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: September 30, 2008
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
K&L Gates LLP
Four Embarcadero Center, Suite 1200
San Francisco, California 94111
(Counsel for the Registrant)
ITEM 1 – Reports to Stockholders
[logo - American Funds®]
The right choice for the long term®
EuroPacific Growth Fund
[photo – hands holding a primitive vase]
Semi-annual report for the six months ended September 30, 2008
EuroPacific Growth Fund® seeks long-term capital appreciation by investing primarily in the securities of companies based in Europe and the Pacific Basin. More than 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 31 American Funds. American Funds is one of the nation’s largest mutual fund families. For more than 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.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended September 30, 2008:
Class A shares | | 1 year | | | 5 years | | | 10 years | |
| | | | | | | | | |
Reflecting 5.75% maximum sales charge | | | –29.67 | % | | | 10.74 | % | | | 8.39 | % |
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 the waiver 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 22 to 25 for details.
Results for other share classes can be found on page 28.
Investing outside the United States may be subject to additional risks, such as currency fluctuations and political instability, which are detailed in the fund’s prospectus.
Fellow shareholders:
[photo – hands holding a primitive vase]
The last day of EuroPacific Growth Fund’s current reporting period, September 30, 2008, came amid one of the most turbulent periods in market history. The fund recorded a total return of –20.0% for the six months, as markets around the world grappled with a deepening financial shock.
EuroPacific’s return, while negative, was better than the –22.5% return of the unmanaged MSCI ACWI (All Country World Index) ex USA, which measures 47 country indexes in developed and developing countries. The fund’s return was also better than the Lipper International Funds Average, which saw a –22.2% return over the same period.
We want to take a moment to reiterate our focus on fundamental company research and long-term investing. Even during periods of shocking market gyrations such as today, we do not change our basic approach. Well-researched stock selection is always our top priority, in any market environment. However, in recent weeks, markets have traded on fear and panic, not on fundamentals. In this period, most companies — both those with strong balance sheets and those with weak ones — saw their stocks drop in the global panic. However, we continue to invest in companies outside the United States that we believe are most likely to negotiate periods of uncertainty and thrive in the years to come.
[Begin Sidebar]
Results at a glance | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
For periods ended September 30, 2008, with all distributions reinvested | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Total returns | | | Average annual total returns | |
| | | | | | | | | | | | | | Lifetime | |
| | 6 months | | | 1 year | | | 5 years | | | 10 years | | | (since 4/16/84) | |
| | | | | | | | | | | | | | | |
EuroPacific Growth Fund | | | | | | | | | | | | | | | |
(Class A shares) | | | –20.0 | % | | | –25.4 | % | | | 12.1 | % | | | 9.0 | % | | | 12.4 | % |
| | | | | | | | | | | | | | | | | | | | |
MSCI ACWI (All Country World | | | | | | | | | | | | | | | | | | | | |
Index) ex USA1,2 | | | –22.5 | | | | –30.0 | | | | 11.8 | | | | 6.8 | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Lipper International Funds | | | | | | | | | | | | | | | | | | | | |
Average3 | | | –22.2 | | | | –30.5 | | | | 9.4 | | | | 6.1 | | | | 9.9 | |
| | | | | | | | | | | | | | | | | | | | |
MSCI EAFE (Europe, | | | | | | | | | | | | | | | | | | | | |
Australasia, Far East) Index1 | | | –22.0 | | | | –30.1 | | | | 10.2 | | | | 5.4 | | | | 9.9 | |
| | | | | | | | | | | | | | | | | | | | |
1 Indexes are unmanaged. | | | | | | | | | | | | | | | | | | | | |
2 The index did not exist prior to December 31, 1987. | | | | | | | | | | | | | | | | | | | | |
3 Source: Lipper. Lipper averages do not reflect the effect of sales charges. | | | | | | | | | | | | | | | | | |
[End Sidebar]
The events that challenged global markets in the period included the rescue of Fannie Mae and Freddie Mac by U.S. regulators, the bankruptcy of Lehman Brothers, Bank of America’s purchase of Merrill Lynch and the government takeover of insurance giant AIG. The crisis spread from one region to the next, freezing interbank lending and crippling world markets for credit and credit insurance. Asian and European stock markets suffered steep losses in the period. Russia suspended share-trading for a few days and propped up its three largest banks with an infusion of $44 billion. The U.S. government took aggressive action, approving a new banking law that gives the Treasury power to purchase bank assets up to $700 billion, with the goal of increasing the liquidity of the financial system. Central banks around the world are working to unlock the credit markets and, perhaps more importantly, to renew confidence. Shortly after the close of the fund’s fiscal period, the U.S. Federal Reserve, European Central Bank, Bank of England, Bank of Canada and other central banks worldwide announced coordinated cuts in target interest rates, in a dramatic action to help stem the global financial disturbance.
Declining global markets
Among the fund’s top 10 equity holdings, only two stocks posted gains: pharmaceutical company Novartis (2.1%) and business software provider SAP (8.0%). In fact, only 14 stocks out of the fund’s more than 300 equity holdings saw positive returns for the six months. Those included China-based Internet company Tencent Holdings (26.6%), power producer British Energy Group (4.7%) and oil producer Canadian Natural Resources (0.5%).
In a market that punished most stocks regardless of quality, the fund’s holdings in financials (15.0% of total fund assets), energy (8.1%) and utilities (3.9%) hurt the return for the period. Telecommunications (10.4% of total fund assets), consumer staples (7.8%) and information technology (7.5%) holdings held up slightly better than the broad market during the six months. In general, companies in France, Germany and Japan* were slightly more resilient to the decline than international stocks as a whole. Meanwhile, those in India, Russia and Korea were among the hardest hit in the period. See the table on page 3 for full details of where the fund’s assets were invested.
EuroPacific Growth Fund continued to be more heavily invested in European stocks than Asian stocks. Holdings in Japan and the United Kingdom remained at relatively low levels, while holdings in continental Europe increased during the period. The fund’s holdings in developing-market stocks remained a consistently meaningful percentage of fund assets throughout the six months.
*Country returns are based on MSCI indexes, expressed in U.S. dollars, and assume reinvestment of dividends, unless otherwise noted.
[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 | | | | | | | | | |
| | | | | | | | | |
| | | | | MSCI ACWI ex USA Index2 | |
| | (9/30/08) | | | (3/31/08) | | | (9/30/08) | |
Europe | | | | | | | | | |
| | | | | | | | | |
Euro zone3 | | | 33.1 | % | | | 32.3 | % | | | 25.7 | % |
Switzerland | | | 7.7 | | | | 6.8 | | | | 5.8 | |
United Kingdom | | | 7.2 | | | | 7.0 | | | | 16.0 | |
Russia | | | 2.7 | | | | 2.7 | | | | 1.6 | |
Denmark | | | 1.7 | | | | 2.1 | | | | .7 | |
Sweden | | | 1.7 | | | | 1.7 | | | | 1.6 | |
Norway | | | .8 | | | | 1.1 | | | | .6 | |
Turkey | | | .3 | | | | — | | | | .3 | |
Hungary | | | .2 | | | | — | | | | .2 | |
Other Europe | | | .2 | | | | .6 | | | | .5 | |
| | | 55.6 | | | | 54.3 | | | | 53.0 | |
| | | | | | | | | | | | |
Pacific Basin | | | | | | | | | | | | |
| | | | | | | | | | | | |
Japan | | | 7.5 | | | | 7.8 | | | | 16.4 | |
Mexico | | | 3.2 | | | | 2.5 | | | | 1.0 | |
South Korea | | | 2.8 | | | | 4.4 | | | | 2.5 | |
Canada | | | 2.7 | | | | 2.1 | | | | 7.4 | |
Taiwan | | | 2.6 | | | | 3.7 | | | | 1.9 | |
Australia | | | 2.0 | | | | 1.7 | | | | 4.7 | |
China | | | 1.8 | | | | 1.0 | | | | 2.7 | |
Hong Kong | | | 1.3 | | | | 1.1 | | | | 1.5 | |
Singapore | | | 1.0 | | | | 1.0 | | | | .9 | |
Philippines | | | .3 | | | | .3 | | | | .1 | |
Other Pacific Basin | | | .7 | | | | .9 | | | | 1.1 | |
| | | 25.9 | | | | 26.5 | | | | 40.2 | |
Other | | | | | | | | | | | | |
| | | | | | | | | | | | |
Brazil | | | 2.9 | | | | 3.3 | | | | 2.8 | |
India | | | 2.0 | | | | 2.9 | | | | 1.3 | |
South Africa | | | 1.4 | | | | 1.4 | | | | 1.4 | |
Israel | | | .9 | | | | — | | | | .5 | |
Other countries | | | .1 | | | | .8 | | | | .8 | |
| | | 7.3 | | | | 8.4 | | | | 6.8 | |
| | | | | | | | | | | | |
Short-term securities & other assets less liabilities | | | 11.2 | | | | 10.8 | | | | — | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
| | | | | | | | | | | | |
1 A country is considered part of the Pacific Basin if any of its borders touches the Pacific Ocean. | | | | | | | | | | |
2 Weighted by market capitalization. | | | | | | | | | | | | |
3 Countries using the common currency, the euro, are: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain. | |
[End Sidebar]
Looking ahead
Although the immediate economic outlook is murky, we believe that stock valuations are at very attractive levels and corporate balance sheets in aggregate are strong. With the overall decline in global markets, many public companies appear to be selling well below the value of their assets. For example, the yield on the European stock market (excluding financials) is currently greater than that offered by government bonds, a situation not seen before. In Japan, corporate balance sheets in general are in a very strong position. Indeed, many large Japanese blue-chip companies have considerable net cash reserves — in some cases equivalent to 50% of their market capitalization. Examples such as these lead us to believe that the upcoming period could be a productive one for long-term investment. Although we see this as evidence of light through the clouds, we continue to position the fund conservatively to protect against risks.
We are carefully monitoring companies as the world economy faces several crises. There are many indications that a U.S. recession could spill out into the rest of the world, and it is likely that U.S. problems could impact the economies and companies of other countries. On the whole, inflation has become less of a concern, and although commodity prices are volatile, they have been lower. It will take time for the global markets to respond to the crisis and sort through the changes in the financial systems. Industry consolidation that might have taken as much as a decade under more benign circumstances was compressed into weeks, and most business models that relied on short-term funding have been thwarted from growing. The crisis of confidence has spread to other industries, and indeed, entire economies are feeling the impact of what began last year in the mortgage industry.
We expect the road to recovery will not be without rough patches. However, we believe that over time, well-diversified portfolios managed by prudent organizations can provide long-term strength and stability. We have the courage to stay focused, not solely on the markets, but on the research process that has been the backbone of our shareholders’ success for decades. We thank you for your own courage amid troubled times and for your conviction in the long-term benefits of our investment philosophy.
Sincerely,
/s/ Gina H. Despres
Gina H. Despres
Vice Chairman of the Board
/s/ Mark Denning
Mark Denning
President
November 7, 2008
For current information about the fund, visit americanfunds.com.
