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: 811-03734
EuroPacific Growth 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: March 31
Date of reporting period: March 31, 2007
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:
Mark D. Perlow
Kirkpatrick & Lockhart Preston Gates Ellis LLP
55 Second Street, Suite 1700
San Francisco, California 94105
(Counsel for the registrant)
ITEM 1 - Reports to Stockholders
[logo - American Funds®]
The right choice for the long term®
EuroPacific Growth Fund
Many perspectives, one purpose
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Annual report for the year ended March 31, 2007
EuroPacific Growth Fund® seeks long-term capital appreciation by investing primarily in the securities of companies based in Europe and the Pacific Basin. About half of the world’s investment opportunities can be found beyond the borders of our country. As a shareholder in the fund, you have access to what we believe are the best of those opportunities.
This fund is one of the 30 American Funds. The organization ranks among the nation’s three largest mutual fund families. For 75 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.
Contents | |
Letter to shareholders, with results at a glance | 1 |
The value of a long-term perspective | 4 |
Feature article | |
Many perspectives, one purpose | 6 |
Tapping global potential | 12 |
Summary investment portfolio | 13 |
Financial statements | 18 |
Board of trustees and other officers | 35 |
What makes American Funds different? | back cover |
Figures shown are past results for Class A shares and are not predictive of results in 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. For current information and month-end results, visit americanfunds.com. Fund results shown, unless otherwise indicated, are at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower.
The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased it to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 26 and 27 for details.
Results for other share classes can be found on page 34.
Investing outside the United States is subject to additional risks, such as currency fluctuations and political instability, which are detailed in the fund’s prospectus.
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Fellow shareholders:
EuroPacific Growth Fund reported a solid 16.6% gain for the fiscal year ended March 31, 2007, in a market environment of relatively low volatility and continued strength despite a few sharp corrections in global markets.
EuroPacific’s total return lagged the 20.3% return of the unmanaged MSCI ACWI (All Country World Index) Index, ex-USA, which measures 47 country indexes in developed and developing countries. Recently, the fund began to use this index as the primary benchmark, as it better reflects our investment universe. It replaces the MSCI EAFE (Europe, Australasia, Far East) Index, which returned 20.7% in the same period. The Lipper International Funds Average returned 17.7%. Over the long term, however, EuroPacific has maintained an advantage over its peers since the fund began operations on April 16, 1984, as shown in the table below.
A long-term view
We reiterate our long-term investment focus and our vigilant approach to moderating risk. Although we are pleased with the fund’s return, we are disappointed not to exceed our benchmarks. We tend to be more cautious in strong, heady markets, with the aim of safeguarding our gains rather than chasing after ever-higher growth. We are mindful of global markets that have doubled, tripled and, in some cases, rose even more in the past four years. We always strive to surpass our benchmarks, but we do not want to jeopardize the fund’s investments in the process.
In the current market environment — indeed, in all environments — well-researched stock selection is always our top priority. With the help of our intensive fundamental analysis, we invest in companies outside the United States that are most likely to negotiate periods of uncertainty and be leaders in the years ahead, not just in the months ahead.
What helped the fund
European companies did well throughout the fiscal year, after several years of subpar results, with the help of strong profits and solid corporate balance sheets. About 50.3% of the fund’s assets were invested in European companies at the end of the fiscal year, up from 42.1% a year earlier. This shift helped the fund, as the region’s returns were robust. The fund’s biggest holdings were in Germany and France, where stocks returned 28.4% and 23.0%, respectively.* The fund also benefited from large holdings in Switzerland and the United Kingdom, where markets were up 22.7% and 24.3%, respectively.
*Country returns are based on MSCI indexes, expressed in U.S. dollars, and assume reinvestment of dividends.
[Begin Sidebar]
Results at a glance | |||||||||||||
(for periods ended March 31, 2007, with all distributions reinvested) | |||||||||||||
Total return | Average annual total returns | ||||||||||||
1 year | 5 years | 10 years | Lifetime1 | ||||||||||
EuroPacific Growth Fund | +16.6 | % | +15.5 | % | +11.3 | % | +14.1 | % | |||||
MSCI ACWI (All Country World Index) | |||||||||||||
Index, ex-USA2,3 | +20.3 | +17.4 | +9.0 | — | |||||||||
Lipper International Funds Average4 | +17.7 | +14.5 | +8.7 | +11.7 | |||||||||
MSCI EAFE (Europe, Australasia, Far East) | |||||||||||||
Index2 | +20.7 | +16.2 | +8.7 | +11.9 | |||||||||
1Since April 16, 1984. | |||||||||||||
2The indexes are unmanaged and their returns do not reflect the effects of sales charges, commissions or expenses. | |||||||||||||
3The index did not exist prior to December 31, 1987. | |||||||||||||
4Source: Lipper. Lipper averages do not include the effects of sales charges. |
[End Sidebar]
Of EuroPacific’s largest 10 holdings, half were European. Our top holding, Swiss pharmaceutical maker Roche, was up 19.2%, and the second-largest, German pharmaceutical manufacturer Bayer, rose 59.7%. Swiss food and beverage company Nestlé, also a top holding, returned 31.5%. Also contributing to positive returns were pharmaceutical maker Novo Nordisk, based in Denmark, which was up 46.8%, and French financial giant AXA, up 20.9%.
European companies were not the only ones to flourish in the positive global economy. Many of our stock selections in Asia, Latin America, India and other parts of the world fared well. For example, our ninth-largest holding, Taiwan-based Hon Hai Precision Industry — which makes a range of electronic products including cell phones, personal computers and consumer gadgets for companies such as Dell, Hewlett Packard, Nokia and Sony — rose 29.8%. India-based ICICI Bank rose 45.3%, and the share price of China Unicom, a cellular communications business, increased 77.5%.
What hurt the fund
The fund’s investments in Japan, at more than 12% of assets, dampened results for the year. Despite expectations that recent economic growth in Japan would translate into gains in Japanese stocks, markets there were stagnant for the year. As a whole, Japanese equities rose only 3.1% in the period. Changes in Japan’s regulatory policies hurt our consumer finance holdings, including ORIX, which fell 16.2%.
Other Japan-based stocks that disappointed in the period were Sumitomo Mitsui Financial, down 17.6%, and Nitto Denko, a Japanese industrial manufacturer, which dropped 44.6%; its return was the lowest of any stock the fund held throughout the period. Convenience store operator Seven & I Holdings fell 22.9%, while banking conglomerate Mitsubishi UFJ Financial was down 26.1%. Our seventh-largest holding, Samsung Electronics, is a Korea-based company that makes a wide variety of equipment, including mobile phones, semiconductors, televisions, air conditioners, refrigerators and microwave ovens. The stock lost 7.7% in the period, but we believe the company is well positioned for the growing middle class around the world with more discretionary income to spend on consumer products.
[Begin Sidebar]
Where the fund’s assets are invested
(percent invested by country)
EuroPacific invests primarily in the stocks of companies based in Europe and the Pacific Basin.1 | ||||||||||
EuroPacific Growth Fund | MSCI ACWI(All Country World Index)Index, ex-USA2 | |||||||||
(3/31/07 | ) | (3/31/06 | ) | (3/31/07 | ) | |||||
Europe | ||||||||||
Euro zone3 | 29.7 | % | 22.9 | % | 27.3 | % | ||||
Switzerland | 7.7 | 6.1 | 5.4 | |||||||
United Kingdom | 7.6 | 8.1 | 18.4 | |||||||
Denmark | 1.7 | 1.2 | .7 | |||||||
Russia | 1.4 | 1.5 | 1.6 | |||||||
Norway | .6 | 1.2 | .7 | |||||||
Hungary | .6 | .7 | .1 | |||||||
Other Europe | 1.0 | .4 | 2.7 | |||||||
50.3 | 42.1 | 56.9 | ||||||||
Pacific Basin | ||||||||||
Japan | 12.2 | 17.7 | 17.9 | |||||||
South Korea | 7.4 | 8.0 | 2.3 | |||||||
Taiwan | 4.6 | 4.8 | 1.8 | |||||||
Mexico | 3.0 | 2.7 | .9 | |||||||
Canada | 2.2 | 2.7 | 5.8 | |||||||
Australia | 2.0 | 1.4 | 4.7 | |||||||
Hong Kong | 1.8 | 2.0 | 1.4 | |||||||
Singapore | 1.0 | .6 | .8 | |||||||
China | .6 | .6 | 1.7 | |||||||
Indonesia | .4 | .7 | .2 | |||||||
Other Pacific Basin | .9 | 1.1 | .8 | |||||||
36.1 | 42.3 | 38.3 | ||||||||
Other | ||||||||||
India | 2.8 | 2.1 | .9 | |||||||
Brazil | 2.3 | 3.4 | 1.6 | |||||||
South Africa | 1.7 | 1.2 | 1.3 | |||||||
Other countries | .6 | — | 1.0 | |||||||
7.4 | 6.7 | 4.8 | ||||||||
Short-term securities & | ||||||||||
other assets less | ||||||||||
liabilities | 6.2 | 8.9 | — | |||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||
1A country is considered part of the Pacific Basin if any of its borders touches the Pacific Ocean. | ||||||||||
2Weighted by market capitalization. | ||||||||||
3Countries using the common currency, the euro, are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia and Spain. |
[End Sidebar]
Despite short-term issues that have hurt share prices in the region, we believe our Japanese holdings, as well as our South Korean investments, represent solid companies poised for growth in the long term. We point out that a few of our Japanese stock picks did quite well, including Nintendo, the Japanese electronics entertainment company known for its success with the Pokemon toy brand, which rose 94.8%.
Looking ahead
We continue to be watchful but optimistic about the global economy. Inflation remains contained, energy prices are moderating, economic growth appears stable, and earnings projections remain strong. The fund can invest anywhere outside the United States, with at least 80% of its assets in companies located in Europe and the Pacific Basin. (We consider that region to include any country that has a border touching the Pacific Ocean.) In addition, we have investments in strong companies in other areas that we believe are promising, such as India, Pakistan, South Africa and Brazil. (See the table on the previous page for more information on the fund’s geographic breakdown.)
We are confident in our ability to find attractively valued companies that should do well over time, and we see many encouraging signs for economies around the world. However, we are always cognizant that surprises could lurk around the corner, and we position the fund conservatively to protect against potential risks to the global economy. Inflationary pressures, excessive debt levels, rising commodity prices, a slowing U.S. consumer market and geopolitical issues are just a few on a long list of concerns that could potentially cause instability in the future. International investing involves widely varying political, economic, accounting and cultural issues.
EuroPacific Growth Fund has attracted more than 500,000 new shareholders in the past year, bringing the number of accounts under management to more than 2.9 million, up from 2.4 million. We welcome all newcomers and express our appreciation for all our shareholders, and we look forward to serving you for many years to come. We thank you for your confidence in us.
Sincerely,
/s/ Gina H. Despres
Gina H. Despres
Vice Chairman of the Board
/s/ Mark Denning
Mark Denning
President
May 8, 2007
For current information about the fund, visit americanfunds.com.
The value of a long-term perspective
Figures shown are past results for Class A shares and are not predictive of results in 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. Fund figures reflect deduction of the maximum sales charge of 5.75% on a $10,000 investment.1 Thus, the net amount invested was $9,425.2
How a $10,000 investment has grown
While notable for their volatility in recent years, financial markets have tended to reward investors over the long term. Active management — bolstered by experience and careful research — can add even more value. As the chart shows, over its lifetime, EuroPacific Growth Fund has done demonstrably better than its relevant benchmark.
Average annual total returns based on a $1,000 investment
(for periods ended March 31, 2007)*
1 year | 5 years | 10 years | ||||||||
Class A shares | +9.92 | % | +14.15 | % | +10.61 | % |
*Assumes reinvestment of all distributions and payment of the maximum 5.75% sales charge.
The total annual fund operating expense ratio for Class A shares as of the most recent fiscal year-end was 0.79%. This figure does not reflect a fee waiver currently in effect; therefore, the actual expense ratio is lower.
The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased it to 10% on April 1, 2005. Fund results shown reflect actual expenses, with the waiver applied. Fund results would have been lower without the waiver. Please see the Financial Highlights table on pages 26 and 27 for details.
[mountain chart]
For Year Ended March 31 | |||||||||||
EuroPacific Growth Fund, with dividends reinvested4 | MSCI ACWI ex USA Index, with dividends reinvested5,6 | Consumer Price Index (inflation)7 | |||||||||
04/16/84 | $9,425 | $10,000 | $10,000 | ||||||||
1985 | Low | 07/23/84 | 8,696 | Low | 07/23/84 | 8,155 | Low | 04/30/84 | $10,000 | ||
Hi | 03/28/85 | 9,955 | Hi | 03/31/85 | 10,348 | Hi | 03/31/85 | 10,320 | |||
Close | 03/31/85 | 9,941 | Close | 03/31/85 | 10,348 | Close | 03/31/85 | 10,320 | |||
1986 | Low | 04/08/85 | 9,775 | Low | 04/09/85 | 10,115 | Low | 04/30/85 | 10,369 | ||
Hi | 03/21/86 | 15,364 | Hi | 03/31/86 | 19,228 | Hi | 01/31/86 | 10,630 | |||
Close | 03/31/86 | 15,357 | Close | 03/31/86 | 19,228 | Close | 03/31/86 | 10,553 | |||
1987 | Low | 07/22/86 | 15,634 | Low | 04/07/86 | 18,448 | Low | 04/30/86 | 10,533 | ||
Hi | 03/27/87 | 19,887 | Hi | 03/27/87 | 31,405 | Hi | 03/31/87 | 10,873 | |||
Close | 03/31/87 | 19,813 | Close | 03/31/87 | 31,010 | Close | 03/31/87 | 10,873 | |||
1988 | Hi | 10/08/87 | 24,499 | Hi | 10/14/87 | 36,201 | Low | 04/30/87 | 10,931 | ||
Low | 12/11/87 | 17,992 | Low | 11/11/87 | 28,389 | Hi | 03/31/88 | 11,300 | |||
Close | 03/31/88 | 21,422 | Close | 03/31/88 | 36,179 | Close | 03/31/88 | 11,300 | |||
1989 | Low | 09/01/88 | 21,189 | Low | 08/31/88 | 33,481 | Low | 04/30/88 | 11,358 | ||
Hi | 02/09/89 | 24,835 | Hi | 02/28/89 | 41,150 | Hi | 03/31/89 | 11,862 | |||
Close | 03/31/89 | 24,569 | Close | 03/31/89 | 40,446 | Close | 03/31/89 | 11,862 | |||
1990 | Low | 06/13/89 | 24,282 | Hi | 12/31/89 | 45,003 | Low | 04/30/89 | 11,940 | ||
Hi | 12/06/89 | 28,391 | Low | 03/31/90 | 36,338 | Hi | 03/31/90 | 12,483 | |||
Close | 03/31/90 | 28,742 | Close | 03/31/90 | 36,338 | Close | 03/31/90 | 12,483 | |||
1991 | Hi | 07/18/90 | 33,103 | Hi | 07/31/90 | 40,323 | Low | 04/30/90 | 12,502 | ||
Low | 01/16/91 | 27,795 | Low | 09/30/90 | 31,618 | Hi | 03/31/91 | 13,094 | |||
Close | 03/31/91 | 31,359 | Close | 03/31/91 | 37,523 | Close | 03/31/91 | 13,094 | |||
1992 | Low | 08/19/91 | 30,061 | Hi | 12/31/91 | 39,623 | Low | 04/30/91 | 13,113 | ||
Hi | 02/28/92 | 36,033 | Low | 03/31/92 | 35,581 | Hi | 03/31/92 | 13,511 | |||
Close | 03/31/92 | 35,033 | Close | 03/31/92 | 35,581 | Close | 03/31/92 | 13,511 | |||
1993 | Hi | 06/02/92 | 37,465 | Low | 10/31/92 | 34,792 | Low | 04/30/92 | 13,531 | ||
Low | 11/17/92 | 33,764 | Hi | 03/31/93 | 39,345 | Hi | 03/31/93 | 13,928 | |||
Close | 03/31/93 | 37,728 | Close | 03/31/93 | 39,345 | Close | 03/31/93 | 13,928 | |||
1994 | Low | 04/02/93 | 37,813 | Low | 04/30/93 | 42,820 | Low | 04/30/93 | 13,967 | ||
Hi | 02/02/94 | 50,611 | Hi | 01/31/94 | 51,503 | Hi | 03/31/94 | 14,277 | |||
Close | 03/31/94 | 47,638 | Close | 03/31/94 | 48,772 | Close | 03/31/94 | 14,277 | |||
1995 | Hi | 09/02/94 | 51,011 | Hi | 10/31/94 | 53,443 | Low | 04/30/94 | 14,297 | ||
Low | 01/31/95 | 46,642 | Low | 02/16/95 | 48,179 | Hi | 03/31/95 | 14,685 | |||
Close | 03/31/95 | 47,974 | Close | 03/31/95 | 50,901 | Close | 03/31/95 | 14,685 | |||
1996 | Low | 04/03/95 | 47,928 | Low | 06/30/95 | 51,925 | Low | 04/30/95 | 14,733 | ||
Hi | 03/25/96 | 57,612 | Hi | 03/31/96 | 57,610 | Hi | 03/31/96 | 15,102 | |||
Close | 03/31/96 | 57,494 | Close | 03/31/96 | 57,610 | Close | 03/31/96 | 15,102 | |||
1997 | Low | 07/24/96 | 57,229 | Low | 07/31/96 | 56,809 | Low | 04/30/96 | 15,160 | ||
Hi | 03/11/97 | 67,625 | Hi | 11/30/96 | 60,212 | Hi | 03/31/97 | 15,519 | |||
Close | 03/31/97 | 66,627 | Close | 03/31/97 | 59,368 | Close | 03/31/97 | 15,519 | |||
1998 | Hi | 10/03/97 | 77,523 | Low | 04/30/97 | 59,868 | Low | 05/31/97 | 15,529 | ||
Low | 01/12/98 | 67,131 | Hi | 03/31/98 | 69,026 | Hi | 03/31/98 | 15,732 | |||
Close | 03/31/98 | 80,601 | Close | 03/31/98 | 69,026 | Close | 03/31/98 | 15,732 | |||
1999 | Hi | 04/15/98 | 83,900 | Low | 09/30/98 | 57,722 | Low | 04/30/98 | 15,761 | ||
Low | 10/05/98 | 65,404 | Hi | 03/31/99 | 71,159 | Hi | 03/31/99 | 16,004 | |||
Close | 03/31/99 | 87,198 | Close | 03/31/99 | 71,159 | Close | 03/31/99 | 16,004 | |||
2000 | Low | 04/01/99 | 87,833 | Low | 05/31/99 | 71,208 | Low | 06/30/99 | 16,120 | ||
Hi | 03/29/00 | 137,516 | Hi | 03/31/00 | 91,706 | Hi | 03/31/00 | 16,605 | |||
Close | 03/31/00 | 134,560 | Close | 03/31/00 | 91,706 | Close | 03/31/00 | 16,605 | |||
2001 | Hi | 04/10/00 | 134,710 | Hi | 06/30/00 | 87,965 | Low | 04/30/00 | 16,615 | ||
Low | 03/22/01 | 94,189 | Low | 03/22/01 | 64,313 | Hi | 03/31/01 | 17,090 | |||
Close | 03/31/01 | 96,853 | Close | 03/31/01 | 67,112 | Close | 03/31/01 | 17,090 | |||
2002 | Hi | 05/21/01 | 104,778 | Hi | 05/02/01 | 72,556 | Low | 12/31/01 | 17,139 | ||
Low | 09/21/01 | 79,958 | Low | 09/21/01 | 52,947 | Hi | 03/31/02 | 17,342 | |||
Close | 03/31/02 | 94,302 | Close | 03/31/02 | 63,226 | Close | 03/31/02 | 17,342 | |||
2003 | Hi | 05/17/02 | 96,306 | Hi | 05/17/02 | 65,397 | Low | 04/30/02 | 17,439 | ||
Low | 03/12/03 | 69,809 | Low | 03/12/03 | 46,776 | Hi | 03/31/03 | 17,866 | |||
