UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
Certified Shareholder Report of
Registered Management Investment Companies
Investment Company Act File Number: 811-03734
EuroPacific Growth Fund
(Exact Name of Registrant as Specified in Charter)
333 South Hope Street
Los Angeles, California 90071
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (213) 486-9200
Date of fiscal year end: March 31
Date of reporting period: March 31, 2018
Michael W. Stockton
EuroPacific Growth Fund
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
ITEM 1 – Reports to Stockholders
EuroPacific Growth Fund®
Annual report |
Tap into the growth
potential of
international equities.
EuroPacific Growth Fund seeks to provide you with long-term growth of capital.
This fund is one of more than 40 offered by one of the nation’s largest mutual fund families, American Funds® by Capital Group. For more than 85 years, Capital has invested with a long-term focus based on thorough research and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfunds.com.
See page 4 for Class A share results with relevant sales charges deducted and fund expenses. For other share class results, visit americanfunds.com and americanfundsretirement.com.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers, without which results would have been lower. Visit americanfunds.com for more information.
Investing outside the United States may be subject to risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries. Refer to the fund prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Contents
1 | Letter to investors |
4 | The value of a long-term perspective |
6 | Tapping global potential |
7 | Summary investment portfolio |
12 | Financial statements |
35 | Board of trustees and other officers |
During a 12-month period when international equity markets staged an impressive rally, EuroPacific Growth Fund generated strong results and exceeded all of its benchmarks.
The fund returned 20.74% for shareholders who reinvested dividends and capital gains. This return surpassed the 16.53% increase recorded by the fund’s primary benchmark, the unmanaged MSCI All Country World Index ex USA, which reflects the returns of more than 40 developed and developing country stock markets.
In addition, EuroPacific Growth outpaced its peers as reflected by the Lipper International Funds Average, which advanced 16.67% during the one-year period ended March 31, 2018. The fund also exceeded the return of the MSCI EAFE (Europe, Australasia, Far East) Index, which gained 14.80%. Over longer time frames, the fund’s results outpaced the indexes and the peer group, as shown in the table below.
Strong gains in resilient markets
International equity markets enjoyed significant gains during the one-year period from March 2017 to March 2018, supported by improving economic activity in Europe, Japan, China and many other emerging markets. Including the U.S., the world economy experienced a rare period of synchronized economic growth and generally rising equity markets. In most sectors, corporate earnings growth advanced at a healthy pace as companies benefited from higher consumer spending, growing manufacturing activity and historically low debt-service costs. Central bank stimulus measures, particularly in Europe and Japan, also provided support for economies struggling to combat deflationary pressures. At times, European economic growth matched or exceeded the growth rate of the U.S. economy.
Results at a glance
For periods ended March 31, 2018, with all distributions reinvested
Cumulative total return | Average annual total returns | |||||||||||||||
1 year | 5 years | 10 years | Lifetime (since 4/16/84) | |||||||||||||
EuroPacific Growth Fund (Class A shares)1 | 20.74 | % | 8.43 | % | 4.55 | % | 10.96 | % | ||||||||
MSCI ACWI (All Country World Index) ex USA2,3 | 16.53 | 5.89 | 2.70 | — | ||||||||||||
MSCI EAFE (Europe, Australasia, Far East) Index2,4 | 14.80 | 6.50 | 2.74 | 8.42 | ||||||||||||
Lipper International Funds Average5 | 16.67 | 6.47 | 2.93 | 8.97 |
1 | Results do not include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting priciples (“U.S. GAAP”). |
2 | The market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. |
3 | The index did not exist prior to December 31, 1987. Results reflect dividends net of withholding taxes. Source: MSCI. |
4 | This index was the fund’s primary benchmark until the fiscal year ended March 31, 2007. Results reflect dividends net of withholding taxes. Source: MSCI. |
5 | Lipper averages reflect the current composition of all eligible mutual funds (all share classes) within a given category. Lipper source: Thomson Reuters Lipper. Lipper categories are dynamic and averages may have few funds, especially over longer periods. To see the number of funds included in the Lipper category for each fund’s lifetime, please see the Quarterly Statistical Update, available on our website. |
EuroPacific Growth Fund | 1 |
A series of elections with market-friendly outcomes also helped to boost markets. President Emmanuel Macron’s victory in France fueled investor hopes for pro-business policies and labor market reforms. The re-election of German Chancellor Angela Merkel and Japanese Prime Minister Shinzō Abe added to a sense of stability, despite serious challenges from nationalist and populist parties. Late in the period, markets came under pressure amid investor concerns about inflationary pressures and rising interest rates. U.S.-China trade tensions further rattled markets as the two countries threatened to impose billions of dollars in tariffs against one another. Market volatility spiked for the first time in two years as technology stocks also came under pressure. Even so, the tech sector finished the 12-month period with the biggest gains.
All sectors rise
Every sector in the ACWI ex USA index generated positive returns, led by a 34% gain in the information technology sector (in U.S. dollar terms). Investor enthusiasm for e-commerce platforms, new consumer-tech products and solid earnings growth drove share prices higher among global technology giants, including China’s Alibaba and Tencent, and computer-chip maker Taiwan Semiconductor Manufacturing. Stocks in the consumer discretionary sector also experienced strong gains, rising 19% in aggregate, as a brightening global economic outlook helped to spur consumer spending in key markets.
Cyclical sectors outpaced defensive areas of the market by a wide margin. Stocks in the basic materials sector rose 18% on expectations for accelerating global economic growth and rising demand from China. Shares of Vale soared as the Brazilian mining company benefited from rising global prices for iron ore, improving profitability and aggressive debt reduction measures. Though generating positive gains, stocks in the health care sector lagged the overall market, rising 9%. Shares of several pharmaceuticals companies declined amid growing competition from generic drug makers and pricing pressures from pharmacy-benefit managers. European drug makers Roche and Sanofi slipped.
In foreign exchange markets, the U.S. dollar declined against the euro, the British pound, the Japanese yen and most other major currencies. Dollar weakness provided a significant tailwind to non-U.S. investments during the 12-month period.
Inside the portfolio
Select investments in the information technology sector produced strong returns for the fund. Among the top contributors to relative returns in this sector were Nintendo, Alibaba and Tencent. All three companies have benefited greatly from the rapid growth of e-commerce and mobile communications. Nintendo shares rallied on the growing popularity of its smartphone games, as well as the innovative new Switch gaming console. Shares of Chinese internet companies Alibaba and Tencent rose sharply amid booming growth in China’s online search and shopping markets. Chinese stocks in general bounced back strongly from steep declines in 2016 amid worries about China’s slowing economy.
Investments in the financials sector also boosted returns. Shares of AIA Group moved significantly higher after the Hong Kong-based insurance company experienced a big gain in new business during the first quarter, boosted by rising life-insurance sales in China. Shares of HDFC Bank advanced as the Indian bank attracted a growing customer base and reported higher-than-expected earnings. Industrials stocks provided another bright spot for the fund. Airbus shares soared amid strong global demand for more fuel-efficient airplanes; the European aircraft manufacturer reported that it delivered a record number of new airplanes in 2017. Elsewhere in the sector, shares of Ryanair advanced as the discount European airline used its growing size and scale to drive unit costs lower and increase its cost advantage over other carriers.
Certain investments in consumer-related sectors disappointed. Shares of Dutch cable and telecommunications firm Altice declined amid concerns about the company’s earnings outlook and debt levels. British American Tobacco shares fell after the U.S. Food and Drug Administration announced a regulatory plan to reduce nicotine levels in cigarettes; the high dividend-paying stock was also hurt by rising interest rates. Elsewhere in the portfolio, shares of Teva Pharmaceuticals declined amid weak corporate earnings that were blamed on pricing pressures in the U.S. generic drug market, followed by subsequent credit rating downgrades.
Looking ahead
We remain optimistic about the long-term outlook for international equity markets, despite the recent upswing in volatility. The current synchronized global economic recovery is supportive of underlying corporate earnings growth, while relatively low inflation, moderately rising commodity prices and broadly accommodative monetary policies from many of the major central banks should provide a favorable backdrop. That said, we believe the market declines and rising volatility we saw in the first quarter of 2018 were long overdue, largely because earnings at some highly valued companies were starting to run too far ahead of underlying fundamentals. As we have stated many times in the past, periodic corrections are expected and even healthy as they tend to remove the froth from overly optimistic markets. Going forward, we think equity valuations
2 | EuroPacific Growth Fund |
The New Geography of Investing®
EuroPacific Growth Fund invests primarily in companies based in developed markets in Europe and the Pacific Basin. However, emerging markets also make up a sizable and important area of focus for the fund (34%), especially when looking at the companies in terms of where they generate revenue (45%).
Equity portion breakdown by domicile (%)
Region | Fund | |||||
n | United States | 1 | % | |||
n | Canada | 4 | ||||
n | Europe | 40 | ||||
n | Japan | 14 | ||||
n | Asia-Pacific ex. Japan | 7 | ||||
n | Emerging markets | 34 | ||||
Total | 100 | % |
Equity portion breakdown by revenue (%)
Region | Fund | |||||
n | United States | 18 | % | |||
n | Canada | 2 | ||||
n | Europe | 23 | ||||
n | Japan | 8 | ||||
n | Asia-Pacific ex. Japan | 4 | ||||
n | Emerging markets | 45 | ||||
Total | 100 | % |
Source: Capital Group (as of March 31, 2018).
Compared with the MSCI ACWI ex USA as a percent of net assets.
remain attractive, particularly in non-U.S. markets. However, we expect to see further bouts of volatility in the months and years ahead, driven by gradually rising interest rates, geopolitical risk and deteriorating trade relations between the U.S. and China. Moreover, as the global economy continues to recover from the 2008-09 financial crisis, the adjustment to a more normalized environment may spark additional downturns as the market adapts to a world with significantly fewer experimental stimulus measures. We will be watching these events closely and gauging the potential impact on each one of our portfolio companies.
As always, we remain focused on the long-term picture, which we believe positions us well to tolerate periods of short-term market volatility and even use them as buying opportunities. When markets decline broadly, research-driven stock pickers can take advantage of lower prices and greater volatility to generate excess returns. In the meantime, we are encouraged by the rebound in European and emerging markets stocks over the past 12-month period, and we continue to be optimistic about the potential for significant price appreciation in international markets in the years ahead.
We thank you for your commitment to the fund and we look forward to reporting to you again in six months.
Sincerely,
Carl Kawaja
Vice Chairman of the Board and President
May 11, 2018
For current information about the fund, visit americanfunds.com.
EuroPacific Growth Fund | 3 |
The value of a long-term perspective
How a $10,000 investment has grown
The results shown are before taxes on fund distributions and sale of fund shares.
1 | As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares. |
2 | The maximum initial sales charge was 8.50% prior to July 1, 1988. |
3 | For the period April 16, 1984, commencement of operations, through March 31, 1985. |
4 | Includes reinvested dividends of $56,737 and reinvested capital gain distributions of $85,357. |
5 | The index is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index. |
6 | From April 16, 1984, through December 31, 1987, the MSCI EAFE (Europe, Australasia, Far East) Index was used because the MSCI ACWI (All Country World Index) ex USA did not yet exist. Since January 1, 1988, the MSCI ACWI ex USA has been used. The MSCI EAFE Index reflects dividends net of withholding taxes. The MSCI ACWI ex USA reflects dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. |
7 | Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics. |
4 | EuroPacific Growth Fund |
Fund results shown are for Class A shares and reflect deduction of the maximum sales charge of 5.75% on the $10,000 investment.¹ Thus, the net amount invested was $9,425.2 Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
EuroPacific Growth Fund | 5 |
The table above compares total returns for the MSCI USA Index (shown in gray) and the MSCI ACWI (All Country World Index) ex USA (shown in blue) over the past 25 calendar years.
Results for the MSCI USA Index reflect dividends gross of withholding taxes. Results for the MSCI ACWI (All Country World Index) ex USA reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter.