Summary investment portfolio, September 30, 2008
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 | | | 15.03 | % |
Health care | | | 11.86 | |
Telecommunication services | | | 10.42 | |
Consumer discretionary | | | 8.19 | |
Energy | | | 8.11 | |
Other industries | | | 35.10 | |
Preferred stocks | | | 0.04 | |
Bonds & notes | | | 0.06 | |
Short-term securities & other assets less liabilities | | | 11.19 | |
[end pie chart]
Country diversification (percent of net assets) | | | |
Euro zone * | | | 33.1 | |
Switzerland | | | 7.7 | |
Japan | | | 7.5 | |
United Kingdom | | | 7.2 | |
Mexico | | | 3.2 | |
Brazil | | | 2.9 | |
South Korea | | | 2.8 | |
Canada | | | 2.7 | |
Russia | | | 2.7 | |
Taiwan | | | 2.6 | |
Other countries | | | 16.4 | |
Short-term securities & other assets less liabilities | | | 11.2 | |
| | | | |
* Countries using the euro as a common currency; those represented in the portfolio are Austria, Belguim, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. | |
Common stocks - 88.71% | | Shares | | | Value (000) | | | Percent of net assets | |
| | | | | | | | | |
Financials - 15.03% | | | | | | | | | |
Banco Santander, SA (1) | | | 105,483,105 | | | $ | 1,595,623 | | | | 1.74 | % |
AXA SA (1) | | | 40,208,514 | | | | 1,317,217 | | | | 1.44 | |
BNP Paribas SA (1) | | | 7,028,320 | | | | 675,176 | | | | .74 | |
HSBC Holdings PLC (United Kingdom) (1) | | | 19,281,258 | | | | 312,441 | | | | | |
HSBC Holdings PLC (Hong Kong) (1) | | | 15,390,930 | | | | 242,966 | | | | .61 | |
Erste Bank der oesterreichischen Sparkassen AG (1) | | | 9,909,591 | | | | 499,092 | | | | .55 | |
Other securities | | | | | | | 9,111,155 | | | | 9.95 | |
| | | | | | | 13,753,670 | | | | 15.03 | |
| | | | | | | | | | | | |
Health care - 11.86% | | | | | | | | | | | | |
Roche Holding AG (1) | | | 17,677,550 | | | | 2,759,381 | | | | 3.01 | |
Bayer AG, non-registered shares (1) | | | 37,222,650 | | | | 2,715,058 | | | | 2.97 | |
Novo Nordisk A/S, Class B (1) | | | 26,822,967 | | | | 1,373,383 | | | | 1.50 | |
Novartis AG (1) | | | 25,706,320 | | | | 1,346,375 | | | | 1.47 | |
Teva Pharmaceutical Industries Ltd. (ADR) | | | 18,398,100 | | | | 842,449 | | | | .92 | |
Other securities | | | | | | | 1,821,914 | | | | 1.99 | |
| | | | | | | 10,858,560 | | | | 11.86 | |
| | | | | | | | | | | | |
Telecommunication services - 10.42% | | | | | | | | | | | | |
América Móvil, SAB de CV, Series L (ADR) | | | 36,228,700 | | | | 1,679,563 | | | | | |
América Móvil, SAB de CV, Series L | | | 28,940,000 | | | | 66,199 | | | | 1.91 | |
Vodafone Group PLC (1) | | | 504,824,931 | | | | 1,115,917 | | | | 1.22 | |
Koninklijke KPN NV (1) | | | 58,996,900 | | | | 849,742 | | | | .93 | |
MTN Group Ltd. (1) | | | 58,609,000 | | | | 830,934 | | | | .91 | |
Bharti Airtel Ltd. (1) (2) | | | 27,832,491 | | | | 473,374 | | | | .52 | |
Singapore Telecommunications Ltd. (1) | | | 206,403,075 | | | | 472,869 | | | | .52 | |
Other securities | | | | | | | 4,045,855 | | | | 4.41 | |
| | | | | | | 9,534,453 | | | | 10.42 | |
| | | | | | | | | | | | |
Consumer discretionary - 8.19% | | | | | | | | | | | | |
Honda Motor Co., Ltd. (1) | | | 29,766,250 | | | | 884,943 | | | | .97 | |
Industria de Diseno Textil, SA (1) | | | 20,373,120 | | | | 868,487 | | | | .95 | |
Toyota Motor Corp. (1) | | | 13,086,700 | | | | 556,173 | | | | .61 | |
Daimler AG (1) | | | 9,813,778 | | | | 495,636 | | | | | |
Daimler AG (New York registered) | | | 250,000 | | | | 12,625 | | | | .55 | |
Renault SA (1) | | | 6,545,765 | | | | 422,671 | | | | .46 | |
Other securities | | | | | | | 4,256,638 | | | | 4.65 | |
| | | | | | | 7,497,173 | | | | 8.19 | |
| | | | | | | | | | | | |
Energy - 8.11% | | | | | | | | | | | | |
OAO Gazprom (ADR) (1) | | | 48,215,000 | | | | 1,549,421 | | | | 1.69 | |
Petróleo Brasileiro SA - Petrobras, ordinary nominative (ADR) | | | 23,366,340 | | | | 1,026,951 | | | | | |
Petróleo Brasileiro SA - Petrobras, preferred nominative (ADR) | | | 715,860 | | | | 26,788 | | | | 1.15 | |
TOTAL SA (1) | | | 9,798,984 | | | | 590,761 | | | | .65 | |
Canadian Natural Resources, Ltd. | | | 8,461,300 | | | | 581,670 | | | | .64 | |
Royal Dutch Shell PLC, Class B (1) | | | 15,457,435 | | | | 438,778 | | | | | |
Royal Dutch Shell PLC, Class B (ADR) | | | 1,586,078 | | | | 90,549 | | | | .58 | |
OAO LUKOIL (ADR) (1) | | | 8,361,100 | | | | 503,355 | | | | .55 | |
Other securities | | | | | | | 2,616,670 | | | | 2.85 | |
| | | | | | | 7,424,943 | | | | 8.11 | |
| | | | | | | | | | | | |
Industrials - 8.06% | | | | | | | | | | | | |
Schneider Electric SA (1) | | | 10,178,907 | | | | 882,303 | | | | .96 | |
Siemens AG (1) | | | 8,583,500 | | | | 805,027 | | | | .88 | |
Vallourec SA (1) | | | 2,566,470 | | | | 557,799 | | | | .61 | |
Sandvik AB (1) | | | 51,629,000 | | | | 546,784 | | | | .60 | |
Ryanair Holdings PLC (ADR) (2) (3) | | | 19,373,900 | | | | 434,557 | | | | .47 | |
Other securities | | | | | | | 4,148,208 | | | | 4.54 | |
| | | | | | | 7,374,678 | | | | 8.06 | |
| | | | | | | | | | | | |
Consumer staples - 7.75% | | | | | | | | | | | | |
Nestlé SA (1) | | | 30,247,000 | | | | 1,309,993 | | | | 1.43 | |
Groupe Danone SA (1) | | | 10,816,664 | | | | 765,920 | | | | .84 | |
L'Oréal SA (1) | | | 7,377,259 | | | | 727,979 | | | | .79 | |
Tesco PLC (1) | | | 103,953,061 | | | | 723,364 | | | | .79 | |
InBev (1) | | | 7,942,048 | | | | 468,493 | | | | .51 | |
Diageo PLC (1) | | | 25,156,500 | | | | 426,101 | | | | .47 | |
Other securities | | | | | | | 2,672,680 | | | | 2.92 | |
| | | | | | | 7,094,530 | | | | 7.75 | |
| | | | | | | | | | | | |
Information technology - 7.52% | | | | | | | | | | | | |
SAP AG (1) | | | 17,130,000 | | | | 919,193 | | | | | |
SAP AG (ADR) | | | 4,537,500 | | | | 242,439 | | | | 1.27 | |
Taiwan Semiconductor Manufacturing Co. Ltd. (1) | | | 389,588,260 | | | | 639,079 | | | | | |
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | | | 10,215,964 | | | | 95,724 | | | | .80 | |
Samsung Electronics Co., Ltd. (1) | | | 1,359,600 | | | | 626,398 | | | | .69 | |
HTC Corp. (1) (3) | | | 38,373,100 | | | | 547,720 | | | | .60 | |
Nokia Corp. (1) | | | 19,611,000 | | | | 365,342 | | | | | |
Nokia Corp. (ADR) | | | 7,468,900 | | | | 139,295 | | | | .55 | |
Other securities | | | | | | | 3,305,300 | | | | 3.61 | |
| | | | | | | 6,880,490 | | | | 7.52 | |
| | | | | | | | | | | | |
Materials - 6.25% | | | | | | | | | | | | |
Linde AG (1) | | | 5,896,900 | | | | 631,940 | | | | .69 | |
POSCO (1) | | | 1,527,000 | | | | 564,737 | | | | .62 | |
Other securities | | | | | | | 4,524,183 | | | | 4.94 | |
| | | | | | | 5,720,860 | | | | 6.25 | |
| | | | | | | | | | | | |
Utilities - 3.88% | | | | | | | | | | | | |
GDF Suez (1) | | | 14,046,617 | | | | 734,475 | | | | .80 | |
E.ON AG (1) | | | 13,908,000 | | | | 703,846 | | | | .77 | |
British Energy Group PLC (1) | | | 37,702,454 | | | | 511,125 | | | | .56 | |
Other securities | | | | | | | 1,603,394 | | | | 1.75 | |
| | | | | | | 3,552,840 | | | | 3.88 | |
| | | | | | | | | | | | |
Miscellaneous - 1.64% | | | | | | | | | | | | |
Other common stocks in initial period of acquisition | | | | | | | 1,497,222 | | | | 1.64 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total common stocks (cost: $80,504,606,000) | | | | | | | 81,189,419 | | | | 88.71 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Preferred stocks - 0.04% | | | | | | | | | | | | |
| | | | | | | | | | | | |
Financials - 0.04% | | | | | | | | | | | | |
Other securities | | | | | | | 36,640 | | | | .04 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total preferred stocks (cost: $50,001,000) | | | | | | | 36,640 | | | | .04 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Rights - 0.00% | | | | | | | | | | | | |
| | | | | | | | | | | | |
Miscellaneous - 0.00% | | | | | | | | | | | | |
Other rights in initial period of acquisition | | | | | | | 1,968 | | | | .00 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total rights (cost: $0) | | | | | | | 1,968 | | | | .00 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Bonds & notes - 0.06% | | | | | | | | | | | | |
| | | | | | | | | | | | |
Other - 0.06% | | | | | | | | | | | | |
Other securities | | | | | | | 50,442 | | | | .06 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total bonds & notes (cost: $55,955,000) | | | | | | | 50,442 | | | | .06 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Short-term securities - 11.22% | | Principal amount (000) | | | | | | | | | |
| | | | | | | | | | | | |
U.S. Treasury Bills 1.49%-1.925% due 10/2/2008-2/26/2009 | | $ | 1,460,700 | | | | 1,457,990 | | | | 1.59 | |
Federal Home Loan Bank 2.04%-3.31% due 10/3/2008-3/10/2009 | | | 1,439,641 | | | | 1,435,694 | | | | 1.57 | |
Freddie Mac 2.06%-2.70% due 10/20-12/15/2008 | | | 1,296,295 | | | | 1,293,085 | | | | 1.41 | |
Fannie Mae 2.07%-2.70% due 10/1-12/22/2008 | | | 987,574 | | | | 985,673 | | | | 1.08 | |
American Honda Finance Corp. 2.20%-2.23% due 10/16-11/19/2008 | | | 320,746 | | | | 319,863 | | | | .35 | |
Nestlé Capital Corp. 2.01%-2.31% due 10/14/2008-1/21/2009 (4) | | | 236,000 | | | | 234,829 | | | | | |
Alcon Capital Corp. 2.10% due 11/10/2008 (4) | | | 47,700 | | | | 47,558 | | | | .31 | |
Novartis Finance Corp. 2.10%-2.20% due 10/30-11/21/2008 (4) | | | 151,200 | | | | 150,608 | | | | .16 | |
Other securities | | | | | | | 4,351,415 | | | | 4.75 | |
| | | | | | | | | | | | |
Total short-term securities (cost: $10,277,695,000) | | | | | | | 10,276,715 | | | | 11.22 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total investment securities (cost: $90,888,257,000) | | | | | | | 91,555,184 | | | | 100.03 | |
Other assets less liabilities | | | | | | | (27,840 | ) | | | (.03 | ) |
| | | | | | | | | | | | |
Net assets | | | | | | $ | 91,527,344 | | | | 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 value of "Other securities" under their respective industry sectors. Further |
details on these holdings and related transactions during the six months ended September 30, 2008, appear below. |
| Beginning shares | Additions | Reductions | Ending shares | Dividend income (000) | Value of affiliates at 9/30/08 (000) |
| | | | | | |
HTC Corp. (1) | 25,558,000 | 16,643,100 | 3,828,000 | 38,373,100 | $ 27,101 | $ 547,720 |
Ryanair Holdings PLC (ADR) (2) | 19,373,900 | - | - | 19,373,900 | - | 434,557 |
UCB SA (1) | 11,908,290 | - | 179,362 | 11,728,928 | 14,538 | 416,666 |
Nobel Biocare Holding AG (1) | 908,464 | 6,894,842 | - | 7,803,306 | 3,638 | 261,976 |
Hirose Electric Co., Ltd. (1) | 2,547,000 | - | - | 2,547,000 | 1,790 | 243,424 |
Techtronic Industries Co. Ltd. (1) | 86,710,000 | - | - | 86,710,000 | 500 | 79,766 |
Acer Inc. (1) (5) | 136,488,101 | 1,471,428 | 49,102,838 | 88,856,691 | 9,299 | - |
Chuo Mitsui Trust Holdings, Inc. (5) | 64,238,000 | - | 64,238,000 | - | - | - |
Continental AG (5) | 8,280,790 | 698,000 | 8,978,790 | - | 21,978 | - |
Mondi PLC (5) | 19,197,500 | - | 19,197,500 | - | 4,821 | - |
ProSiebenSAT.1 Media AG, nonvoting preferred (1) (5) | 7,110,000 | - | 3,360,000 | 3,750,000 | 11,675 | - |
Public Power Corp. SA (1) (5) | 11,646,727 | - | 451,324 | 11,195,403 | 1,815 | - |
| | | | | $ 97,155 | $ 1,984,109 |
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) 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 $70,693,336,000, which represented 77.24% of the net assets of the fund. | |
(2) Security did not produce income during the last 12 months. | | | | | | | | | | | | |
(3) Represents an affiliated company as defined under the Investment Company Act of 1940. | | | | | | | | | |
(4) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the United States in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $3,083,806,000, which represented 3.37% of the net assets of the fund. | |
(5) Unaffiliated issuer at 9/30/2008. | | | | | | | | | | | | |
| | | | | | | | | | | | |
Key to abbreviation | | | | | | | | | | | | |
ADR = American Depositary Receipts | | | | | | | | | | | | |
| | | | | | | | | | | | |
See Notes to Financial Statements | | | | | | | | | | | | |
Financial statements
Statement of assets and liabilities | | | | | unaudited | |
at September 30, 2008 | | (dollars in thousands) | |
| | | | | | |
Assets: | | | | | | |
Investment securities, at value: | | | | | | |
Unaffiliated issuers (cost: $88,467,012) | | $ | 89,571,075 | | | | |
Affiliated issuers (cost: $2,421,245) | | | 1,984,109 | | | $ | 91,555,184 | |
Cash denominated in currencies other than U.S. dollars | | | | | | | | |
(cost: $26,835) | | | | | | | 26,693 | |
Cash | | | | | | | 10,758 | |
Unrealized gain on forward currency contracts | | | | | | | 28,174 | |
Receivables for: | | | | | | | | |
Sales of investments | | | 347,604 | | | | | |
Sales of fund's shares | | | 177,234 | | | | | |
Dividends and interest | | | 221,017 | | | | 745,855 | |
| | | | | | | 92,366,664 | |
Liabilities: | | | | | | | | |
Payables for: | | | | | | | | |
Purchases of investments | | | 274,819 | | | | | |
Repurchases of fund's shares | | | 493,186 | | | | | |
Investment advisory services | | | 30,817 | | | | | |
Services provided by affiliates | | | 34,052 | | | | | |
Trustees' deferred compensation | | | 3,181 | | | | | |
Other | | | 3,265 | | | | 839,320 | |
Net assets at September 30, 2008 | | | | | | $ | 91,527,344 | |
| | | | | | | | |
Net assets consist of: | | | | | | | | |
Capital paid in on shares of beneficial interest | | | | | | $ | 86,744,547 | |
Undistributed net investment income | | | | | | | 1,652,644 | |
Undistributed net realized gain | | | | | | | 2,443,702 | |
Net unrealized appreciation | | | | | | | 686,451 | |
Net assets at September 30, 2008 | | | | | | $ | 91,527,344 | |
(dollars and shares in thousands, except per-share amounts) | |
Shares of beneficial interest issued and outstanding (no stated par value) - unlimited shares authorized (2,452,735 total shares outstanding) | |