Close | 03/31/03 | 72,463 | Close | 03/31/03 | 49,204 | Close | 03/31/03 | 17,866 | |||
2004 | Low | 04/01/03 | 73,091 | Low | 04/01/03 | 49,620 | Low | 05/31/03 | 17,798 | ||
High | 03/01/04 | 114,695 | High | 02/17/04 | 79,825 | Hi | 03/31/04 | 18,177 | |||
Close | 03/31/04 | 113,848 | Close | 03/31/04 | 78,684 | Close | 03/31/04 | 18,177 | |||
2005 | Low | 05/17/04 | 103,225 | Low | 05/17/04 | 71,764 | Low | 04/30/04 | 18,235 | ||
High | 03/04/05 | 132,976 | High | 03/08/05 | 95,174 | Hi | 03/31/05 | 18,749 | |||
Close | 03/31/05 | 127,604 | Close | 03/31/05 | 91,389 | Close | 03/31/05 | 18,749 | |||
2006 | Low | 04/28/05 | 123,628 | Low | 05/17/05 | 88,203 | Low | 05/31/05 | 18,855 | ||
High | 03/30/06 | 166,244 | High | 03/30/06 | 117,805 | Hi | 03/31/06 | 19,379 | |||
Close | 03/31/06 | 166,207 | Close | 03/31/06 | 117,092 | Close | 03/31/06 | 19,379 | |||
2007 | Low | 06/13/06 | 150,639 | Low | 06/13/06 | 107,730 | Low | 04/30/06 | 19,544 | ||
High | 12/20/06 | 186,512 | High | 02/26/07 | 142,457 | Hi | 03/31/07 | 19,918 | |||
Close | 03/31/07 | 193,850 | Close | 03/31/07 | 140,848 | Close | 03/31/07 | 19,918 |
[end mountain chart]
Year ended March 31 | 19853 | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | |||||||||||||||||
TOTAL VALUE | |||||||||||||||||||||||||
Dividends reinvested | $ | 69 | 35 | 118 | 491 | 316 | 527 | 656 | 611 | ||||||||||||||||
Value at year-end | $ | 9,941 | 15,357 | 19,813 | 21,422 | 24,569 | 28,742 | 31,359 | 35,033 | ||||||||||||||||
Total return (%) | (0.6 | ) | 54.5 | 29.0 | 8.1 | 14.7 | 17.0 | 9.1 | 11.7 | ||||||||||||||||
Year ended March 31 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | |||||||||||||||||
TOTAL VALUE | |||||||||||||||||||||||||
Dividends reinvested | 538 | 515 | 715 | 1,131 | 1,062 | 1,155 | 991 | 841 | |||||||||||||||||
Value at year-end | 37,728 | 47,638 | 47,974 | 57,494 | 66,627 | 80,601 | 87,198 | 134,560 | |||||||||||||||||
Total return (%) | 7.7 | 26.3 | 0.7 | 19.8 | 15.9 | 21.0 | 8.2 | 54.3 | |||||||||||||||||
Year ended March 31 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||||
TOTAL VALUE | |||||||||||||||||||||||||
Dividends reinvested | 637 | 2,209 | 836 | 1,083 | 1,796 | 2,575 | 2,899 | ||||||||||||||||||
Value at year-end | 96,853 | 94,302 | 72,463 | 113,848 | 127,604 | 166,207 | 193,850 | ||||||||||||||||||
Total return (%) | (28.0 | ) | (2.6 | ) | (23.2 | ) | 57.1 | 12.1 | 30.3 | 16.6 | |||||||||||||||
Average annual total return for fund’s lifetime: 13.8%4 | |||||||||||||||||||||||||
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. | |||||||||||||||||||||||||
3For the period April 16, 1984 (commencement of operations), through March 31, 1985. | |||||||||||||||||||||||||
4Includes reinvested dividends of $21,805 and reinvested capital gain distributions of $49,833. | |||||||||||||||||||||||||
5The index is unmanaged and its result does not reflect the effects of sales charges, commissions or expenses. | |||||||||||||||||||||||||
6From April 16, 1984, through December 31, 1987, the MSCI EAFE Index was used because the MSCI ACWI ex USA Index did not yet exist. Since January 1, 1988, the MSCI ACWI ex USA Index has been used. | |||||||||||||||||||||||||
7Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics. |
Many perspectives, one purpose
All the portfolio counselors of EuroPacific Growth Fund have their eyes on the same goal: the long-term growth of capital. They all invest in companies domiciled outside the United States, according to the fund’s guidelines. However, these eight counselors have different strategies on how to get there, with each one separately managing a section of the fund’s assets. This blend of cooperation and individual accountability allows them to make independent decisions and to act on their highest convictions.
[photo of a four-panel wood door - colored circles painted on the doors]
[photo of wooden clogs - painted and unpainted]
[Begin Photo Caption]
[photo of Alwyn Heong]
Alwyn Heong
[End Photo Caption]
The distinctive system harnesses the combined power of many viewpoints from investment professionals based in different corners of the world. We call it the multiple portfolio counselor system. “It’s at the core of what sets our culture apart and what makes us different as a company,” says Rob Lovelace, a portfolio counselor in the fund, as well as the chairman, principal executive officer and a director of Capital Research Company and a director of The Capital Group Companies.
The system is based on a simple concept: The independent ideas of several experienced portfolio counselors and analysts are generally better than those of a committee or single manager — no matter how brilliant. In practice, that simple idea has profound implications and layers of subtleties. Unlike team-led funds, EuroPacific portfolio counselors do not need to gain consensus of the group before they act, although they do need to communicate their actions. Each one independently manages a slice of the fund as if it were an entire fund. “There is a respect here for independence of thought — we acknowledge that we all approach things differently and that we can disagree,” says portfolio counselor Tim Dunn, who is based in London.
The system enables individual portfolio counselors to push their boundaries in areas they believe in strongly. “We can stretch our imaginations, knowing that if we made a mistake, the negative impact on the overall fund would be mitigated by others,” says Sung Lee, a portfolio counselor based in Tokyo. “So when the system is at its best — when most counselors are taking healthy levels of risk and acting on their high-conviction ideas and getting it right — it has the potential to provide consistent long-term results.”
Many perspectives
The diversity of views, experience, styles and skill helps the fund. “It’s imperative to have a wide range of perspectives, as well as the right mix of investment styles,” Rob says. “There are some who do best in a bull market, some whose strategies prosper in a bear market and others who are good in a sideways market.”
That’s why, for EuroPacific Growth Fund and all the American Funds, portfolio managers are selected to complement each other over the long term. For example, some managers who favor high-growth companies have had successful years, while concurrently those who prefer to invest in deep-value or dividend-paying stocks have not, and vice versa. The strategic combination of several investing styles — somewhat similar to offensive and defensive squads on a football team — has smoothed out market peaks and valleys over time and has helped sustain EuroPacific’s approach in a variety of stock market conditions.
[Begin Sidebar]
“The system leads to a collegial atmosphere, individual responsibility and a way for us to handle growth.”
Carl Kawaja
[photo of Carl Kawaja]
[photo of wood boxes filled with colored dye]
[End Sidebar]
“There’s an art to this, making sure that we have the right mix of styles that help each other, not cancel each other out,” says portfolio counselor Carl Kawaja, who is based in San Francisco. “We select for strengths that can lead to lower volatility through the very different market cycles that happen over time. That’s the power of the system.”
[Begin Photo Caption]
[photo of decorative plates]
[photo of Sung Lee]
Sung Lee
[End Photo Caption]
The multiple portfolio counselor system is like the “secret sauce,” says portfolio counselor Steve Bepler, who has been with American Funds for 35 years and is based in New York. The system allows Steve, who leans toward stocks of dividend-paying companies, to balance out the styles of other managers, say, those who put more emphasis on capital growth. “The beauty is that we can stick with what we are comfortable with and what history tells us we’ve been good at,” he says.
Each counselor can invest in what they know, and a natural result is an organic diversification across the fund. “I can construct my portfolio based on my strengths and my own preferences for risk and avoid areas I don’t know. I don’t have to own every sector,” says Nick Grace, a London-based portfolio counselor. That’s because the other counselors have complementary strategies to help create the necessary diversity.
“One of the most compelling aspects of the system is that we all work together as a whole, but we also work with our individual flair and convictions,” says Mark Denning, president of the fund and a portfolio counselor. “In the end, it’s the shareholders who have benefited most from this duality.”
Elegant expansion
The multiple portfolio counselor system also allows for easy expansion when a fund’s assets grow, makes contraction easier to manage, and allows for seamless retirements. When the system began in the 1950s, growth was not an issue. But the ability to incorporate additional portfolio counselors has become an important side benefit, because it allows a fund to grow without breaking stride.
“One person can manage only so many assets; there is a limit to what an individual can do,” Tim says. “The system allows us to incrementally add people who have different approaches when we need to. It’s a fluid process and it gives us a lot of flexibility.”
Investment analysts can invest fund assets, which provides management with a significant track record to ascertain individual investment styles. So when new portfolio counselors are named, they already have had much experience in the fund. For example, both Nick Grace and Sung Lee, who became portfolio counselors for EuroPacific last year, each had been managing money in the research portfolio for 12 years.
The system proved its elegant manageability during several periods of strong growth over the last few decades, including the remarkable period from March 2004 to March 2007, when EuroPacific’s net assets grew from $42 billion to $104 billion. The fund added counselors, bringing the total number to the current eight. The investment analysts together manage a ninth portion of the fund, so the fund is effectively made up of nine smaller funds.
“I’ve been a manager in EuroPacific for more than a decade, and in the last three years, I have not received more assets to manage. My slice of the pie has not increased, other than through stock price appreciation, despite the fund’s overall growth,” Rob says. “The new money has flowed to new counselors.”
[Begin Sidebar]
“We all work together, and we all work with our individual flair and convictions.”
Mark Denning
[photo of Mark Denning]
[photo of a row of colored houses]
[End Sidebar]
[Begin Sidebar]
[photo of a three covered boats]
“The system is at the core of what sets our culture apart and what makes us different as a company.”
Robert Lovelace
[End Sidebar]
A network of trust
One of the reasons the multiple portfolio counselor system works so well is the robust communication among all investment professionals. The camaraderie and willingness to share information is at the heart of the system. The investment professionals share a network of trust, developed and bolstered by years, often decades, of working together. In fact, the portfolio counselors of EuroPacific average nearly 20 years each of investment experience within American Funds.
Although the portfolio counselors and analysts make decisions independently for their portions of the fund, they collaborate extensively. Investment professionals with specialties across sectors, asset classes and objectives meet frequently in person and on global teleconferences.
“We share information, we share our thought processes and then we individually determine how best to serve the shareholder with our slice of the portfolio,” Tim says. “We trade information about companies and managements, but we each act autonomously.”
Not a committee
This all creates a very different fund than one managed by a team or a committee, where the focus is on agreement. Although the culture of the multiple portfolio counselor system breeds collegiality and cooperation, the counselors do not have to agree with one another in order to buy a stock.
“‘Group think’ definitely plays no part in our system,” says Alwyn Heong, a portfolio counselor based in Hong Kong. “A counselor can buy a stock solo, even if no one else likes his idea. And those independent ideas — which might be pushed out in a team-managed fund — can often be some of the most successful over the long term.”
Cooperation is an intrinsic part of the culture at American Funds, and it extends to the system’s compensation structure as well. Each counselor is not only evaluated on his or her own results, but on those of the fund as a whole as well — this encourages collaboration, not competition. Another important aspect of the compensation plan is the focus on long-term thinking: The investment professionals are evaluated primarily on a four-year rolling average of their results — not on an annual figure.
The research portfolio
A large group of investment analysts manages one portion of EuroPacific — about 21% of the fund — bringing the additional experience of 55 decision-makers to bear on stock selection. Investment analysts together act as one portfolio manager for that portion of the fund, and they invest only in the areas and companies they cover. This portion is diversified by industry and, if appropriate, by geography, and it is overseen by a principal research portfolio coordinator.
[Begin Photo Caption]
Nicholas Grace
[photo of Nicholas Grace]
[photo of a spools of colored thread]
[End Photo Caption]
[Begin Photo Caption]
[photo of three colored windmills]
[photo of Steve Bepler]
Steve Bepler
[End Photo Caption]
[Begin Sidebar]
History of the multiple portfolio counselor system
The fund’s adviser, Capital Research and Management Company, developed the multiple portfolio counselor system nearly 50 years ago. There has been much refinement over the years, and it has led to benefits that were not clear when the system began. In 1958, Capital started the system as a solution to the problem of fund mandates and manager styles. However, the idea worked even better than hoped and was eventually put in place to guide all of American Funds’ 30 funds.
In the late 1950s, the portfolio manager of one fund was quite bullish and positioned his portfolio for growth, while the manager of another was bearish and positioned his fund to preserve capital. The problem was that the stated objectives of the two funds were just the opposite. Company management decided that instead of switching portfolio counselors, it might be better to let each manager control a portion of both funds to get the funds back into alignment with their respective objectives. The experiment was successful, and to this day, most American Funds are managed this way.
[End Sidebar]
It is rare in the mutual funds industry to have analysts investing money, but it is an important component of the multiple portfolio counselor system for a few reasons. One is that the analysts have a stake; their buy or sell recommendation is not merely an academic exercise. When analysts recommend a company to a portfolio counselor and then invest their own portion of the fund in that company’s stock, it sends a clear signal to others — analysts’ strongest convictions are obviously reflected by their holdings. (The investment analysts are evaluated, as the portfolio counselors are, on a four-year rolling average of their results, as well as on the fund’s results.) As such, the research portfolio is a powerful communication tool that enables portfolio managers to see when analysts put their money, literally, on their best ideas.
Another unique aspect of the system is that investment analysts and portfolio counselors are peers. At many investment management firms, analysis is considered a training ground for portfolio management. Because there is no such hierarchy at American Funds, it allows people to do what they do best, whether it is deeply researching industries, companies or regions, or steering a broad general slice of the portfolio. Analysts often craft entire careers covering the same industries, giving the fund a unique body of knowledge that could not be gained otherwise. For those analysts who do want to manage a broader portfolio, their experience with the research portfolio gives management a feel for where their styles would best fit in succession planning.
[photo of a row of houses/businesses]
Controls and structure
The structure necessary to keep track of all the independent decisions is complex and far-reaching throughout the organization. Monitoring EuroPacific’s eight portfolio counselors, as well as the investment analysts, is a large investment control group that watches the overall picture. The group deals with legal and compliance issues, oversees investment limits (to ensure that all managers are not buying too many of the same stocks or buying too much of a single company) and checks to make sure the fund is always aiming for its objectives, among other responsibilities. A lead manager and investment committee make sure the fund is managed according to its goals and objectives, in addition to monitoring risk for the entire portfolio. The complicated control structure is another reason why the multiple portfolio counselor system could not be easily replicated.
The structure and the system as a whole have been constantly evolving for nearly five decades at Capital, bringing the wisdom of many to the search for consistent investment results. “The system leads to a collegial atmosphere, individual responsibility and a focus on the long term. It also fosters the potential of key individuals and gives us a modular system that helps us cope with growth,” Carl says. “And that’s just the start of the list of things that I find exciting about it.”
[photo of a row of decorative bamboo]
[Begin Sidebar]
Slices of a pie
The eight portfolio counselors for EuroPacific Growth Fund manage discrete sections of the overall fund, making independent investment decisions based on their best ideas and interpretation of research, subject to the fund’s overall guidelines. The investment analysts for the fund together manage another slice of the pie.
Years with | Years of | |
Portfolio counselors | American Funds | investment experience |
Stephen Bepler | 35 | 41 |
Mark Denning | 25 | 25 |
Robert Lovelace | 22 | 22 |
Timothy Dunn | 17 | 21 |
Carl Kawaja | 16 | 19 |
Alwyn Heong | 15 | 19 |
Nicholas Grace | 14 | 17 |
Sung Lee | 13 | 13 |
Years of experience as of June 2007. |
[End Sidebar]
[Begin Sidebar]
“We believe that over the long term, the sum of the parts is more than the whole.”