MSCI USA Index | MSCI ACWI (All Country World Index) ex USA |
A world of opportunity
With many of the world’s investment opportunities located beyond our shores, an international focus gives U.S. investors access to growth potential that would otherwise be out of reach. As the chart shows, international stocks have outpaced their U.S. counterparts in 12 of the past 25 calendar years. Diversifying across U.S. and non-U.S. stock markets can also help investors mitigate fluctuations in the value of their investments.
The Capital SystemSM
Negotiating the unfamiliar terrain of international markets can be challenging. That is why so many people choose to invest overseas through professionally managed mutual funds. EuroPacific Growth Fund draws on the global research experience of its investment adviser, Capital Research and Management Company, to find attractive companies based chiefly in Europe and the Pacific Basin.
6 | EuroPacific Growth Fund |
Summary investment portfolio March 31, 2018
Industry sector diversification | Percent of net assets |
Country diversification by domicile | Percent of net assets | |||
Euro zone* | 21.04 | % | ||
Japan | 13.56 | |||
United Kingdom | 10.71 | |||
China | 9.52 | |||
India | 6.94 | |||
South Korea | 5.75 | |||
Hong Kong | 4.63 | |||
Canada | 3.30 | |||
Brazil | 3.11 | |||
Other countries | 15.50 | |||
Short-term securities & other assets less liabilities | 5.94 |
* | Countries using the euro as a common currency; those represented in the fund’s portfolio are Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. |
Common stocks 93.97% | Shares | Value (000) | ||||||
Information technology 18.85% | ||||||||
Samsung Electronics Co., Ltd. | 1,718,745 | $ | 3,968,319 | |||||
Samsung Electronics Co., Ltd., nonvoting preferred | 48,800 | 93,397 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 369,400,649 | 3,135,668 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 8,247,523 | 360,911 | ||||||
Alibaba Group Holding Ltd. (ADR)1 | 17,537,795 | 3,218,887 | ||||||
Nintendo Co., Ltd. | 6,797,026 | 2,992,658 | ||||||
ASML Holding NV2 | 12,721,811 | 2,516,153 | ||||||
Tencent Holdings Ltd.2 | 43,446,711 | 2,312,604 | ||||||
Baidu, Inc., Class A (ADR)1 | 7,606,062 | 1,697,597 | ||||||
SK hynix, Inc. | 19,770,500 | 1,507,967 | ||||||
Murata Manufacturing Co., Ltd. | 10,765,526 | 1,473,773 | ||||||
Hangzhou Hikvision Digital Technology Co., Ltd., Class A | 134,849,288 | 885,178 | ||||||
AAC Technologies Holdings Inc.2 | 42,638,799 | 779,622 | ||||||
Keyence Corp. | 1,122,700 | 696,637 | ||||||
Other securities | 5,772,316 | |||||||
31,411,687 | ||||||||
Financials 16.68% | ||||||||
AIA Group Ltd.2 | 463,164,600 | 3,953,776 | ||||||
HDFC Bank Ltd.2 | 98,865,874 | 2,934,224 | ||||||
HDFC Bank Ltd. (ADR) | 6,073,800 | 599,909 | ||||||
UniCredit SpA1,2 | 101,312,152 | 2,125,054 | ||||||
Prudential PLC2 | 78,186,496 | 1,952,781 | ||||||
Kotak Mahindra Bank Ltd.2 | 94,161,246 | 1,527,106 | ||||||
Barclays PLC2 | 491,999,185 | 1,435,638 | ||||||
Sberbank of Russia PJSC (ADR)2 | 59,071,716 | 1,103,225 | ||||||
DBS Group Holdings Ltd2 | 42,819,000 | 903,367 | ||||||
Housing Development Finance Corp. Ltd.2 | 31,813,425 | 894,781 | ||||||
Credit Suisse Group AG2 | 43,429,553 | 728,419 | ||||||
Other securities | 9,644,366 | |||||||
27,802,646 | ||||||||
Consumer discretionary 11.02% | ||||||||
Sony Corp. | 46,244,000 | 2,235,945 | ||||||
Naspers Ltd., Class N2 | 5,764,722 | 1,412,107 | ||||||
LVMH Moët Hennessy-Louis Vuitton SE2 | 3,679,000 | 1,134,194 | ||||||
adidas AG2 | 4,389,373 | 1,062,678 | ||||||
Industria de Diseño Textil, SA2 | 31,680,512 | 992,612 | ||||||
Galaxy Entertainment Group Ltd.2 | 93,299,000 | 855,205 | ||||||
Paddy Power Betfair PLC2,3 | 6,722,677 | 690,494 | ||||||
ASOS PLC1,2,3 | 6,690,380 | 654,037 |
EuroPacific Growth Fund | 7 |
Common stocks (continued) | Shares | Value (000) | ||||||
Consumer discretionary (continued) | ||||||||
Other securities | $ | 9,330,965 | ||||||
18,368,237 | ||||||||
Materials 9.31% | ||||||||
Vale SA, ordinary nominative (ADR) | 101,729,456 | 1,293,999 | ||||||
Vale SA, ordinary nominative | 33,786,278 | 431,529 | ||||||
Glencore PLC2 | 340,229,000 | 1,691,464 | ||||||
Teck Resources Ltd., Class B | 36,999,000 | 952,830 | ||||||
LG Chem, Ltd. | 1,856,417 | 671,403 | ||||||
Other securities | 10,470,677 | |||||||
15,511,902 | ||||||||
Industrials 8.87% | ||||||||
Airbus SE, non-registered shares2 | 30,053,105 | 3,476,125 | ||||||
Ryanair Holdings PLC (ADR)1,3 | 17,974,744 | 2,208,197 | ||||||
International Consolidated Airlines Group, SA (CDI)2,3 | 150,105,675 | 1,295,335 | ||||||
Komatsu Ltd. | 23,964,600 | 798,670 | ||||||
Rolls-Royce Holdings PLC1,2 | 61,465,533 | 752,207 | ||||||
Other securities | 6,259,280 | |||||||
14,789,814 | ||||||||
Consumer staples 7.55% | ||||||||
British American Tobacco PLC2 | 56,772,250 | 3,292,873 | ||||||
Pernod Ricard SA2 | 8,893,013 | 1,480,956 | ||||||
Nestlé SA2 | 16,481,299 | 1,304,219 | ||||||
Associated British Foods PLC2 | 29,942,423 | 1,045,891 | ||||||
Kao Corp. | 13,629,200 | 1,022,030 | ||||||
CP ALL PCL, foreign registered | 348,535,000 | 980,847 | ||||||
Other securities | 3,458,232 | |||||||
12,585,048 | ||||||||
Health care 6.31% | ||||||||
Shire PLC2 | 29,280,500 | 1,458,361 | ||||||
Novartis AG2 | 13,586,000 | 1,098,675 | ||||||
Teva Pharmaceutical Industries Ltd. (ADR) | 50,202,159 | 857,955 | ||||||
Daiichi Sankyo Co., Ltd. | 21,006,000 | 695,924 | ||||||
HOYA Corp. | 13,504,200 | 673,116 | ||||||
Other securities | 5,737,328 | |||||||
10,521,359 | ||||||||
Energy 4.51% | ||||||||
Reliance Industries Ltd.2 | 209,106,942 | 2,843,417 | ||||||
Other securities | 4,678,876 | |||||||
7,522,293 | ||||||||
Utilities 2.51% | ||||||||
Ørsted AS2,3 | 24,649,666 | 1,604,405 | ||||||
China Gas Holdings Ltd.2 | 211,940,000 | 777,427 | ||||||
Other securities | 1,801,781 | |||||||
4,183,613 | ||||||||
Telecommunication services 2.46% | ||||||||
SoftBank Group Corp. | 33,646,406 | 2,513,285 | ||||||
Other securities | 1,586,172 | |||||||
4,099,457 | ||||||||
Real estate 0.93% | ||||||||
Other securities | 1,553,986 | |||||||
Miscellaneous 4.97% | ||||||||
Other common stocks in initial period of acquisition | 8,275,114 | |||||||
Total common stocks (cost: $106,488,944,000) | 156,625,156 |
8 | EuroPacific Growth Fund |
Bonds, notes & other debt instruments 0.09% | Principal amount (000) | Value (000) | ||||||
Other 0.09% | ||||||||
U.S. Treasury 0.875% 20184 | $ | 50,000 | $ | 49,868 | ||||
Other securities | 103,575 | |||||||
153,443 | ||||||||
Total bonds, notes & other debt instruments (cost: $151,629,000) | 153,443 | |||||||
Short-term securities 5.64% | ||||||||
Federal Home Loan Bank 1.42%–1.79% due 4/6/2018–8/3/2018 | 2,828,499 | 2,824,107 | ||||||
U.S. Treasury Bills 1.22%–1.87% due 4/19/2018–11/8/2018 | 2,108,200 | 2,100,473 | ||||||
Other securities | 4,474,206 | |||||||
Total short-term securities (cost: $9,400,668,000) | 9,398,786 | |||||||
Total investment securities 99.70% (cost: $116,041,241,000) | 166,177,385 | |||||||
Other assets less liabilities 0.30% | 492,437 | |||||||
Net assets 100.00% | $ | 166,669,822 |
This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.
As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.
“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. Some securities in “Other securities” (with an aggregate value of $472,514,000, an aggregate cost of $421,557,000, and which represented .28% of the net assets of the fund) were acquired from 11/14/2017 to 12/18/2017 through private placement transactions exempt from registration under the Securities Act of 1933, which may subject them to legal or contractual restrictions on resale. “Other securities” also includes securities (with an aggregate value of $3,611,513,000, which represented 2.17% of the net assets of the fund) which were acquired in transactions exempt from registration under Section 4(2) of the Securities Act of 1933 and may be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers.
Forward currency contracts
Contract amount | Unrealized appreciation (depreciation) | |||||||||
Purchases (000) | Sales (000) | Counterparty | Settlement date | at 3/31/2018 (000) | ||||||
USD173,622 | INR11,337,161 | Bank of America, N. A. | 4/16/2018 | $ | 170 | |||||
USD34,231 | JPY3,669,900 | Bank of America, N. A. | 4/16/2018 | (287 | ) | |||||
USD224,421 | GBP160,279 | UBS AG | 4/23/2018 | (487 | ) | |||||
USD338,206 | GBP239,992 | Citibank | 4/24/2018 | 1,428 | ||||||
USD6,286 | JPY664,700 | JPMorgan Chase | 5/11/2018 | 23 | ||||||
USD46,332 | JPY4,900,000 | JPMorgan Chase | 5/21/2018 | 136 | ||||||
$ | 983 |
EuroPacific Growth Fund | 9 |
Investments in affiliates
A company is an affiliate of the fund under the Investment Company Act of 1940 if the fund’s holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund’s affiliated-company holdings is either shown in the summary investment portfolio or included in the value of “Other securities” under the respective industry sectors. Further details on such holdings and related transactions during the year ended March 31, 2018, appear below.