| | Net assets | | | Shares outstanding | | | Net asset value per share* | |
Class A | | $ | 43,624,238 | | | | 1,163,791 | | | $ | 37.48 | |
Class B | | | 1,263,119 | | | | 34,326 | | | | 36.80 | |
Class C | | | 3,142,142 | | | | 86,336 | | | | 36.39 | |
Class F-1 | | | 8,259,417 | | | | 221,357 | | | | 37.31 | |
Class F-2 | | | 446,426 | | | | 11,905 | | | | 37.50 | |
Class 529-A | | | 671,191 | | | | 18,024 | | | | 37.24 | |
Class 529-B | | | 87,489 | | | | 2,401 | | | | 36.43 | |
Class 529-C | | | 264,146 | | | | 7,263 | | | | 36.37 | |
Class 529-E | | | 37,331 | | | | 1,012 | | | | 36.90 | |
Class 529-F-1 | | | 44,034 | | | | 1,181 | | | | 37.28 | |
Class R-1 | | | 181,332 | | | | 5,004 | | | | 36.24 | |
Class R-2 | | | 1,058,455 | | | | 29,102 | | | | 36.37 | |
Class R-3 | | | 5,519,983 | | | | 149,982 | | | | 36.80 | |
Class R-4 | | | 9,490,983 | | | | 256,848 | | | | 36.95 | |
Class R-5 | | | 17,437,058 | | | | 464,203 | | | | 37.56 | |
(*) 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 $39.77 and $39.51, respectively. | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
See Notes to Financial Statements | | | | | | | | | | | | |
Statement of operations | | | | | unaudited | |
for the six months ended September 30, 2008 | | (dollars in thousands) | |
| | | | | | |
Investment income: | | | | | | |
Income: | | | | | | |
Dividends (net of non-U.S. | | | | | | |
taxes of $255,463; also includes | | | | | | |
$97,155 from affiliates) | | $ | 2,019,280 | | | | |
Interest | | | 131,510 | | | $ | 2,150,790 | |
| | | | | | | | |
Fees and expenses*: | | | | | | | | |
Investment advisory services | | | 236,920 | | | | | |
Distribution services | | | 148,473 | | | | | |
Transfer agent services | | | 29,094 | | | | | |
Administrative services | | | 32,877 | | | | | |
Reports to shareholders | | | 2,228 | | | | | |
Registration statement and prospectus | | | 3,373 | | | | | |
Postage, stationery and supplies | | | 2,777 | | | | | |
Trustees' compensation | | | (67 | ) | | | | |
Auditing and legal | | | 57 | | | | | |
Custodian | | | 11,986 | | | | | |
Other | | | 42 | | | | | |
Total fees and expenses before waiver | | | 467,760 | | | | | |
Less investment advisory services waiver | | | 23,692 | | | | | |
Total fees and expenses after waiver | | | | | | | 444,068 | |
Net investment income | | | | | | | 1,706,722 | |
| | | | | | | | |
Net realized loss and unrealized | | | | | | | | |
depreciation on investments | | | | | | | | |
and currency: | | | | | | | | |
Net realized loss on: | | | | | | | | |
Investments (including $276,081 net loss from affiliates) | | | (732,749 | ) | | | | |
Currency transactions | | | (36,238 | ) | | | (768,987 | ) |
Net unrealized (depreciation) appreciation on: | | | | | | | | |
Investments | | | (24,176,551 | ) | | | | |
Currency translations | | | 24,502 | | | | (24,152,049 | ) |
Net realized loss and | | | | | | | | |
unrealized depreciation | | | | | | | | |
on investments and currency | | | | | | | (24,921,036 | ) |
Net decrease in net assets resulting | | | | | | | | |
from operations | | | | | | $ | (23,214,314 | ) |
| | | | | | | | |
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements. |
| | | | | | | | |
See Notes to Financial Statements | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Statements of changes in net assets | | (dollars in thousands) | |
| | | | | | | | |
| | | | | | | | |
| | Six months ended September 30, 2008* | | | Year ended March 31, 2008 |
Operations: | | | | | | | | |
Net investment income | | $ | 1,706,722 | | | $ | 2,093,494 | |
Net realized (loss) gain on investments and | | | | | | | | |
currency transactions | | | (768,987 | ) | | | 9,586,162 | |
Net unrealized depreciation | | | | | | | | |
on investments and currency translations | | | (24,152,049 | ) | | | (5,297,662 | ) |
Net (decrease) increase in net assets | | | | | | | | |
resulting from operations | | | (23,214,314 | ) | | | 6,381,994 | |
| | | | | | | | |
Dividends and distributions paid to | | | | | | | | |
shareholders | | | | | | | | |
Dividends from net investment income | | | - | | | | (2,229,069 | ) |
| | | | | | | | |
Distributions from net realized gain | | | | | | | | |
on investments | | | - | | | | (8,184,379 | ) |
Total dividends and distributions paid | | | | | | | | |
to shareholders | | | - | | | | (10,413,448 | ) |
| | | | | | | | |
Net capital share transactions | | | (33,878 | ) | | | 14,630,777 | |
| | | | | | | | |
Total (decrease) increase in net assets | | | (23,248,192 | ) | | | 10,599,323 | |
| | | | | | | | |
Net assets: | | | | | | | | |
Beginning of period | | | 114,775,536 | | | | 104,176,213 | |
End of period (including | | | | | | | | |
undistributed and distributions in excess of | | | | | | | | |
net investment income: $1,652,644 and $(54,078), respectively) | | $ | 91,527,344 | | | $ | 114,775,536 | |
| | | | | | | | |
*Unaudited. | | | | | | | | |
| | | | | | | | |
See Notes to Financial Statements | | | | | | | | |
Notes to financial statements
unaudited
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 15 share classes consisting of five retail share classes, five 529 college savings plan share classes and five retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are generally offered only through employer-sponsored retirement plans. The fund’s share classes are described below:
Share class | Initial sales charge | Contingent deferred sales charge upon redemption | Conversion feature |
Classes A and 529-A | Up to 5.75% | None (except 1% for certain redemptions within one year of purchase without an initial sales charge) | None |
Classes B and 529-B | None | Declines from 5% to 0% for redemptions within six years of purchase | Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years |
Class C | None | 1% for redemptions within one year of purchase | Class C converts to Class F-1 after 10 years |
Class 529-C | None | 1% for redemptions within one year of purchase | None |
Class 529-E | None | None | None |
Classes F-1, F-2 and 529-F-1 | None | None | None |
Classes R-1, R-2, R-3, R-4 and R-5 | None | None | None |
On August 1, 2008, the fund made an additional retail share class (Class F-2) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”). In addition, Class F shares were renamed Class F-1 and Class 529-F shares were renamed Class 529-F-1. Refer to the fund’s prospectus for more details.
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. 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 securities outside the U.S.) 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.
Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
Forward currency contracts – The fund may enter into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The fund enters into these contracts to manage its exposure to changes in exchange rates arising from investments denominated in currencies other than U.S. dollars. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates. 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. Closed forward currency contracts that have not reached their expiration date are included in the respective receivables for sales or payables for purchases of investment securities in the statement of assets and liabilities.
2. Risk factors
Investing in the fund may involve certain risks including, but not limited to, those described below.
The price of securities held by the fund may decline in response to certain events, including those directly involving the companies whose securities are owned by the fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and commodity price fluctuations. The growth-oriented, equity-type securities generally purchased by the fund may involve large price swings and potential for loss.
Investments in securities issued by entities based outside the United States may also be affected by currency controls; different accounting, auditing, financial reporting, and legal standards and practices in some countries; expropriation; changes in tax policy; greater market volatility; differing securities market structures; higher transaction costs; and various administrative difficulties, such as delay in clearing and settling portfolio transactions or in receiving payment of dividends. These risks may be heightened in connection with investments in developing countries.
3. Taxation and distributions
Federal income taxation - The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
As of and during the period ended September 30, 2008, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2004, by state tax authorities for tax years before 2003 and by tax authorities outside the U.S. for tax years before 2001.
Non-U.S. 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 realized and unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities. For the six months ended September 30, 2008, there were no non-U.S. taxes paid on realized gains. As of September 30, 2008, there were no non-U.S. taxes provided on unrealized gains.
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 currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; and unrealized appreciation of certain investments in securities outside the U.S. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.
The components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of March 31, 2008, the fund had tax basis undistributed ordinary income of $197,144,000, currency loss deferrals (realized during the period November 1, 2007, through March 31, 2008) of $19,047,000 and undistributed long-term capital gains of $3,252,385,000.
As of September 30, 2008, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:
| | (dollars in thousands) | |
Gross unrealized appreciation on investment securities | | $ | 12,446,413 | |
Gross unrealized depreciation on investment securities | | | (12,076,583 | ) |
Net unrealized appreciation on investment securities | | | 369,830 | |
Cost of investment securities | | | 91,185,354 | |
No distributions were paid to shareholders during the six month ended September 30, 2008. The tax character of distributions paid to shareholders during the year ended March 31, 2008, was as follows (dollars in thousands):
Share class | | Ordinary income | | | Long-term capital gains | | | Total distributions paid | |
| | | | | | | | | |
Class A | | $ | 1,167,078 | | | $ | 4,213,545 | | | $ | 5,380,623 | |
Class B | | | 23,244 | | | | 131,749 | | | | 154,993 | |
Class C | | | 52,409 | | | | 299,432 | | | | 351,841 | |
Class F-1 | | | 195,993 | | | | 709,861 | | | | 905,854 | |
Class 529-A | | | 14,493 | | | | 52,632 | | | | 67,125 | |
Class 529-B | | | 1,259 | | | | 7,566 | | | | 8,825 | |
Class 529-C | | | 3,746 | | | | 21,866 | | | | 25,612 | |
Class 529-E | | | 720 | | | | 3,077 | | | | 3,797 | |
Class 529-F-1 | | | 1,021 | | | | 3,411 | | | | 4,432 | |
Class R-1 | | | 2,306 | | | | 12,678 | | | | 14,984 | |
Class R-2 | | | 16,094 | | | | 92,884 | | | | 108,978 | |
Class R-3 | | | 127,609 | | | | 542,968 | | | | 670,577 | |
Class R-4 | | | 205,109 | | | | 753,852 | | | | 958,961 | |
Class R-5 | | | 417,988 | | | | 1,338,858 | | | | 1,756,846 | |
Total | | $ | 2,229,069 | | | $ | 8,184,379 | | | $ | 10,413,448 | |
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® ("AFS"), the fund’s transfer agent, and American Funds Distributors,® 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. These fees are based on a declining series of annual rates beginning with 0.690% on the first $500 million of daily net assets and decreasing to 0.397% on such assets in excess of $115 billion. CRMC is currently waiving 10% of investment advisory services fees. During the six months ended September 30, 2008, total investment advisory services fees waived by CRMC were $23,692,000. As a result, the fee shown on the accompanying financial statements of $236,920,000, which was equivalent to an annualized rate of 0.421%, was reduced to $213,228,000, or 0.379% 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 Classes F-2 and 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 except Classes F-2 and R-5 may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
For Classes A and 529-A, 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 September 30, 2008, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.
Share class | Currently approved limits | Plan limits |
Class A | 0.25% | 0.25% |
Class 529-A | 0.25 | 0.50 |
Classes B and 529-B | 1.00 | 1.00 |
Classes C, 529-C and R-1 | 1.00 | 1.00 |
Class R-2 | 0.75 | 1.00 |
Classes 529-E and R-3 | 0.50 | 0.75 |
Classes F-1, 529-F-1 and R-4 | 0.25 | 0.50 |
Transfer agent services – The fund has a transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC 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 Classes 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. 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 529 college savings 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 six months ended September 30, 2008, 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 | $66,769 | $28,370 | Not applicable | Not applicable | Not applicable |
Class B | 8,246 | 724 | Not applicable | Not applicable | Not applicable |
Class C | 19,814 | Included in administrative services | $2,268 | $282 | Not applicable |
Class F-1 | 12,772 | 6,112 | 461 | Not applicable |
Class F-2† | Not applicable | 66 | 6 | Not applicable |
Class 529-A | 764 | 314 | 42 | $397 |
Class 529-B | 527 | 42 | 14 | 53 |
Class 529-C | 1,577 | 125 | 34 | 158 |
Class 529-E | 112 | 18 | 2 | 22 |
Class 529-F-1 | - | 20 | 2 | 26 |
Class R-1 | 1,076 | 111 | 30 | Not applicable |
Class R-2 | 4,808 | 942 | 1,709 | Not applicable |
Class R-3 | 18,301 | 3,616 | 1,068 | Not applicable |
Class R-4 | 13,707 | 7,877 | 102 | Not applicable |
Class R-5 | Not applicable | 6,903 | 55 | Not applicable |
Total | $148,473 | $29,094 | $28,414 | $3,807 | $656 |
† Class F-2 was offered beginning August 1, 2008.
