | | | | 1,640 | |
| Class R-6 | | | 167,308 | | | | 6,260 | | | | 16,740 | | | | 631 | | | | (68,379 | ) | | | (2,538 | ) | | | 115,669 | | | | 4,353 | |
| Total net increase (decrease) | | $ | 2,547,175 | | | | 96,291 | | | $ | 250,244 | | | | 9,458 | | | $ | (1,584,162 | ) | | | (59,919 | ) | | $ | 1,213,257 | | | | 45,830 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| *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 $3,275,188,000 and $2,580,735,000, respectively, during the six months ended April 30, 2012.
Approval of Investment Advisory and Service Agreement
The fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through March 31, 2013. The board approved the agreement following the recommendation of the fund’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided and that approving the agreement was in the best interests of the fund and its shareholders.
In reaching this decision, the board and the committee took into account information furnished to them throughout the year, as well as information prepared specifically in connection with their review of the agreement and were advised by their independent counsel. They considered the factors discussed below, among others, but did not identify any single issue or particular piece of information that, in isolation, was the controlling factor.
1. Nature, extent and quality of services
The board and the committee considered the depth and quality of CRMC’s investment management process, including its global research capabilities; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of its organization; and the ongoing evolution of CRMC’s organizational structure designed to maintain and strengthen these qualities. The board and the committee also considered the nature, extent and quality of administrative, compliance and shareholder services provided by CRMC to the fund under the agreement and other agreements as well as the benefits to fund shareholders from investing in a fund that is part of a large family of funds. The board and the committee concluded that the nature, extent and quality of the services provided by CRMC have benefited and should continue to benefit the fund and its shareholders.
2. Investment results
The board and the committee considered the investment results of the fund in light of its three balanced objectives: current income, growth of capital and conservation of principal. They compared the fund’s total returns with those of other relevant funds (including the other funds that are the basis of the Lipper index for the category in which the fund is included) and market data such as relevant market indices, in each case as available at the time of the related board and committee meetings. This report, including the letter to shareholders and related disclosures, contains certain information about the fund’s investment results. The board and the committee concluded that the fund’s long-term results have been satisfactory and that CRMC’s record in managing the fund indicated that its continued management should benefit the fund and its shareholders.
3. Advisory fees and total expenses
The board and the committee compared the advisory fees and total expense levels of the fund to those of other relevant funds. They observed that the fund’s advisory fees and expenses remain significantly below those of most other relevant funds. The board and the committee also noted the breakpoint discounts in the fund’s advisory fee structure that reduce the level of fees charged by CRMC to the fund as fund assets increase. In addition, they reviewed information regarding the advisory fees paid by clients of an affiliate of CRMC. They noted that, to the extent there were differences between the advisory fees paid by the fund and the advisory fees paid by those clients, the differences appropriately reflected the investment, operational and regulatory differences between advising the fund and the other clients. The board and the committee concluded that the fund’s cost structure was fair and reasonable in relation to the services provided, and that the shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund.
4. Ancillary benefits
The board and the committee considered a variety of other benefits received by CRMC and its affiliates as a result of CRMC’s relationship with the fund and the other American Funds, including fees for administrative services provided to certain share classes; fees paid to CRMC’s affiliated transfer agent; sales charges and distribution fees received and retained by the fund’s principal underwriter, an affiliate of CRMC; and possible ancillary benefits to CRMC’s institutional management affiliates. The board and the committee reviewed CRMC’s portfolio trading practices, noting that while CRMC receives the benefit of research provided by broker-dealers executing portfolio transactions on behalf of the fund, it does not obtain third-party research or other services in return for allocating brokerage to such broker-dealers. The board and the committee took these ancillary benefits into account in evaluating the reasonableness of the advisory fees and other amounts paid to CRMC by the fund.
5. Adviser financial information
The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, including personnel, systems and resources of investment, compliance, trading, accounting and other administrative operations. They considered CRMC’s costs and willingness to invest in technology, infrastructure and staff to maintain and expand services and capabilities, respond to industry and regulatory developments and attract and retain qualified personnel. They noted information regarding the compensation structure for CRMC’s investment professionals. The board and the committee also compared CRMC’s profitability to the reported results of several large, publicly held investment management companies. The board and the committee noted the competitiveness and cyclicality of both the mutual fund industry and the capital markets, and the importance in that environment of CRMC’s long-term profitability for maintaining its independence, company culture and management continuity. They further considered the breakpoint discounts in the fund’s advisory fee structure. The board and the committee concluded that the fund’s advisory fee structure reflected a reasonable sharing of benefits between CRMC and the fund’s shareholders.