Beginning shares | Additions | Reductions | Ending shares | Net realized gain (loss) (000) | Net unrealized appreciation (depreciation) (000) | Dividend income (000) | Value of affiliates at 3/31/2018 (000) | |||||||||||||||||||||||||
Common stocks 6.05% | ||||||||||||||||||||||||||||||||
Information technology 0.30% | ||||||||||||||||||||||||||||||||
Just Eat PLC1,2 | — | 51,012,545 | — | 51,012,545 | $ | — | $ | 38,980 | $ | — | $ | 499,884 | ||||||||||||||||||||
Nintendo Co., Ltd.5 | 7,332,426 | — | 535,400 | 6,797,026 | 113,030 | 1,363,391 | 35,227 | — | ||||||||||||||||||||||||
499,884 | ||||||||||||||||||||||||||||||||
Financials 0.00% | ||||||||||||||||||||||||||||||||
Indiabulls Housing Finance Ltd.2,5 | 26,207,577 | — | 26,207,577 | — | 210,010 | (123,047 | ) | 11,000 | — | |||||||||||||||||||||||
Consumer discretionary 1.62% | ||||||||||||||||||||||||||||||||
Altice NV, Class A1,2 | 52,918,115 | 27,446,944 | 11,250,704 | 69,114,355 | (105,334 | ) | (875,134 | ) | — | 571,456 | ||||||||||||||||||||||
Altice NV, Class B1,2 | 16,341,536 | — | — | 16,341,536 | — | (234,690 | ) | — | 134,892 | |||||||||||||||||||||||
Paddy Power Betfair PLC2 | 6,722,676 | 1 | — | 6,722,677 | — | (30,267 | ) | 15,078 | 690,494 | |||||||||||||||||||||||
ASOS PLC1,2 | 6,674,299 | 16,081 | — | 6,690,380 | — | 147,223 | — | 654,037 | ||||||||||||||||||||||||
Kroton Educacional SA, ordinary nominative | 90,424,000 | — | — | 90,424,000 | — | (11,463 | ) | 12,076 | 372,115 | |||||||||||||||||||||||
William Hill PLC2 | 51,985,007 | 3,394,152 | — | 55,379,159 | — | 51,427 | 8,546 | 256,686 | ||||||||||||||||||||||||
Global Brands Group Holding Ltd.1,2 | 487,835,358 | — | — | 487,835,358 | — | (24,514 | ) | — | 27,587 | |||||||||||||||||||||||
2,707,267 | ||||||||||||||||||||||||||||||||
Materials 0.74% | ||||||||||||||||||||||||||||||||
Chr. Hansen Holding A/S2 | 8,743,000 | — | 1,251,636 | 7,491,364 | 57,427 | 136,193 | 16,365 | 647,058 | ||||||||||||||||||||||||
First Quantum Minerals Ltd. | 35,467,201 | 13,723,800 | 7,580,000 | 41,611,001 | (46,908 | ) | 132,854 | 266 | 584,246 | |||||||||||||||||||||||
Nitto Denko Corp.5 | 10,347,699 | 500,000 | 7,323,299 | 3,524,400 | 120,963 | (87,503 | ) | 8,029 | — | |||||||||||||||||||||||
HeidelbergCement AG2,5 | 12,222,194 | 226,000 | 7,143,510 | 5,304,684 | 66,624 | (35,125 | ) | 21,433 | — | |||||||||||||||||||||||
1,231,304 | ||||||||||||||||||||||||||||||||
Industrials 2.10% | ||||||||||||||||||||||||||||||||
Ryanair Holdings PLC (ADR)1 | 10,729,994 | 7,244,750 | — | 17,974,744 | — | 477,624 | — | 2,208,197 | ||||||||||||||||||||||||
International Consolidated Airlines Group, SA (CDI)2 | 153,050,123 | — | 2,944,448 | 150,105,675 | 4,283 | 303,619 | 44,452 | 1,295,335 | ||||||||||||||||||||||||
Toshiba Corp.2,5 | 278,979,000 | — | 278,979,000 | — | (236,802 | ) | 404,443 | — | — | |||||||||||||||||||||||
3,503,532 | ||||||||||||||||||||||||||||||||
Consumer staples 0.00% | ||||||||||||||||||||||||||||||||
Associated British Foods PLC2,5 | 42,312,249 | 5,246,300 | 17,616,126 | 29,942,423 | (13,436 | ) | 152,376 | 21,165 | — | |||||||||||||||||||||||
Health care 0.16% | ||||||||||||||||||||||||||||||||
Hikma Pharmaceuticals PLC2 | 8,501,389 | 6,822,384 | — | 15,323,773 | — | (57,333 | ) | 3,078 | 259,704 | |||||||||||||||||||||||
Sysmex Corp.5 | 14,836,538 | — | 8,989,538 | 5,847,000 | 126,336 | 88,707 | 4,337 | — | ||||||||||||||||||||||||
UCB SA2,5 | 12,642,824 | — | 8,947,034 | 3,695,790 | 59,891 | (96,189 | ) | 15,811 | — | |||||||||||||||||||||||
259,704 | ||||||||||||||||||||||||||||||||
Energy 0.17% | ||||||||||||||||||||||||||||||||
Tourmaline Oil Corp. | 16,547,000 | — | — | 16,547,000 | — | (88,307 | ) | 1,031 | 280,621 | |||||||||||||||||||||||
Utilities 0.96% | ||||||||||||||||||||||||||||||||
Ørsted AS2,6 | 27,014,285 | 137,381 | 2,502,000 | 24,649,666 | 45,692 | 655,064 | 36,472 | 1,604,405 | ||||||||||||||||||||||||
China Gas Holdings Ltd.2,5 | 225,874,000 | 42,826,000 | 56,760,000 | 211,940,000 | 73,786 | 415,363 | 8,648 | — | ||||||||||||||||||||||||
1,604,405 | ||||||||||||||||||||||||||||||||
Total 6.05% | $ | 475,562 | $ | 2,703,692 | $ | 263,014 | $ | 10,086,717 |
10 | EuroPacific Growth Fund |
1 | Security did not produce income during the last 12 months. |
2 | 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 $94,008,068,000, which represented 56.40% of the net assets of the fund. This amount includes $90,598,979,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading. |
3 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
4 | A portion of this security was pledged as collateral. The total value of pledged collateral was $2,774,000, which represented less than .01% of the net assets of the fund. |
5 | Unaffiliated issuer at 3/31/2018. |
6 | This security changed its name during the reporting period. |
Key to abbreviations and symbol
ADR = American Depositary Receipts
CDI = CREST Depository Interest
GBP = British pounds
INR = Indian rupees
JPY = Japanese yen
USD/$ = U.S. dollars
See Notes to Financial Statements
EuroPacific Growth Fund | 11 |
Statement of assets and liabilities
at March 31, 2018 | (dollars in thousands) |
Assets: | ||||||||
Investment securities, at value: | ||||||||
Unaffiliated issuers (cost: $108,101,237) | $ | 156,090,668 | ||||||
Affiliated issuers (cost: $7,940,004) | 10,086,717 | $ | 166,177,385 | |||||
Cash | 291,163 | |||||||
Cash denominated in currencies other than U.S. dollars (cost: $44,264) | 44,278 | |||||||
Unrealized appreciation on open forward currency contracts | 1,757 | |||||||
Receivables for: | ||||||||
Sales of investments | 224,999 | |||||||
Sales of fund’s shares | 442,323 | |||||||
Dividends and interest | 552,056 | |||||||
Other | 14,107 | 1,233,485 | ||||||
167,748,068 | ||||||||
Liabilities: | ||||||||
Unrealized depreciation on open forward currency contracts | 774 | |||||||
Payables for: | ||||||||
Purchases of investments | 394,720 | |||||||
Repurchases of fund’s shares | 315,238 | |||||||
Investment advisory services | 58,869 | |||||||
Services provided by related parties | 23,758 | |||||||
Trustees’ deferred compensation | 4,176 | |||||||
Non-U.S. taxes | 236,283 | |||||||
Other | 44,428 | 1,077,472 | ||||||
Net assets at March 31, 2018 | $ | 166,669,822 | ||||||
Net assets consist of: | ||||||||
Capital paid in on shares of beneficial interest | $ | 112,536,013 | ||||||
Distributions in excess of net investment income | (747,101 | ) | ||||||
Undistributed net realized gain | 4,965,968 | |||||||
Net unrealized appreciation | 49,914,942 | |||||||
Net assets at March 31, 2018 | $ | 166,669,822 |
See Notes to Financial Statements
12 | EuroPacific Growth Fund |
(dollars and shares in thousands, except per-share amounts)
Shares of beneficial interest issued and outstanding (no stated par value) —
unlimited shares authorized (2,951,267 total shares outstanding)
Net assets | Shares outstanding | Net asset value per share | ||||||||||
Class A | $ | 29,066,679 | 512,963 | $ | 56.66 | |||||||
Class C | 1,349,669 | 24,396 | 55.32 | |||||||||
Class T | 12 | — | * | 56.69 | ||||||||
Class F-1 | 4,384,692 | 77,748 | 56.40 | |||||||||
Class F-2 | 25,826,278 | 456,938 | 56.52 | |||||||||
Class F-3 | 9,473,249 | 167,133 | 56.68 | |||||||||
Class 529-A | 1,525,613 | 27,243 | 56.00 | |||||||||
Class 529-C | 278,168 | 5,077 | 54.79 | |||||||||
Class 529-E | 70,622 | 1,272 | 55.50 | |||||||||
Class 529-T | 12 | — | * | 56.68 | ||||||||
Class 529-F-1 | 133,708 | 2,388 | 55.99 | |||||||||
Class R-1 | 263,409 | 4,837 | 54.46 | |||||||||
Class R-2 | 818,320 | 14,897 | 54.93 | |||||||||
Class R-2E | 253,787 | 4,551 | 55.76 | |||||||||
Class R-3 | 4,630,817 | 83,475 | 55.48 | |||||||||
Class R-4 | 10,277,511 | 185,118 | 55.52 | |||||||||
Class R-5E | 603,016 | 10,712 | 56.29 | |||||||||
Class R-5 | 8,944,223 | 158,107 | 56.57 | |||||||||
Class R-6 | 68,770,037 | 1,214,412 | 56.63 |
* | Amount less than one thousand. |
See Notes to Financial Statements
EuroPacific Growth Fund | 13 |
Statement of operations
for the year ended March 31, 2018 | (dollars in thousands) | |||||||
Investment income: | ||||||||
Income: | ||||||||
Dividends (net of non-U.S. taxes of $238,445; also includes $263,014 from affiliates) | $ | 2,436,529 | ||||||
Interest | 147,639 | $ | 2,584,168 | |||||
Fees and expenses*: | ||||||||
Investment advisory services | 639,370 | |||||||
Distribution services | 161,168 | |||||||
Transfer agent services | 95,956 | |||||||
Administrative services | 65,790 | |||||||
Reports to shareholders | 3,399 | |||||||
Registration statement and prospectus | 3,707 | |||||||
Trustees’ compensation | 1,298 | |||||||
Auditing and legal | 1,202 | |||||||
Custodian | 23,608 | |||||||
Other | 1,589 | 997,087 | ||||||
Net investment income | 1,587,081 | |||||||
Net realized gain and unrealized appreciation: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments (net of non-U.S. taxes of $116): | ||||||||
Unaffiliated issuers | 8,385,759 | |||||||
Affiliated issuers | 475,562 | |||||||
Forward currency contracts | (116,563 | ) | ||||||
Currency transactions | (22,795 | ) | 8,721,963 | |||||
Net unrealized appreciation on: | ||||||||
Investments (net of non-U.S. taxes of $236,283): | ||||||||
Unaffiliated issuers | 14,610,807 | |||||||
Affiliated issuers | 2,703,692 | |||||||
Forward currency contracts | 68,744 | |||||||
Currency translations | 7,661 | 17,390,904 | ||||||
Net realized gain and unrealized appreciation | 26,112,867 | |||||||
Net increase in net assets resulting from operations | $ | 27,699,948 |
* | Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements. |
Statements of changes in net assets | ||
(dollars in thousands) |
Year ended March 31 | ||||||||
2018 | 2017 | |||||||
Operations: | ||||||||
Net investment income | $ | 1,587,081 | $ | 1,381,363 | ||||
Net realized gain | 8,721,963 | 4,043,887 | ||||||
Net unrealized appreciation | 17,390,904 | 9,840,119 | ||||||
Net increase in net assets resulting from operations | 27,699,948 | 15,265,369 | ||||||
Dividends and distributions paid to shareholders: | ||||||||
Dividends from net investment income | (1,625,899 | ) | (1,711,516 | ) | ||||
Distributions from net realized gain on investments | (5,913,625 | ) | — | |||||
Total dividends and distributions paid to shareholders | (7,539,524 | ) | (1,711,516 | ) | ||||
Net capital share transactions | 14,228,851 | (2,837,635 | ) | |||||
Total increase in net assets | 34,389,275 | 10,716,218 | ||||||
Net assets: | ||||||||
Beginning of year | 132,280,547 | 121,564,329 | ||||||
End of year (including distributions in excess of net investment income: $(747,101) and $(588,546), respectively) | $ | 166,669,822 | $ | 132,280,547 |
See Notes to Financial Statements
14 | EuroPacific Growth Fund |
Notes to financial statements
1. 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 to provide long-term growth of capital. Shareholders approved a proposal to reorganize the fund from a Massachusetts business trust to a Delaware statutory trust. The reorganization may be completed in the next 12 months; however, the fund reserves the right to delay the implementation.