Trustees’ deferred 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 ($67,000), shown on the accompanying financial statements, includes $178,000 in current fees (either paid in cash or deferred) and a net decrease of $245,000 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. Disclosure of fair value measurements
The fund adopted the Statement of Financial Accounting Standards No. 157 (“FAS 157”), Fair Value Measurements, on April 1, 2008. FAS 157 requires the fund to classify its assets and liabilities based on valuation method using three levels. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are generally high quality and liquid; however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of September 30, 2008 (dollars in thousands):
| | Investment securities | | | Forward currency contracts | |
Level 1 – Quoted prices | | $ | 10,547,728 | | | | |
Level 2 – Other significant observable inputs | | | 80,975,454 | * | | $ | 28,174 | † |
Level 3 – Significant unobservable inputs | | | 32,002 | | | | | |
Total | | $ | 91,555,184 | | | | | |
The following table reconciles the valuation of the fund’s Level 3 investment securities and related transactions during the six months ended September 30, 2008 (dollars in thousands):
Beginning value at 4/1/2008 | | $ | - | |
Net transfers into Level 3 | | | 32,002 | |
Ending value at 9/30/2008 | | $ | 32,002 | |
* Includes certain securities trading primarily outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.
† Net unrealized appreciation on forward currency contracts is not included in the summary investment portfolio.
6. 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 (decrease) increase | |
| | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
Six months ended September 30, 2008 | | | | | | | | | | | | | | | | | | | | | | |
Class A | | $ | 3,335,825 | | | | 73,083 | | | $ | - | | | | - | | | $ | (5,988,703 | ) | | | (136,085 | ) | | $ | (2,652,878 | ) | | | (63,002 | ) |
Class B | | | 83,150 | | | | 1,836 | | | | - | | | | - | | | | (262,154 | ) | | | (5,980 | ) | | | (179,004 | ) | | | (4,144 | ) |
Class C | | | 287,119 | | | | 6,410 | | | | - | | | | - | | | | (413,245 | ) | | | (9,755 | ) | | | (126,126 | ) | | | (3,345 | ) |
Class F-1 | | | 1,904,178 | | | | 41,950 | | | | - | | | | - | | | | (1,809,231 | ) | | | (42,136 | ) | | | 94,947 | | | | (186 | ) |
Class F-2† | | | 509,780 | | | | 12,265 | | | | - | | | | - | | | | (14,048 | ) | | | (360 | ) | | | 495,732 | | | | 11,905 | |
Class 529-A | | | 78,588 | | | | 1,734 | | | | - | | | | - | | | | (29,509 | ) | | | (677 | ) | | | 49,079 | | | | 1,057 | |
Class 529-B | | | 6,597 | | | | 148 | | | | - | | | | - | | | | (3,635 | ) | | | (85 | ) | | | 2,962 | | | | 63 | |
Class 529-C | | | 32,162 | | | | 727 | | | | - | | | | - | | | | (17,132 | ) | | | (401 | ) | | | 15,030 | | | | 326 | |
Class 529-E | | | 3,871 | | | | 86 | | | | - | | | | - | | | | (1,891 | ) | | | (43 | ) | | | 1,980 | | | | 43 | |
Class 529-F-1 | | | 6,505 | | | | 143 | | | | - | | | | - | | | | (2,435 | ) | | | (54 | ) | | | 4,070 | | | | 89 | |
Class R-1 | | | 65,688 | | | | 1,460 | | | | - | | | | - | | | | (27,786 | ) | | | (648 | ) | | | 37,902 | | | | 812 | |
Class R-2 | | | 222,149 | | | | 5,047 | | | | - | | | | - | | | | (188,257 | ) | | | (4,347 | ) | | | 33,892 | | | | 700 | |
Class R-3 | | | 1,271,080 | | | | 28,366 | | | | - | | | | - | | | | (1,932,760 | ) | | | (44,295 | ) | | | (661,680 | ) | | | (15,929 | ) |
Class R-4 | | | 2,412,148 | | | | 54,427 | | | | - | | | | - | | | | (1,532,770 | ) | | | (35,192 | ) | | | 879,378 | | | | 19,235 | |
Class R-5 | | | 4,104,660 | | | | 91,356 | | | | - | | | | - | | | | (2,133,822 | ) | | | (48,230 | ) | | | 1,970,838 | | | | 43,126 | |
Total net increase | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(decrease) | | $ | 14,323,500 | | | | 319,038 | | | $ | - | | | | - | | | $ | (14,357,378 | ) | | | (328,288 | ) | | $ | (33,878 | ) | | | (9,250 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended March 31, 2008 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | $ | 8,974,111 | | | | 175,762 | | | $ | 5,084,576 | | | | 97,312 | | | $ | (12,394,368 | ) | | | (244,286 | ) | | $ | 1,664,319 | | | | 28,788 | |
Class B | | | 228,910 | | | | 4,560 | | | | 148,566 | | | | 2,879 | | | | (251,107 | ) | | | (5,087 | ) | | | 126,369 | | | | 2,352 | |
Class C | | | 865,400 | | | | 17,372 | | | | 336,601 | | | | 6,593 | | | | (586,970 | ) | | | (11,971 | ) | | | 615,031 | | | | 11,994 | |
Class F-1 | | | 3,195,982 | | | | 63,620 | | | | 795,906 | | | | 15,300 | | | | (1,930,614 | ) | | | (38,373 | ) | | | 2,061,274 | | | | 40,547 | |
Class 529-A | | | 199,305 | | | | 3,946 | | | | 67,120 | | | | 1,292 | | | | (44,306 | ) | | | (880 | ) | | | 222,119 | | | | 4,358 | |
Class 529-B | | | 17,676 | | | | 356 | | | | 8,824 | | | | 173 | | | | (5,231 | ) | | | (106 | ) | | | 21,269 | | | | 423 | |
Class 529-C | | | 79,000 | | | | 1,595 | | | | 25,606 | | | | 502 | | | | (22,495 | ) | | | (456 | ) | | | 82,111 | | | | 1,641 | |
Class 529-E | | | 10,012 | | | | 200 | | | | 3,797 | | | | 73 | | | | (3,122 | ) | | | (63 | ) | | | 10,687 | | | | 210 | |
Class 529-F-1 | | | 14,387 | | | | 285 | | | | 4,432 | | | | 85 | | | | (5,218 | ) | | | (103 | ) | | | 13,601 | | | | 267 | |
Class R-1 | | | 95,361 | | | | 1,934 | | | | 14,948 | | | | 294 | | | | (47,160 | ) | | | (951 | ) | | | 63,149 | | | | 1,277 | |
Class R-2 | | | 546,756 | | | | 11,042 | | | | 108,925 | | | | 2,135 | | | | (398,814 | ) | | | (8,108 | ) | | | 256,867 | | | | 5,069 | |
Class R-3 | | | 3,104,305 | | | | 61,709 | | | | 670,402 | | | | 13,038 | | | | (2,757,473 | ) | | | (55,406 | ) | | | 1,017,234 | | | | 19,341 | |
Class R-4 | | | 5,085,720 | | | | 101,445 | | | | 958,504 | | | | 18,601 | | | | (3,262,932 | ) | | | (64,766 | ) | | | 2,781,292 | | | | 55,280 | |
Class R-5 | | | 8,505,982 | | | | 165,682 | | | | 1,736,435 | | | | 33,233 | | | | (4,546,962 | ) | | | (90,558 | ) | | | 5,695,455 | | | | 108,357 | |
Total net increase | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(decrease) | | $ | 30,922,907 | | | | 609,508 | | | $ | 9,964,642 | | | | 191,510 | | | $ | (26,256,772 | ) | | | (521,114 | ) | | $ | 14,630,777 | | | | 279,904 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(*) Includes exchanges between share classes of the fund. | | | | | | | | | | | | | | | | | | | | | |
† Class F-2 was offered beginning August 1, 2008 | | | | | | | | | | | | | | | | | | | | | | | | | |
7. Forward currency contracts
As of September 30, 2008, the fund had open forward currency contract(s) to sell currencies as follows (amounts in thousands):
| | Contract amount | | | U.S. valuation at September 30, 2008 | |
| | | | | | | | | | | | |
| | | | | | | | | | | Unrealized | |
| | Receive | | | Deliver | | | Amount | | | appreciation | |
| | | | | | | | | | | | |
Sales: | | | | | | | | | | | | |
| | | | | | | | | | | | |
British pounds | | | | | | | | | | | | |
expiring 10/31/2008 - 2/13/2009 | | $ | 435,892 | | | £ | 231,797 | | | $ | 412,859 | | | $ | 23,033 | |
| | | | | | | | | | | | | | | | |
Euros | | | | | | | | | | | | | | | | |
expiring 2/11/2009 | | | 70,000 | | | € | 45,963 | | | | 64,859 | | | | 5,141 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Forward currency contracts - net | | | | | | | | | | | | | | $ | 28,174 | |
8. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $20,887,563,000 and $17,386,586,000, respectively, during the six months ended September 30, 2008.