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 March 31, 2012 (the most recent calendar quarter-end): | | | | | | | | | |
| | | | | | | | | 10 years/ | |
| | | 1 year | | | 5 years | | | Life of class1 | |
Class B shares2 | | | | | | | | | |
| Reflecting applicable contingent deferred sales charge | | | | | | | | | |
| (CDSC), maximum of 5%, payable only if shares are | | | | | | | | | |
| sold within six years of purchase | | | 1.47 | % | | | 1.25 | % | | | 4.27 | % |
| Not reflecting CDSC | | | 6.47 | | | | 1.61 | | | | 4.27 | |
| | | | | | | | | | | | | |
| Class C shares | | | | | | | | | | | | |
| Reflecting CDSC, maximum of 1%, payable only | | | | | | | | | | | | |
| if shares are sold within one year of purchase | | | 5.44 | | | | 1.56 | | | | 4.05 | |
| Not reflecting CDSC | | | 6.44 | | | | 1.56 | | | | 4.05 | |
| | | | | | | | | | | | | |
Class F-1 shares3 | | | | | | | | | | | | |
| Not reflecting annual asset-based fee charged | | | | | | | | | | | | |
| by sponsoring firm | | | 7.29 | | | | 2.36 | | | | 4.86 | |
| | | | | | | | | | | | | |
Class F-2 shares3 — first sold 8/5/08 | | | | | | | | | | | | |
| Not reflecting annual asset-based fee charged | | | | | | | | | | | | |
| by sponsoring firm | | | 7.57 | | | | — | | | | 5.54 | |
| | | | | | | | | | | | | |
Class 529-A shares4 | | | | | | | | | | | | |
| Reflecting 5.75% maximum sales charge | | | 1.05 | | | | 1.10 | | | | 4.22 | |
| Not reflecting maximum sales charge | | | 7.23 | | | | 2.31 | | | | 4.83 | |
| | | | | | | | | | | | | |
Class 529-B shares2,4 | | | | | | | | | | | | |
| Reflecting applicable CDSC, maximum of 5%, payable | | | | | | | | | | | | |
| only if shares are sold within six years of purchase | | | 1.35 | | | | 1.13 | | | | 4.12 | |
| Not reflecting CDSC | | | 6.35 | | | | 1.48 | | | | 4.12 | |
| | | | | | | | | | | | | |
Class 529-C shares4 | | | | | | | | | | | | |
| Reflecting CDSC, maximum of 1%, payable only | | | | | | | | | | | | |
| if shares are sold within one year of purchase | | | 5.36 | | | | 1.50 | | | | 3.97 | |
| Not reflecting CDSC | | | 6.36 | | | | 1.50 | | | | 3.97 | |
| | | | | | | | | | | | | |
Class 529-E shares3,4 | | | 6.92 | | | | 2.02 | | | | 4.50 | |
| | | | | | | | | | | | | |
Class 529-F-1 shares3,4 — first sold 9/17/02 | | | | | | | | | | | | |
| Not reflecting annual asset-based fee charged by | | | | | | | | | | | | |
| sponsoring firm | | | 7.44 | | | | 2.53 | | | | 7.19 | |
| | 1Applicable to Class F-2 and 529-F-1 shares only. All other share classes reflect 10-year results. |
| | 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. When applicable, investment results reflect fee waivers, without which results would have been lower. Visit americanfunds.com for more information.
For information regarding the differences among the various share classes, refer to the fund prospectus.
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 investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-4225 or visit the American Funds website at americanfunds.com.
“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.
A complete April 30, 2012, 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 June 30, 2012, 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 25 years of investment experience, including 21 years at our company, reflecting a career commitment to our long-term approach.1
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 91% of 10-year periods and 96% of 20-year periods. Our fixed-income funds have beaten their Lipper indexes in 60% of 10-year periods and 67% of 20-year periods.2 Our fund management fees have been among the lowest in the industry.3
| | 2Based on Class A share results for periods through 12/31/11. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date. |
| | 3Based on management fees for the 20-year period ended 12/31/11 versus comparable Lipper categories, excluding funds of funds. |
American Funds span a range of investment objectives
| | The Growth Fund of America® |
| | Capital World Growth and Income Fund® |
| | International Growth and Income FundSM |
| | The Investment Company of America® |
| | Washington Mutual Investors FundSM |
| | The Income Fund of America® |
| | American Funds Global Balanced FundSM |
| | American Funds Mortgage Fund® |
| | American High-Income TrustSM |
| | The Bond Fund of America® |
| | Intermediate Bond Fund of America® |
| | Short-Term Bond Fund of America® |
| | U.S. Government Securities FundSM |
| | American Funds Short-Term Tax-Exempt Bond Fund® |
| | American High-Income Municipal Bond Fund® |
| | Limited Term Tax-Exempt Bond Fund of America® |
| | The Tax-Exempt Bond Fund of America® |
| | State-specific tax-exempt funds |
| | American Funds Tax-Exempt Fund of New York® |
| | The Tax-Exempt Fund of California® |
| | The Tax-Exempt Fund of Maryland® |
| | The Tax-Exempt Fund of Virginia® |
| | American Funds Money Market Fund® |
| | •American Funds Portfolio SeriesSM |
| | American Funds Global Growth PortfolioSM |
| | American Funds Growth PortfolioSM |
| | American Funds Growth and Income PortfolioSM |
| | American Funds Balanced PortfolioSM |
| | American Funds Income PortfolioSM |
| | American Funds Tax-Advantaged Income PortfolioSM |
| | American Funds Preservation PortfolioSM |
| | American Funds Tax-Exempt Preservation PortfolioSM |
| | •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. MFGESR-903-0612P
Litho in USA BBC/ALD/8079-S28717
Printed on paper containing 10% post-consumer waste
Printed with inks containing soy and/or vegetable oil
ITEM 2 – Code of Ethics