Timothy Dunn
[photo of Timothy Dunn]
[photo of two rows of hanging colored lanterns]
[End Sidebar]
[Begin Sidebar]
Tapping global potential | ||||
1982 | 1983 | 1984 | 1985 | 1986 |
U.S. | All major stock | All major stock | All major stock | All major stock |
stock market | markets outside | markets outside | markets outside | markets outside |
North America | North America | North America | North America | |
+22% | +25% | +8% | +57% | +70% |
-1% | +22% | +6% | +33% | +18% |
1987 | 1988 | 1989 | 1990 | 1991 |
All major stock | All major stock | U.S. | U.S. | U.S. |
markets outside | markets outside | stock market | stock market | stock market |
North America | North America | |||
+25% | +29% | +31% | -2% | +31% |
+4% | +16% | +11% | -23% | +12% |
1992 | 1993 | 1994 | 1995 | 1996 |
U.S. | All major stock | All major stock | U.S. | U.S. |
stock market | markets outside | markets outside | stock market | stock market |
North America | North America | |||
+7% | +33% | +8% | +38% | +24% |
-12% | +10% | +2% | +12% | +6% |
1997 | 1998 | 1999 | 2000 | 2001 |
U.S. | U.S. | All major stock | U.S. | U.S. |
stock market | stock market | markets outside | stock market | stock market |
North America | ||||
+34% | +31% | +27% | -13% | -12% |
+2% | +20% | +22% | -14% | -21% |
2002 | 2003 | 2004 | 2005 | 2006 |
All major stock | All major stock | All major stock | All major stock | All major stock |
Markets outside | markets outside | markets outside | markets outside | markets outside |
North America | North America | North America | North America | North America |
-16% | +39% | +21% | +14% | +27% |
-23% | +29% | +11% | +6% | +15% |
The table above compares total returns for the unmanaged MSCI EAFE (Europe, Australasia, Far East) and U.S. indexes over the past 25 calendar years. Figures in red represent U.S. stocks; those in black show stocks in major markets outside North America. |
[End Sidebar]
A world of opportunity
With about half of the world’s investment opportunities located beyond our shores, an international focus gives U.S. investors access to growth potential that would otherwise be out of reach. As the chart shows, international stocks have outpaced their U.S. counterparts in 14 of the past 25 calendar years.
Tempered volatility
Diversifying among many markets can also help investors mitigate fluctuations in the value of their investments. Over the past 25 calendar years, the least volatile equity portfolio would have been composed of approximately 65% U.S. stocks and 35% non-U.S. stocks (rebalanced monthly), and been nearly as rewarding as one invested entirely in U.S. stocks. (Volatility is measured by annualized standard deviation, based on monthly returns, or how returns have varied from the mean over time.)
Active management
Negotiating the unfamiliar terrain of international markets can be challenging. That is why so many people choose to invest overseas through professionally managed mutual funds. EuroPacific Growth Fund draws on the global research experience of its investment adviser, Capital Research and Management Company, to find attractive companies based chiefly in Europe and the Pacific Basin.
Summary investment portfolio, March 31, 2007
The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings. For details on how to obtain a complete schedule of portfolio holdings, please see the inside back cover.
[begin pie chart]
Industry sector diversification (percent of net assets) | ||||
Financials | 22.26% | |||
Consumer discretionary | 11.45 | |||
Information technology | 10.48 | |||
Telecommunication services | 9.23 | |||
Health care | 8.50 | |||
Other industries | 31.81 | |||
Convertible securities & warrants | 0.05 | |||
Short-term securities & other assets less liabilities | 6.22 |
[end pie chart]
Country diversification (percent of net assets) | ||||
Euro zone | 29.67% | |||
Japan | 12.21 | |||
Switzerland | 7.73 | |||
United Kingdom | 7.57 | |||
South Korea | 7.40 | |||
Taiwan | 4.60 | |||
Mexico | 3.02 | |||
India | 2.80 | |||
Brazil | 2.32 | |||
Canada | 2.21 | |||
Australia | 2.02 | |||
Other countries | 12.23 | |||
Short-term securities & other assets less liabilities | 6.22 |
Market | Percent | |||||||||
value | of net | |||||||||
Common stocks - 93.73% | Shares | (000 | ) | assets | ||||||
Financials - 22.26% | ||||||||||
Kookmin Bank (1) | 18,047,910 | $ | 1,619,610 | |||||||
Kookmin Bank (1) (2) | 330,000 | 29,614 | 1.58 | % | ||||||
AXA SA | 28,496,214 | 1,209,547 | 1.16 | |||||||
ING Groep NV | 25,818,017 | 1,092,762 | 1.05 | |||||||
Banco Santander Central Hispano, SA | 56,884,805 | 1,016,323 | .98 | |||||||
BNP Paribas | 7,874,199 | 823,354 | .79 | |||||||
UniCredito Italiano SpA (Italy) | 72,140,000 | 687,369 | ||||||||
UniCredito Italiano SpA (Germany) | 10,000,000 | 94,681 | .75 | |||||||
Mizuho Financial Group, Inc. | 116,995 | 754,903 | .72 | |||||||
Erste Bank der oesterreichischen Sparkassen AG | 9,508,286 | 741,310 | .71 | |||||||
UBS AG | 11,336,796 | 675,121 | .65 | |||||||
Mitsui Trust Holdings, Inc. (1) | 58,827,000 | 581,118 | .56 | |||||||
Hypo Real Estate Holding AG (1) | 8,183,540 | 522,459 | .50 | |||||||
Shinhan Financial Group Co., Ltd. | 9,075,000 | 521,053 | .50 | |||||||
Sun Hung Kai Properties Ltd. | 44,364,000 | 513,299 | .49 | |||||||
Banco Itaú Holding Financeira SA, preferred nominative | 14,255,300 | 498,519 | .48 | |||||||
Other securities | 11,808,048 | 11.34 | ||||||||
23,189,090 | 22.26 | |||||||||
Consumer discretionary - 11.45% | ||||||||||
Continental AG | 7,038,000 | 910,697 | .87 | |||||||
Vivendi SA | 20,332,256 | 827,130 | .79 | |||||||
Compagnie Générale des Etablissements Michelin, Class B | 6,998,000 | 773,661 | .74 | |||||||
Toyota Motor Corp. | 10,665,000 | 684,526 | .66 | |||||||
Industria de Diseno Textil, SA | 10,900,468 | 678,277 | .65 | |||||||
Renault SA | 5,420,000 | 634,577 | .61 | |||||||
Hyundai Motor Co. | 8,766,275 | 616,109 | .59 | |||||||
Honda Motor Co., Ltd. | 14,884,250 | 520,057 | .50 | |||||||
Other securities | 6,284,644 | 6.04 | ||||||||
11,929,678 | 11.45 | |||||||||
Information technology - 10.48% | ||||||||||
Samsung Electronics Co., Ltd. | 2,055,075 | 1,230,204 | ||||||||
Samsung Electronics Co., Ltd., nonvoting preferred | 48,800 | 22,960 | 1.20 | |||||||
Hon Hai Precision Industry Co., Ltd. | 175,322,901 | 1,176,415 | 1.13 | |||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 459,751,622 | 943,543 | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | 21,294,771 | 228,919 | 1.13 | |||||||
Nokia Corp. | 31,399,100 | 723,488 | ||||||||
Nokia Corp. (ADR) | 12,982,900 | 297,568 | .98 | |||||||
Hynix Semiconductor Inc. (3) | 19,563,700 | 673,965 | .65 | |||||||
Toshiba Corp. | 76,515,000 | 511,921 | .49 | |||||||
Other securities | 5,114,849 | 4.90 | ||||||||
10,923,832 | 10.48 | |||||||||
Telecommunication services - 9.23% | ||||||||||
América Móvil, SAB de CV, Series L (ADR) | 34,906,100 | 1,668,162 | ||||||||
América Móvil, SAB de CV, Series L | 8,940,000 | 21,407 | 1.62 | |||||||
Koninklijke KPN NV | 55,675,000 | 868,136 | .83 | |||||||
Vodafone Group PLC | 321,357,931 | 857,294 | .82 | |||||||
SOFTBANK CORP. | 25,468,900 | 656,047 | .63 | |||||||
MTN Group Ltd. | 46,676,100 | 632,755 | .61 | |||||||
Telefónica, SA | 24,862,000 | 548,591 | .53 | |||||||
Other securities | 4,363,320 | 4.19 | ||||||||
9,615,712 | 9.23 | |||||||||
Health care - 8.50% | ||||||||||
Roche Holding AG | 15,574,550 | 2,761,901 | 2.65 | |||||||
Novo Nordisk A/S, Class B | 17,016,750 | 1,555,227 | 1.49 | |||||||
AstraZeneca PLC (Sweden) | 11,286,617 | 607,651 | ||||||||
AstraZeneca PLC (United Kingdom) | 5,925,000 | 318,925 | .89 | |||||||
Smith & Nephew PLC (1) | 52,421,300 | 666,718 | .64 | |||||||
Novartis AG (4) | 11,516,960 | 629,171 | .60 | |||||||
UCB SA (1) | 9,373,290 | 546,146 | .53 | |||||||
Other securities | 1,771,167 | 1.70 | ||||||||
8,856,906 | 8.50 | |||||||||
Consumer staples - 7.24% | ||||||||||
Nestlé SA | 4,059,700 | 1,584,669 | 1.52 | |||||||
Koninklijke Ahold NV (3) | 50,537,132 | 591,354 | .57 | |||||||
Tesco PLC | 66,260,561 | 579,541 | .56 | |||||||
Seven & I Holdings Co., Ltd. | 18,563,000 | 566,532 | .54 | |||||||
Other securities | 4,219,788 | 4.05 | ||||||||
7,541,884 | 7.24 | |||||||||
Energy - 7.00% | ||||||||||
Petróleo Brasileiro SA - Petrobras, ordinary nominative (ADR) | 8,222,500 | 818,221 | .79 | |||||||
Oil & Natural Gas Corp. Ltd. | 36,339,064 | 742,632 | .71 | |||||||
Reliance Industries Ltd. | 21,142,718 | 672,201 | .65 | |||||||
SK Corp. | 5,992,510 | 588,738 | .57 | |||||||
Royal Dutch Shell PLC, Class B | 12,137,435 | 404,084 | ||||||||
Royal Dutch Shell PLC, Class B (ADR) | 1,586,078 | 105,649 | .49 | |||||||
Other securities | 3,957,139 | 3.79 | ||||||||
7,288,664 | 7.00 | |||||||||
Materials - 6.68% | ||||||||||
Bayer AG | 33,616,766 | 2,150,681 | 2.06 | |||||||
Linde AG | 7,617,903 | 821,615 | .79 | |||||||
POSCO | 1,362,000 | 572,025 | .55 | |||||||
Other securities | 3,410,993 | 3.28 | ||||||||
6,955,314 | 6.68 | |||||||||
Industrials - 4.98% | ||||||||||
Ryanair Holdings PLC (ADR) (3) | 15,072,400 | 675,093 | .65 | |||||||
Other securities | 4,508,688 | 4.33 | ||||||||
5,183,781 | 4.98 | |||||||||
Utilities - 2.24% | ||||||||||
Veolia Environnement | 8,412,228 | 626,157 | .60 | |||||||
E.ON AG | 3,735,000 | 508,372 | .49 | |||||||
Other securities | 1,202,343 | 1.15 | ||||||||
2,336,872 | 2.24 | |||||||||
MISCELLANEOUS - 3.67% | ||||||||||
Other common stocks in initial period of acquisition | 3,821,318 | 3.67 | ||||||||
Total common stocks (cost: $67,479,966,000) | 97,643,051 | 93.73 | ||||||||
Market | Percent | |||||||||
value | of net | |||||||||
Warrants - 0.03% | Shares | (000 | ) | assets | ||||||
Financials - 0.03% | ||||||||||
ING Groep NV, warrants, expire 2008 (3) | 1,730,000 | 31,719 | .03 | |||||||
Total warrants (cost: $46,430,000) | 31,719 | .03 | ||||||||
Market | Percent | |||||||||
value | of net | |||||||||
Convertible securities - 0.02% | (000 | ) | assets | |||||||
Financials - 0.02% | ||||||||||
Other securities | 21,375 | .02 | ||||||||
Total convertible securities (cost: $20,352,000) | 21,375 | .02 | ||||||||
Principal | Market | Percent | ||||||||
amount | value | of net | ||||||||
Short-term securities - 5.68% | (000 | ) | (000 | ) | assets | |||||
ING (U.S.) Funding LLC 5.225%-5.25% due 4/2-6/25/2007 | $ | 168,600 | 167,605 | .16 | ||||||
Other securities | 5,749,910 | 5.52 | ||||||||
Total short-term securities (cost: $5,916,973,000) | 5,917,515 | 5.68 | ||||||||
Total investment securities (cost: $73,463,721,000) | 103,613,660 | 99.46 | ||||||||
Other assets less liabilities | 562,553 | .54 | ||||||||
Net assets | $ | 104,176,213 | 100.00 | % | ||||||
"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed. | ||||||||||
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio. |
Investments in affiliates | ||||||
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The fund's affiliated holdings listed below are either shown in the preceding summary investment portfolio or included in the market value of "Other securities" under their respective industry sectors. Further details on these holdings and related transactions during the year ended March 31, 2007, appear below. |
Company | Beginning shares | Purchases | Sales | Ending shares | Dividend income (000 | ) | Market value of affiliates at 3/31/07 (000 | ) | |||||||||||
Kookmin Bank | 16,473,310 | 2,387,000 | 812,400 | 18,047,910 | $ | 59,127 | $ | 1,619,610 | |||||||||||
Kookmin Bank (2) | 330,000 | - | - | 330,000 | 1,081 | 29,614 | |||||||||||||
Smith & Nephew PLC | 38,987,200 | 13,434,100 | - | 52,421,300 | 4,547 | 666,718 | |||||||||||||
Mitsui Trust Holdings, Inc. | 21,427,000 | 37,400,000 | - | 58,827,000 | 2,319 | 581,118 | |||||||||||||
UCB SA | 7,296,059 | 2,153,231 | 76,000 | 9,373,290 | 6,886 | 546,146 | |||||||||||||
UCB SA | - | 1,091,877 | 1,091,877 | - | - | - | |||||||||||||
Hypo Real Estate Holding AG | 3,188,540 | 4,995,000 | - | 8,183,540 | 4,555 | 522,459 | |||||||||||||
SEGA SAMMY HOLDINGS INC. | 9,170,000 | 9,231,600 | - | 18,401,600 | 7,462 | 430,200 | |||||||||||||
Hirose Electric Co., Ltd. | 1,830,000 | 717,000 | - | 2,547,000 | 2,664 | 306,818 | |||||||||||||
Acer Inc. | 102,306,000 | 49,539,420 | - | 151,845,420 | 8,237 | 291,437 | |||||||||||||
$ | 96,878 | $ | 4,994,120 |
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item. | ||||||||||
(1) Represents an affiliated company as defined under the Investment Company Act of 1940. | ||||||||||
(2) Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities, including those in "Other securities" in the summary investment portfolio, was $2,753,128,000, which represented 2.64% of the net assets of the fund. | ||||||||||
(3) Security did not produce income during the last 12 months. | ||||||||||
(4) Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in "Miscellaneous" and "Other securities," was $635,374,000. | ||||||||||
ADR = American Depositary Receipts | ||||||||||
The descriptions of the companies shown in the summary investment portfolio are supplemental. These descriptions and the industry classifications were obtained from published reports and other sources believed to be reliable, and are not covered by the Report of Independent Registered Public Accounting Firm. | ||||||||||
See Notes to Financial Statements |
Financial statements
Statement of assets and liabilities | |||||||
at March 31, 2007 | (dollars and shares in thousands, except per-share amounts) | ||||||
Assets: | |||||||
Investment securities at market: | |||||||
Unaffiliated issuers (cost: $69,428,899) | $ | 98,619,540 | |||||
Affiliated issuers (cost: $4,034,822) | 4,994,120 | $ | 103,613,660 | ||||
Cash denominated in non-U.S. currencies | |||||||
(cost: $18,145) | 18,083 | ||||||
Cash | 21,516 | ||||||
Receivables for: | |||||||
Sales of investments | 425,948 | ||||||
Sales of fund's shares | 638,847 | ||||||
Dividends and interest | 242,902 | 1,307,697 | |||||
104,960,956 | |||||||
Liabilities: | |||||||
Payables for: | |||||||
Purchases of investments | 263,170 | ||||||
Repurchases of fund's shares | 436,507 | ||||||
Open forward currency contracts | 46 | ||||||
Investment advisory services | 32,752 | ||||||
Services provided by affiliates | 31,491 | ||||||
Deferred trustees' compensation | 3,034 | ||||||
Other | 17,743 | 784,743 | |||||
Net assets at March 31, 2007 | $ | 104,176,213 | |||||
Net assets consist of: | |||||||
Capital paid in on shares of beneficial interest | $ | 71,602,056 | |||||
Distributions in excess of net investment income | (154,843 | ) | |||||
Undistributed net realized gain | 2,592,838 | ||||||
Net unrealized appreciation | 30,136,162 | ||||||
Net assets at March 31, 2007 | $ | 104,176,213 |
Shares of beneficial interest issued and outstanding - unlimited shares authorized (2,182,081 total shares outstanding) | ||||||||||
Net assets | Shares outstanding | Net asset value per share(* | ) | |||||||
Class A | $ | 57,406,675 | 1,198,005 | $ | 47.92 | |||||
Class B | 1,708,529 | 36,118 | 47.31 | |||||||
Class C | 3,639,878 | 77,687 | 46.85 | |||||||
Class F | 8,639,359 | 180,996 | 47.73 | |||||||
Class 529-A | 600,870 | 12,609 | 47.66 | |||||||
Class 529-B | 89,871 | 1,915 | 46.93 | |||||||
Class 529-C | 248,222 | 5,296 | 46.87 | |||||||
Class 529-E | 35,919 | 759 | 47.34 | |||||||
Class 529-F | 39,334 | 825 | 47.65 | |||||||
Class R-1 | 136,135 | 2,915 | 46.71 | |||||||
Class R-2 | 1,093,021 | 23,333 | 46.84 | |||||||
Class R-3 | 6,918,178 | 146,570 | 47.20 | |||||||
Class R-4 | 8,626,969 | 182,333 | 47.31 | |||||||
Class R-5 | 14,993,253 | 312,720 | 47.94 | |||||||
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A and 529-A, for which the maximum offering prices per share were $50.84 and $50.57, respectively. | ||||||||||
See Notes to Financial Statements |
Statement of operations | |||||||
for the year ended March 31, 2007 | (dollars in thousands) | ||||||
Investment income: | |||||||
Income: | |||||||
Dividends (net of non-U.S. taxes of $198,491; also includes $96,878 from affiliates) | $ | 1,741,325 | |||||
Interest (net of non-U.S. taxes of $22) | 323,617 | $ | 2,064,942 | ||||
Fees and expenses(*): | |||||||
Investment advisory services | 387,385 | ||||||
Distribution services | 253,692 | ||||||
Transfer agent services | 40,735 | ||||||
Administrative services | 50,436 | ||||||
Reports to shareholders | 1,957 | ||||||
Registration statement and prospectus | 4,679 | ||||||
Postage, stationery and supplies | 4,276 | ||||||
Trustees' compensation | 811 | ||||||
Auditing and legal | 266 | ||||||
Custodian | 24,695 | ||||||
State and local taxes | 1,141 | ||||||
Other | 198 | ||||||
Total fees and expenses before reimbursements/waivers | 770,271 | ||||||
Less reimbursements/waivers of fees and expenses: | |||||||
Investment advisory services | 38,792 | ||||||
Administrative services | 376 | ||||||
Total fees and expenses after reimbursements/waivers | 731,103 | ||||||
Net investment income | 1,333,839 | ||||||
Net realized gain and unrealized appreciation on investments | |||||||
and non-U.S. currency: | |||||||
Net realized gain (loss) on: | |||||||
Investments (including $26,817 net gain from affiliates) | 5,451,852 | ||||||
Non-U.S. currency transactions | (23,395 | ) | 5,428,457 | ||||
Net unrealized appreciation on: | |||||||
Investments | 7,432,999 | ||||||
Non-U.S. currency translations | 2,991 | 7,435,990 | |||||
Net realized gain and unrealized appreciation on investments | |||||||
and non-U.S. currency | 12,864,447 | ||||||
Net increase in net assets resulting from operations | $ | 14,198,286 | |||||
(*) 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 March 31 | |||||||
2007 | 2006 | ||||||
Operations: | |||||||
Net investment income | $ | 1,333,839 | $ | 971,674 | |||
Net realized gain on investments and non-U.S. currency transactions | 5,428,457 | 4,869,519 | |||||
Net unrealized appreciation on investments and non-U.S. currency translations | 7,435,990 | 11,583,898 | |||||
Net increase in net assets resulting from operations | 14,198,286 | 17,425,091 | |||||
Dividends and distributions paid to shareholders: | |||||||
Dividends from net investment income | (1,497,738 | ) | (1,165,183 | ) | |||
Distributions from net realized gain on investments | (5,369,098 | ) | (2,179,508 | ) | |||
Total dividends and distributions paid to shareholders | (6,866,836 | ) | (3,344,691 | ) | |||
Capital share transactions | 15,648,633 | 12,951,237 | |||||
Total increase in net assets | 22,980,083 | 27,031,637 | |||||
Net assets: | |||||||
Beginning of year | 81,196,130 | 54,164,493 | |||||
End of year (including distributions in excess of | |||||||
net investment income: $(154,843) and $(202,944), respectively) | $ | 104,176,213 | $ | 81,196,130 | |||
See Notes to Financial Statements |
Notes to financial statements
1. | Organization and significant accounting policies |
Organization - EuroPacific Growth Fund (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks long-term capital appreciation by investing primarily in the securities of companies based in Europe and the Pacific Basin.