The fund has 19 share classes consisting of six retail share classes (Classes A, C, T, F-1, F-2 and F-3), five 529 college savings plan share classes (Classes 529-A, 529-C, 529-E, 529-T and 529-F-1) and eight retirement plan share classes (Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education. The retirement plan share classes are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described further in the following table:
Share class | Initial sales charge | Contingent deferred sales charge upon redemption | Conversion feature | |||
Classes A and 529-A | Up to 5.75% | None (except 1% for certain redemptions within 18 months of purchase without an initial sales charge) | None | |||
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 | Class 529-C converts to Class 529-A after 10 years* | |||
Class 529-E | None | None | None | |||
Classes T and 529-T† | Up to 2.50% | None | None | |||
Classes F-1, F-2, F-3 and 529-F-1 | None | None | None | |||
Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6 | None | None | None |
* | Effective December 1, 2017. |
† | Class T and 529-T shares are not available for purchase. |
Holders of all share classes have equal pro rata rights to the assets, dividends and liquidation proceeds of the fund. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution, transfer agent and administrative services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each share class.
2. Significant accounting policies
The fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The fund’s financial statements have been prepared to comply with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles require the fund’s investment adviser to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Subsequent events, if any, have been evaluated through the date of issuance in the preparation of the financial statements. The fund follows the significant accounting policies described in this section, as well as the valuation policies described in the next section on valuation.
Cash — Cash may include amounts held in an interest bearing deposit facility.
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, transfer agent and administrative services, are charged directly to the respective share class.
EuroPacific Growth Fund | 15 |
Dividends and distributions to shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.
Currency translation — Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates supplied by one or more pricing vendors on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. The effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments in the fund’s statement of operations. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
3. Valuation
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by U.S. GAAP. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs — The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.
Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including short-term securities, are generally valued at prices obtained from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.
Fixed-income class | Examples of standard inputs | |
All | Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”) | |
Corporate bonds & notes; convertible securities | Standard inputs and underlying equity of the issuer | |
Bonds & notes of governments & government agencies | Standard inputs and interest rate volatilities |
When the fund’s investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or deemed to be not representative), fixed-income securities will be valued in good faith at the mean quoted bid and ask prices that are reasonably and timely available (or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described for either equity or fixed-income securities, depending on which method is deemed most appropriate by the fund’s investment adviser. Forward currency contracts are valued at the mean of representative quoted bid and ask prices, generally based on prices supplied by one or more pricing vendors.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the fund’s investment adviser are fair valued as determined in good faith under fair valuation guidelines adopted by authority of the fund’s board of trustees as further described. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. In addition, the closing prices of equity securities that trade in markets outside U.S. time zones may be adjusted to reflect significant events that occur after the close of local trading but before the net asset value of each share class of the fund is determined. Fair valuations and
16 | EuroPacific Growth Fund |
valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.
Processes and structure — The fund’s board of trustees has delegated authority to the fund’s investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation teams. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees with supplemental information to support the changes. The fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.
The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control self-evaluation program facilitated by the investment adviser’s compliance group.
Classifications — The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Certain securities trading outside the U.S. may transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following tables present the fund’s valuation levels as of March 31, 2018 (dollars in thousands):
Investment securities | ||||||||||||||||
Level 1 | Level 2* | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Common stocks: | ||||||||||||||||
Information technology | $ | 22,604,561 | $ | 8,807,126 | $ | — | $ | 31,411,687 | ||||||||
Financials | 3,747,619 | 24,055,027 | — | 27,802,646 | ||||||||||||
Consumer discretionary | 5,662,052 | 12,706,185 | — | 18,368,237 | ||||||||||||
Materials | 6,626,054 | 8,885,848 | — | 15,511,902 | ||||||||||||
Industrials | 5,328,928 | 9,460,886 | — | 14,789,814 | ||||||||||||
Consumer staples | 4,679,104 | 7,905,944 | — | 12,585,048 | ||||||||||||
Health care | 3,688,675 | 6,832,684 | — | 10,521,359 | ||||||||||||
Energy | 3,280,552 | 4,241,741 | — | 7,522,293 | ||||||||||||
Utilities | — | 4,183,613 | — | 4,183,613 | ||||||||||||
Telecommunication services | 3,513,759 | 585,698 | — | 4,099,457 | ||||||||||||
Real estate | 135,986 | 1,417,170 | 830 | 1,553,986 | ||||||||||||
Miscellaneous | 3,349,798 | 4,925,316 | — | 8,275,114 | ||||||||||||
Bonds, notes & other debt instruments | — | 153,443 | — | 153,443 | ||||||||||||
Short-term securities | — | 9,398,786 | — | 9,398,786 | ||||||||||||
Total | $ | 62,617,088 | $ | 103,559,467 | $ | 830 | $ | 166,177,385 |
Other investments† | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Unrealized appreciation on open forward currency contracts | $ | — | $ | 1,757 | $ | — | $ | 1,757 | ||||||||
Liabilities: | ||||||||||||||||
Unrealized depreciation on open forward currency contracts | — | (774 | ) | — | (774 | ) | ||||||||||
Total | $ | — | $ | 983 | $ | — | $ | 983 |
* | Securities with a value of $75,458,621,000, which represented 45.27% of the net assets of the fund, transferred from Level 1 to Level 2 since the prior fiscal year-end, primarily due to significant market movements following the close of local trading. |
† | Forward currency contracts are not included in the investment portfolio. |
EuroPacific Growth Fund | 17 |
4. Risk factors
Investing in the fund may involve certain risks including, but not limited to, those described below.
Market conditions — The prices of, and the income generated by, the common stocks and other securities held by the fund may decline — sometimes rapidly or unpredictably — due to various factors, including events or conditions affecting the general economy or particular industries; overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions; and currency exchange rate, interest rate and commodity price fluctuations.
Issuer risks — The prices of, and the income generated by, securities held by the fund may decline in response to various factors directly related to the issuers of such securities, including reduced demand for an issuer’s goods or services, poor management performance and strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives.
Investing in growth-oriented stocks — Growth-oriented common stocks and other equity-type securities (such as preferred stocks, convertible preferred stocks and convertible bonds) may involve larger price swings and greater potential for loss than other types of investments. These risks may be even greater in the case of smaller capitalization stocks.
Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations or revenues outside the U.S., may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts, terrorism and war) in the countries or regions in which the issuers operate or generate revenue. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Issuers of these securities may be more susceptible to actions of foreign governments, such as the imposition of price controls or punitive taxes, that could adversely impact the value of these securities. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different accounting practices and different regulatory, legal and reporting standards and practices, and may be more difficult to value, than those in the U.S. In addition, the value of investments outside the U.S. may be reduced by foreign taxes, including foreign withholding taxes on interest and dividends. Further, there may be increased risks of delayed settlement of securities purchased or sold by the fund. The risks of investing outside the U.S. may be heightened in connection with investments in emerging markets.
Investing in emerging markets — Investing in emerging markets may involve risks in addition to and greater than those generally associated with investing in the securities markets of developed countries. For instance, developing countries may have less developed legal and accounting systems than those in developed countries. The governments of these countries may be less stable and more likely to impose capital controls, nationalize a company or industry, place restrictions on foreign ownership and on withdrawing sale proceeds of securities from the country, and/or impose punitive taxes that could adversely affect the prices of securities. In addition, the economies of these countries may be dependent on relatively few industries that are more susceptible to local and global changes. Securities markets in these countries can also be relatively small and have substantially lower trading volumes. As a result, securities issued in these countries may be more volatile and less liquid, and may be more difficult to value, than securities issued in countries with more developed economies and/or markets. Less certainty with respect to security valuations may lead to additional challenges and risks in calculating the fund’s net asset value. Additionally, there may be increased settlement risks for transactions in local securities.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.
5. Certain investment techniques
Forward currency contracts — The fund has entered into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The fund’s investment adviser uses forward currency contracts to manage the fund’s exposure to changes in exchange rates. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates.
On a daily basis, the fund’s investment adviser values forward currency contracts and records unrealized appreciation or depreciation for open forward currency contracts in the fund’s statement of assets and liabilities. Realized gains or losses are recorded at the time the forward currency contract is closed or offset by another contract with the same broker for the same settlement date and currency.
Closed forward currency contracts that have not reached their settlement date are included in the respective receivables or payables for closed forward currency contracts in the fund’s statement of assets and liabilities. Net realized gains or losses from closed forward
18 | EuroPacific Growth Fund |
currency contracts and net unrealized appreciation or depreciation from open forward currency contracts are recorded in the fund’s statement of operations. The average month-end notional amount of open forward currency contracts while held was $1,975,386,000.
The following tables present the financial statement impacts resulting from the fund’s use of forward currency contracts as of, or for the year ended, March 31, 2018 (dollars in thousands):
Assets | Liabilities | |||||||||||
Contracts | Risk type | Location on statement of assets and liabilities | Value | Location on statement of assets and liabilities | Value | |||||||
Forward currency | Currency | Unrealized appreciation on open forward currency contracts | $ | 1,757 | Unrealized depreciation on open forward currency contracts | $ | 774 | |||||
Net realized loss | Net unrealized appreciation | |||||||||||
Contracts | Risk type | Location on statement of operations | Value | Location on statement of operations | Value | |||||||
Forward currency | Currency | Net realized loss on forward currency contracts | $(116,563 | ) | Net unrealized appreciation on forward currency contracts | $68,744 |
Collateral — The fund participates in a collateral program due to its use of forward currency contracts that calls for the fund to either receive or pledge highly liquid assets, such as cash or U.S. government securities, as collateral based on the net gain or loss on unsettled forward currency contracts by counterparty. The purpose of the collateral is to cover potential losses that could occur in the event that either party cannot meet its contractual obligation. Non-cash collateral pledged by the fund, if any, is disclosed in the fund’s investment portfolio, and cash collateral pledged by the fund, if any, is held in a segregated account with the fund’s custodian, which is reflected as restricted cash in the fund’s statement of assets and liabilities.
Rights of offset — The fund has entered into enforceable master netting agreements with certain counterparties for forward currency contracts, where on any date amounts payable by each party to the other (in the same currency with respect to the same transaction) may be closed or offset by each party’s payment obligation. If an early termination date occurs under these agreements following an event of default or termination event, all obligations of each party to its counterparty are settled net through a single payment in a single currency (“close-out netting”). For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to these master netting arrangements in the statement of assets and liabilities.
The following table presents the fund’s forward currency contracts by counterparty that are subject to master netting agreements but that are not offset in the fund’s statement of assets and liabilities. The net amount column shows the impact of offsetting on the fund’s statement of assets and liabilities as of March 31, 2018, if close-out netting was exercised (dollars in thousands):
Gross amounts recognized in the | Gross amounts not offset in the statement of assets and liabilities and subject to a master netting agreement | |||||||||||||||||||
Counterparty | statement of assets and liabilities | Available to offset | Non-cash collateral* | Cash collateral | Net amount | |||||||||||||||
Assets: | ||||||||||||||||||||
Bank of America, N.A. | $ | 170 | $ | (170 | ) | $ | — | $ | — | $ | — | |||||||||
Citibank | 1,428 | — | — | — | 1,428 | |||||||||||||||
JPMorgan Chase | 159 | — | (159 | ) | — | — | ||||||||||||||
Total | $ | 1,757 | $ | (170 | ) | $ | (159 | ) | $ | — | �� | $ | 1,428 | |||||||
Liabilities: | ||||||||||||||||||||
Bank of America, N.A. | $ | 287 | $ | (170 | ) | $ | (117 | ) | $ | — | $ | — | ||||||||
UBS AG | 487 | — | (487 | ) | — | — | ||||||||||||||
Total | $ | 774 | $ | (170 | ) | $ | (604 | ) | $ | — | $ | — |
* | Non-cash collateral is shown on a settlement basis. |
EuroPacific Growth Fund | 19 |
6. Taxation and distributions
Federal income taxation — The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
As of and during the period ended March 31, 2018, 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 significant interest or penalties.