Financial highlights (1)
| | | (Loss) income from investment operations (2) | Dividends and distributions | | | | | | | | | |
| | Net asset value, beginning of period | Net investment income | Net (losses) gains 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: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | $46.83 | $.70 | | $ | (10.05) | | $(9.35) | $ - | $ - | $ - | $37.48 | (19.97)% | $43,624 | .80% | (6) | .76% | (6) | 3.08% | (6) |
Year ended 3/31/2008 | | 47.92 | .95 | | | 2.60 | | 3.55 | (1.01) | (3.63) | (4.64) | 46.83 | 6.40 | 57,445 | .79 | | .74 | | 1.87 | |
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 | |
Class B: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 46.14 | .53 | | | (9.87) | | (9.34) | - | - | - | 36.80 | (20.24) | 1,263 | 1.55 | (6) | 1.50 | (6) | 2.37 | (6) |
Year ended 3/31/2008 | | 47.31 | .56 | | | 2.54 | | 3.10 | (.64) | (3.63) | (4.27) | 46.14 | 5.60 | 1,775 | 1.52 | | 1.48 | | 1.12 | |
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 | |
Class C: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 45.64 | .51 | | | (9.76) | | (9.25) | - | - | - | 36.39 | (20.27) | 3,142 | 1.59 | (6) | 1.54 | (6) | 2.29 | (6) |
Year ended 3/31/2008 | | 46.85 | .53 | | | 2.53 | | 3.06 | (.64) | (3.63) | (4.27) | 45.64 | 5.57 | 4,093 | 1.57 | | 1.53 | | 1.06 | |
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 | |
Class F-1: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 46.62 | .68 | | | (9.99) | | (9.31) | - | - | - | 37.31 | (19.97) | 8,259 | .83 | (6) | .79 | (6) | 3.02 | (6) |
Year ended 3/31/2008 | | 47.73 | .92 | | | 2.60 | | 3.52 | (1.00) | (3.63) | (4.63) | 46.62 | 6.38 | 10,328 | .81 | | .77 | | 1.81 | |
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 | |
Class F-2: | | | | | | | | | | | | | | | | | | | | |
Period from 8/1/2008 to 9/30/2008 | (5) | 43.75 | .10 | | | (6.35) | | (6.25) | - | - | - | 37.50 | (14.29) | 447 | .11 | | .10 | | .24 | |
Class 529-A: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 46.53 | .68 | | | (9.97) | | (9.29) | - | - | - | 37.24 | (19.96) | 671 | .84 | (6) | .80 | (6) | 3.00 | (6) |
Year ended 3/31/2008 | | 47.66 | .90 | | | 2.60 | | 3.50 | (1.00) | (3.63) | (4.63) | 46.53 | 6.34 | 789 | .83 | | .79 | | 1.78 | |
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 | |
Class 529-B: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 45.71 | .49 | | | (9.77) | | (9.28) | - | - | - | 36.43 | (20.30) | 88 | 1.66 | (6) | 1.62 | (6) | 2.19 | (6) |
Year ended 3/31/2008 | | 46.93 | .48 | | | 2.53 | | 3.01 | (.60) | (3.63) | (4.23) | 45.71 | 5.47 | 107 | 1.66 | | 1.61 | | .97 | |
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 | |
Class 529-C: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 45.63 | .48 | | | (9.74) | | (9.26) | - | - | - | 36.37 | (20.30) | 264 | 1.66 | (6) | 1.62 | (6) | 2.19 | (6) |
Year ended 3/31/2008 | | 46.87 | .48 | | | 2.53 | | 3.01 | (.62) | (3.63) | (4.25) | 45.63 | 5.47 | 317 | 1.65 | | 1.61 | | .96 | |
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 | |
Class 529-E: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 46.17 | .60 | | | (9.87) | | (9.27) | - | - | - | 36.90 | (20.08) | 37 | 1.15 | (6) | 1.11 | (6) | 2.70 | (6) |
Year ended 3/31/2008 | | 47.34 | .74 | | | 2.57 | | 3.31 | (.85) | (3.63) | (4.48) | 46.17 | 6.00 | 45 | 1.14 | | 1.10 | | 1.47 | |
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 | |
| | | | | | | | | | | | | | | | | | | | |
Class 529-F-1: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | $46.54 | $.72 | | $ | (9.98) | | $(9.26) | $ - | $ - | $ - | $37.28 | (19.90)% | $44 | .65% | (6) | .61% | (6) | 3.18% | (6) |
Year ended 3/31/2008 | | 47.65 | .99 | | | 2.62 | | 3.61 | (1.09) | (3.63) | (4.72) | 46.54 | 6.55 | 51 | .64 | | .60 | | 1.96 | |
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 | |
Class R-1: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 45.45 | .49 | | | (9.70) | | (9.21) | - | - | - | 36.24 | (20.26) | 181 | 1.59 | (6) | 1.54 | (6) | 2.25 | (6) |
Year ended 3/31/2008 | | 46.71 | .49 | | | 2.54 | | 3.03 | (.66) | (3.63) | (4.29) | 45.45 | 5.52 | 190 | 1.61 | | 1.57 | | .99 | |
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 | |
Class R-2: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 45.62 | .50 | | | (9.75) | | (9.25) | - | - | - | 36.37 | (20.28) | 1,059 | 1.62 | (6) | 1.58 | (6) | 2.24 | (6) |
Year ended 3/31/2008 | | 46.84 | .50 | | | 2.54 | | 3.04 | (.63) | (3.63) | (4.26) | 45.62 | 5.51 | 1,296 | 1.61 | | 1.57 | | 1.01 | |
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 | |
Class R-3: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 46.04 | .63 | | | (9.87) | | (9.24) | - | - | - | 36.80 | (20.07) | 5,520 | 1.08 | (6) | 1.04 | (6) | 2.82 | (6) |
Year ended 3/31/2008 | | 47.20 | .78 | | | 2.54 | | 3.32 | (.85) | (3.63) | (4.48) | 46.04 | 6.05 | 7,639 | 1.11 | | 1.07 | | 1.55 | |
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 | |
Class R-4: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 46.17 | .67 | | | (9.89) | | (9.22) | - | - | - | 36.95 | (19.97) | 9,491 | .85 | (6) | .80 | (6) | 2.99 | (6) |
Year ended 3/31/2008 | | 47.31 | .88 | | | 2.60 | | 3.48 | (.99) | (3.63) | (4.62) | 46.17 | 6.32 | 10,970 | .85 | | .81 | | 1.75 | |
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 | |
Class R-5: | | | | | | | | | | | | | | | | | | | | |
Six months ended 9/30/2008 | (5) | 46.86 | .75 | | | (10.05) | | (9.30) | - | - | - | 37.56 | (19.85) | 17,437 | .53 | (6) | .48 | (6) | 3.30 | (6) |
Year ended 3/31/2008 | | 47.94 | 1.05 | | | 2.63 | | 3.68 | (1.13) | (3.63) | (4.76) | 46.86 | 6.64 | 19,731 | .55 | | .50 | | 2.05 | |
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 | |
| | | | | Year ended March 31 | |
| | Six months ended September 30, 2008(5) | | | 2008 | | | 2007 | | | 2006 | | | 2005 | | | 2004 | |
| | | | | | | | | | | | | | | | | | |
Portfolio turnover rate for all classes of shares | | | 17 | % | | | 38 | % | | | 27 | % | | | 35 | % | | | 30 | % | | | 25 | % |
(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 any applicable sales charges, including contingent deferred sales charges. |
(4) This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes. |
(5) Unaudited. |
(6) Annualized. |
|
See Notes to Financial Statements |
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 (April 1, 2008, through September 30, 2008).
Actual expenses:
The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Notes:
There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would 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 4/1/2008 | | | Ending account value 9/30/2008 | | | Expenses paid during period* | | | Annualized expense ratio | |
| | | | | | | | | | | | |
Class A -- actual return | | $ | 1,000.00 | | | $ | 800.35 | | | $ | 3.43 | | | | .76 | % |
Class A -- assumed 5% return | | | 1,000.00 | | | | 1,021.26 | | | | 3.85 | | | | .76 | |
Class B -- actual return | | | 1,000.00 | | | | 797.57 | | | | 6.76 | | | | 1.50 | |
Class B -- assumed 5% return | | | 1,000.00 | | | | 1,017.55 | | | | 7.59 | | | | 1.50 | |
Class C -- actual return | | | 1,000.00 | | | | 797.34 | | | | 6.94 | | | | 1.54 | |
Class C -- assumed 5% return | | | 1,000.00 | | | | 1,017.35 | | | | 7.79 | | | | 1.54 | |
Class F-1 -- actual return | | | 1,000.00 | | | | 800.30 | | | | 3.57 | | | | .79 | |
Class F-1 -- assumed 5% return | | | 1,000.00 | | | | 1,021.11 | | | | 4.00 | | | | .79 | |
Class F-2 -- actual return † | | | 1,000.00 | | | | 857.14 | | | | .95 | | | | .62 | |
Class F-2 -- assumed 5% return † | | | 1,000.00 | | | | 1,021.96 | | | | 3.14 | | | | .62 | |
Class 529-A -- actual return | | | 1,000.00 | | | | 800.36 | | | | 3.61 | | | | .80 | |
Class 529-A -- assumed 5% return | | | 1,000.00 | | | | 1,021.06 | | | | 4.05 | | | | .80 | |
Class 529-B -- actual return | | | 1,000.00 | | | | 796.98 | | | | 7.30 | | | | 1.62 | |
Class 529-B -- assumed 5% return | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | | | | 1.62 | |
Class 529-C -- actual return | | | 1,000.00 | | | | 797.05 | | | | 7.30 | | | | 1.62 | |
Class 529-C -- assumed 5% return | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | | | | 1.62 | |
Class 529-E -- actual return | | | 1,000.00 | | | | 799.22 | | | | 5.01 | | | | 1.11 | |
Class 529-E -- assumed 5% return | | | 1,000.00 | | | | 1,019.50 | | | | 5.62 | | | | 1.11 | |
Class 529-F-1 -- actual return | | | 1,000.00 | | | | 801.04 | | | | 2.75 | | | | .61 | |
Class 529-F-1 -- assumed 5% return | | | 1,000.00 | | | | 1,022.01 | | | | 3.09 | | | | .61 | |
Class R-1 -- actual return | | | 1,000.00 | | | | 797.35 | | | | 6.94 | | | | 1.54 | |
Class R-1 -- assumed 5% return | | | 1,000.00 | | | | 1,017.35 | | | | 7.79 | | | | 1.54 | |
Class R-2 -- actual return | | | 1,000.00 | | | | 797.23 | | | | 7.12 | | | | 1.58 | |
Class R-2 -- assumed 5% return | | | 1,000.00 | | | | 1,017.15 | | | | 7.99 | | | | 1.58 | |
Class R-3 -- actual return | | | 1,000.00 | | | | 799.30 | | | | 4.69 | | | | 1.04 | |
Class R-3 -- assumed 5% return | | | 1,000.00 | | | | 1,019.85 | | | | 5.27 | | | | 1.04 | |
Class R-4 -- actual return | | | 1,000.00 | | | | 800.30 | | | | 3.61 | | | | .80 | |
Class R-4 -- assumed 5% return | | | 1,000.00 | | | | 1,021.06 | | | | 4.05 | | | | .80 | |
Class R-5 -- actual return | | | 1,000.00 | | | | 801.53 | | | | 2.17 | | | | .48 | |
Class R-5 -- assumed 5% return | | | 1,000.00 | | | | 1,022.66 | | | | 2.43 | | | | .48 | |
*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period).
† The period for the “annualized expense ratio” and “actual return” line is based on the number of days from August 1, 2008 (the initial sale of the share class) through September 30, 2008, and accordingly, is not representative of a full period. The “assumed 5% return” line is based on 183 days.
Other share class results
unaudited
Classes B, C, F and 529
Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
Average annual total returns for periods ended September 30, 2008: | | | | | | | | | |
| | | | | | | | | |
| | 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 | | | –29.33 | % | | | 10.98 | % | | | 2.12 | % |
Not reflecting CDSC | | | –25.91 | | | | 11.24 | | | | 2.12 | |
| | | | | | | | | | | | |
Class C shares — first sold 3/15/01 | | | | | | | | | | | | |
Reflecting CDSC, maximum of 1%, payable only if | | | | | | | | | | | | |
shares are sold within one year of purchase | | | –26.63 | | | | 11.15 | | | | 6.28 | |
Not reflecting CDSC | | | –25.95 | | | | 11.15 | | | | 6.28 | |
| | | | | | | | | | | | |
Class F-1 shares1 — first sold 3/15/01 | | | | | | | | | | | | |
Not reflecting annual asset-based fee charged by | | | | | | | | | | | | |
sponsoring firm | | | –25.38 | | | | 12.02 | | | | 7.13 | |
| | | | | | | | | | | | |
Class F-2 shares1 — first sold 8/1/08 | | | | | | | | | | | | |
Not reflecting annual asset-based fee charged by | | | | | | | | | | | | |
sponsoring firm | | | — | | | | — | | | | –14.29 | 2 |
| | | | | | | | | | | | |
Class 529-A shares3 — first sold 2/15/02 | | | | | | | | | | | | |
Reflecting 5.75% maximum sales charge | | | –29.68 | | | | 10.69 | | | | 8.58 | |
Not reflecting maximum sales charge | | | –25.38 | | | | 12.01 | | | | 9.56 | |
| | | | | | | | | | | | |
Class 529-B shares3 — first sold 2/19/02 | | | | | | | | | | | | |
Reflecting applicable CDSC, maximum of 5%, | | | | | | | | | | | | |
payable only if shares are sold within six years | | | | | | | | | | | | |
of purchase | | | –29.42 | | | | 10.78 | | | | 8.93 | |
Not reflecting CDSC | | | –26.00 | | | | 11.05 | | | | 8.93 | |
| | | | | | | | | | | | |
Class 529-C shares3 — first sold 2/15/02 | | | | | | | | | | | | |
Reflecting CDSC, maximum of 1%, payable only if | | | | | | | | | | | | |
shares are sold within one year of purchase | | | –26.68 | | | | 11.06 | | | | 8.62 | |
Not reflecting CDSC | | | –25.99 | | | | 11.06 | | | | 8.62 | |
| | | | | | | | | | | | |
Class 529-E shares1,3 — first sold 3/7/02 | | | –25.62 | | | | 11.64 | | | | 8.43 | |
| | | | | | | | | | | | |
Class 529-F-1 shares1,3 — first sold 9/16/02 | | | | | | | | | | | | |
Not reflecting annual asset-based fee charged by | | | | | | | | | | | | |
sponsoring firm | | | –25.25 | | | | 12.11 | | | | 13.14 | |
| | | | | | | | | | | | |
1 These shares are sold without any initial or contingent deferred sales charge. | | | | | | | | | | | | |
2 Results are cumulative total returns; they are not annualized. | | | | | | | | | | | | |
3 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 the waiver 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 22 to 25 for details.
For information regarding the differences among the various share classes, please refer to the fund’s prospectus.
Offices of the fund and of the investment adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
6455 Irvine Center Drive
Irvine, CA 92618
Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address near you.)
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Counsel
K&L Gates LLP
55 Second Street, Suite 1700
San Francisco, CA 94105
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 professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.
“American Funds Proxy Voting 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 September 30, 2008, 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 December 31, 2008, 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 more than 75 years, we have followed a consistent philosophy to benefit our investors. Our 31 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 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 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 26 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 |
| AMCAP Fund® |
> | EuroPacific Growth Fund® |
| The Growth Fund of America® |
• | Growth-and-income funds |
| American Mutual Fund® |
| Capital World Growth and Income FundSM |
| International Growth and Income FundSM |
| The Investment Company of America® |
| Washington Mutual Investors FundSM |
• | Equity-income funds |
| Capital Income Builder® |
| The Income Fund of America® |
• | Balanced fund |
| American Balanced Fund® |
• | Bond funds |
| American High-Income TrustSM |
| The Bond Fund of AmericaSM |
| Intermediate Bond Fund of America® |
| Short-Term Bond Fund of AmericaSM |
| U.S. Government Securities FundSM |
• | Tax-exempt bond funds |
| 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 Series® |
The Capital Group Companies
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust
Lit. No. MFGESR-916-1108P
Litho in USA BG/ALD/8082-S16779
Printed on paper containing 10% post-consumer waste
Printed with inks containing soy and/or vegetable oil
ITEM 2 – Code of Ethics
Not applicable for filing of semi-annual reports to shareholders.
ITEM 3 – Audit Committee Financial Expert
Not applicable for filing of semi-annual reports to shareholders.
ITEM 4 – Principal Accountant Fees and Services
Not applicable for filing of semi-annual reports to shareholders.