The fund offers 14 share classes consisting of four retail share classes, five CollegeAmerica® savings plan share classes and five retirement plan share classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F) can be utilized to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry any conversion rights. The fund’s share classes are described below:
Share class | Initial sales charge | Contingent deferred sales charge upon redemption | Conversion feature |
Class 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 |
Class B and 529-B | None | Declines from 5% to 0% for redemptions within six years of purchase | Class B and 529-B convert to Class 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 after 10 years |
Class 529-C | None | 1% for redemptions within one year of purchase | None |
Class 529-E | None | None | None |
Class F and 529-F | None | None | None |
Class R-1, R-2, R-3, R-4 and R-5 | None | None | None |
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.
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 following is a summary of the significant accounting policies followed by the fund:
Security valuation - Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (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 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 market 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 or less remaining to maturity. The ability of the issuers of the debt securities held by the fund to meet their obligations may be affected by economic developments in a specific industry, state or region. Forward currency contracts are valued at the mean of representative quoted bid and asked prices.
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 procedures adopted by authority of the fund's board of trustees. Market quotations may be considered unreliable if events occur that materially affect the value of securities (particularly non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors 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.
Security transactions and related investment income - Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations - Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, 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.
Non-U.S. currency translation - Assets and liabilities, including investment securities, denominated in non-U.S. currencies 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. In the accompanying financial statements, the effects of changes in non-U.S. 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 non-U.S. currencies are disclosed separately.
Forward currency contracts - The fund may enter into forward currency contracts, which represent agreements to exchange non-U.S. currencies on specific future dates at predetermined rates. The fund enters into these contracts to manage its exposure to changes in non-U.S. exchange rates arising from investments denominated in non-U.S. currencies. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in non-U.S. exchange rates. Due to these risks, the fund could incur losses up to the entire contract amount, which may exceed the net unrealized value shown on the accompanying financial statements. On a daily basis, the fund values forward currency contracts based on the applicable exchange rates and records unrealized gains or losses. The fund records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency.
2. | Non-U.S. investments |
Investment risk - The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.
Taxation - Dividend and interest income is recorded net of non-U.S. taxes paid. Gains realized by the fund on the sale of securities in certain countries are subject to non-U.S. taxes. The fund records a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities. For the year ended March 31, 2007, non-U.S. taxes paid on realized gains were $3,840,000. As of March 31, 2007, non-U.S. taxes provided on unrealized gains were $15,487,000.
3. Federal income taxation and distributions
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.
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 differing treatment for items such as non-U.S. currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in non-U.S. securities; cost of investments sold; and non-U.S. taxes on capital gains. 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 fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
During the year ended March 31, 2007, the fund reclassified $212,432,000 from undistributed net realized gains to distributions in excess of net investment income; and reclassified $432,000 from distributions in excess of net investment income and $333,128,000 from undistributed net realized gains to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.
As of March 31, 2007, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investments were as follows:
(dollars in thousands) | ||||
Undistributed ordinary income | $ | 290,244 | ||
Post-October non-U.S. currency loss deferrals (realized during the period November 1, 2006, through March 31, 2007)* | (25,171 | ) | ||
Undistributed long-term capital gain | 2,597,216 | |||
Gross unrealized appreciation on investment securities | 30,848,918 | |||
Gross unrealized depreciation on investment securities | (1,120,286 | ) | ||
Net unrealized appreciation on investment securities | 29,728,632 | |||
Cost of investment securities | 73,885,028 | |||
*These deferrals are considered incurred in the subsequent year. |
The tax character of distributions paid to shareholders was as follows (dollars in thousands):
Year ended March 31, 2007 | Year ended March 31, 2006 | ||||||||||||||||||
Ordinary income | Long-term capital gains | Total distributions paid | Ordinary income | Long-term capital gains | Total distributions paid | ||||||||||||||
Share class | |||||||||||||||||||
Class A | $ | 1,530,317 | $ | 2,393,516 | $ | 3,923,833 | $ | 759,044 | $ | 1,397,736 | $ | 2,156,780 | |||||||
Class B | 35,100 | 71,445 | 106,545 | 13,272 | 38,144 | 51,416 | |||||||||||||
Class C | 72,589 | 149,151 | 221,740 | 24,151 | 69,543 | 93,694 | |||||||||||||
Class F | 222,669 | 348,654 | 571,323 | 93,903 | 173,956 | 267,859 | |||||||||||||
Class 529-A | 14,641 | 22,781 | 37,422 | 5,281 | 9,692 | 14,973 | |||||||||||||
Class 529-B | 1,724 | 3,610 | 5,334 | 546 | 1,718 | 2,264 | |||||||||||||
Class 529-C | 4,710 | 9,668 | 14,378 | 1,435 | 4,253 | 5,688 | |||||||||||||
Class 529-E | 816 | 1,402 | 2,218 | 274 | 589 | 863 | |||||||||||||
Class 529-F | 1,001 | 1,480 | 2,481 | 327 | 577 | 904 | |||||||||||||
Class R-1 | 2,647 | 5,054 | 7,701 | 599 | 1,547 | 2,146 | |||||||||||||
Class R-2 | 21,349 | 43,247 | 64,596 | 6,864 | 18,799 | 25,663 | |||||||||||||
Class R-3 | 156,894 | 268,161 | 425,055 | 50,412 | 106,965 | 157,377 | |||||||||||||
Class R-4 | 208,767 | 328,144 | 536,911 | 70,568 | 130,147 | 200,715 | |||||||||||||
Class R-5 | 387,070 | 560,229 | 947,299 | 138,507 | 225,842 | 364,349 | |||||||||||||
Total | $ | 2,660,294 | $ | 4,206,542 | $ | 6,866,836 | $ | 1,165,183 | $ | 2,179,508 | $ | 3,344,691 |
4. Fees and transactions with related parties
Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company SM ("AFS"), the fund’s transfer agent, and American Funds Distributors, SM Inc. ("AFD"), the principal underwriter of the fund’s shares.
Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. At the beginning of the year, these fees were based on a declining series of annual rates beginning with 0.690% on the first $500 million of daily net assets and decreasing to 0.405% on such assets in excess of $71 billion. The board of trustees approved an amended agreement effective January 1, 2007, continuing the series of rates to include an additional annual rate of 0.400% on daily net assets in excess of $89 billion. During the year ended March 31, 2007, CRMC reduced investment advisory services rates to those provided by the amended agreement. CRMC is currently waiving 10% of investment advisory services fees. During the year ended March 31, 2007, total investment advisory services fees waived by CRMC were $38,792,000. As a result, the fee shown on the accompanying financial statements of $387,385,000, which was equivalent to an annualized rate of 0.426%, was reduced to $348,593,000, or 0.384% 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 adopted plans of distribution for all share classes, except Class R-5. 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 may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
For Class A and 529-A, the board of trustees has also approved 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 March 31, 2007, unreimbursed expenses subject to reimbursement totaled $8,278,000 for Class A. There were no unreimbursed expenses subject to reimbursement for Class 529-A.
Share class | Currently approved limits | Plan limits |
Class A | 0.25% | 0.25% |
Class 529-A | 0.25 | 0.50 |
Class B and 529-B | 1.00 | 1.00 |
Class C, 529-C and R-1 | 1.00 | 1.00 |
Class R-2 | 0.75 | 1.00 |
Class 529-E and R-3 | 0.50 | 0.75 |
Class F, 529-F and R-4 | 0.25 | 0.50 |
Transfer agent services - The fund has a transfer agent agreement with AFS for Class 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 described below.
Administrative services - The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Class A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) 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. CRMC has agreed to pay AFS on the fund's behalf for a portion of the transfer agent services fees for some of the retirement plan share classes. For the year ended March 31, 2007, the total administrative services fees paid by CRMC were $376,000 for Class R-2. Administrative services fees are presented gross of any payments made by CRMC. Each 529 share class is subject to an additional annual administrative services fee of 0.10% of its respective average daily net assets; this fee is payable to the Commonwealth of Virginia for the maintenance of the CollegeAmerica plan. 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 on the previous page for the year ended March 31, 2007, were as follows (dollars in thousands):
Share class | Distribution services | Transfer agent services | Administrative services | ||
CRMC administrative services | Transfer agent services | Commonwealth of Virginia administrative services | |||
Class A | $132,182 | $39,652 | Not applicable | Not applicable | Not applicable |
Class B | 15,380 | 1,083 | Not applicable | Not applicable | Not applicable |
Class C | 31,279 | Included in administrative services | $4,254 | $453 | Not applicable |
Class F | 18,891 | 7,167 | 751 | Not applicable | |
Class 529-A | 847 | 346 | 45 | $ 476 | |
Class 529-B | 754 | 55 | 24 | 76 | |
Class 529-C | 1,988 | 144 | 52 | 199 | |
Class 529-E | 145 | 21 | 3 | 29 | |
Class 529-F | - | 22 | 3 | 30 | |
Class R-1 | 979 | 116 | 34 | Not applicable | |
Class R-2 | 6,680 | 1,299 | 2,755 | Not applicable | |
Class R-3 | 27,654 | 8,296 | 1,719 | Not applicable | |
Class R-4 | 16,913 | 10,165 | 139 | Not applicable | |
Class R-5 | Not applicable | 11,687 | 76 | Not applicable | |
Total | $253,692 | $40,735 | $43,572 | $6,054 | $810 |
Deferred trustees’ compensation - Since the adoption of the deferred compensation plan in 1993, 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 $811,000, shown on the accompanying financial statements, includes $434,000 in current fees (either paid in cash or deferred) and a net increase of $377,000 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.
5. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
Share class | Sales(*) | Reinvestments of dividends and distributions | Repurchases(*) | Net increase | |||||||||||||||||||||
Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||
Year ended March 31, 2007 | |||||||||||||||||||||||||
Class A | $ | 9,114,821 | 198,156 | $ | 3,721,933 | 81,000 | $ | (9,935,802 | ) | (217,043 | ) | $ | 2,900,952 | 62,113 | |||||||||||
Class B | 273,549 | 6,039 | 102,014 | 2,245 | (183,075 | ) | (4,050 | ) | 192,488 | 4,234 | |||||||||||||||
Class C | 915,499 | 20,346 | 212,631 | 4,722 | (429,234 | ) | (9,598 | ) | 698,896 | 15,470 | |||||||||||||||
Class F | 2,897,757 | 63,298 | 503,269 | 10,993 | (2,060,809 | ) | (45,060 | ) | 1,340,217 | 29,231 | |||||||||||||||
Class 529-A | 163,476 | 3,560 | 37,415 | 818 | (25,465 | ) | (557 | ) | 175,426 | 3,821 | |||||||||||||||
Class 529-B | 17,299 | 384 | 5,334 | 118 | (3,154 | ) | (70 | ) | 19,479 | 432 | |||||||||||||||
Class 529-C | 68,192 | 1,510 | 14,376 | 319 | (14,146 | ) | (315 | ) | 68,422 | 1,514 | |||||||||||||||
Class 529-E | 9,422 | 206 | 2,216 | 49 | (1,951 | ) | (43 | ) | 9,687 | 212 | |||||||||||||||
Class 529-F | 13,464 | 294 | 2,479 | 54 | (2,351 | ) | (51 | ) | 13,592 | 297 | |||||||||||||||
Class R-1 | 76,879 | 1,715 | 7,674 | 171 | (21,761 | ) | (489 | ) | 62,792 | 1,397 | |||||||||||||||
Class R-2 | 454,985 | 10,104 | 64,573 | 1,434 | (232,177 | ) | (5,163 | ) | 287,381 | 6,375 | |||||||||||||||
Class R-3 | 3,192,385 | 70,228 | 424,979 | 9,381 | (1,466,601 | ) | (32,415 | ) | 2,150,763 | 47,194 | |||||||||||||||
Class R-4 | 3,814,157 | 83,581 | 536,635 | 11,825 | (1,611,565 | ) | (35,585 | ) | 2,739,227 | 59,821 | |||||||||||||||
Class R-5 | 6,007,339 | 130,238 | 935,188 | 20,352 | (1,953,216 | ) | (42,725 | ) | 4,989,311 | 107,865 | |||||||||||||||
Total net increase | |||||||||||||||||||||||||
(decrease) | $ | 27,019,224 | 589,659 | $ | 6,570,716 | 143,481 | $ | (17,941,307 | ) | (393,164 | ) | $ | 15,648,633 | 339,976 | |||||||||||
Year ended March 31, 2006 | |||||||||||||||||||||||||
Class A | $ | 8,534,230 | 212,260 | $ | 2,043,046 | 49,977 | $ | (7,057,998 | ) | (179,258 | ) | $ | 3,519,278 | 82,979 | |||||||||||
Class B | 251,424 | 6,302 | 49,103 | 1,213 | (103,791 | ) | (2,660 | ) | 196,736 | 4,855 | |||||||||||||||
Class C | 862,304 | 21,782 | 90,002 | 2,240 | (231,111 | ) | (5,932 | ) | 721,195 | 18,090 | |||||||||||||||
Class F | 2,239,413 | 56,190 | 234,046 | 5,745 | (792,274 | ) | (19,984 | ) | 1,681,185 | 41,951 | |||||||||||||||
Class 529-A | 124,997 | 3,132 | 14,973 | 368 | (10,656 | ) | (266 | ) | 129,314 | 3,234 | |||||||||||||||
Class 529-B | 13,939 | 354 | 2,264 | 56 | (1,558 | ) | (40 | ) | 14,645 | 370 | |||||||||||||||
Class 529-C | 51,016 | 1,300 | 5,688 | 141 | (6,419 | ) | (163 | ) | 50,285 | 1,278 | |||||||||||||||
Class 529-E | 8,384 | 211 | 863 | 21 | (708 | ) | (17 | ) | 8,539 | 215 | |||||||||||||||
Class 529-F | 7,844 | 195 | 904 | 22 | (847 | ) | (21 | ) | 7,901 | 196 | |||||||||||||||
Class R-1 | 39,340 | 988 | 2,142 | 53 | (13,441 | ) | (350 | ) | 28,041 | 691 | |||||||||||||||
Class R-2 | 336,231 | 8,570 | 25,635 | 638 | (115,279 | ) | (2,947 | ) | 246,587 | 6,261 | |||||||||||||||
Class R-3 | 2,149,181 | 54,390 | 157,301 | 3,895 | (965,574 | ) | (24,801 | ) | 1,340,908 | 33,484 | |||||||||||||||
Class R-4 | 2,523,838 | 63,546 | 200,459 | 4,961 | (856,006 | ) | (21,686 | ) | 1,868,291 | 46,821 | |||||||||||||||
Class R-5 | 3,672,179 | 91,973 | 354,930 | 8,684 | (888,777 | ) | (22,271 | ) | 3,138,332 | 78,386 | |||||||||||||||
Total net increase | |||||||||||||||||||||||||
(decrease) | $ | 20,814,320 | 521,193 | $ | 3,181,356 | 78,014 | $ | (11,044,439 | ) | (280,396 | ) | $ | 12,951,237 | 318,811 | |||||||||||
(*) Includes exchanges between share classes of the fund. |
6. Forward currency contracts
As of March 31, 2007, the fund had an open forward currency contract to sell non-U.S. currencies as follows (amounts in thousands):
Contract amount | U.S. valuation at March 31, 2007 | ||||||||||||
Non-U.S. currency contract | Non-U.S. | U.S. | Amount | Unrealized depreciation | |||||||||
Sales: | |||||||||||||
South African rand expiring 5/24/2007 | ZAR 1,430,657 | $ | 195,000 | $ | 195,046 | $ | (46 | ) |
7. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities, of $33,940,005,000 and $23,149,545,000, respectively, during the year ended March 31, 2007.