The fund’s tax returns are not subject to examination by federal, state and, if applicable, non-U.S. tax authorities after the expiration of each jurisdiction’s statute of limitations, which is generally three years after the date of filing but can be extended in certain jurisdictions.
Non-U.S. taxation — Dividend and interest income are recorded net of non-U.S. taxes paid. The fund may file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. As a result of rulings from European courts, the fund filed for additional reclaims related to prior years. These reclaims are recorded when the amount is known and there are no significant uncertainties on collectability. Gains realized by the fund on the sale of securities in certain countries, if any, may be subject to non-U.S. taxes. If applicable, the fund records an estimated deferred tax liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
Distributions — Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to different treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in securities outside the U.S.; cost of investments sold and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
During the year ended March 31, 2018, the fund reclassified $269,446,000 from distributions in excess of net investment income to capital paid in on shares of beneficial interest, $149,709,000 from undistributed net realized gain to distributions in excess of net investment income and $153,547,000 from undistributed net realized gain to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.
As of March 31, 2018, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investments were as follows (dollars in thousands):
Undistributed ordinary income | $ | 101,338 | ||
Undistributed long-term capital gains | 4,825,162 | |||
Gross unrealized appreciation on investments | 53,323,320 | |||
Gross unrealized depreciation on investments | (3,889,651 | ) | ||
Net unrealized appreciation on investments | 49,433,669 | |||
Cost of investments | 116,744,699 |
20 | EuroPacific Growth Fund |
Distributions paid were characterized for tax purposes as follows (dollars in thousands):
Year ended March 31, 2018 | Year ended March 31, 2017 | |||||||||||||||||||||||
Share class | Ordinary income | Long-term capital gains | Total dividends and distributions paid | Ordinary income | Long-term capital gains | Total distributions paid | ||||||||||||||||||
Class A | $ | 247,242 | $ | 1,087,109 | $ | 1,334,351 | $ | 300,737 | $ | — | $ | 300,737 | ||||||||||||
Class B1 | — | — | — | — | — | — | ||||||||||||||||||
Class C | 1,675 | 52,155 | 53,830 | 4,442 | — | 4,442 | ||||||||||||||||||
Class T2 | — | 3 | 1 | 1 | ||||||||||||||||||||
Class F-1 | 37,697 | 175,011 | 212,708 | 46,706 | — | 46,706 | ||||||||||||||||||
Class F-2 | 265,665 | 941,406 | 1,207,071 | 317,393 | — | 317,393 | ||||||||||||||||||
Class F-34 | 82,028 | 220,257 | 302,285 | — | — | — | ||||||||||||||||||
Class 529-A | 12,322 | 54,000 | 66,322 | 13,138 | — | 13,138 | ||||||||||||||||||
Class 529-B1 | — | — | — | — | — | — | ||||||||||||||||||
Class 529-C | 214 | 12,822 | 13,036 | 1,422 | — | 1,422 | ||||||||||||||||||
Class 529-E | 423 | 2,633 | 3,056 | 547 | — | 547 | ||||||||||||||||||
Class 529-T2 | — | 3 | 1 | 1 | ||||||||||||||||||||
Class 529-F-1 | 1,305 | 4,721 | 6,026 | 1,325 | — | 1,325 | ||||||||||||||||||
Class R-1 | 434 | 10,611 | 11,045 | 1,303 | — | 1,303 | ||||||||||||||||||
Class R-2 | 1,396 | 32,753 | 34,149 | 3,686 | — | 3,686 | ||||||||||||||||||
Class R-2E | 1,191 | 9,019 | 10,210 | 1,976 | — | 1,976 | ||||||||||||||||||
Class R-3 | 27,704 | 187,911 | 215,615 | 41,451 | — | 41,451 | ||||||||||||||||||
Class R-4 | 93,792 | 417,928 | 511,720 | 120,004 | — | 120,004 | ||||||||||||||||||
Class R-5E | 2,014 | 6,397 | 8,411 | 70 | — | 70 | ||||||||||||||||||
Class R-5 | 103,478 | 349,875 | 453,353 | 129,449 | — | 129,449 | ||||||||||||||||||
Class R-6 | 747,319 | 2,349,015 | 3,096,334 | 727,867 | — | 727,867 | ||||||||||||||||||
Total | $ | 1,625,899 | $ | 5,913,625 | $ | 7,539,524 | $ | 1,711,516 | $ | — | $ | 1,711,516 |
1 | Class B and 529-B shares were fully liquidated on May 5, 2017. |
2 | Class T and 529-T shares began investment operations on April 7, 2017. |
3 | Amount less than one thousand. |
4 | Class F-3 shares began investment operations on January 27, 2017. |
7. Fees and transactions with related parties
CRMC, the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. (“AFD”), the principal underwriter of the fund’s shares, and American Funds Service Company® (“AFS”), the fund’s transfer agent. CRMC, AFD and AFS are considered related parties to the fund.
Investment advisory services — The fund has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. These fees are based on a series of decreasing annual rates beginning with 0.690% on the first $500 million of daily net assets and decreasing to 0.394% on such assets in excess of $144 billion. For the year ended March 31, 2018, the investment advisory services fee was $639,370,000, which was equivalent to an annualized rate of 0.415% of average daily net assets.
Class-specific fees and expenses — Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are further described below:
Distribution services — The fund has plans of distribution for all share classes, except Class F-2, F-3, R-5E, R-5 and R-6 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted in this section. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide
EuroPacific Growth Fund | 21 |
certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
Share class | Currently approved limits | Plan limits | ||||||
Class A | 0.25 | % | 0.25 | % | ||||
Class 529-A | 0.25 | 0.50 | ||||||
Classes C, 529-C and R-1 | 1.00 | 1.00 | ||||||
Class R-2 | 0.75 | 1.00 | ||||||
Class R-2E | 0.60 | 0.85 | ||||||
Classes 529-E and R-3 | 0.50 | 0.75 | ||||||
Classes T, F-1, 529-T, 529-F-1 and R-4 | 0.25 | 0.50 |
For Class A and 529-A shares, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These share classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limits are not exceeded. As of March 31, 2018, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A shares.
Transfer agent services — The fund has a shareholder services agreement with AFS under which the fund compensates AFS for providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.
Administrative services — The fund has an administrative services agreement with CRMC under which the fund compensates CRMC for providing administrative services to Class A, C, T, F, 529 and R shares. Administrative services are provided by CRMC to help assist third parties providing non-distribution services to fund shareholders. These services include providing in depth information on the fund and market developments that impact fund investments. Administrative services also include, but are not limited to, coordinating, monitoring and overseeing third parties that provide services to fund shareholders. The agreement between the fund and the investment adviser provides the fund the ability to charge an administrative services fee of 0.05% of average daily net assets for all share classes. Currently Class A shares pay an annual fee of 0.01% of average daily net assets (which could be increased as noted above) and Class C, T, F, 529 and R shares pay an annual fee of 0.05% of their respective average daily net assets.
529 plan services — Each 529 share class is subject to service fees to compensate the Virginia College Savings Plan (“Virginia529”) for its oversight and administration of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $20 billion of the net assets invested in the Class 529 shares of the American Funds and decreasing to 0.03% on such assets in excess of $100 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. The fee is included in other expenses in the fund’s statement of operations. Virginia529 is not considered a related party to the fund.
22 | EuroPacific Growth Fund |
For the year ended March 31, 2018, class-specific expenses under the agreements were as follows (dollars in thousands):
Share class | Distribution services | Transfer agent services | Administrative services | 529 plan services | ||||||||
Class A | $69,570 | $36,259 | $2,832 | Not applicable | ||||||||
Class B1 | 1 | — | 2 | Not applicable | Not applicable | |||||||
Class C | 13,290 | 1,572 | 665 | Not applicable | ||||||||
Class T3 | — | — | 2 | — | 2 | Not applicable | ||||||
Class F-1 | 11,228 | 5,476 | 2,248 | Not applicable | ||||||||
Class F-2 | Not applicable | 24,459 | 12,051 | Not applicable | ||||||||
Class F-3 | Not applicable | 231 | 3,198 | Not applicable | ||||||||
Class 529-A | 2,996 | 1,352 | 686 | $920 | ||||||||
Class 529-B1 | — | 2 | — | 2 | — | 2 | — | 2 | ||||
Class 529-C | 3,425 | 375 | 173 | 233 | ||||||||
Class 529-E | 335 | 40 | 34 | 45 | ||||||||
Class 529-T3 | — | — | 2 | — | 2 | — | 2 | |||||
Class 529-F-1 | — | 120 | 61 | 82 | ||||||||
Class R-1 | 2,656 | 292 | 133 | Not applicable | ||||||||
Class R-2 | 6,114 | 2,899 | 411 | Not applicable | ||||||||
Class R-2E | 1,397 | 463 | 117 | Not applicable | ||||||||
Class R-3 | 23,689 | 7,151 | 2,372 | Not applicable | ||||||||
Class R-4 | 26,467 | 10,424 | 5,302 | Not applicable | ||||||||
Class R-5E | Not applicable | 284 | 108 | Not applicable | ||||||||
Class R-5 | Not applicable | 4,352 | 4,527 | Not applicable | ||||||||
Class R-6 | Not applicable | 207 | 30,872 | Not applicable | ||||||||
Total class-specific expenses | $161,168 | $95,956 | $65,790 | $1,280 |
1 | Class B and 529-B shares were fully liquidated on May 5, 2017. |
2 | Amount less than one thousand. |
3 | Class T and 529-T shares began investment operations on April 7, 2017. |
Trustees’ deferred compensation — Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation of $1,298,000 in the fund’s statement of operations reflects $540,000 in current fees (either paid in cash or deferred) and a net increase of $758,000 in the value of the deferred amounts.
Affiliated officers and trustees — Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFD and AFS. No affiliated officers or trustees received any compensation directly from the fund.
Security transactions with related funds — The fund may purchase from, or sell securities to, other funds managed by CRMC (or funds managed by certain affiliates of CRMC) under procedures adopted by the fund’s board of trustees. The funds involved in such transactions are considered related by virtue of having a common investment adviser (or affiliated investment advisers), common trustees and/or common officers. When such transactions occur, each transaction is executed at the current market price of the security and no brokerage commissions or fees are paid in accordance with Rule 17a-7 of the 1940 Act.
Interfund lending — Pursuant to an exemptive order issued by the SEC, the fund, along with other CRMC-managed funds (or funds managed by certain affiliates of CRMC), may participate in an interfund lending program. The program provides an alternate credit facility that permits the funds to lend or borrow cash for temporary purposes directly to or from one another, subject to the conditions of the exemptive order. The fund did not lend or borrow cash through the interfund lending program at any time during the year ended March 31, 2018.