ITEM 5 – Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 – Schedule of Investments
[logo – American Funds®]
EuroPacific Growth Fund®
Investment portfolio
September 30, 2008
unaudited
Common stocks — 88.71% | | Shares | | | Value (000) | |
| | | | | | |
FINANCIALS — 15.03% | | | | | | |
Banco Santander, SA1 | | | 105,483,105 | | | $ | 1,595,623 | |
AXA SA1 | | | 40,208,514 | | | | 1,317,217 | |
BNP Paribas SA1 | | | 7,028,320 | | | | 675,176 | |
HSBC Holdings PLC (United Kingdom)1 | | | 19,281,258 | | | | 312,441 | |
HSBC Holdings PLC (Hong Kong)1 | | | 15,390,930 | | | | 242,966 | |
Erste Bank der oesterreichischen Sparkassen AG1 | | | 9,909,591 | | | | 499,092 | |
Banco Bradesco SA, preferred nominative | | | 22,996,722 | | | | 373,893 | |
QBE Insurance Group Ltd.1 | | | 15,641,758 | | | | 338,128 | |
Sun Hung Kai Properties Ltd.1 | | | 32,728,000 | | | | 336,119 | |
ING Groep NV, depository receipts1 | | | 14,247,747 | | | | 309,714 | |
National Bank of Greece SA1 | | | 7,409,600 | | | | 304,368 | |
Société Générale1 | | | 3,341,761 | | | | 303,132 | |
UniCredit SpA1 | | | 72,758,840 | | | | 268,622 | |
Kookmin Bank1 | | | 5,373,410 | | | | 245,511 | |
Shinhan Financial Group Co., Ltd.1 | | | 6,310,000 | | | | 227,627 | |
Housing Development Finance Corp. Ltd.1 | | | 4,729,346 | | | | 220,820 | |
Sberbank (Savings Bank of the Russian Federation) (GDR)1 | | | 825,935 | | | | 219,752 | |
Industrial and Commercial Bank of China Ltd., Class H1 | | | 356,250,000 | | | | 212,251 | |
Mitsubishi Estate Co., Ltd.1 | | | 10,375,000 | | | | 204,088 | |
Macquarie Group Ltd.1 | | | 6,431,600 | | | | 200,847 | |
AMP Ltd.1 | | | 34,424,518 | | | | 197,021 | |
Oversea-Chinese Banking Corp. Ltd.1 | | | 38,500,000 | | | | 195,098 | |
Fairfax Financial Holdings Ltd. (CAD denominated) | | | 500,000 | | | | 160,627 | |
Fairfax Financial Holdings Ltd. | | | 94,114 | | | | 30,916 | |
Unibanco-União de Bancos Brasileiros SA, units (GDR) | | | 1,840,000 | | | | 185,693 | |
Investor AB, Class B1 | | | 9,653,000 | | | | 180,095 | |
Prudential PLC1 | | | 19,150,500 | | | | 176,380 | |
Sampo Oyj, Class A1 | | | 7,688,722 | | | | 175,461 | |
Barclays PLC1 | | | 28,050,000 | | | | 170,498 | |
Banco Bilbao Vizcaya Argentaria, SA1 | | | 10,358,100 | | | | 167,797 | |
Bank of China Ltd., Class H1 | | | 424,000,000 | | | | 162,594 | |
Türkiye Garanti Bankasi AS1,2 | | | 67,850,000 | | | | 161,066 | |
HDFC Bank Ltd.1 | | | 5,921,258 | | | | 158,844 | |
Royal Bank of Scotland Group PLC1 | | | 45,120,957 | | | | 149,553 | |
Unibail-Rodamco, non-registered shares1 | | | 719,000 | | | | 146,369 | |
Bank of Nova Scotia | | | 3,200,000 | | | | 144,646 | |
Banco do Brasil SA, ordinary nominative | | | 12,030,500 | | | | 143,822 | |
State Bank of India1 | | | 4,281,336 | | | | 136,022 | |
TrygVesta A/S1 | | | 1,991,000 | | | | 127,993 | |
Ayala Land, Inc.1 | | | 631,283,600 | | | | 125,836 | |
Mitsui Sumitomo Insurance Group Holdings, Inc.1 | | | 3,576,000 | | | | 121,062 | |
Skandinaviska Enskilda Banken AB, Class A1 | | | 7,560,000 | | | | 118,606 | |
Ping An Insurance (Group) Co. of China, Ltd.1 | | | 17,593,500 | | | | 102,963 | |
CapitaMall Trust, units1 | | | 63,533,000 | | | | 101,279 | |
Westfield Group1 | | | 7,172,277 | | | | 97,889 | |
Topdanmark A/S1,2 | | | 673,550 | | | | 96,309 | |
PartnerRe Holdings Ltd. | | | 1,395,000 | | | | 94,986 | |
PT Bank Mandiri (Persero) Tbk1 | | | 330,055,000 | | | | 91,775 | |
Grupo Financiero Banorte, SAB de CV, Series O | | | 28,785,478 | | | | 91,570 | |
Swire Pacific Ltd., Class A1 | | | 10,270,000 | | | | 90,542 | |
Türkiye Is Bankasi AS, Class C1 | | | 20,500,000 | | | | 85,220 | |
UBS AG1 | | | 4,616,506 | | | | 79,914 | |
ICICI Bank Ltd.1 | | | 4,750,000 | | | | 55,853 | |
ICICI Bank Ltd. (ADR) | | | 1,000,000 | | | | 23,520 | |
DBS Group Holdings Ltd1 | | | 6,675,000 | | | | 78,998 | |
Unione di Banche Italiane Scpa1 | | | 3,365,000 | | | | 73,410 | |
Samsung Fire & Marine Insurance Co., Ltd.1 | | | 400,000 | | | | 70,230 | |
Commerzbank AG1 | | | 4,701,000 | | | | 70,148 | |
Banco Comercial Português, SA1 | | | 42,000,000 | | | | 68,605 | |
ORIX Corp.1 | | | 532,000 | | | | 65,855 | |
DnB NOR ASA1 | | | 7,300,000 | | | | 56,333 | |
Swedbank AB1 | | | 4,250,000 | | | | 55,904 | |
Allianz SE1 | | | 401,000 | | | | 55,111 | |
China Life Insurance Co. Ltd., Class H1 | | | 14,585,000 | | | | 54,010 | |
Brookfield Asset Management Inc., Class A | | | 1,823,625 | | | | 49,270 | |
Daito Trust Construction Co., Ltd.1 | | | 1,315,000 | | | | 49,217 | |
Banco Itaú Holding Financeira SA, preferred nominative | | | 2,892,600 | | | | 48,489 | |
Credit Suisse Group AG1 | | | 1,000,000 | | | | 47,675 | |
Kotak Mahindra Bank Ltd.1 | | | 3,550,000 | | | | 43,111 | |
Hypo Real Estate Holding AG1 | | | 6,791,264 | | | | 39,798 | |
GuangZhou R&F Properties Co., Ltd., Class H1 | | | 28,541,200 | | | | 26,687 | |
Ayala Corp.1 | | | 4,058,412 | | | | 25,477 | |
Korea Exchange Bank1 | | | 1,769,260 | | | | 16,367 | |
Hana Financial Holdings1 | | | 159,370 | | | | 3,769 | |
| | | | | | | 13,753,670 | |
| | | | | | | | |
HEALTH CARE — 11.86% | | | | | | | | |
Roche Holding AG1 | | | 17,677,550 | | | | 2,759,381 | |
Bayer AG, non-registered shares1 | | | 37,222,650 | | | | 2,715,058 | |
Novo Nordisk A/S, Class B1 | | | 26,822,967 | | | | 1,373,383 | |
Novartis AG1 | | | 25,706,320 | | | | 1,346,375 | |
Teva Pharmaceutical Industries Ltd. (ADR) | | | 18,398,100 | | | | 842,449 | |
UCB SA1,3 | | | 11,728,928 | | | | 416,666 | |
Merck KGaA1 | | | 2,913,558 | | | | 312,563 | |
Nobel Biocare Holding AG1,3 | | | 7,803,306 | | | | 261,976 | |
Daiichi Sankyo Co., Ltd.1 | | | 6,934,900 | | | | 177,208 | |
Richter Gedeon NYRT1 | | | 849,000 | | | | 155,803 | |
AstraZeneca PLC (Sweden)1 | | | 2,900,000 | | | | 128,369 | |
Smith & Nephew PLC1 | | | 10,010,100 | | | | 105,573 | |
Lonza Group Ltd.1 | | | 669,276 | | | | 83,348 | |
Essilor1 | | | 1,427,000 | | | | 71,307 | |
Elan Corp., PLC (ADR)2 | | | 6,000,000 | | | | 64,020 | |
Straumann Holding AG1 | | | 164,000 | | | | 45,081 | |
| | | | | | | 10,858,560 | |
| | | | | | | | |
TELECOMMUNICATION SERVICES — 10.42% | | | | | | | | |
América Móvil, SAB de CV, Series L (ADR) | | | 36,228,700 | | | | 1,679,563 | |
América Móvil, SAB de CV, Series L | | | 28,940,000 | | | | 66,199 | |
Vodafone Group PLC1 | | | 504,824,931 | | | | 1,115,917 | |
Koninklijke KPN NV1 | | | 58,996,900 | | | | 849,742 | |
MTN Group Ltd.1 | | | 58,609,000 | | | | 830,934 | |
Bharti Airtel Ltd.1,2 | | | 27,832,491 | | | | 473,374 | |
Singapore Telecommunications Ltd.1 | | | 206,403,075 | | | | 472,869 | |
KDDI Corp.1 | | | 73,150 | | | | 410,120 | |
Telefónica, SA1 | | | 15,275,000 | | | | 364,895 | |
Teléfonos de México, SAB de CV, Class L (ADR) | | | 11,913,351 | | | | 306,769 | |
Telenor ASA1 | | | 24,915,330 | | | | 306,047 | |
Chunghwa Telecom Co., Ltd. (ADR)2 | | | 10,937,623 | | | | 258,894 | |
Chunghwa Telecom Co., Ltd.1,2 | | | 8,659,800 | | | | 20,231 | |
France Télécom SA1 | | | 8,716,000 | | | | 243,909 | |
Telekomunikacja Polska SA1 | | | 24,216,227 | | | | 231,419 | |
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk, Class B1 | | | 246,563,200 | | | | 185,455 | |
TIM Participações SA, preferred nominative (ADR) | | | 8,060,917 | | | | 168,151 | |
Philippine Long Distance Telephone Co.1 | | | 2,976,260 | | | | 167,992 | |
Portugal Telecom, SGPS, SA1 | | | 15,795,000 | | | | 159,697 | |
Telekom Austria AG, non-registered shares1 | | | 7,421,203 | | | | 130,692 | |
Telstra Corp. Ltd.1 | | | 38,830,000 | | | | 130,258 | |
Telmex Internacional, SAB de CV, Class L (ADR) | | | 10,000,000 | | | | 130,000 | |
NTT DoCoMo, Inc.1 | | | 78,953 | | | | 127,446 | |
China Unicom Ltd.1 | | | 83,480,000 | | | | 126,417 | |
Iliad SA1 | | | 1,497,000 | | | | 124,284 | |
China Mobile Ltd.1 | | | 11,700,000 | | | | 117,171 | |
Orascom Telecom Holding SAE (GDR)1 | | | 3,085,492 | | | | 109,976 | |
SOFTBANK CORP.1 | | | 7,365,000 | | | | 95,296 | |
China Netcom Group Corp. (Hong Kong) Ltd. (ADR) | | | 1,592,800 | | | | 72,441 | |
Joint-Stock Financial Corp. Sistema (GDR)1 | | | 3,472,000 | | | | 58,295 | |
| | | | | | | 9,534,453 | |
| | | | | | | | |
CONSUMER DISCRETIONARY — 8.19% | | | | | | | | |
Honda Motor Co., Ltd.1 | | | 29,766,250 | | | | 884,943 | |
Industria de Diseno Textil, SA1 | | | 20,373,120 | | | | 868,487 | |
Toyota Motor Corp.1 | | | 13,086,700 | | | | 556,173 | |
Daimler AG1 | | | 9,813,778 | | | | 495,636 | |
Daimler AG (New York registered) | | | 250,000 | | | | 12,625 | |
Renault SA1 | | | 6,545,765 | | | | 422,671 | |
Cie. Générale des Établissements Michelin, Class B1 | | | 6,380,000 | | | | 418,290 | |
British Sky Broadcasting Group PLC1 | | | 45,477,805 | | | | 338,396 | |
adidas AG1 | | | 5,062,000 | | | | 271,668 | |
OPAP (Greek Organization of Football Prognostics) SA1 | | | 8,701,490 | | | | 266,158 | |
Continental AG1,2 | | | 2,509,500 | | | | 249,244 | |
Fiat SpA1 | | | 18,168,393 | | | | 242,083 | |
Esprit Holdings Ltd.1 | | | 37,652,700 | | | | 231,384 | |
Yamada Denki Co., Ltd.1 | | | 2,785,000 | | | | 211,373 | |
Vivendi SA1 | | | 6,320,317 | | | | 197,641 | |
Nikon Corp.1 | | | 8,220,000 | | | | 195,587 | |
Mediaset SpA1 | | | 27,444,198 | | | | 173,722 | |
Marks and Spencer Group PLC1 | | | 40,291,134 | | | | 145,845 | |
Cie. Financière Richemont SA, Class A, units1 | | | 3,225,000 | | | | 143,427 | |
GOME Electrical Appliances Holding Ltd.1 | | | 456,301,000 | | | | 133,230 | |
Porsche Automobil Holding SE, nonvoting preferred1 | | | 1,182,621 | | | | 126,420 | |
Hyundai Motor Co.1 | | | 1,500,000 | | | | 94,685 | |