Financial highlights(1)
Income (loss) from investment operations(2) | 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(3) (4 | ) | 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 | (4 | ) | Ratio of net income to average net assets | (4 | ) | ||||||||||||||||||||||||||||
Class A: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | $ | 44.20 | $ | .71 | $ | 6.49 | $ | 7.20 | $ | (.77 | ) | $ | (2.71 | ) | $ | (3.48 | ) | $ | 47.92 | 16.63 | % | $ | 57,407 | .79 | % | .75 | % | 1.54 | % | ||||||||||||||||||||
Year ended 3/31/2006 | 35.63 | .62 | 9.99 | 10.61 | (.72 | ) | (1.32 | ) | (2.04 | ) | 44.20 | 30.25 | 50,209 | .81 | .76 | 1.58 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 32.26 | .43 | 3.45 | 3.88 | (.51 | ) | - | (.51 | ) | 35.63 | 12.08 | 37,515 | .83 | .82 | 1.31 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.78 | .29 | 11.50 | 11.79 | (.31 | ) | - | (.31 | ) | 32.26 | 57.11 | 32,759 | .87 | .87 | 1.08 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.23 | .25 | (6.46 | ) | (6.21 | ) | (.24 | ) | - | (.24 | ) | 20.78 | (23.16 | ) | 20,143 | .90 | .90 | 1.06 | |||||||||||||||||||||||||||||||
Class B: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.71 | .35 | 6.42 | 6.77 | (.46 | ) | (2.71 | ) | (3.17 | ) | 47.31 | 15.78 | 1,709 | 1.54 | 1.50 | .78 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.29 | .32 | 9.88 | 10.20 | (.46 | ) | (1.32 | ) | (1.78 | ) | 43.71 | 29.32 | 1,394 | 1.55 | 1.51 | .82 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 32.00 | .18 | 3.41 | 3.59 | (.30 | ) | - | (.30 | ) | 35.29 | 11.24 | 954 | 1.58 | 1.56 | .55 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.65 | .08 | 11.41 | 11.49 | (.14 | ) | - | (.14 | ) | 32.00 | 55.95 | 737 | 1.62 | 1.62 | .31 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.09 | .07 | (6.43 | ) | (6.36 | ) | (.08 | ) | - | (.08 | ) | 20.65 | (23.79 | ) | 387 | 1.68 | 1.68 | .28 | |||||||||||||||||||||||||||||||
Class C: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.35 | .31 | 6.35 | 6.66 | (.45 | ) | (2.71 | ) | (3.16 | ) | 46.85 | 15.65 | 3,640 | 1.62 | 1.58 | .69 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.04 | .27 | 9.82 | 10.09 | (.46 | ) | (1.32 | ) | (1.78 | ) | 43.35 | 29.21 | 2,697 | 1.64 | 1.60 | .71 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 31.81 | .14 | 3.40 | 3.54 | (.31 | ) | - | (.31 | ) | 35.04 | 11.16 | 1,546 | 1.67 | 1.65 | .44 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.58 | .06 | 11.37 | 11.43 | (.20 | ) | - | (.20 | ) | 31.81 | 55.76 | 939 | 1.70 | 1.70 | .19 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.07 | .05 | (6.42 | ) | (6.37 | ) | (.12 | ) | - | (.12 | ) | 20.58 | (23.80 | ) | 275 | 1.74 | 1.74 | .19 | |||||||||||||||||||||||||||||||
Class F: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 44.05 | .69 | 6.47 | 7.16 | (.77 | ) | (2.71 | ) | (3.48 | ) | 47.73 | 16.59 | 8,639 | .82 | .78 | 1.50 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.52 | .59 | 9.97 | 10.56 | (.71 | ) | (1.32 | ) | (2.03 | ) | 44.05 | 30.22 | 6,686 | .84 | .80 | 1.50 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 32.18 | .40 | 3.45 | 3.85 | (.51 | ) | - | (.51 | ) | 35.52 | 12.01 | 3,901 | .90 | .89 | 1.20 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.75 | .27 | 11.48 | 11.75 | (.32 | ) | - | (.32 | ) | 32.18 | 57.02 | 2,449 | .92 | .92 | .97 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.23 | .24 | (6.46 | ) | (6.22 | ) | (.26 | ) | - | (.26 | ) | 20.75 | (23.21 | ) | 861 | .94 | .94 | 1.00 | |||||||||||||||||||||||||||||||
Class 529-A: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 44.00 | .67 | 6.48 | 7.15 | (.78 | ) | (2.71 | ) | (3.49 | ) | 47.66 | 16.59 | 601 | .83 | .79 | 1.45 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.49 | .58 | 9.97 | 10.55 | (.72 | ) | (1.32 | ) | (2.04 | ) | 44.00 | 30.21 | 387 | .85 | .80 | 1.47 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 32.15 | .39 | 3.46 | 3.85 | (.51 | ) | - | (.51 | ) | 35.49 | 12.04 | 197 | .91 | .89 | 1.18 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.74 | .27 | 11.47 | 11.74 | (.33 | ) | - | (.33 | ) | 32.15 | 57.00 | 104 | .91 | .91 | .98 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.23 | .23 | (6.45 | ) | (6.22 | ) | (.27 | ) | - | (.27 | ) | 20.74 | (23.22 | ) | 33 | .94 | .94 | .98 | |||||||||||||||||||||||||||||||
Class 529-B: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.42 | .28 | 6.37 | 6.65 | (.43 | ) | (2.71 | ) | (3.14 | ) | 46.93 | 15.60 | 90 | 1.67 | 1.63 | .63 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.09 | .25 | 9.82 | 10.07 | (.42 | ) | (1.32 | ) | (1.74 | ) | 43.42 | 29.10 | 64 | 1.71 | 1.67 | .64 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 31.86 | .10 | 3.40 | 3.50 | (.27 | ) | - | (.27 | ) | 35.09 | 11.01 | 39 | 1.80 | 1.79 | .30 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.61 | .02 | 11.38 | 11.40 | (.15 | ) | - | (.15 | ) | 31.86 | 55.61 | 24 | 1.83 | 1.83 | .06 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.21 | .02 | (6.43 | ) | (6.41 | ) | (.19 | ) | - | (.19 | ) | 20.61 | (23.91 | ) | 8 | 1.86 | 1.86 | .07 | |||||||||||||||||||||||||||||||
Class 529-C: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.38 | .28 | 6.37 | 6.65 | (.45 | ) | (2.71 | ) | (3.16 | ) | 46.87 | 15.62 | 248 | 1.67 | 1.63 | .62 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.08 | .24 | 9.83 | 10.07 | (.45 | ) | (1.32 | ) | (1.77 | ) | 43.38 | 29.11 | 164 | 1.70 | 1.66 | .63 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 31.86 | .10 | 3.40 | 3.50 | (.28 | ) | - | (.28 | ) | 35.08 | 11.02 | 88 | 1.79 | 1.78 | .31 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.61 | .02 | 11.39 | 11.41 | (.16 | ) | - | (.16 | ) | 31.86 | 55.66 | 50 | 1.82 | 1.82 | .07 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.20 | .02 | (6.42 | ) | (6.40 | ) | (.19 | ) | - | (.19 | ) | 20.61 | (23.88 | ) | 15 | 1.84 | 1.84 | .08 | |||||||||||||||||||||||||||||||
Class 529-E: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.75 | .52 | 6.43 | 6.95 | (.65 | ) | (2.71 | ) | (3.36 | ) | 47.34 | 16.21 | 36 | 1.15 | 1.11 | 1.14 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.33 | .45 | 9.91 | 10.36 | (.62 | ) | (1.32 | ) | (1.94 | ) | 43.75 | 29.77 | 24 | 1.18 | 1.13 | 1.13 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 32.04 | .28 | 3.43 | 3.71 | (.42 | ) | - | (.42 | ) | 35.33 | 11.63 | 12 | 1.26 | 1.24 | .84 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.69 | .17 | 11.44 | 11.61 | (.26 | ) | - | (.26 | ) | 32.04 | 56.45 | 7 | 1.28 | 1.28 | .61 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2003 | 27.23 | .15 | (6.44 | ) | (6.29 | ) | (.25 | ) | - | (.25 | ) | 20.69 | (23.48 | ) | 2 | 1.30 | 1.30 | .66 | |||||||||||||||||||||||||||||||
Class 529-F: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.98 | .74 | 6.49 | 7.23 | (.85 | ) | (2.71 | ) | (3.56 | ) | 47.65 | 16.79 | 39 | .65 | .61 | 1.61 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.45 | .64 | 9.96 | 10.60 | (.75 | ) | (1.32 | ) | (2.07 | ) | 43.98 | 30.39 | 23 | .70 | .66 | 1.63 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 32.13 | .36 | 3.44 | 3.80 | (.48 | ) | - | (.48 | ) | 35.45 | 11.89 | 12 | 1.01 | .99 | 1.09 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.74 | .24 | 11.48 | 11.72 | (.33 | ) | - | (.33 | ) | 32.13 | 56.79 | 6 | 1.02 | 1.02 | .82 | ||||||||||||||||||||||||||||||||||
Period from 9/16/2002 to 3/31/2003 | 22.67 | .16 | (1.83 | ) | (1.67 | ) | (.26 | ) | - | (.26 | ) | 20.74 | (7.57 | ) | 1 | 1.05 | (5 | ) | 1.05 | (5 | ) | 1.31 | (5 | ) | |||||||||||||||||||||||||
Class R-1: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | $ | 43.29 | $ | .28 | $ | 6.38 | $ | 6.66 | $ | (.53 | ) | $ | (2.71 | ) | $ | (3.24 | ) | $ | 46.71 | 15.68 | % | $ | 136 | 1.62 | % | 1.58 | % | .61 | % | ||||||||||||||||||||
Year ended 3/31/2006 | 35.04 | .26 | 9.82 | 10.08 | (.51 | ) | (1.32 | ) | (1.83 | ) | 43.29 | 29.16 | 66 | 1.65 | 1.61 | .66 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 31.89 | .11 | 3.43 | 3.54 | (.39 | ) | - | (.39 | ) | 35.04 | 11.18 | 29 | 1.72 | 1.68 | .34 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.67 | .04 | 11.41 | 11.45 | (.23 | ) | - | (.23 | ) | 31.89 | 55.72 | 8 | 1.82 | 1.71 | .15 | ||||||||||||||||||||||||||||||||||
Period from 6/17/2002 to 3/31/2003 | 26.26 | .06 | (5.41 | ) | (5.35 | ) | (.24 | ) | - | (.24 | ) | 20.67 | (20.56 | ) | 1 | 2.84 | (5 | ) | 1.73 | (5 | ) | .32 | (5 | ) | |||||||||||||||||||||||||
Class R-2: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.36 | .30 | 6.35 | 6.65 | (.46 | ) | (2.71 | ) | (3.17 | ) | 46.84 | 15.66 | 1,093 | 1.67 | 1.59 | .66 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.07 | .26 | 9.83 | 10.09 | (.48 | ) | (1.32 | ) | (1.80 | ) | 43.36 | 29.20 | 735 | 1.76 | 1.60 | .68 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 31.86 | .14 | 3.41 | 3.55 | (.34 | ) | - | (.34 | ) | 35.07 | 11.17 | 375 | 1.90 | 1.64 | .42 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.64 | .05 | 11.40 | 11.45 | (.23 | ) | - | (.23 | ) | 31.86 | 55.78 | 174 | 2.08 | 1.67 | .17 | ||||||||||||||||||||||||||||||||||
Period from 5/31/2002 to 3/31/2003 | 27.34 | .10 | (6.55 | ) | (6.45 | ) | (.25 | ) | - | (.25 | ) | 20.64 | (23.80 | ) | 29 | 2.33 | (5 | ) | 1.70 | (5 | ) | .53 | (5 | ) | |||||||||||||||||||||||||
Class R-3: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.64 | .52 | 6.41 | 6.93 | (.66 | ) | (2.71 | ) | (3.37 | ) | 47.20 | 16.20 | 6,918 | 1.15 | 1.10 | 1.14 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.23 | .46 | 9.89 | 10.35 | (.62 | ) | (1.32 | ) | (1.94 | ) | 43.64 | 29.85 | 4,336 | 1.15 | 1.11 | 1.18 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 31.96 | .30 | 3.42 | 3.72 | (.45 | ) | - | (.45 | ) | 35.23 | 11.68 | 2,321 | 1.18 | 1.16 | .89 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.68 | .15 | 11.45 | 11.60 | (.32 | ) | - | (.32 | ) | 31.96 | 56.46 | 1,052 | 1.29 | 1.29 | .51 | ||||||||||||||||||||||||||||||||||
Period from 5/21/2002 to 3/31/2003 | 27.64 | .17 | (6.86 | ) | (6.69 | ) | (.27 | ) | - | (.27 | ) | 20.68 | (24.40 | ) | 63 | 1.35 | (5 | ) | 1.31 | (5 | ) | .87 | (5 | ) | |||||||||||||||||||||||||
Class R-4: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 43.69 | .64 | 6.45 | 7.09 | (.76 | ) | (2.71 | ) | (3.47 | ) | 47.31 | 16.61 | 8,627 | .87 | .82 | 1.41 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.25 | .57 | 9.91 | 10.48 | (.72 | ) | (1.32 | ) | (2.04 | ) | 43.69 | 30.20 | 5,352 | .87 | .83 | 1.45 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 31.95 | .39 | 3.44 | 3.83 | (.53 | ) | - | (.53 | ) | 35.25 | 12.04 | 2,668 | .90 | .88 | 1.17 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.63 | .27 | 11.41 | 11.68 | (.36 | ) | - | (.36 | ) | 31.95 | 57.00 | 1,106 | .92 | .92 | .92 | ||||||||||||||||||||||||||||||||||
Period from 6/7/2002 to 3/31/2003 | 26.69 | .22 | (6.00 | ) | (5.78 | ) | (.28 | ) | - | (.28 | ) | 20.63 | (21.87 | ) | 76 | .96 | (5 | ) | .96 | (5 | ) | 1.27 | (5 | ) | |||||||||||||||||||||||||
Class R-5: | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 3/31/2007 | 44.22 | .78 | 6.53 | 7.31 | (.88 | ) | (2.71 | ) | (3.59 | ) | 47.94 | 16.91 | 14,993 | .57 | .52 | 1.70 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2006 | 35.64 | .69 | 10.02 | 10.71 | (.81 | ) | (1.32 | ) | (2.13 | ) | 44.22 | 30.56 | 9,059 | .58 | .53 | 1.74 | |||||||||||||||||||||||||||||||||
Year ended 3/31/2005 | 32.26 | .50 | 3.47 | 3.97 | (.59 | ) | - | (.59 | ) | 35.64 | 12.38 | 4,507 | .59 | .58 | 1.51 | ||||||||||||||||||||||||||||||||||
Year ended 3/31/2004 | 20.78 | .35 | 11.51 | 11.86 | (.38 | ) | - | (.38 | ) | 32.26 | 57.49 | 2,473 | .61 | .61 | 1.27 | ||||||||||||||||||||||||||||||||||
Period from 5/15/2002 to 3/31/2003 | 27.55 | .26 | (6.74 | ) | (6.48 | ) | (.29 | ) | - | (.29 | ) | 20.78 | (23.71 | ) | 782 | .63 | (5 | ) | .63 | (5 | ) | 1.31 | (5 | ) |
Year ended March 31 | ||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||
Portfolio turnover rate for all classes of shares | 27 | % | 35 | % | 30 | % | 25 | % | 29 | % |
(1) Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year. |
(2) Based on average shares outstanding. |
(3) Total returns exclude all sales charges, including contingent deferred sales charges. |
(4) 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 for all share classes. |
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. |
(5) Annualized. |
See Notes to Financial Statements |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of EuroPacific Growth Fund:
We have audited the accompanying statement of assets and liabilities of EuroPacific Growth Fund (the “Fund”), including the summary investment portfolio, as of March 31, 2007, 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 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 March 31, 2007, 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, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of EuroPacific Growth Fund as of March 31, 2007, 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
May 9, 2007
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 March 31, 2007:
Long-term capital gains | $ | 4,330,985,000 | ||
Foreign taxes | 198,729,000 | |||
Foreign source income | 2,165,886,000 | |||
Qualified dividend income | 100 | % | ||
Corporate dividends received deduction | $ | 2,127,000 | ||
U.S. government income that may be exempt from state taxation | 10,525,000 |
Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2008, to determine the calendar year amounts to be included on their 2007 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 period (October 1, 2006, through March 31, 2007).
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. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica 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 and 529-F 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 also be lower by the amount of these fees.
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. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica 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 and 529-F 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 also be lower by the amount of these fees.