EuroPacific Growth Fund | 23 |
8. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
Sales1 | Reinvestments of dividends and distributions | Repurchases1 | Net (decrease) increase | |||||||||||||||||||||||||||||
Share class | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||||||||
Year ended March 31, 2018 | ||||||||||||||||||||||||||||||||
Class A | $ | 2,843,403 | 51,520 | $ | 1,307,706 | 24,158 | $ | (4,581,031 | ) | (83,563 | ) | $ | (429,922 | ) | (7,885 | ) | ||||||||||||||||
Class B2 | — | 3 | — | 3 | — | — | (3,850 | ) | (78 | ) | (3,850 | ) | (78 | ) | ||||||||||||||||||
Class C | 283,062 | 5,244 | 53,157 | 1,007 | (405,218 | ) | (7,594 | ) | (68,999 | ) | (1,343 | ) | ||||||||||||||||||||
Class T4 | 10 | — | 3 | — | — | — | — | 10 | — | 3 | ||||||||||||||||||||||
Class F-1 | 1,107,097 | 20,232 | 207,272 | 3,851 | (1,727,999 | ) | (31,488 | ) | (413,630 | ) | (7,405 | ) | ||||||||||||||||||||
Class F-2 | 8,507,578 | 154,605 | 1,143,934 | 21,198 | (9,998,054 | ) | (185,550 | ) | (346,542 | ) | (9,747 | ) | ||||||||||||||||||||
Class F-3 | 8,492,577 | 157,263 | 288,899 | 5,256 | (1,064,140 | ) | (18,947 | ) | 7,717,336 | 143,572 | ||||||||||||||||||||||
Class 529-A | 277,885 | 5,013 | 66,304 | 1,237 | (166,157 | ) | (3,035 | ) | 178,032 | 3,215 | ||||||||||||||||||||||
Class 529-B2 | — | 3 | — | 3 | — | — | (378 | ) | (8 | ) | (378 | ) | (8 | ) | ||||||||||||||||||
Class 529-C | 39,172 | 733 | 13,030 | 251 | (168,308 | ) | (3,097 | ) | (116,106 | ) | (2,113 | ) | ||||||||||||||||||||
Class 529-E | 8,365 | 155 | 3,057 | 57 | (9,497 | ) | (176 | ) | 1,925 | 36 | ||||||||||||||||||||||
Class 529-T4 | 10 | — | 3 | 1 | — | 3 | — | — | 11 | — | 3 | |||||||||||||||||||||
Class 529-F-1 | 27,992 | 513 | 6,025 | 112 | (17,854 | ) | (325 | ) | 16,163 | 300 | ||||||||||||||||||||||
Class R-1 | 33,981 | 642 | 11,045 | 213 | (64,379 | ) | (1,218 | ) | (19,353 | ) | (363 | ) | ||||||||||||||||||||
Class R-2 | 194,136 | 3,633 | 34,093 | 650 | (287,727 | ) | (5,407 | ) | (59,498 | ) | (1,124 | ) | ||||||||||||||||||||
Class R-2E | 49,166 | 913 | 10,210 | 191 | (24,043 | ) | (438 | ) | 35,333 | 666 | ||||||||||||||||||||||
Class R-3 | 1,004,933 | 18,679 | 215,367 | 4,069 | (1,745,504 | ) | (32,510 | ) | (525,204 | ) | (9,762 | ) | ||||||||||||||||||||
Class R-4 | 2,226,257 | 41,532 | 511,553 | 9,646 | (3,768,347 | ) | (69,864 | ) | (1,030,537 | ) | (18,686 | ) | ||||||||||||||||||||
Class R-5E | 624,795 | 11,154 | 8,410 | 156 | (43,879 | ) | (781 | ) | 589,326 | 10,529 | ||||||||||||||||||||||
Class R-5 | 1,764,445 | 32,126 | 452,863 | 8,386 | (3,236,891 | ) | (59,603 | ) | (1,019,583 | ) | (19,091 | ) | ||||||||||||||||||||
Class R-6 | 17,132,391 | 310,505 | 3,083,362 | 56,893 | (10,491,436 | ) | (190,228 | ) | 9,724,317 | 177,170 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 44,617,255 | 814,462 | $ | 7,416,288 | 137,331 | $ | (37,804,692 | ) | (693,910 | ) | $ | 14,228,851 | 257,883 | ||||||||||||||||||
Year ended March 31, 2017 | ||||||||||||||||||||||||||||||||
Class A | $ | 1,849,987 | 40,081 | $ | 293,229 | 6,513 | $ | (5,789,900 | ) | (125,416 | ) | $ | (3,646,684 | ) | (78,822 | ) | ||||||||||||||||
Class B | 226 | 5 | — | — | (53,639 | ) | (1,164 | ) | (53,413 | ) | (1,159 | ) | ||||||||||||||||||||
Class C | 125,247 | 2,778 | 4,348 | 98 | (504,610 | ) | (11,223 | ) | (375,015 | ) | (8,347 | ) | ||||||||||||||||||||
Class F-1 | 838,435 | 18,237 | 45,045 | 1,005 | (1,433,894 | ) | (31,225 | ) | (550,414 | ) | (11,983 | ) | ||||||||||||||||||||
Class F-2 | 7,158,147 | 154,265 | 292,300 | 6,513 | (6,192,781 | ) | (132,780 | ) | 1,257,666 | 27,998 | ||||||||||||||||||||||
Class F-35 | 1,146,977 | 23,623 | — | — | (3,073 | ) | (62 | ) | 1,143,904 | 23,561 | ||||||||||||||||||||||
Class 529-A | 102,696 | 2,249 | 13,136 | 295 | (167,766 | ) | (3,681 | ) | (51,934 | ) | (1,137 | ) | ||||||||||||||||||||
Class 529-B | 84 | 2 | — | — | (7,735 | ) | (170 | ) | (7,651 | ) | (168 | ) | ||||||||||||||||||||
Class 529-C | 30,837 | 693 | 1,422 | 33 | (59,566 | ) | (1,336 | ) | (27,307 | ) | (610 | ) | ||||||||||||||||||||
Class 529-E | 5,550 | 123 | 547 | 12 | (9,123 | ) | (202 | ) | (3,026 | ) | (67 | ) | ||||||||||||||||||||
Class 529-F-1 | 18,435 | 402 | 1,324 | 30 | (18,027 | ) | (396 | ) | 1,732 | 36 | ||||||||||||||||||||||
Class R-1 | 38,474 | 865 | 1,303 | 30 | (67,425 | ) | (1,514 | ) | (27,648 | ) | (619 | ) | ||||||||||||||||||||
Class R-2 | 161,681 | 3,600 | 3,677 | 84 | (280,184 | ) | (6,255 | ) | (114,826 | ) | (2,571 | ) | ||||||||||||||||||||
Class R-2E | 180,964 | 4,101 | 1,976 | 44 | (20,947 | ) | (455 | ) | 161,993 | 3,690 | ||||||||||||||||||||||
Class R-3 | 816,899 | 18,069 | 41,415 | 938 | (1,879,284 | ) | (41,630 | ) | (1,020,970 | ) | (22,623 | ) | ||||||||||||||||||||
Class R-4 | 1,799,825 | 39,879 | 119,988 | 2,717 | (4,449,180 | ) | (99,122 | ) | (2,529,367 | ) | (56,526 | ) | ||||||||||||||||||||
Class R-5E | 8,904 | 189 | 70 | 2 | (341 | ) | (8 | ) | 8,633 | 183 | ||||||||||||||||||||||
Class R-5 | 1,719,794 | 37,373 | 129,324 | 2,880 | (3,340,903 | ) | (73,021 | ) | (1,491,785 | ) | (32,768 | ) | ||||||||||||||||||||
Class R-6 | 12,538,147 | 272,818 | 724,851 | 16,126 | (8,774,521 | ) | (190,045 | ) | 4,488,477 | 98,899 | ||||||||||||||||||||||
Total net increase (decrease) | $ | 28,541,309 | 619,352 | $ | 1,673,955 | 37,320 | $ | (33,052,899 | ) | (719,705 | ) | $ | (2,837,635 | ) | (63,033 | ) |
1 | Includes exchanges between share classes of the fund. |
2 | Class B and 529-B shares were fully liquidated on May 5, 2017. |
3 | Amount less than one thousand. |
4 | Class T and 529-T shares began investment operations on April 7, 2017. |
5 | Class F-3 shares began investment operations on January 27, 2017. |
24 | EuroPacific Growth Fund |
9. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $52,784,247,000 and $41,949,314,000, respectively, during the year ended March 31, 2018.
EuroPacific Growth Fund | 25 |
Financial highlights
Income (loss) from investment operations1 | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
Period ended | Net asset value, beginning of period | Net investment income2 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return3 | Net assets, end of period (in millions) | Ratio of expenses to average net assets | Ratio of net income to average net assets2 | ||||||||||||||||||||||||||||||||||||
Class A: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | $ | 49.30 | $ | .47 | $ | 9.51 | $ | 9.98 | $ | (.49 | ) | $ | (2.13 | ) | $ | (2.62 | ) | $ | 56.66 | 20.74 | % | $ | 29,067 | .82 | % | .86 | % | |||||||||||||||||||||
3/31/2017 | 44.28 | .44 | 5.14 | 5.58 | (.56 | ) | — | (.56 | ) | 49.30 | 12.72 | 25,678 | .85 | .95 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.91 | .44 | (4.68 | ) | (4.24 | ) | (.80 | ) | (.59 | ) | (1.39 | ) | 44.28 | (8.60 | ) | 26,556 | .83 | .92 | ||||||||||||||||||||||||||||||
3/31/2015 | 49.37 | .43 | .76 | 1.19 | (.65 | ) | — | (.65 | ) | 49.91 | 2.48 | 30,770 | .83 | .88 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 42.38 | .69 | 6.75 | 7.44 | (.45 | ) | — | (.45 | ) | 49.37 | 17.57 | 32,295 | .84 | 1.50 | ||||||||||||||||||||||||||||||||||
Class C: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 48.19 | .04 | 9.29 | 9.33 | (.07 | ) | (2.13 | ) | (2.20 | ) | 55.32 | 19.82 | 1,350 | 1.60 | .08 | |||||||||||||||||||||||||||||||||
3/31/2017 | 43.25 | .08 | 5.02 | 5.10 | (.16 | ) | — | (.16 | ) | 48.19 | 11.82 | 1,240 | 1.63 | .17 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 48.75 | .06 | (4.56 | ) | (4.50 | ) | (.41 | ) | (.59 | ) | (1.00 | ) | 43.25 | (9.30 | ) | 1,474 | 1.62 | .13 | ||||||||||||||||||||||||||||||
3/31/2015 | 48.22 | .05 | .73 | .78 | (.25 | ) | — | (.25 | ) | 48.75 | 1.65 | 1,803 | 1.61 | .11 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.41 | .32 | 6.59 | 6.91 | (.10 | ) | — | (.10 | ) | 48.22 | 16.69 | 1,990 | 1.62 | .72 | ||||||||||||||||||||||||||||||||||
Class T: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/20184,5 | 49.19 | .58 | 9.63 | 10.21 | (.58 | ) | (2.13 | ) | (2.71 | ) | 56.69 | 21.27 | 6,7 | — | 8 | .60 | 7,9 | 1.07 | 7,9 | |||||||||||||||||||||||||||||
Class F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 49.08 | .45 | 9.46 | 9.91 | (.46 | ) | (2.13 | ) | (2.59 | ) | 56.40 | 20.69 | 4,385 | .86 | .83 | |||||||||||||||||||||||||||||||||
3/31/2017 | 44.08 | .43 | 5.11 | 5.54 | (.54 | ) | — | (.54 | ) | 49.08 | 12.69 | 4,179 | .87 | .93 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.67 | .41 | (4.64 | ) | (4.23 | ) | (.77 | ) | (.59 | ) | (1.36 | ) | 44.08 | (8.60 | ) | 4,281 | .86 | .86 | ||||||||||||||||||||||||||||||
3/31/2015 | 49.10 | .45 | .71 | 1.16 | (.59 | ) | — | (.59 | ) | 49.67 | 2.43 | 6,773 | .86 | .93 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 42.15 | .67 | 6.72 | 7.39 | (.44 | ) | — | (.44 | ) | 49.10 | 17.55 | 9,425 | .87 | 1.47 | ||||||||||||||||||||||||||||||||||
Class F-2: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 49.17 | .61 | 9.48 | 10.09 | (.61 | ) | (2.13 | ) | (2.74 | ) | 56.52 | 21.05 | 25,826 | .59 | 1.11 | |||||||||||||||||||||||||||||||||
3/31/2017 | 44.19 | .55 | 5.12 | 5.67 | (.69 | ) | — | (.69 | ) | 49.17 | 12.99 | 22,949 | .60 | 1.19 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.82 | .56 | (4.68 | ) | (4.12 | ) | (.92 | ) | (.59 | ) | (1.51 | ) | 44.19 | (8.36 | ) | 19,386 | .60 | 1.18 | ||||||||||||||||||||||||||||||
3/31/2015 | 49.32 | .53 | .76 | 1.29 | (.79 | ) | — | (.79 | ) | 49.82 | 2.69 | 16,273 | .59 | 1.06 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 42.33 | .82 | 6.74 | 7.56 | (.57 | ) | — | (.57 | ) | 49.32 | 17.90 | 10,714 | .59 | 1.78 | ||||||||||||||||||||||||||||||||||
Class F-3: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 49.32 | .59 | 9.58 | 10.17 | (.68 | ) | (2.13 | ) | (2.81 | ) | 56.68 | 21.15 | 9,473 | .49 | 1.06 | |||||||||||||||||||||||||||||||||
3/31/20174,10 | 47.46 | .24 | 1.62 | 1.86 | — | — | — | 49.32 | 3.92 | 6 | 1,162 | .09 | 6 | .50 | 6 | |||||||||||||||||||||||||||||||||
Class 529-A: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 48.77 | .44 | 9.40 | 9.84 | (.48 | ) | (2.13 | ) | (2.61 | ) | 56.00 | 20.71 | 1,525 | .87 | .81 | |||||||||||||||||||||||||||||||||
3/31/2017 | 43.82 | .41 | 5.09 | 5.50 | (.55 | ) | — | (.55 | ) | 48.77 | 12.65 | 1,172 | .90 | .90 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.41 | .40 | (4.63 | ) | (4.23 | ) | (.77 | ) | (.59 | ) | (1.36 | ) | 43.82 | (8.64 | ) | 1,103 | .90 | .86 | ||||||||||||||||||||||||||||||
3/31/2015 | 48.89 | .40 | .75 | 1.15 | (.63 | ) | — | (.63 | ) | 49.41 | 2.41 | 1,205 | .89 | .82 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.98 | .66 | 6.69 | 7.35 | (.44 | ) | — | (.44 | ) | 48.89 | 17.52 | 1,187 | .90 | 1.45 |
26 | EuroPacific Growth Fund |
Income (loss) from investment operations1 | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
Period ended | Net asset value, beginning of period | Net investment income2 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return3 | Net assets, end of period (in millions) | Ratio of expenses to average net assets | Ratio of net income to average net assets2 | ||||||||||||||||||||||||||||||||||||