Grupo Televisa, SAB, ordinary participation certificates (ADR) | | | 4,000,000 | | | | 87,480 | |
Kingfisher PLC1 | | | 35,677,216 | | | | 84,647 | |
Techtronic Industries Co. Ltd.1,3 | | | 86,710,000 | | | | 79,766 | |
JCDecaux SA1 | | | 3,528,700 | | | | 78,060 | |
Carnival PLC1 | | | 2,500,000 | | | | 74,973 | |
Suzuki Motor Corp.1 | | | 3,946,333 | | | | 73,354 | |
H & M Hennes & Mauritz AB, Class B1 | | | 1,675,000 | | | | 68,017 | |
GEOX SpA1 | | | 6,352,000 | | | | 61,470 | |
News Corp., Class A | | | 4,152,946 | | | | 49,794 | |
Swatch Group Ltd, non-registered shares1 | | | 178,070 | | | | 33,005 | |
Swatch Group Ltd1 | | | 126,956 | | | | 4,203 | |
Hyundai Mobis Co., Ltd.1 | | | 451,350 | | | | 35,140 | |
Carphone Warehouse Group PLC1 | | | 8,500,000 | | | | 26,224 | |
ProSiebenSAT.1 Media AG, nonvoting preferred1 | | | 3,750,000 | | | | 25,670 | |
DSG International PLC1 | | | 25,345,000 | | | | 21,880 | |
Li & Fung Ltd.1 | | | 5,650,000 | | | | 13,802 | |
| | | | | | | 7,497,173 | |
| | | | | | | | |
ENERGY — 8.11% | | | | | | | | |
OAO Gazprom (ADR)1 | | | 48,215,000 | | | | 1,549,421 | |
Petróleo Brasileiro SA – Petrobras, ordinary nominative (ADR) | | | 23,366,340 | | | | 1,026,951 | |
Petróleo Brasileiro SA – Petrobras, preferred nominative (ADR) | | | 715,860 | | | | 26,788 | |
Royal Dutch Shell PLC, Class B1 | | | 15,457,435 | | | | 438,778 | |
Royal Dutch Shell PLC, Class A1 | | | 5,000,000 | | | | 144,725 | |
Royal Dutch Shell PLC, Class B (ADR) | | | 1,586,078 | | | | 90,549 | |
Royal Dutch Shell PLC, Class A (ADR) | | | 1,000,000 | | | | 59,010 | |
TOTAL SA1 | | | 9,798,984 | | | | 590,761 | |
Canadian Natural Resources, Ltd. | | | 8,461,300 | | | | 581,670 | |
OAO LUKOIL (ADR)1 | | | 8,361,100 | | | | 503,355 | |
Saipem SpA, Class S1 | | | 12,666,566 | | | | 375,379 | |
Eni SpA1 | | | 9,894,000 | | | | 260,967 | |
China National Offshore Oil Corp.1 | | | 215,288,100 | | | | 247,102 | |
SK Energy Co., Ltd.1 | | | 3,040,225 | | | | 229,817 | |
Oil & Natural Gas Corp. Ltd.1 | | | 9,687,000 | | | | 217,105 | |
Reliance Industries Ltd.1 | | | 4,622,000 | | | | 195,324 | |
StatoilHydro ASA1 | | | 6,478,320 | | | | 154,300 | |
Sasol Ltd.1 | | | 3,518,000 | | | | 149,613 | |
OGX Petróleo e Gás Participações SA, ordinary nominative2 | | | 625,100 | | | | 127,122 | |
Suncor Energy Inc. | | | 3,010,000 | | | | 124,720 | |
Nexen Inc. | | | 4,021,777 | | | | 93,547 | |
Woodside Petroleum Ltd.1 | | | 1,945,813 | | | | 79,995 | |
Petro-Canada | | | 2,300,000 | | | | 76,674 | |
PetroChina Co. Ltd., Class H1 | | | 46,600,000 | | | | 49,268 | |
Oil and Gas Development Co. Ltd.1 | | | 33,000,000 | | | | 32,002 | |
| | | | | | | 7,424,943 | |
| | | | | | | | |
INDUSTRIALS — 8.06% | | | | | | | | |
Schneider Electric SA1 | | | 10,178,907 | | | | 882,303 | |
Siemens AG1 | | | 8,583,500 | | | | 805,027 | |
Vallourec SA1 | | | 2,566,470 | | | | 557,799 | |
Sandvik AB1 | | | 51,629,000 | | | | 546,784 | |
Ryanair Holdings PLC (ADR)2,3 | | | 19,373,900 | | | | 434,557 | |
FANUC LTD1 | | | 5,147,500 | | | | 388,653 | |
ABB Ltd1,2 | | | 16,780,000 | | | | 322,349 | |
Mitsubishi Corp.1 | | | 11,740,000 | | | | 244,548 | |
Qantas Airways Ltd.1 | | | 82,969,628 | | | | 210,246 | |
SMC Corp.1 | | | 1,804,500 | | | | 188,975 | |
ALSTOM SA1 | | | 2,328,000 | | | | 175,429 | |
AB Volvo, Class B1 | | | 19,110,000 | | | | 173,155 | |
Gamesa Corporación Technologica, SA1 | | | 4,825,800 | | | | 165,658 | |
Orkla AS1 | | | 17,000,000 | | | | 156,103 | |
Scania AB, Class B1 | | | 11,909,700 | | | | 146,456 | |
Scania AB, Class A1 | | | 449,780 | | | | 5,495 | |
European Aeronautic Defence and Space Co. EADS NV1 | | | 8,540,000 | | | | 147,658 | |
Air France1 | | | 6,008,668 | | | | 138,507 | |
Finmeccanica SpA1 | | | 5,896,000 | | | | 126,717 | |
Capita Group PLC1 | | | 9,837,005 | | | | 122,336 | |
KONE Oyj, Class B1 | | | 4,438,000 | | | | 121,419 | |
Geberit AG1 | | | 858,501 | | | | 105,874 | |
Deutsche Post AG1 | | | 4,995,500 | | | | 105,298 | |
Komatsu Ltd.1 | | | 6,466,000 | | | | 104,768 | |
Nippon Express Co., Ltd.1 | | | 22,890,000 | | | | 102,399 | |
Deutsche Lufthansa AG1 | | | 5,000,000 | | | | 98,283 | |
Atlas Copco AB, Class A1 | | | 8,274,600 | | | | 94,581 | |
Wolseley PLC1 | | | 12,120,523 | | | | 92,362 | |
SUEZ Environnement Co.1,2 | | | 3,630,425 | | | | 90,437 | |
Bharat Heavy Electricals Ltd.1 | | | 2,583,550 | | | | 89,264 | |
Tata Motors Ltd.1 | | | 10,500,076 | | | | 78,249 | |
Hays PLC1 | | | 48,076,956 | | | | 69,177 | |
Embraer – Empresa Brasileira de Aeronáutica SA, ordinary nominative (ADR) | | | 2,500,000 | | | | 67,525 | |
Toll Holdings Ltd.1 | | | 9,367,940 | | | | 52,517 | |
Wienerberger AG1 | | | 1,777,632 | | | | 48,284 | |
MAN AG1 | | | 705,000 | | | | 47,323 | |
Asciano Ltd., units1 | | | 12,418,149 | | | | 32,397 | |
Metso Oyj1 | | | 1,250,000 | | | | 30,725 | |
China International Marine Containers (Group) Co., Ltd., Class B1 | | | 7,369,680 | | | | 5,041 | |
| | | | | | | 7,374,678 | |
| | | | | | | | |
CONSUMER STAPLES — 7.75% | | | | | | | | |
Nestlé SA1 | | | 30,247,000 | | | | 1,309,993 | |
Groupe Danone SA1 | | | 10,816,664 | | | | 765,920 | |
L’Oréal SA1 | | | 7,377,259 | | | | 727,979 | |
Tesco PLC1 | | | 103,953,061 | | | | 723,364 | |
InBev1 | | | 7,942,048 | | | | 468,493 | |
Diageo PLC1 | | | 25,156,500 | | | | 426,101 | |
Shoppers Drug Mart Corp. | | | 8,600,000 | | | | 415,868 | |
Koninklijke Ahold NV1 | | | 35,017,705 | | | | 403,763 | |
Unilever NV, depository receipts1 | | | 9,985,000 | | | | 281,884 | |
Wal-Mart de México, SAB de CV, Series V | | | 64,835,718 | | | | 222,137 | |
SABMiller PLC1 | | | 11,146,000 | | | | 217,849 | |
METRO AG1 | | | 3,060,000 | | | | 153,149 | |
IOI Corp. Bhd.1 | | | 118,840,000 | | | | 146,312 | |
Shinsegae Co., Ltd.1 | | | 288,823 | | | | 136,248 | |
Woolworths Ltd.1 | | | 6,090,626 | | | | 131,735 | |
British American Tobacco PLC (United Kingdom)1 | | | 3,325,400 | | | | 108,722 | |
Imperial Tobacco Group PLC1 | | | 3,292,500 | | | | 105,848 | |
Pernod Ricard Co.1 | | | 941,785 | | | | 82,739 | |
Unilever PLC1 | | | 2,526,750 | | | | 68,632 | |
Coca-Cola Hellenic Bottling Co. SA1 | | | 3,000,000 | | | | 64,899 | |
ITC Ltd.1 | | | 11,472,373 | | | | 46,167 | |
Foster’s Group Ltd.1 | | | 10,000,000 | | | | 43,706 | |
Fomento Económico Mexicano, SAB de CV (ADR) | | | 1,128,000 | | | | 43,022 | |
| | | | | | | 7,094,530 | |
| | | | | | | | |
INFORMATION TECHNOLOGY — 7.52% | | | | | | | | |
SAP AG1 | | | 17,130,000 | | | | 919,193 | |
SAP AG (ADR) | | | 4,537,500 | | | | 242,439 | |
Taiwan Semiconductor Manufacturing Co. Ltd.1 | | | 389,588,260 | | | | 639,079 | |
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | | | 10,215,964 | | | | 95,724 | |
Samsung Electronics Co., Ltd.1 | | | 1,359,600 | | | | 626,398 | |
Samsung Electronics Co., Ltd., nonvoting preferred1 | | | 48,800 | | | | 15,484 | |
HTC Corp.1,3 | | | 38,373,100 | | | | 547,720 | |
Nokia Corp.1 | | | 19,611,000 | | | | 365,342 | |
Nokia Corp. (ADR) | | | 7,468,900 | | | | 139,295 | |
HOYA CORP.1 | | | 21,136,800 | | | | 419,157 | |
Hon Hai Precision Industry Co., Ltd.1 | | | 116,626,841 | | | | 413,994 | |
Canon, Inc.1 | | | 10,595,200 | | | | 396,515 | |
Murata Manufacturing Co., Ltd.1 | | | 8,727,400 | | | | 350,531 | |
Hirose Electric Co., Ltd.1,3 | | | 2,547,000 | | | | 243,424 | |
Hynix Semiconductor Inc.1,2 | | | 13,395,000 | | | | 224,349 | |
STMicroelectronics NV1 | | | 15,000,000 | | | | 152,306 | |
Acer Inc.1 | | | 88,856,691 | | | | 151,376 | |
Konica Minolta Holdings, Inc.1 | | | 12,585,000 | | | | 145,203 | |
Keyence Corp.1 | | | 454,000 | | | | 90,393 | |
Redecard SA, ordinary nominative | | | 6,510,000 | | | | 85,112 | |
Ibiden Co., Ltd.1 | | | 3,435,000 | | | | 83,752 | |
Rohm Co., Ltd.1 | | | 1,240,200 | | | | 68,135 | |
ASML Holding NV1 | | | 3,440,222 | | | | 61,383 | |
ASML Holding NV (New York registered) | | | 189,333 | | | | 3,334 | |
Nippon Electric Glass Co., Ltd.1 | | | 6,750,000 | | | | 61,101 | |
Delta Electronics, Inc.1 | | | 20,812,101 | | | | 53,910 | |
AU Optronics Corp.1 | | | 46,335,128 | | | | 52,140 | |
NHN Corp.1,2 | | | 350,000 | | | | 45,150 | |
Toshiba Corp.1 | | | 10,105,000 | | | | 43,681 | |
Quanta Computer Inc.1 | | | 34,100,965 | | | | 41,306 | |
Mediatek Incorporation1 | | | 3,945,000 | | | | 41,101 | |
Tencent Holdings Ltd.1 | | | 5,340,400 | | | | 38,481 | |
Chartered Semiconductor Manufacturing Ltd1,2 | | | 60,000,000 | | | | 16,089 | |
Nortel Networks Corp.2 | | | 3,523,600 | | | | 7,893 | |
| | | | | | | 6,880,490 | |
| | | | | | | | |
MATERIALS — 6.25% | | | | | | | | |
Linde AG1 | | | 5,896,900 | | | | 631,940 | |
POSCO1 | | | 1,527,000 | | | | 564,737 | |
ArcelorMittal1 | | | 8,307,300 | | | | 415,230 | |
Syngenta AG1 | | | 1,402,315 | | | | 298,153 | |
Cia. Vale do Rio Doce, ordinary nominative (ADR) | | | 8,000,000 | | | | 153,200 | |
Cia. Vale do Rio Doce, Class A, preferred nominative (ADR) | | | 7,000,000 | | | | 123,900 | |
Barrick Gold Corp. | | | 7,489,453 | | | | 275,162 | |
BASF SE1 | | | 5,658,000 | | | | 270,971 | |
CRH PLC1 | | | 11,281,433 | | | | 245,340 | |
CEMEX, SAB de CV, ordinary participation certificates, units (ADR)2 | | | 14,126,640 | | | | 243,261 | |
BHP Billiton PLC1 | | | 10,703,200 | | | | 242,254 | |
Impala Platinum Holdings Ltd.1 | | | 11,062,888 | | | | 224,958 | |
Teck Cominco Ltd., Class B | | | 7,806,000 | | | | 222,146 | |
Holcim Ltd.1 | | | 3,028,571 | | | | 221,899 | |
Shin-Etsu Chemical Co., Ltd.1 | | | 3,656,100 | | | | 174,238 | |
Nitto Denko Corp.1 | | | 6,139,200 | | | | 156,055 | |