Please 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 10/1/2006 | Ending account value 3/31/2007 | Expenses paid during period* | Annualized expense ratio | ||||||||||
Class A -- actual return | $ | 1,000.00 | $ | 1,118.50 | $ | 3.96 | .75 | % | |||||
Class A -- assumed 5% return | 1,000.00 | 1,021.19 | 3.78 | .75 | |||||||||
Class B -- actual return | 1,000.00 | 1,114.48 | 7.85 | 1.49 | |||||||||
Class B -- assumed 5% return | 1,000.00 | 1,017.50 | 7.49 | 1.49 | |||||||||
Class C -- actual return | 1,000.00 | 1,113.86 | 8.27 | 1.57 | |||||||||
Class C -- assumed 5% return | 1,000.00 | 1,017.10 | 7.90 | 1.57 | |||||||||
Class F -- actual return | 1,000.00 | 1,118.17 | 4.12 | .78 | |||||||||
Class F -- assumed 5% return | 1,000.00 | 1,021.04 | 3.93 | .78 | |||||||||
Class 529-A -- actual return | 1,000.00 | 1,118.34 | 4.17 | .79 | |||||||||
Class 529-A -- assumed 5% return | 1,000.00 | 1,020.99 | 3.98 | .79 | |||||||||
Class 529-B -- actual return | 1,000.00 | 1,113.74 | 8.54 | 1.62 | |||||||||
Class 529-B -- assumed 5% return | 1,000.00 | 1,016.85 | 8.15 | 1.62 | |||||||||
Class 529-C -- actual return | 1,000.00 | 1,113.58 | 8.54 | 1.62 | |||||||||
Class 529-C -- assumed 5% return | 1,000.00 | 1,016.85 | 8.15 | 1.62 | |||||||||
Class 529-E -- actual return | 1,000.00 | 1,116.42 | 5.86 | 1.11 | |||||||||
Class 529-E -- assumed 5% return | 1,000.00 | 1,019.40 | 5.59 | 1.11 | |||||||||
Class 529-F -- actual return | 1,000.00 | 1,119.25 | 3.22 | .61 | |||||||||
Class 529-F -- assumed 5% return | 1,000.00 | 1,021.89 | 3.07 | .61 | |||||||||
Class R-1 -- actual return | 1,000.00 | 1,114.08 | 8.28 | 1.57 | |||||||||
Class R-1 -- assumed 5% return | 1,000.00 | 1,017.10 | 7.90 | 1.57 | |||||||||
Class R-2 -- actual return | 1,000.00 | 1,114.00 | 8.33 | 1.58 | |||||||||
Class R-2 -- assumed 5% return | 1,000.00 | 1,017.05 | 7.95 | 1.58 | |||||||||
Class R-3 -- actual return | 1,000.00 | 1,116.47 | 5.80 | 1.10 | |||||||||
Class R-3 -- assumed 5% return | 1,000.00 | 1,019.45 | 5.54 | 1.10 | |||||||||
Class R-4 -- actual return | 1,000.00 | 1,118.69 | 4.33 | .82 | |||||||||
Class R-4 -- assumed 5% return | 1,000.00 | 1,020.84 | 4.13 | .82 | |||||||||
Class R-5 -- actual return | 1,000.00 | 1,119.73 | 2.75 | .52 | |||||||||
Class R-5 -- assumed 5% return | 1,000.00 | 1,022.34 | 2.62 | .52 | |||||||||
*Expenses 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 (182), and divided by 365 (to reflect the one-half year period). |
Approval of Investment Advisory and Service Agreement
The fund’s board has approved the fund’s Amended Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through December 31, 2007. The approved agreement includes an additional advisory fee breakpoint if and when the fund’s net assets exceed $89 billion. The board approved the agreement following the recommendation of the fund’s governance and contracts committee (the “committee”), which is composed of all the fund’s independent board members. The information, material factors and conclusions that formed the basis for the committee’s recommendation and the board’s subsequent approval are described below.
1. Information reviewed
Materials reviewed— During the course of each year, board members review a wide variety of materials relating to the services provided by CRMC, including reports on the fund’s investment results; portfolio composition; portfolio trading practices; shareholder services; and other information relating to the nature, extent and quality of services provided by CRMC to the fund. In addition, the committee requests and reviews supplementary information that includes extensive materials regarding the fund’s investment results, advisory fee and expense comparisons, financial and profitability information regarding CRMC, descriptions of various functions such as compliance monitoring and portfolio trading practices, and information about the personnel providing investment management and administrative services to the fund.
Review process— The committee received assistance and advice regarding legal and industry standards from independent counsel to the board. The committee discussed the approval of the agreement with CRMC representatives and in a private session with counsel at which no representatives of CRMC were present. In deciding to recommend approval of the agreement, the committee did not identify any single issue or particular information that, in isolation, was the controlling factor. This summary describes the most important, but not all, of the factors considered by the board and the committee.
2. Nature, extent and quality of services
CRMC, its personnel and its resources— 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 ability of its organizational structure to address the recent growth in assets under management, including the evolving separation of the investment management process into independent divisions of CRMC. The board and the committee also considered that CRMC made available to its investment professionals a variety of resources and systems relating to investment management, compliance, trading, results and portfolio accounting. They considered CRMC’s commitment to investing in information technology supporting investment management and compliance. They considered data showing CRMC’s continuing investments in personnel and technology to provide services to the fund. They further considered CRMC’s continuing need to attract and retain qualified personnel and to maintain and enhance its resources and systems. The board and the committee also considered the benefits to fund shareholders of investing in a fund that is part of a large family of funds offering a variety of investment objectives.
Other services— The board and the committee considered CRMC’s policies, procedures and systems designed to comply with applicable laws and regulations and its commitment to compliance; its efforts to keep board members informed; and its attention to matters that may involve potential conflicts of interest with the fund. The board and the committee also considered the nature, extent, quality and cost of administrative, distribution and shareholder services provided by CRMC to the fund under the agreement and other agreements, including the administrative, legal, and fund accounting and treasury functions.
3. Investment results
The board and the committee considered the fund’s investment results in light of its primary objective of providing long-term growth of capital. They also considered information regarding the selection of indexes and funds comparable to the fund. The board and the committee reviewed the fund’s absolute investment results, as well as the fund’s relative investment results measured against, among other things: (i) the Lipper International Funds Index (the Lipper category that includes the fund), (ii) the MSCI EAFE Index and (iii) a comparison group of the other funds in the Lipper International Funds Index as of July 31, 2006. The board and the committee noted that the fund’s investment results exceeded those of both indexes for the five- and 10-year periods ended July 31, 2006, and the average and median results of the comparison group for the 10-year period ended July 31, 2006. The board and the committee also considered the volatility of the fund’s results, as well as the risks assumed by the fund relative to market indexes and comparable funds.
4. Advisory fees and total expenses
The board and the committee reviewed the advisory fees and total expenses of the fund (each as a percentage of average net assets) and compared such amounts with the median fee and expense levels of other funds in the Lipper International Funds Index, as well as a comparison group of the other funds in the Lipper International Funds Index. The board and the committee observed that the fund’s advisory fees and total expenses (each as a percentage of average net assets) were among the lowest of all 30 funds in that comparison group (with the second lowest ratio of total operating expenses to average net assets, not including 12b-1 expenses). The board and the committee also noted the new advisory fee breakpoint if and when the fund’s net assets exceed $89 billion, as well as the 10% advisory fee waiver in effect since April 1, 2005. The board and the committee also reviewed information and materials regarding the advisory fees paid by institutional clients of an affiliate of CRMC with similar investment mandates. They noted, however, that there were significant investment, operational and regulatory differences between advising mutual funds and institutional clients.
5. Adviser financial information
The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, as well as the resulting level of profits to CRMC, comparing those to the reported results of several large, publicly held investment management companies. The board and the committee also received extensive information during the past year concerning economies of scale and the increasing complexity and cost of CRMC’s operations as the assets of the American Funds have increased. The board and the committee also considered information regarding the structure and manner in which CRMC’s investment professionals were compensated and CRMC’s view of the relationship of such compensation to the attraction and retention of quality personnel. The board and the committee considered CRMC’s need to invest in technology, infrastructure and staff to reinforce and offer new services and to accommodate changing regulatory requirements. They further considered that breakpoint discounts in the fund’s advisory fee structure reduce the level of fees charged by CRMC to the fund as fund assets increase. They also considered the impact of the current 10% advisory fee waiver.
6. 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.
7. Conclusions
Based on their review, including their consideration of each of the factors referred to above, the board and the committee concluded that the agreement is fair and reasonable to the fund and its shareholders and that the fund’s shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund. The board and the committee concluded that the nature, extent and quality of services provided by CRMC, including its investment record, the fund’s cost structure and low level of fees, benefit and are in the best interests of the fund and, along with the consideration of other factors, supported approval of the agreement.
Other share class results
unaudited
Class B, Class C, Class F and Class 529
Figures shown are past results and are not predictive of results in 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, 2007: | 1 year | 5 years | Life of class | |||||||
Class B shares— first sold 3/15/00 | ||||||||||
Reflecting applicable contingent deferred sales charge | ||||||||||
(CDSC), maximum of 5%, payable only if shares | ||||||||||
are sold within six years of purchase | +10.78 | % | +14.40 | % | +5.05 | % | ||||
Not reflecting CDSC | +15.78 | % | +14.63 | % | +5.05 | % | ||||
Class C shares— first sold 3/15/01 | ||||||||||
Reflecting CDSC, maximum of 1%, payable only if | ||||||||||
shares are sold within one year of purchase | +14.65 | % | +14.54 | % | +11.02 | % | ||||
Not reflecting CDSC | +15.65 | % | +14.54 | % | +11.02 | % | ||||
Class F shares*— first sold 3/15/01 | ||||||||||
Not reflecting annual asset-based fee charged by | ||||||||||
sponsoring firm | +16.59 | % | +15.45 | % | +11.91 | % | ||||
Class 529-A shares†— first sold 2/15/02 | ||||||||||
Reflecting 5.75% maximum sales charge | +9.89 | % | +14.09 | % | +14.79 | % | ||||
Not reflecting maximum sales charge | +16.59 | % | +15.44 | % | +16.13 | % | ||||
Class 529-B shares†— first sold 2/19/02 | ||||||||||
Reflecting applicable CDSC, maximum of 5%, payable | ||||||||||
only if shares are sold within six years of purchase | +10.60 | % | +14.19 | % | +15.46 | % | ||||
Not reflecting CDSC | +15.60 | % | +14.43 | % | +15.57 | % | ||||
Class 529-C shares†— first sold 2/15/02 | ||||||||||
Reflecting CDSC, maximum of 1%, payable only if | ||||||||||
shares are sold within one year of purchase | +14.62 | % | +14.45 | % | +15.13 | % | ||||
Not reflecting CDSC | +15.62 | % | +14.45 | % | +15.13 | % | ||||
Class 529-E shares*†— first sold 3/7/02 | +16.21 | % | +15.04 | % | +14.75 | % | ||||
Class 529-F shares*†— first sold 9/16/02 | ||||||||||
Not reflecting annual asset-based fee charged by | ||||||||||
sponsoring firm | +16.79 | % | — | +22.05 | % | |||||
*These shares are sold without any initial or contingent deferred sales charge. | ||||||||||
†Results shown do not reflect the $10 initial account setup fee and an annual $10 account maintenance fee. |
The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased it to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 26 and 27 for details.
For information regarding the differences among the various share classes, please refer to the fund’s prospectus.
Board of trustees and other officers
“Independent” trustees | ||
Year first | ||
elected | ||
a trustee | ||
Name and age | of the fund1 | Principal occupation(s) during past five years |
Elisabeth Allison, 60 | 1991 | Partner, ANZI, Ltd. (transactional work specializing in joint ventures and strategic alliances); Business Negotiator, Harvard Medical School |
Vanessa C.L. Chang, 54 | 2005 | Director, EL & EL Investments (real estate); former President and CEO, ResolveItNow.com (insurance-related Internet company); former Senior Vice President, Secured Capital Corporation (real estate investment bank); former Partner, KPMG LLP (independent registered public accounting firm) |
Robert A. Fox, 70 | 1984 | Managing General Partner, Fox Investments LP; corporate director; retired President and CEO, Foster Farms (poultry producer) |
Jae H. Hyun, 58 | 2005 | Chairman of the Board, Tong Yang Major Corp. (holding company of Tong Yang Group companies) |
Koichi Itoh, 66 | 1994 | Executive Chairman of the Board, Itoh Building Co., Ltd. (building management); former President, Autosplice KK (electronics) |
William H. Kling, 65 | 1987 | President, American Public Media Group |
John G. McDonald, 70 | 1984 | Stanford Investors Professor, Graduate School of Business, Stanford University |
William I. Miller, 51 | 1992 | Chairman of the Board and CEO, Irwin Financial |
Chairman of the Board | Corporation | |
(Independent and | ||
Non-Executive) | ||
Alessandro Ovi, 63 | 2002 | Publisher and Editor, Technology Review; President, TechRev.srl; former Special Advisor to the President of the European Commission; former CEO, Tecnitel (subsidiary of a telecommunications company) |
Kirk P. Pendleton, 67 | 1996 | Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment) |
Rozanne L. Ridgway, 71 | 2005 | Director of companies; Chair (non-executive), Baltic-American Enterprise Fund; former co-chair, Atlantic Council of the United States |
“Independent” trustees | ||
Number of | ||
portfolios | ||
in fund | ||
complex2 | ||
overseen by | ||
Name and age | trustee | Other directorships3 held by trustee |
Elisabeth Allison, 60 | 3 | Color Kinetics, Inc. |
Vanessa C.L. Chang, 54 | 3 | Edison International |
Robert A. Fox, 70 | 7 | Chemtura Corporation |
Jae H. Hyun, 58 | 3 | Tong Yang Investment Bank; Tong Yang Magic Inc.; Tong Yang Major Corp.; Tong Yang Systems Corp. |
Koichi Itoh, 66 | 5 | None |
William H. Kling, 65 | 8 | Irwin Financial Corporation |
John G. McDonald, 70 | 8 | iStar Financial, Inc.; Plum Creek Timber Co.; Scholastic Corporation; Varian, Inc. |
William I. Miller, 51 | 3 | Cummins, Inc. |
Chairman of the Board | ||
(Independent and | ||
Non-Executive) | ||
Alessandro Ovi, 63 | 3 | Assicurazioni Generali; Guala Closures SpA; Korn & Ferry Europe (Advisory Board); ST Microelectronics; Telecom Italia Media |
Kirk P. Pendleton, 67 | 7 | None |
Rozanne L. Ridgway, 71 | 3 | Boeing; 3M Corporation; Emerson Electric; Manpower, Inc.; Sara Lee Corporation |
“Interested” trustees4 | ||
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 principal |
position with fund | the fund1 | underwriter of the fund |
Gina H. Despres, 65 | 1999 | Senior Vice President, Capital Research and |
Vice Chairman of the Board | Management Company; Senior Vice President, Capital Strategy Research, Inc.5 | |
Mark E. Denning, 49 | 1994 | Director, Capital Research and Management |
President | Company; Senior Vice President, Capital Research Company;5 Director, Capital International Limited5 |
The statement of additional information includes additional information about fund trustees and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all trustees and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Fund Secretary.
“Interested” trustees4 | ||
Number of | ||
portfolios | ||
in fund | ||
complex2 | ||
Name, age and | overseen by | |
position with fund | trustee | Other directorships3 held by trustee |
Gina H. Despres, 65 | 4 | None |
Vice Chairman of the Board | ||
Mark E. Denning, 49 | 1 | None |
President | ||
Other officers6 | ||
Year first | ||
elected | Principal occupation(s) during past five years | |
Name, age and | an officer | and positions held with affiliated entities or |
position with fund | of the fund1 | the principal underwriter of the fund |
Stephen E. Bepler, 64 | 1984 | Senior Vice President, Capital Research Company5 |
Executive Vice President | ||
Carl M. Kawaja, 42 | 2003 | Senior Vice President, Capital Research Company;5 |
Senior Vice President | Director, Capital International, Inc.;5 Director, Capital International Asset Management, Inc.5 | |
Robert W. Lovelace, 44 | 1996 | Senior Vice President and Director, Capital Research |
Senior Vice President | and Management Company; Chairman of the Board, Capital Research Company;5 Director, The Capital Group Companies, Inc.5 | |
Michael J. Downer, 52 | 2004 | Vice President and Secretary, Capital Research and |
Vice President | Management Company; Director, American Funds Distributors, Inc.;5 Director, Capital Bank and Trust Company5 | |
Nicholas J. Grace, 41 | 2004 | Senior Vice President, Capital Research Company5 |
Vice President | ||
Alwyn Heong, 47 | 1998 | Senior Vice President and Director, Capital Research |
Vice President | Company5 | |
Sung Lee, 40 | 2003 | Executive Vice President and Director, Capital |
Vice President | Research Company5 | |
Vincent P. Corti, 50 | 1984 | Vice President — Fund Business Management |
Secretary | Group, Capital Research and Management Company | |
R. Marcia Gould, 52 | 1993 | Vice President — Fund Business Management |
Treasurer | Group, Capital Research and Management Company | |
Tanya Schneider, 34 | 2007 | Assistant Vice President — Fund Business |
Assistant Secretary | Management Group, Capital Research and Management Company | |
Jennifer M. Buchheim, 33 | 2005 | Vice President — Fund Business Management |
Assistant Treasurer | Group, Capital Research and Management Company | |
1Trustees and officers of the fund serve until their resignation, removal or retirement. | ||
2Capital Research and Management Company manages the American Funds, consisting of 30 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which serves as the underlying investment vehicle for certain variable insurance contracts, American Funds Target Date Retirement Series,SM Inc., which is available to investors in tax-deferred retirement plans and IRAs, and Endowments, whose shareholders are limited to certain nonprofit organizations. | ||
3This includes all directorships (other than those in the American Funds) that are held by each trustee as a director of a public company or a registered investment company. | ||
4“Interested persons” within the meaning of the 1940 Act, 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). | ||
5Company affiliated with Capital Research and Management Company. | ||
6All of the officers listed, except Sung Lee, are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser. |
Offices of the fund and of the investment adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
135 South State College Boulevard
Brea, CA 92821-5823
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 25065
Santa Ana, CA 92799-5065
P.O. Box 659522
San Antonio, TX 78265-9522
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Counsel
Kirkpatrick & Lockhart Preston Gates Ellis LLP
Four Embarcadero Center
San Francisco, CA 94111-4121
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, which can be obtained from your financial adviser 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 Guidelines” — which describes how we vote proxies relating to portfolio securities — is available free of charge on the U.S. Securities and Exchange Commission (SEC) website at sec.gov, on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the SEC for the 12 months ended June 30 by August 31. The report also is available on the SEC and American Funds websites.