Class 529-C: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | $ | 47.73 | $ | .01 | $ | 9.21 | $ | 9.22 | $ | (.03 | ) | $ | (2.13 | ) | $ | (2.16 | ) | $ | 54.79 | 19.76 | % | $ | 278 | 1.65 | % | .03 | % | |||||||||||||||||||||
3/31/2017 | 42.90 | .05 | 4.97 | 5.02 | (.19 | ) | — | (.19 | ) | 47.73 | 11.76 | 343 | 1.68 | .12 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 48.38 | .04 | (4.53 | ) | (4.49 | ) | (.40 | ) | (.59 | ) | (.99 | ) | 42.90 | (9.35 | ) | 335 | 1.68 | .08 | ||||||||||||||||||||||||||||||
3/31/2015 | 47.88 | .02 | .73 | .75 | (.25 | ) | — | (.25 | ) | 48.38 | 1.62 | 374 | 1.67 | .04 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.15 | .29 | 6.54 | 6.83 | (.10 | ) | — | (.10 | ) | 47.88 | 16.57 | 378 | 1.68 | .66 | ||||||||||||||||||||||||||||||||||
Class 529-E: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 48.35 | .31 | 9.31 | 9.62 | (.34 | ) | (2.13 | ) | (2.47 | ) | 55.50 | 20.41 | 71 | 1.11 | .57 | |||||||||||||||||||||||||||||||||
3/31/2017 | 43.45 | .30 | 5.04 | 5.34 | (.44 | ) | — | (.44 | ) | 48.35 | 12.39 | 60 | 1.13 | .66 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.00 | .29 | (4.59 | ) | (4.30 | ) | (.66 | ) | (.59 | ) | (1.25 | ) | 43.45 | (8.86 | ) | 57 | 1.14 | .62 | ||||||||||||||||||||||||||||||
3/31/2015 | 48.49 | .27 | .75 | 1.02 | (.51 | ) | — | (.51 | ) | 49.00 | 2.15 | 62 | 1.14 | .57 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.65 | .54 | 6.63 | 7.17 | (.33 | ) | — | (.33 | ) | 48.49 | 17.22 | 63 | 1.15 | 1.19 | ||||||||||||||||||||||||||||||||||
Class 529-T: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/20184,5 | 49.19 | .56 | 9.62 | 10.18 | (.56 | ) | (2.13 | ) | (2.69 | ) | 56.68 | 21.22 | 6,7 | — | 8 | .64 | 7,9 | 1.03 | 7,9 | |||||||||||||||||||||||||||||
Class 529-F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 48.74 | .56 | 9.40 | 9.96 | (.58 | ) | (2.13 | ) | (2.71 | ) | 55.99 | 20.96 | 134 | .65 | 1.02 | |||||||||||||||||||||||||||||||||
3/31/2017 | 43.81 | .51 | 5.07 | 5.58 | (.65 | ) | — | (.65 | ) | 48.74 | 12.88 | 102 | .68 | 1.11 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.40 | .50 | (4.62 | ) | (4.12 | ) | (.88 | ) | (.59 | ) | (1.47 | ) | 43.81 | (8.44 | ) | 90 | .69 | 1.07 | ||||||||||||||||||||||||||||||
3/31/2015 | 48.89 | .51 | .74 | 1.25 | (.74 | ) | — | (.74 | ) | 49.40 | 2.62 | 96 | .67 | 1.04 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.97 | .75 | 6.70 | 7.45 | (.53 | ) | — | (.53 | ) | 48.89 | 17.75 | 90 | .68 | 1.65 | ||||||||||||||||||||||||||||||||||
Class R-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 47.49 | .05 | 9.14 | 9.19 | (.09 | ) | (2.13 | ) | (2.22 | ) | 54.46 | 19.82 | 263 | 1.60 | .09 | |||||||||||||||||||||||||||||||||
3/31/2017 | 42.69 | .08 | 4.96 | 5.04 | (.24 | ) | — | (.24 | ) | 47.49 | 11.86 | 247 | 1.61 | .19 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 48.14 | .07 | (4.50 | ) | (4.43 | ) | (.43 | ) | (.59 | ) | (1.02 | ) | 42.69 | (9.28 | ) | 248 | 1.61 | .15 | ||||||||||||||||||||||||||||||
3/31/2015 | 47.64 | .06 | .72 | .78 | (.28 | ) | — | (.28 | ) | 48.14 | 1.67 | 285 | 1.59 | .12 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 40.90 | .33 | 6.50 | 6.83 | (.09 | ) | — | (.09 | ) | 47.64 | 16.70 | 299 | 1.61 | .75 | ||||||||||||||||||||||||||||||||||
Class R-2: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 47.88 | .06 | 9.21 | 9.27 | (.09 | ) | (2.13 | ) | (2.22 | ) | 54.93 | 19.84 | 818 | 1.58 | .11 | |||||||||||||||||||||||||||||||||
3/31/2017 | 43.01 | .09 | 5.00 | 5.09 | (.22 | ) | — | (.22 | ) | 47.88 | 11.88 | 767 | 1.60 | .20 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 48.49 | .08 | (4.53 | ) | (4.45 | ) | (.44 | ) | (.59 | ) | (1.03 | ) | 43.01 | (9.25 | ) | 800 | 1.58 | .18 | ||||||||||||||||||||||||||||||
3/31/2015 | 47.96 | .07 | .73 | .80 | (.27 | ) | — | (.27 | ) | 48.49 | 1.70 | 975 | 1.57 | .15 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.20 | .34 | 6.54 | 6.88 | (.12 | ) | — | (.12 | ) | 47.96 | 16.71 | 1,079 | 1.57 | .76 | ||||||||||||||||||||||||||||||||||
Class R-2E: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 48.59 | .20 | 9.38 | 9.58 | (.28 | ) | (2.13 | ) | (2.41 | ) | 55.76 | 20.19 | 254 | 1.29 | .38 | |||||||||||||||||||||||||||||||||
3/31/2017 | 43.79 | .18 | 5.14 | 5.32 | (.52 | ) | — | (.52 | ) | 48.59 | 12.25 | 189 | 1.28 | .40 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.67 | .52 | (4.89 | ) | (4.37 | ) | (.92 | ) | (.59 | ) | (1.51 | ) | 43.79 | (8.89 | ) | 8 | 1.18 | 1.25 | ||||||||||||||||||||||||||||||
3/31/20154,11 | 50.08 | .10 | .27 | .37 | (.78 | ) | — | (.78 | ) | 49.67 | .82 | 6 | — | 8 | 1.26 | 9 | .28 | 9 |
See end of table for footnotes.
EuroPacific Growth Fund | 27 |
Financial highlights (continued)
Income (loss) from investment operations1 | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
Period ended | Net asset value, beginning of period | Net investment income2 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return3 | Net assets, end of period (in millions) | Ratio of expenses to average net assets | Ratio of net income to average net assets2 | ||||||||||||||||||||||||||||||||||||
Class R-3: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | $ | 48.32 | $ | .30 | $ | 9.31 | $ | 9.61 | $ | (.32 | ) | $ | (2.13 | ) | $ | (2.45 | ) | $ | 55.48 | 20.36 | % | $ | 4,631 | 1.14 | % | .56 | % | |||||||||||||||||||||
3/31/2017 | 43.40 | .30 | 5.04 | 5.34 | (.42 | ) | — | (.42 | ) | 48.32 | 12.40 | 4,505 | 1.14 | .66 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 48.93 | .29 | (4.59 | ) | (4.30 | ) | (.64 | ) | (.59 | ) | (1.23 | ) | 43.40 | (8.87 | ) | 5,029 | 1.14 | .62 | ||||||||||||||||||||||||||||||
3/31/2015 | 48.40 | .28 | .74 | 1.02 | (.49 | ) | — | (.49 | ) | 48.93 | 2.16 | 6,482 | 1.13 | .59 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.56 | .54 | 6.62 | 7.16 | (.32 | ) | — | (.32 | ) | 48.40 | 17.24 | 7,219 | 1.14 | 1.20 | ||||||||||||||||||||||||||||||||||
Class R-4: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 48.35 | .46 | 9.32 | 9.78 | (.48 | ) | (2.13 | ) | (2.61 | ) | 55.52 | 20.76 | 10,278 | .83 | .85 | |||||||||||||||||||||||||||||||||
3/31/2017 | 43.45 | .43 | 5.03 | 5.46 | (.56 | ) | — | (.56 | ) | 48.35 | 12.70 | 9,854 | .85 | .96 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 48.99 | .43 | (4.59 | ) | (4.16 | ) | (.79 | ) | (.59 | ) | (1.38 | ) | 43.45 | (8.58 | ) | 11,310 | .85 | .92 | ||||||||||||||||||||||||||||||
3/31/2015 | 48.48 | .42 | .74 | 1.16 | (.65 | ) | — | (.65 | ) | 48.99 | 2.45 | 13,488 | .84 | .88 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 41.63 | .67 | 6.64 | 7.31 | (.46 | ) | — | (.46 | ) | 48.48 | 17.57 | 14,394 | .84 | 1.50 | ||||||||||||||||||||||||||||||||||
Class R-5E: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 49.02 | .59 | 9.45 | 10.04 | (.64 | ) | (2.13 | ) | (2.77 | ) | 56.29 | 21.01 | 603 | .62 | 1.06 | |||||||||||||||||||||||||||||||||
3/31/2017 | 44.14 | .53 | 5.09 | 5.62 | (.74 | ) | — | (.74 | ) | 49.02 | 12.89 | 9 | .62 | 1.14 | ||||||||||||||||||||||||||||||||||
3/31/20164,12 | 48.16 | .20 | (2.65 | ) | (2.45 | ) | (.98 | ) | (.59 | ) | (1.57 | ) | 44.14 | (5.19 | )6 | — | 8 | .25 | 6 | .46 | 6 | |||||||||||||||||||||||||||
Class R-5: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 49.22 | .64 | 9.48 | 10.12 | (.64 | ) | (2.13 | ) | (2.77 | ) | 56.57 | 21.09 | 8,944 | .53 | 1.16 | |||||||||||||||||||||||||||||||||
3/31/2017 | 44.22 | .58 | 5.13 | 5.71 | (.71 | ) | — | (.71 | ) | 49.22 | 13.07 | 8,721 | .54 | 1.27 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.85 | .58 | (4.68 | ) | (4.10 | ) | (.94 | ) | (.59 | ) | (1.53 | ) | 44.22 | (8.32 | ) | 9,285 | .54 | 1.21 | ||||||||||||||||||||||||||||||
3/31/2015 | 49.32 | .59 | .74 | 1.33 | (.80 | ) | — | (.80 | ) | 49.85 | 2.77 | 11,418 | .53 | 1.19 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 42.33 | .82 | 6.76 | 7.58 | (.59 | ) | — | (.59 | ) | 49.32 | 17.93 | 12,197 | .54 | 1.79 | ||||||||||||||||||||||||||||||||||
Class R-6: | ||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2018 | 49.27 | .65 | 9.51 | 10.16 | (.67 | ) | (2.13 | ) | (2.80 | ) | 56.63 | 21.17 | 68,770 | .49 | 1.18 | |||||||||||||||||||||||||||||||||
3/31/2017 | 44.27 | .60 | 5.14 | 5.74 | (.74 | ) | — | (.74 | ) | 49.27 | 13.10 | 51,100 | .50 | 1.30 | ||||||||||||||||||||||||||||||||||
3/31/2016 | 49.90 | .60 | (4.67 | ) | (4.07 | ) | (.97 | ) | (.59 | ) | (1.56 | ) | 44.27 | (8.26 | ) | 41,539 | .50 | 1.27 | ||||||||||||||||||||||||||||||
3/31/2015 | 49.38 | .60 | .74 | 1.34 | (.82 | ) | — | (.82 | ) | 49.90 | 2.80 | 38,346 | .49 | 1.20 | ||||||||||||||||||||||||||||||||||
3/31/2014 | 42.38 | .85 | 6.76 | 7.61 | (.61 | ) | — | (.61 | ) | 49.38 | 17.97 | 32,575 | .49 | 1.85 |
Year ended March 31 | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Portfolio turnover rate for all share classes | 29 | % | 36 | % | 30 | % | 28 | % | 28 | % |
1 | Based on average shares outstanding. |
2 | For the year ended March 31, 2014, this column reflects the impact of a corporate action event that resulted in a one-time increase to net investment income. If the corporate action event had not occurred, the Class A net investment income per share and ratio of net income to average net assets would have been lower by $.19 and .40 percentage points, respectively. The impact to the other share classes would have been similar. |
3 | Total returns exclude any applicable sales charges, including contingent deferred sales charges. |
4 | Based on operations for a period that is less than a full year. |
5 | Class T and 529-T shares began investment operations on April 7, 2017. |
6 | Not annualized. |
7 | All or a significant portion of assets in this class consisted of seed capital invested by CRMC and/or its affiliates. Fees for distribution services are not charged or accrued on these seed capital assets. If such fees were paid by the fund on seed capital assets, fund expenses would have been higher and net income and total return would have been lower. |
8 | Amount less than $1 million. |
9 | Annualized. |
10 | Class F-3 shares began investment operations on January 27, 2017. |
11 | Class R-2E shares began investment operations on August 29, 2014. |
12 | Class R-5E shares began investment operations on November 20, 2015. |
See Notes to Financial Statements
28 | EuroPacific Growth Fund |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of EuroPacific Growth Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of EuroPacific Growth Fund (the “Fund”), including the summary investment portfolio, as of March 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2018, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2018, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Costa Mesa, California
May 11, 2018
We have served as the auditor of one or more American Funds investment companies since 1956.