JSC Uralkali (GDR)1 | | | 4,375,000 | | | | 137,433 | |
First Quantum Minerals Ltd. | | | 3,407,529 | | | | 128,356 | |
JSR Corp.1 | | | 8,645,500 | | | | 113,711 | |
Aracruz Celulose SA, Class B, preferred nominative (ADR) | | | 2,943,472 | | | | 108,055 | |
Akzo Nobel NV1 | | | 2,165,000 | | | | 104,012 | |
Yamana Gold Inc. | | | 10,208,000 | | | | 84,113 | |
Rio Tinto PLC1 | | | 1,300,000 | | | | 80,935 | |
Titan Cement Co. SA1 | | | 2,283,000 | | | | 75,127 | |
Rio Tinto Ltd.1 | | | 990,000 | | | | 68,153 | |
Grupo México, SAB de CV, Series B | | | 54,060,416 | | | | 56,635 | |
Stora Enso Oyj, Class R1 | | | 5,394,843 | | | | 53,166 | |
UPM-Kymmene Oyj1 | | | 3,340,000 | | | | 52,493 | |
K+S AG1 | | | 681,000 | | | | 47,629 | |
Sumitomo Chemical Co., Ltd.1 | | | 6,665,000 | | | | 29,075 | |
Koninklijke DSM NV1 | | | 515,979 | | | | 24,279 | |
Givaudan SA1 | | | 28,500 | | | | 23,665 | |
BlueScope Steel Ltd.1 | | | 3,339,396 | | | | 19,690 | |
Sterlite Industries (India) Ltd. (ADS) | | | 2,167,019 | | | | 19,525 | |
Formosa Plastics Corp.1 | | | 10,233,000 | | | | 16,661 | |
Rhodia SA1 | | | 945,833 | | | | 14,703 | |
| | | | | | | 5,720,860 | |
| | | | | | | | |
UTILITIES — 3.88% | | | | | | | | |
GDF Suez1 | | | 14,046,617 | | | | 734,475 | |
E.ON AG1 | | | 13,908,000 | | | | 703,846 | |
British Energy Group PLC1 | | | 37,702,454 | | | | 511,125 | |
RWE AG1 | | | 3,115,000 | | | | 299,295 | |
Veolia Environnement1 | | | 7,072,557 | | | | 291,453 | |
China Resources Power Holdings Co. Ltd.1 | | | 125,764,000 | | | | 272,280 | |
Electricité de France SA1 | | | 3,718,000 | | | | 269,210 | |
Hong Kong and China Gas Co. Ltd.1 | | | 80,616,250 | | | | 183,726 | |
Public Power Corp. SA1 | | | 11,195,403 | | | | 173,794 | |
Hongkong Electric Holdings Ltd.1 | | | 18,050,000 | | | | 113,636 | |
| | | | | | | 3,552,840 | |
| | | | | | | | |
MISCELLANEOUS — 1.64% | | | | | | | | |
Other common stocks in initial period of acquisition | | | | | | | 1,497,222 | |
| | | | | | | | |
| | | | | | | | |
Total common stocks (cost: $80,504,606,000) | | | | | | | 81,189,419 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Preferred stocks — 0.04% | | | | | | | | |
| | | | | | | | |
FINANCIALS — 0.04% | | | | | | | | |
Shinsei Finance II (Cayman) Ltd. 7.16% noncumulative4,5 | | | 71,405,000 | | | | 36,640 | |
| | | | | | | | |
| | | | | | | | |
Total preferred stocks (cost: $50,001,000) | | | | | | | 36,640 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | Value | |
Rights — 0.00% | | | | | | | (000 | ) |
| | | | | | | | |
MISCELLANEOUS — 0.00% | | | | | | | | |
Other rights in initial period of acquisition | | | | | | $ | 1,968 | |
| | | | | | | | |
| | | | | | | | |
Total rights (cost: $0) | | | | | | | 1,968 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | Principal amount | | | | | |
Bonds & notes — 0.06% | | | (000 | ) | | | | |
| | | | | | | | |
FINANCIALS — 0.06% | | | | | | | | |
SMFG Preferred Capital USD 2 Ltd. 8.75% noncumulative preferred (undated) 5 | | $ | 6,900 | | | | 7,086 | |
SMFG Preferred Capital USD 3 Ltd. 9.50% (undated)4,5 | | | 23,075 | | | | 22,057 | |
Woori Bank 6.208% 20674,5 | | | 29,750 | | | | 18,973 | |
Shinhan Bank 5.663% 20354 | | | 2,690 | | | | 1,849 | |
Shinhan Bank 6.819% 20364 | | | 600 | | | | 477 | |
| | | | | | | 50,442 | |
| | | | | | | | |
Total bonds & notes (cost: $55,955,000) | | | | | | | 50,442 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Short-term securities — 11.22% | | | | | | | | |
| | | | | | | | |
U.S. Treasury Bills 1.49%–1.925% due 10/2/2008–2/26/2009 | | $ | 1,460,700 | | | | 1,457,990 | |
Federal Home Loan Bank 2.04%–3.31% due 10/3/2008–3/10/2009 | | | 1,439,641 | | | | 1,435,694 | |
Freddie Mac 2.06%–2.70% due 10/20–12/15/2008 | | | 1,296,295 | | | | 1,293,085 | |
Fannie Mae 2.07%–2.70% due 10/1–12/22/2008 | | | 987,574 | | | | 985,673 | |
American Honda Finance Corp. 2.20%–2.23% due 10/16–11/19/2008 | | | 320,746 | | | | 319,863 | |
Nestlé Capital Corp. 2.01%–2.31% due 10/14/2008–1/21/20095 | | | 236,000 | | | | 234,829 | |
Alcon Capital Corp. 2.10% due 11/10/20085 | | | 47,700 | | | | 47,558 | |
Coca-Cola Co. 2.15%–2.20% due 10/7/2008–1/16/20095 | | | 275,000 | | | | 274,110 | |
Caisse d’Amortissement de la Dette Sociale 2.10%–2.20% due 11/12–12/12/2008 | | | 269,000 | | | | 267,668 | |
Jupiter Securitization Co., LLC 5.50% due 10/1/20085 | | | 95,800 | | | | 95,785 | |
JPMorgan Chase & Co. 2.50%–2.62% due 10/6–11/3/2008 | | | 102,100 | | | | 101,976 | |
Park Avenue Receivables Co., LLC 2.70% due 12/4/20085 | | | 50,000 | | | | 49,611 | |
Toyota Motor Credit Corp. 2.35%–2.54% due 10/15–12/5/2008 | | | 173,300 | | | | 172,592 | |
Toyota Credit de Puerto Rico Corp. 2.40% due 11/4/2008 | | | 50,000 | | | | 49,884 | |
Hewlett-Packard Co. 2.60%–3.00% due 10/23–12/19/20085 | | | 219,700 | | | | 218,814 | |
Procter & Gamble International Funding S.C.A. 2.10%–2.23% due 10/27–12/17/20085 | | | 216,000 | | | | 215,129 | |
Swedish Export Credit Corp. 1.95%–2.36% due 10/2–10/17/2008 | | | 204,800 | | | | 204,706 | |
BASF AG 2.20%–2.31% due 11/5–12/10/20085 | | | 189,000 | | | | 187,756 | |
Bank of America Corp. 2.54%–2.82% due 10/16/2008–1/9/2009 | | | 165,600 | | | | 164,534 | |
General Electric Capital Corp. 2.05% due 12/12/2008 | | | 100,000 | | | | 99,410 | |
Edison Asset Securitization LLC 2.50%–2.54% due 10/23–12/1/20085 | | | 59,100 | | | | 58,754 | |
Export Development Canada 2.10%–2.20% due 10/21–12/12/2008 | | | 154,800 | | | | 154,057 | |
Novartis Finance Corp. 2.10%–2.20% due 10/30–11/21/20085 | | | 151,200 | | | | 150,608 | |
IBM International Group Capital LLC 2.14%–2.34% due 10/1–11/17/20085 | | | 100,000 | | | | 99,765 | |
IBM Capital Inc. 2.15% due 12/10/20085 | | | 46,326 | | | | 45,971 | |
Electricité de France 2.21%–2.32% due 10/17–11/12/20085 | | | 145,000 | | | | 144,657 | |
European Investment Bank 2.17%–2.215% due 10/24–12/8/2008 | | | 140,000 | | | | 139,441 | |
Eksportfinans ASA 2.30%–2.35% due 11/14–12/11/20085 | | | 130,500 | | | | 129,861 | |
AT&T Inc. 2.15%–2.23% due 10/2–12/5/2008 (5) | | | 126,500 | | | | 126,126 | |
KfW 4(2) CP 2.21%–2.30% due 10/27–12/8/20085 | | | 123,800 | | | | 123,215 | |
Toronto-Dominion Holdings USA Inc. 2.295%–2.375% due 10/8–10/10/20085 | | | 100,000 | | | | 99,942 | |
ING (US) Funding LLC 2.58% due 11/3–11/4/2008 | | | 100,000 | | | | 99,752 | |
Shell International Finance BV 2.08%–2.11% due 11/5–11/13/20085 | | | 97,200 | | | | 96,944 | |
United Parcel Service Inc. 2.01%–2.02% due 12/8–12/9/20085 | | | 97,000 | | | | 96,412 | |
BMW U.S. Capital LLC 2.04% due 10/9–10/10/20085 | | | 90,000 | | | | 89,951 | |
Wal-Mart Stores Inc. 2.00%–2.10% due 11/5–11/10/20085 | | | 78,000 | | | | 77,812 | |
AstraZeneca PLC 2.69% due 12/1/20085 | | | 75,800 | | | | 75,422 | |
Bank of Nova Scotia 2.56% due 10/28/2008 | | | 50,000 | | | | 49,896 | |
Liberty Street Funding Corp. 2.54% due 10/1/20085 | | | 25,000 | | | | 24,998 | |
BP Capital Markets PLC 2.10%–2.20% due 11/19–11/21/20085 | | | 75,000 | | | | 74,733 | |
UBS Finance (Delaware) LLC 2.61% due 10/14/2008 | | | 52,400 | | | | 52,347 | |
HSBC USA Inc. 2.60% due 11/3/2008 | | | 50,000 | | | | 49,877 | |
BNP Paribas Finance Inc. 2.63% due 11/7/2008 | | | 50,000 | | | | 49,861 | |
Rabobank USA Financial Corp. 2.56% due 11/18/2008 | | | 50,000 | | | | 49,779 | |
United Mexican States Government, Series BI 0% due 2/12/20091 | | MXN56,209 | | | | 49,679 | |
John Deere Capital Corp. 2.45% due 11/20/20085 | | $ | 46,000 | | | | 45,840 | |
Private Export Funding Corp. 2.20% due 10/7/20085 | | | 42,000 | | | | 41,981 | |
Sheffield Receivables Corp. 2.56% due 10/23/20085 | | | 40,000 | | | | 39,932 | |
Pfizer Inc. 2.12% due 12/2/20085 | | | 32,700 | | | | 32,534 | |
Canadian Wheat Board 2.02% due 11/14/2008 | | | 30,000 | | | | 29,901 | |
| | | | | | | | |
| | | | | | | | |
Total short-term securities (cost: $10,277,695,000) | | | | | | | 10,276,715 | |
| | | | | | | | |
Total investment securities (cost: $90,888,257,000) | | | | | | | 91,555,184 | |
Other assets less liabilities | | | | | | | (27,840 | ) |
| | | | | | | | |
Net assets | | | | | | $ | 91,527,344 | |
“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
1Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous,”
was $70,693,336,000, which represented 77.24% of the net assets of the fund.
2Security did not produce income during the last 12 months.
3Represents an affiliated company as defined under the Investment Company Act of 1940.
4Coupon rate may change periodically.
5Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the United States in transactions exempt from
registration, normally to qualified institutional buyers. The total value of all such securities was $3,083,806,000, which represented 3.37% of the
net assets of the fund.
Key to abbreviations
ADR = American Depositary Receipts
ADS = American Depositary Shares
GDR = Global Depositary Receipts
MXN = Mexican pesos
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 your financial professional and should be read carefully before investing.
MFGEFP-916-1108O-S15840
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) | Not applicable for filing of semi-annual reports to shareholders. |
| |
(a)(2) | The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| EUROPACIFIC GROWTH FUND |
| |
| By /s/ Gina H. Despres |
| Gina H. Despres, Vice Chairman and Principal Executive Officer |
| |
| Date: December 8, 2008 |
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: December 8, 2008 |
By /s/ Bryan K. Nielsen |
Bryan K. Nielsen, Treasurer and Principal Financial Officer |
|
Date: December 8, 2008 |