A complete March 31, 2007, portfolio of EuroPacific Growth Fund’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
EuroPacific Growth 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. (800/SEC-0330). Additionally, the list of portfolio holdings also is available by calling AFS.
This report is for the information of shareholders of EuroPacific Growth Fund, but it also may be used as sales literature when preceded or accompanied by the current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after June 30, 2007, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
[logo - American Funds®]
The right choice for the long term®
What makes American Funds different?
For 75 years, we have followed a consistent philosophy that we firmly believe is in our investors’ best interests. The range of opportunities offered by our family of just 30 carefully conceived, broadly diversified funds has attracted over 40 million shareholder accounts.
Our unique combination of strengths includes these five factors:
• A long-term, value-oriented approach
We seek to buy securities at reasonable prices relative to their prospects and hold them for the long term.
• An extensive global research effort
Our investment professionals travel the world to find the best investment opportunities and gain a comprehensive understanding of companies and markets.
• The multiple portfolio counselor system
Our unique method of portfolio management, developed nearly 50 years ago, blends teamwork with individual accountability and has provided American Funds with a sustainable method of achieving fund objectives.
• Experienced investment professionals
American Funds portfolio counselors have an average of 24 years of investment experience, providing a wealth of knowledge and experience that few organizations have.
• A commitment to low operating expenses
The American Funds provide exceptional value for shareholders, with operating expenses that are among the lowest in the mutual fund industry.
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 FundSM
SMALLCAP World Fund®
• Growth-and-income funds
Emphasis on long-term growth and dividends through stocks
American Mutual Fund®
Capital World Growth and Income FundSM
Fundamental InvestorsSM
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 fund
Emphasis on long-term growth and current income through stocks and bonds
American Balanced Fund®
• Bond funds
Emphasis on current income through bonds
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-free current income through municipal bonds
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
The Tax-Exempt Fund of California®
The Tax-Exempt Fund of Maryland®
The Tax-Exempt Fund of Virginia®
• Money market funds
The Cash Management Trust of America®
The Tax-Exempt Money Fund of AmericaSM
The U.S. Treasury Money Fund of AmericaSM
• American Funds Target Date Retirement SeriesSM
The Capital Group Companies
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust
Lit. No. MFGEAR-916-0507P
Litho in USA BG/HN/8055-S7514
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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 Vanessa C.L. Chang, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.
ITEM 4 - Principal Accountant Fees and Services
Registrant: | ||||
a) Audit Fees: | ||||
2006 | $89,000 | |||
2007 | $93,000 | |||
b) Audit-Related Fees: | ||||
2006 | $17,000 | |||
2007 | $23,000 | |||
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 Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2006 | $15,000 | |||
2007 | $21,000 | |||
The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns including returns relating to the Registrant’s investments in non-U.S. jurisdictions. | ||||
d) All Other Fees: | ||||
2006 | None | |||
2007 | 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) Not Applicable | ||||
b) Audit-Related Fees: | ||||
2006 | $359,000 | |||
2007 | $656,000 | |||
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 Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2006 | None | |||
2007 | $12,000 | |||
The tax fees consist of consulting services relating to the registrant’s investments. | ||||
d) All Other Fees: | ||||
2006 | $36,000 | |||
2007 | None | |||
The other fees consist of consulting services related to the Registrant’s compliance program. |
The Registrant’s audit committee will pre-approve all audit and permissible non-audit services that the committee considers compatible with maintaining the independent registered public accounting firm’s independence. 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 and the adviser and affiliates that provide ongoing services to the Registrant were $858,000 for fiscal year 2006 and $973,000 for fiscal year 2007. 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
[logo - American Funds®]
EuroPacific Growth Fund®
Investment portfolio
March 31, 2007
Common stocks — 93.73% | Shares | Market value (000 | ) | ||||
FINANCIALS — 22.26% | |||||||
Kookmin Bank1 | 18,047,910 | $ | 1,619,610 | ||||
Kookmin Bank1,2 | 330,000 | 29,614 | |||||
AXA SA | 28,496,214 | 1,209,547 | |||||
ING Groep NV | 25,818,017 | 1,092,762 | |||||
Banco Santander Central Hispano, SA | 56,884,805 | 1,016,323 | |||||
BNP Paribas | 7,874,199 | 823,354 | |||||
UniCredito Italiano SpA (Italy) | 72,140,000 | 687,369 | |||||
UniCredito Italiano SpA (Germany) | 10,000,000 | 94,681 | |||||
Mizuho Financial Group, Inc. | 116,995 | 754,903 | |||||
Erste Bank der oesterreichischen Sparkassen AG | 9,508,286 | 741,310 | |||||
UBS AG | 11,336,796 | 675,121 | |||||
Mitsui Trust Holdings, Inc.1 | 58,827,000 | 581,118 | |||||
Hypo Real Estate Holding AG1 | 8,183,540 | 522,459 | |||||
Shinhan Financial Group Co., Ltd. | 9,075,000 | 521,053 | |||||
Sun Hung Kai Properties Ltd. | 44,364,000 | 513,299 | |||||
Banco Itaú Holding Financeira SA, preferred nominative | 14,255,300 | 498,519 | |||||
Credit Suisse Group | 6,705,000 | 482,247 | |||||
BOC Hong Kong (Holdings) Ltd. | 177,953,500 | 431,378 | |||||
Sberbank (Savings Bank of the Russian Federation) (GDR) | 960,382 | 421,272 | |||||
Sompo Japan Insurance Inc. | 33,256,000 | 415,311 | |||||
Sampo Oyj, Class A | 13,496,622 | 410,074 | |||||
ABN AMRO Holding NV | 9,449,419 | 407,155 | |||||
Commerzbank U.S. Finance, Inc. | 8,844,500 | 391,735 | |||||
Cathay Financial Holding Co., Ltd. | 183,041,831 | 380,081 | |||||
QBE Insurance Group Ltd. | 14,729,266 | 376,387 | |||||
ORIX Corp. | 1,347,190 | 351,600 | |||||
Mitsui Sumitomo Insurance Co., Ltd. | 27,031,000 | 339,869 | |||||
Banco Bilbao Vizcaya Argentaria, SA | 13,326,200 | 327,552 | |||||
Banco Bradesco SA, preferred nominative | 15,849,234 | 323,768 | |||||
Macquarie Bank Ltd. | 4,816,000 | 322,884 | |||||
Société Générale | 1,808,850 | 312,943 | |||||
ICICI Bank Ltd. | 13,455,000 | 266,400 | |||||
ICICI Bank Ltd. (ADR) | 1,111,300 | 40,840 | |||||
FirstRand Ltd. | 88,900,000 | 300,983 | |||||
Swire Pacific Ltd., Class A | 25,959,000 | 291,379 | |||||
Crédit Agricole SA | 6,903,800 | 269,495 | |||||
HSBC Holdings PLC (Hong Kong) | 9,038,436 | 157,096 | |||||
HSBC Holdings PLC (United Kingdom) | 6,344,188 | 111,102 | |||||
Sumitomo Mitsui Financial Group, Inc. | 27,590 | 250,967 | |||||
Samsung Fire & Marine Insurance Co., Ltd. | 1,480,630 | 247,952 | |||||
Unibanco-União de Bancos Brasileiros SA, units (GDR) | 2,815,000 | 246,200 | |||||
Housing Development Finance Corp. Ltd. | 6,571,846 | 231,738 | |||||
DEPFA BANK PLC | 12,890,000 | 230,469 | |||||
Millea Holdings, Inc. | 5,531,500 | 205,027 | |||||
Royal Bank of Scotland Group PLC | 4,823,243 | 188,401 | |||||
NIPPONKOA Insurance Co., Ltd. | 21,854,000 | 187,644 | |||||
Westfield Group | 11,000,000 | 183,324 | |||||
Westfield Group3,4 | 71,189 | 1,177 | |||||
OTP Bank PLC | 3,995,000 | 183,040 | |||||
Fortis | 4,000,000 | 182,836 | |||||
DBS Group Holdings Ltd. | 12,450,000 | 175,676 | |||||
Lloyds TSB Group PLC | 14,500,000 | 159,867 | |||||
Mitsubishi UFJ Financial Group, Inc. | 14,119 | 159,638 | |||||
Hana Financial Holdings | 3,000,000 | 155,343 | |||||
Zurich Financial Services | 532,000 | 153,909 | |||||
Bank of Nova Scotia | 3,200,000 | 147,660 | |||||
Topdanmark A/S3 | 673,550 | 130,615 | |||||
Insurance Australia Group Ltd. | 27,430,311 | 130,233 | |||||
Admiral Group PLC | 5,550,000 | 125,549 | |||||
Akbank TAS | 17,850,000 | 119,428 | |||||
Fairfax Financial Holdings Ltd. | 500,000 | 112,779 | |||||
DnB NOR ASA | 7,300,000 | 103,310 | |||||
Allied Irish Banks, PLC | 3,311,000 | 98,297 | |||||
PartnerRe Holdings Ltd. | 1,395,000 | 95,613 | |||||
Mitsubishi Estate Co., Ltd. | 2,775,000 | 91,297 | |||||
HDFC Bank Ltd. | 3,936,258 | 87,141 | |||||
State Bank of India | 2,662,000 | 61,421 | |||||
State Bank of India (GDR) | 313,800 | 19,142 | |||||
Brookfield Asset Management Inc., Class A | 1,215,750 | 63,640 | |||||
Allianz SE | 305,000 | 62,695 | |||||
FöreningsSparbanken AB, Class A | 1,307,000 | 45,818 | |||||
Suruga Bank Ltd. | 2,960,000 | 38,651 | |||||
23,189,090 | |||||||
CONSUMER DISCRETIONARY — 11.45% | |||||||
Continental AG | 7,038,000 | 910,697 | |||||
Vivendi SA | 20,332,256 | 827,130 | |||||
Compagnie Générale des Etablissements Michelin, Class B | 6,998,000 | 773,661 | |||||
Toyota Motor Corp. | 10,665,000 | 684,526 | |||||
Industria de Diseno Textil, SA | 10,900,468 | 678,277 | |||||
Renault SA | 5,420,000 | 634,577 | |||||
Hyundai Motor Co. | 8,766,275 | 616,109 | |||||
Honda Motor Co., Ltd. | 14,884,250 | 520,057 | |||||
Grupo Televisa, SA, ordinary participation certificates (ADR) | 16,509,600 | 491,986 | |||||
Mediaset SpA | 44,767,109 | 487,617 | |||||
Swatch Group Ltd, non-registered shares | 1,025,246 | 271,660 | |||||
Swatch Group Ltd | 3,042,061 | 162,968 | |||||
SEGA SAMMY HOLDINGS INC.1 | 18,401,600 | 430,200 | |||||
Kingfisher PLC | 72,334,691 | 396,263 | |||||
News Corp., Class A | 15,109,826 | 349,339 | |||||
News Corp., Class B | 565,000 | 13,825 | |||||
British Sky Broadcasting Group PLC | 31,790,938 | 353,008 | |||||
DaimlerChrysler AG | 3,952,000 | 324,500 | |||||
DaimlerChrysler AG (New York registered) | 250,000 | 20,452 | |||||
Carnival PLC | 7,097,200 | 342,198 | |||||
Esprit Holdings Ltd. | 27,780,700 | 325,871 | |||||
Porsche AG, nonvoting preferred | 190,000 | 290,607 | |||||
HYUNDAI MOBIS | 3,149,000 | 270,536 | |||||
LG Electronics Inc. | 3,953,000 | 269,838 | |||||
Suzuki Motor Corp. | 7,239,367 | 188,323 | |||||
Cie. Financière Richemont AG, Class A, units | 3,225,000 | 180,748 | |||||
Publishing & Broadcasting Ltd. | 8,708,532 | 140,055 | |||||
Nikon Corp. | 5,151,000 | 108,818 | |||||
JCDecaux SA | 3,528,700 | 104,241 | |||||
Lotte Shopping Co. | 282,000 | 99,247 | |||||
Sony Corp. | 1,930,000 | 98,280 | |||||
DSG International PLC | 25,345,000 | 84,829 | |||||
Techtronic Industries Co. Ltd. | 65,780,000 | 79,308 | |||||
GEOX SpA | 4,307,000 | 75,222 | |||||
William Hill PLC | 5,526,000 | 69,194 | |||||
Daito Trust Construction Co., Ltd. | 1,315,000 | 62,044 | |||||
Marks and Spencer Group PLC | 4,500,000 | 59,935 | |||||
Inchcape PLC | 4,873,200 | 54,736 | |||||
Daiwa House Industry Co., Ltd. | 2,960,300 | 48,646 | |||||
Yamada Denki Co., Ltd. | 323,000 | 30,150 | |||||
TI Automotive Ltd., Class A3,4 | 3,197,300 | — | |||||
11,929,678 | |||||||
INFORMATION TECHNOLOGY — 10.48% | |||||||
Samsung Electronics Co., Ltd. | 2,055,075 | 1,230,204 | |||||
Samsung Electronics Co., Ltd., nonvoting preferred | 48,800 | 22,960 | |||||
Hon Hai Precision Industry Co., Ltd. | 175,322,901 | 1,176,415 | |||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 459,751,622 | 943,543 | |||||
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | 21,294,771 | 228,919 | |||||
Nokia Corp. | 31,399,100 | 723,488 | |||||
Nokia Corp. (ADR) | 12,982,900 | 297,568 | |||||
Hynix Semiconductor Inc.3 | 19,563,700 | 673,965 | |||||
Toshiba Corp. | 76,515,000 | 511,921 | |||||
Nintendo Co., Ltd. | 1,485,000 | 432,383 | |||||
Rohm Co., Ltd. | 4,623,700 | 420,193 | |||||
Murata Manufacturing Co., Ltd. | 5,254,600 | 384,167 | |||||
Nippon Electric Glass Co., Ltd. | 20,163,000 | 353,962 | |||||
Tokyo Electron Ltd. | 4,395,700 | 307,919 | |||||
Hirose Electric Co., Ltd.1 | 2,547,000 | 306,818 | |||||
AU Optronics Corp. | 205,283,500 | 293,484 | |||||
Acer Inc.1 | 151,845,420 | 291,437 | |||||
Chi Mei Optoelectronics Corp. | 274,661,770 | 286,409 | |||||
Hoya Corp. | 7,560,000 | 251,293 | |||||
LG.Philips LCD Co., Ltd.3 | 6,557,130 | 229,377 | |||||
Mediatek Incorporation | 16,140,656 | 185,385 | |||||
Quanta Computer Inc. | 118,063,807 | 180,209 | |||||
TDK Corp. | 1,800,000 | 156,389 | |||||
Konica Minolta Holdings, Inc. | 11,838,000 | 155,787 | |||||
Compal Electronics, Inc. | 164,224,042 | 138,984 | |||||
Advanced Semiconductor Engineering, Inc.3 | 116,643,491 | 138,379 | |||||
SAP AG | 2,400,000 | 107,102 | |||||
Canon, Inc. | 1,852,600 | 99,694 | |||||
Powerchip Semiconductor Corp. | 150,314,877 | 89,957 | |||||
Wipro Ltd. | 5,907,297 | 76,671 | |||||
ASML Holding NV3 | 2,500,000 | 61,817 | |||||
ASML Holding NV (New York registered)3 | 213,000 | 5,272 | |||||
Delta Electronics, Inc. | 18,931,000 | 61,225 | |||||
Chartered Semiconductor Manufacturing Ltd3 | 56,897,000 | 54,398 | |||||
Infosys Technologies Ltd. | 800,000 | 37,469 | |||||
livedoor Co., Ltd.3,4 | 7,390,152 | 5,026 | |||||
ASUSTeK Computer Inc. | 1,545,190 | 3,643 | |||||
10,923,832 | |||||||
TELECOMMUNICATION SERVICES — 9.23% | |||||||
América Móvil, SAB de CV, Series L (ADR) | 34,906,100 | 1,668,162 | |||||
América Móvil, SAB de CV, Series L | 8,940,000 | 21,407 | |||||
Koninklijke KPN NV | 55,675,000 | 868,136 | |||||
Vodafone Group PLC | 321,357,931 | 857,294 | |||||
SOFTBANK CORP. | 25,468,900 | 656,047 | |||||
MTN Group Ltd. | 46,676,100 | 632,755 | |||||
Telefónica, SA | 24,862,000 | 548,591 | |||||
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk, Class B | 429,266,200 | 463,626 | |||||
Singapore Telecommunications Ltd. | 206,403,075 | 446,395 | |||||
Telekom Austria AG | 15,256,288 | 381,726 | |||||
France Télécom SA | 12,868,000 | 340,209 | |||||
Teléfonos de México, SAB de CV, Class L (ADR) | 10,000,000 | 334,000 | |||||
Chunghwa Telecom Co., Ltd. (ADR) | 10,937,624 | 217,877 | |||||
Chunghwa Telecom Co., Ltd. | 8,659,800 | 16,778 | |||||
Telenor ASA | 12,452,800 | 221,832 | |||||
Bharti Airtel Ltd.3 | 12,507,000 | 221,673 | |||||
Portugal Telecom, SGPS, SA | 15,795,000 | 211,860 | |||||
Telekomunikacja Polska SA | 23,320,000 | 192,767 | |||||
Telecom Italia SpA | 44,750,000 | 127,827 | |||||
Telecom Italia SpA, nonvoting | 25,000,000 | 61,950 | |||||
KDDI Corp. | 20,000 | 159,993 | |||||
Philippine Long Distance Telephone Co. | 2,976,260 | 156,401 | |||||
Orascom Telecom Holding (GDR) | 2,226,350 | 151,392 | |||||
Advanced Info Service PCL | 78,352,500 | 149,946 | |||||
China Unicom Ltd. | 97,900,000 | 141,089 | |||||
Brasil Telecom Participações SA, preferred nominative (ADR) | 1,950,000 | 87,925 | |||||
China Netcom Group Corp. (Hong Kong) Ltd. (ADR) | 1,592,800 | 83,240 | |||||
KT Corp. | 1,500,000 | 67,305 | |||||
KT Corp. (ADR) | 635,000 | 14,218 | |||||
Tele Norte Leste Participações SA, preferred nominative | 5,550,600 | 77,077 | |||||
Telecomunicações de Sao Paulo SA, preferred nominative | 1,462,200 | 36,214 | |||||
9,615,712 | |||||||
HEALTH CARE — 8.50% | |||||||
Roche Holding AG | 15,574,550 | 2,761,901 | |||||
Novo Nordisk A/S, Class B | 17,016,750 | 1,555,227 | |||||
AstraZeneca PLC (Sweden) | 11,286,617 | 607,651 | |||||
AstraZeneca PLC (United Kingdom) | 5,925,000 | 318,925 | |||||
Smith & Nephew PLC1 | 52,421,300 | 666,718 | |||||
Novartis AG4 | 11,516,960 | 629,171 | |||||
UCB SA1 | 9,373,290 | 546,146 | |||||
Merck KGaA | 2,913,558 | 376,071 | |||||
Chugai Pharmaceutical Co., Ltd. | 11,057,800 | 280,135 | |||||
Teva Pharmaceutical Industries Ltd. (ADR) | 6,610,000 | 247,412 | |||||
Essilor | 1,646,000 | 189,303 | |||||
Alcon, Inc. | 1,375,000 | 181,252 | |||||
Nobel Biocare Holding AG | 465,500 | 170,089 | |||||
Richter Gedeon NYRT | 849,000 | 153,307 | |||||
Shionogi & Co., Ltd. | 7,420,000 | 133,728 | |||||
Elan Corp., PLC (ADR)3 | 3,000,000 | 39,870 | |||||
8,856,906 | |||||||
CONSUMER STAPLES — 7.24% | |||||||
Nestlé SA | 4,059,700 | 1,584,669 | |||||
Koninklijke Ahold NV3 | 50,537,132 | 591,354 | |||||
Tesco PLC | 66,260,561 | 579,541 | |||||
Seven & I Holdings Co., Ltd. | 18,563,000 | 566,532 | |||||
Diageo PLC | 22,135,000 | 448,650 | |||||
L’Oréal SA | 4,041,000 | 441,671 | |||||
Groupe Danone | 2,578,000 | 421,636 | |||||
METRO AG | 5,815,000 | 412,227 | |||||
Shoppers Drug Mart Corp. | 6,900,000 | 306,181 | |||||
Wal-Mart de México, SAB de CV, Series V | 64,835,718 | 276,794 | |||||
Unilever PLC | 8,597,783 | 259,157 | |||||
Pernod Ricard Co. | 1,200,000 | 243,635 | |||||
Shinsegae Co., Ltd. | 413,853 | 237,619 | |||||
SABMiller PLC | 10,336,900 | 226,917 | |||||
Unilever NV | 7,502,400 | 218,719 | |||||
Woolworths Ltd. | 9,679,441 | 213,232 | |||||
Coca-Cola Hellenic Bottling Co. SA | 3,004,583 | 126,568 | |||||
Gallaher Group PLC | 5,550,866 | 123,820 | |||||
Fomento Económico Mexicano, SAB de CV (ADR) | 935,600 | 103,281 | |||||
Foster’s Group Ltd. | 12,206,070 | 67,742 | |||||
Koninklijke Numico NV | 1,284,000 | 66,297 | |||||
Coca-Cola FEMSA, SAB de CV, Series L | 7,089,200 | 25,642 | |||||
7,541,884 | |||||||
ENERGY — 7.00% | |||||||
Petróleo Brasileiro SA - Petrobras, ordinary nominative (ADR) | 8,222,500 | 818,221 | |||||
Petróleo Brasileiro SA - Petrobras, preferred nominative (ADR) | 1,686,350 | 150,675 | |||||
Royal Dutch Shell PLC, Class B | 12,137,435 | 404,084 | |||||
Royal Dutch Shell PLC, Class A | 7,600,000 | 253,071 | |||||
Royal Dutch Shell PLC, Class B (ADR) | 1,586,078 | 105,649 | |||||
Royal Dutch Shell PLC, Class A (ADR) | 1,000,000 | 66,300 | |||||
Oil & Natural Gas Corp. Ltd. | 36,339,064 | 742,632 | |||||
Reliance Industries Ltd. | 21,142,718 | 672,201 | |||||
SK Corp. | 5,992,510 | 588,738 | |||||
OAO Gazprom (ADR) | 11,688,300 | 489,740 | |||||
Canadian Natural Resources, Ltd. | 8,331,300 | 460,762 | |||||
OAO LUKOIL (ADR) | 5,064,000 | 438,036 | |||||
Norsk Hydro ASA | 8,592,000 | 285,564 | |||||
Saipem SpA, Class S | 9,760,000 | 285,187 | |||||
MOL Magyar Olaj- és Gázipari Rt., Class A | 2,348,900 | 270,949 | |||||
TOTAL SA | 3,479,000 | 244,022 | |||||
China National Offshore Oil Corp. | 265,288,100 | 232,584 | |||||
Petro-Canada | 5,800,000 | 227,180 | |||||
Cameco Corp. | 5,396,300 | 221,432 | |||||
Nexen Inc. | 2,000,000 | 122,703 | |||||
ENI SpA | 3,500,000 | 114,018 | |||||
PetroChina Co. Ltd., Class H | 80,000,000 | 94,916 | |||||
7,288,664 | |||||||
MATERIALS — 6.68% | |||||||
Bayer AG | 33,616,766 | $ | 2,150,681 | ||||
Linde AG | 7,617,903 | 821,615 | |||||
POSCO | 1,362,000 | 572,025 | |||||
Nitto Denko Corp. | 8,687,900 | 408,434 | |||||
BASF AG | 3,272,575 | 368,844 | |||||
Lonmin PLC | 4,550,000 | 297,407 | |||||
Barrick Gold Corp. | 5,580,000 | 159,309 | |||||
Barrick Gold Corp. (Canada) | 3,537,838 | 101,099 | |||||
CEMEX, SAB de CV, ordinary participation certificates, units (ADR)3 | 6,947,970 | 227,546 | |||||
Lonza Group Ltd. | 2,107,922 | 203,073 | |||||
UPM-Kymmene Corp. | 7,340,000 | 187,187 | |||||
Kuraray Co., Ltd. | 16,662,500 | 180,323 | |||||
Harmony Gold Mining Co. Ltd.3 | 12,002,600 | 167,253 | |||||
BlueScope Steel Ltd. | 19,250,000 | 163,762 | |||||
Cia. Vale do Rio Doce, ordinary nominative (ADR) | 4,000,000 | 147,960 | |||||
BHP Billiton PLC | 6,000,000 | 133,839 | |||||
Gold Fields Ltd. | 6,107,500 | 113,055 | |||||
Holcim Ltd. | 1,028,571 | 103,247 | |||||
Stora Enso Oyj, Class R | 5,394,843 | 93,789 | |||||
Siam Cement PCL | 12,674,900 | 86,889 | |||||
JSR Corp. | 2,940,500 | 67,994 | |||||
CRH PLC | 1,465,000 | 62,693 | |||||
Titan Cement Co. SA | 1,150,000 | 62,131 | |||||
James Hardie Industries Ltd. | 6,120,500 | 41,456 | |||||
Goldcorp Inc. | 1,402,000 | 33,703 | |||||
6,955,314 | |||||||
INDUSTRIALS — 4.98% | |||||||
Ryanair Holdings PLC (ADR) 3 | 15,072,400 | 675,093 | |||||
Siemens AG | 4,196,000 | 449,017 | |||||
Cintra, Concesiones de Infraestructuras de Transporte, SA | 17,378,269 | 325,824 | |||||
Fraport AG | 4,355,900 | 318,519 | |||||
Nippon Express Co., Ltd. | 45,277,000 | 284,449 | |||||
Deutsche Post AG | 8,142,500 | 246,744 | |||||
Bombardier Inc., Class B3 | 56,963,800 | 230,287 | |||||
Sandvik AB | 12,064,000 | 214,483 | |||||
ABB Ltd | 12,145,000 | 208,360 | |||||
Toll Holdings Ltd. | 12,418,149 | 206,254 | |||||
Asahi Glass Co., Ltd. | 14,120,000 | 199,142 | |||||
Singapore Airlines Ltd. | 17,788,000 | 194,699 | |||||
Scania AB, Class B | 2,349,700 | 184,618 | |||||
Scania AB, Class A | 112,445 | 9,044 | |||||
Kubota Corp. | 20,032,000 | 175,917 | |||||
Suzlon Energy Ltd. | 7,499,100 | 174,254 | |||||
Keppel Corp. Ltd. | 10,250,000 | 128,412 | |||||
Mitsubishi Corp. | 4,700,000 | 109,279 | |||||
Macquarie Infrastructure Group | 32,329,427 | 100,582 | |||||
Wienerberger AG | 1,568,500 | 98,061 | |||||
Mitsubishi Heavy Industries, Ltd. | 13,852,000 | 89,732 | |||||
Far Eastern Textile Ltd. | 101,204,136 | 87,179 | |||||
Capita Group PLC | 5,060,000 | 67,992 | |||||
Bidvest Group Ltd. | 3,545,000 | 67,324 | |||||
Metso Oyj | 1,250,000 | 66,113 | |||||
Orkla AS | 910,000 | 64,317 | |||||
Geberit AG | 39,900 | 61,542 | |||||
Hays PLC | 16,390,000 | 50,581 | |||||
FANUC LTD | 530,000 | 49,427 | |||||
Imperial Holdings Ltd. | 2,231,900 | 46,536 | |||||
5,183,781 | |||||||
UTILITIES — 2.24% | |||||||
Veolia Environnement | 8,412,228 | 626,157 | |||||
E.ON AG | 3,735,000 | 508,372 | |||||
SUEZ SA | 6,842,000 | 361,235 | |||||
RWE AG | 2,115,000 | 223,980 | |||||
Hong Kong and China Gas Co. Ltd. | 81,625,000 | 182,406 | |||||
Electricité de France SA | 2,018,000 | 169,368 | |||||
NTPC Ltd. | 44,270,154 | 154,329 | |||||
National Grid PLC | 7,071,122 | 111,025 | |||||
2,336,872 | |||||||
MISCELLANEOUS — 3.67% | |||||||
Other common stocks in initial period of acquisition | 3,821,318 | ||||||
Total common stocks (cost: $67,479,966,000) | 97,643,051 | ||||||
Warrants — 0.03% | |||||||
FINANCIALS — 0.03% | |||||||
ING Groep NV, warrants, expire 20083 | 1,730,000 | 31,719 | |||||
Total warrants (cost: $46,430,000) | 31,719 | ||||||
Convertible securities — 0.02% | Principal amount | ||||||
FINANCIALS — 0.02% | |||||||
Fairfax Financial Holdings Ltd. 5.00% convertible debentures 20232 | $ | 20,000,000 | 21,375 | ||||
Total convertible securities (cost: $20,352,000) | 21,375 | ||||||
Short-term securities — 5.68% | Principal amount (000 | ) | |||||
BASF AG 5.23%-5.25% due 4/4-5/23/20072 | $ | 354,600 | 353,738 | ||||
Stadshypotek Delaware Inc. 5.23%-5.24% due 4/23-6/7/20072 | 279,000 | 277,040 | |||||
Svenska Handelsbanken Inc. 5.23% due 4/10/2007 | 75,000 | 74,894 | |||||
Depfa Bank PLC 5.225%-5.24% due 4/12-6/15/20072 | 353,100 | 350,994 | |||||
Barclays U.S. Funding Corp. 5.205%-5.25% due 4/9-6/25/2007 | 223,400 | 221,782 | |||||
Sheffield Receivables Corp. 5.25%-5.26% due 4/12-5/16/20072 | 91,000 | 90,636 | |||||
Federal Home Loan Bank 5.135%-5.14% due 4/4-4/25/2007 | 227,500 | 226,961 | |||||
Federal Home Loan Bank 5.115% due 5/9/20075 | 75,000 | 74,564 | |||||
Freddie Mac 5.14% due 6/4-6/18/2007 | 298,700 | 295,553 | |||||
HBOS Treasury Services PLC 5.235%-5.24% due 4/17-6/14/2007 | 265,400 | 263,811 | |||||
Thunder Bay Funding, LLC 5.23%-5.26% due 4/13-6/20/20072 | 145,390 | 144,592 | |||||
Old Line Funding, LLC 5.25%-5.26% due 4/16-5/4/20072 | 118,664 | 118,229 | |||||
Dexia Delaware LLC 5.23%-5.235% due 4/3-5/29/2007 | 240,200 | 238,937 | |||||
Amsterdam Funding Corp. 5.23%-5.26% due 4/2-5/17/20072 | 221,200 | 220,557 | |||||
Liberty Street Funding Corp. 5.24%-5.26% due 4/13-5/25/20072 | 212,900 | 212,224 | |||||
Danske Corp. 5.215%-5.24% due 4/2-5/14/20072 | 211,500 | 211,036 | |||||
UBS Finance (Delaware) LLC 5.225%-5.24% due 4/3-6/12/2007 | 209,900 | 208,586 | |||||
Toyota Motor Credit Corp. 5.22%-5.23% due 4/3-6/6/2007 | 200,000 | 199,362 | |||||
ING (U.S.) Funding LLC 5.225%-5.25% due 4/2-6/25/2007 | 168,600 | 167,605 | |||||
Allied Irish Banks N.A. Inc. 5.21%-5.23% due 4/5-5/14/20072 | 163,400 | 162,723 | |||||
Swedbank Mortgage AB 5.23%-5.235% due 4/11-6/21/2007 | 91,900 | 91,273 | |||||
Swedbank Mortgage AB 5.22%-5.235% due 5/4-5/14/20075 | 70,000 | 69,621 | |||||
Bank of Ireland 5.225%-5.24% due 4/25-5/31/20072 | 160,900 | 160,104 | |||||
Australia & New Zealand Banking Group, Ltd. 5.22%-5.235% due 5/7-6/25/20072 | 148,920 | 147,442 | |||||
Fannie Mae 5.145%-5.165% due 5/23/20075 | 104,200 | 103,410 | |||||
Fannie Mae 5.14% due 6/13/2007 | 37,229 | 36,829 | |||||
HSBC USA Inc. 5.22%-5.235% due 4/23-6/25/2007 | 125,000 | 124,139 | |||||
Calyon North America Inc. 5.22%-5.23% due 4/10-5/21/2007 | 116,200 | 115,647 | |||||
Bank of America Corp. 5.22%-5.24% due 4/9-6/29/2007 | 110,000 | 109,281 | |||||
Total Capital SA 5.21% due 5/21/20072 | 100,000 | 99,271 | |||||
Credit Suisse New York Branch 5.23%-5.25% due 4/9-5/9/2007 | 96,200 | 95,876 | |||||
Société Générale North America, Inc. 5.23%-5.24% due 4/12-5/10/2007 | 95,812 | 95,465 | |||||
Electricité de France 5.22%-5.235% due 5/9/2007 | 75,000 | 74,592 | |||||
American Honda Finance Corp. 5.21%-5.23% due 5/2-5/8/2007 | 74,600 | 74,249 | |||||
CAFCO, LLC 5.25%-5.26% due 5/15-5/24/20072 | 63,700 | 63,228 | |||||
DaimlerChrysler Revolving Auto Conduit LLC 5.24% due 5/4/2007 | 52,334 | 52,086 | |||||
Swedish Export Credit Corp. 5.23% due 4/24/2007 | 50,000 | 49,829 | |||||
Canadian Imperial Holdings Inc. 5.24% due 4/19/2007 | 48,300 | 48,176 | |||||
Westpac Banking Corp. 5.24% due 4/12/20072 | 47,725 | 47,647 | |||||
BMW U.S. Capital LLC 5.205% due 5/22/20072 | 43,000 | 42,678 | |||||
Export Development Canada 5.20% due 6/5/2007 | 28,545 | 28,280 | |||||
Bank of Montreal 5.225% due 4/30/2007 | 25,000 | 24,893 | |||||
BNP Paribas Finance Inc. 5.23% due 5/3/2007 | 25,000 | 24,886 | |||||
CBA (Delaware) Finance Inc. 5.24% due 5/29/2007 | 25,000 | 24,789 | |||||
Total short-term securities (cost: $5,916,973,000) | 5,917,515 | ||||||
Total investment securities (cost: $73,463,721,000) | 103,613,660 | ||||||
Other assets less liabilities | 562,553 | ||||||
Net assets | $ | 104,176,213 |
“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
1Represents an affiliated company as defined under the Investment Company Act of 1940.
2Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total
value of all such restricted securities was $2,753,128,000, which represented 2.64% of the net assets of the fund.
3Security did not produce income during the last 12 months.
4Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in "Miscellaneous,"
was $635,374,000.
5This security, or a portion of this security, has been segregated to cover funding requirements on investment transactions settling in the future.
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from a financial adviser and should be read carefully before investing.
MFGEFP-916-0507-S6888
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO
To the Shareholders and Board of Trustees of
EuroPacific Growth Fund
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of EuroPacific Growth Fund, (the “Fund”) as of March 31, 2007, and for the year then ended and have issued our report thereon dated May 9, 2007, 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 March 31, 2007, 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
May 9, 2007
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 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 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 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, as amended, 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.
EUROPACIFIC GROWTH FUND | |
By /s/ Gina H. Despres | |
Gina H. Despres, Vice Chairman and Principal Executive Officer | |
Date: June 8, 2007 |
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/ Gina H. Despres |
Gina H. Despres, Vice Chairman and Principal Executive Officer |
Date: June 8, 2007 |
By /s/ R. Marcia Gould |
R. Marcia Gould, Treasurer and Principal Financial Officer |
Date: June 8, 2007 |