EuroPacific Growth Fund | 29 |
Expense example | unaudited |
As a fund shareholder, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period (October 1, 2017, through March 31, 2018).
Actual expenses:
The first line of each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled “Expenses paid during period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Notes:
Retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2, F-3 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.
Note that the expenses shown in the table on the following page are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
30 | EuroPacific Growth Fund |
Beginning account value 10/1/2017 | Ending account value 3/31/2018 | Expenses paid during period* | Annualized expense ratio | |||||||||||||
Class A – actual return | $ | 1,000.00 | $ | 1,051.35 | $ | 4.14 | .81 | % | ||||||||
Class A – assumed 5% return | 1,000.00 | 1,020.89 | 4.08 | .81 | ||||||||||||
Class C – actual return | 1,000.00 | 1,047.19 | 8.12 | 1.59 | ||||||||||||
Class C – assumed 5% return | 1,000.00 | 1,017.00 | 8.00 | 1.59 | ||||||||||||
Class T – actual return | 1,000.00 | 1,052.47 | 3.02 | .59 | ||||||||||||
Class T – assumed 5% return | 1,000.00 | 1,021.99 | 2.97 | .59 | ||||||||||||
Class F-1 – actual return | 1,000.00 | 1,051.04 | 4.35 | .85 | ||||||||||||
Class F-1 – assumed 5% return | 1,000.00 | 1,020.69 | 4.28 | .85 | ||||||||||||
Class F-2 – actual return | 1,000.00 | 1,052.55 | 2.97 | .58 | ||||||||||||
Class F-2 – assumed 5% return | 1,000.00 | 1,022.04 | 2.92 | .58 | ||||||||||||
Class F-3 – actual return | 1,000.00 | 1,053.08 | 2.46 | .48 | ||||||||||||
Class F-3 – assumed 5% return | 1,000.00 | 1,022.54 | 2.42 | .48 | ||||||||||||
Class 529-A – actual return | 1,000.00 | 1,051.18 | 4.45 | .87 | ||||||||||||
Class 529-A – assumed 5% return | 1,000.00 | 1,020.59 | 4.38 | .87 | ||||||||||||
Class 529-C – actual return | 1,000.00 | 1,047.03 | 8.37 | 1.64 | ||||||||||||
Class 529-C – assumed 5% return | 1,000.00 | 1,016.75 | 8.25 | 1.64 | ||||||||||||
Class 529-E – actual return | 1,000.00 | 1,049.76 | 5.62 | 1.10 | ||||||||||||
Class 529-E – assumed 5% return | 1,000.00 | 1,019.45 | 5.54 | 1.10 | ||||||||||||
Class 529-T – actual return | 1,000.00 | 1,052.18 | 3.22 | .63 | ||||||||||||
Class 529-T – assumed 5% return | 1,000.00 | 1,021.79 | 3.18 | .63 | ||||||||||||
Class 529-F-1 – actual return | 1,000.00 | 1,052.29 | 3.33 | .65 | ||||||||||||
Class 529-F-1 – assumed 5% return | 1,000.00 | 1,021.69 | 3.28 | .65 | ||||||||||||
Class R-1 – actual return | 1,000.00 | 1,047.36 | 8.12 | 1.59 | ||||||||||||
Class R-1 – assumed 5% return | 1,000.00 | 1,017.00 | 8.00 | 1.59 | ||||||||||||
Class R-2 – actual return | 1,000.00 | 1,047.36 | 8.12 | 1.59 | ||||||||||||
Class R-2 – assumed 5% return | 1,000.00 | 1,017.00 | 8.00 | 1.59 | ||||||||||||
Class R-2E – actual return | 1,000.00 | 1,048.81 | 6.59 | 1.29 | ||||||||||||
Class R-2E – assumed 5% return | 1,000.00 | 1,018.50 | 6.49 | 1.29 | ||||||||||||
Class R-3 – actual return | 1,000.00 | 1,049.64 | 5.83 | 1.14 | ||||||||||||
Class R-3 – assumed 5% return | 1,000.00 | 1,019.25 | 5.74 | 1.14 | ||||||||||||
Class R-4 – actual return | 1,000.00 | 1,051.20 | 4.24 | .83 | ||||||||||||
Class R-4 – assumed 5% return | 1,000.00 | 1,020.79 | 4.18 | .83 | ||||||||||||
Class R-5E – actual return | 1,000.00 | 1,052.39 | 3.22 | .63 | ||||||||||||
Class R-5E – assumed 5% return | 1,000.00 | 1,021.79 | 3.18 | .63 | ||||||||||||
Class R-5 – actual return | 1,000.00 | 1,052.86 | 2.71 | .53 | ||||||||||||
Class R-5 – assumed 5% return | 1,000.00 | 1,022.29 | 2.67 | .53 | ||||||||||||
Class R-6 – actual return | 1,000.00 | 1,053.06 | 2.46 | .48 | ||||||||||||
Class R-6 – assumed 5% return | 1,000.00 | 1,022.54 | 2.42 | .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). |
EuroPacific Growth Fund | 31 |
Tax information | unaudited |
We are required to advise you of the federal tax status of certain distributions received by shareholders during the fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended March 31, 2018:
Foreign taxes | $0.08 per share | |
Foreign source income | $0.93 per share | |
Long-term capital gains | $5,913,625,000 | |
Qualified dividend income | 100% | |
Corporate dividends received deduction | $2,715,000 | |
U.S. government income that may be exempt from state taxation | $39,650,000 |
Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2019, to determine the calendar year amounts to be included on their 2018 tax returns. Shareholders should consult their tax advisors.
32 | EuroPacific Growth Fund |
Approval of Investment Advisory and Service Agreement
EuroPacific Growth Fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through January 31, 2019. The board approved the agreement following the recommendation of the fund’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided, and that approving the agreement was in the best interests of the fund and its shareholders.
In reaching this decision, the board and the committee took into account information furnished to them throughout the year and otherwise provided to them, as well as information prepared specifically in connection with their review of the agreement, and were advised by their independent counsel. They considered the following factors, among others, but did not identify any single issue or particular piece of information that, in isolation, was the controlling factor, and each board and committee member did not necessarily attribute the same weight to each factor.
1. Nature, extent and quality of services
The board and the committee considered the depth and quality of CRMC’s investment management process, including its global research capabilities; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of CRMC and the Capital Group organization; and the ongoing evolution of CRMC’s organizational structure designed to maintain and strengthen these qualities. The board and the committee also considered the nature, extent and quality of administrative, compliance and shareholder services provided by CRMC to the fund under the agreement and other agreements, as well as the benefits to fund shareholders from investing in a fund that is part of a large family of funds. The board and the committee concluded that the nature, extent and quality of the services provided by CRMC have benefited and should continue to benefit the fund and its shareholders.
2. Investment results
The board and the committee considered the investment results of the fund in light of its objective of providing long-term growth of capital. They compared the fund’s investment results with those of other funds (including funds that currently form the basis of the Lipper index for the category in which the fund is included), and data such as relevant market and fund indexes, over various periods through June 30, 2017. This report, including the letter to shareholders and related disclosures, contains certain information about the fund’s investment results. The board and the committee reviewed the fund’s investment results measured against various indexes, including the Lipper International Funds Index, the MSCI All Country World ex U.S. Index and the MSCI EAFE Index. They noted that the investment results of the fund compared favorably to the results of these indexes for the lifetime period, 20-year period, 10-year period and five-year period. The board and the committee concluded that the fund’s investment results have been satisfactory for renewal of the agreement and that CRMC’s record in managing the fund indicated that its continued management should benefit the fund and its shareholders.
3. Advisory fees and total expenses
The board and the committee compared the advisory fees and total expense levels of the fund to those of other relevant funds. They observed that the fund’s advisory fees and expenses generally compared favorably to those of other similar funds included in the Lipper International Funds category. The board and the committee also considered the breakpoint discounts in the fund’s advisory fee structure that reduce the level of fees charged by CRMC to the fund as fund assets increase. In addition, they reviewed information regarding the effective advisory fees charged to non-mutual fund clients by CRMC and its affiliates. They noted that, to the extent there were differences between the advisory fees paid by the fund and the advisory fees paid by those clients, the differences appropriately reflected the investment, operational, regulatory and market differences between advising the fund and the other clients. The board and the committee concluded that the fund’s cost structure was fair and reasonable in relation to the services provided, and that the fund’s shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund.
EuroPacific Growth Fund | 33 |
4. Ancillary benefits
The board and the committee considered a variety of other benefits that CRMC and its affiliates receive as a result of CRMC’s relationship with the fund and other American Funds, including fees for administrative services provided to certain share classes; fees paid to CRMC’s affiliated transfer agent; sales charges and distribution fees received and retained by the fund’s principal underwriter, an affiliate of CRMC; and possible ancillary benefits to CRMC and its institutional management affiliates in managing other investment vehicles. The board and the committee reviewed CRMC’s portfolio trading practices, noting the benefits CRMC receives from the research obtained with commissions from portfolio transactions made on behalf of the fund. The board and the committee took these ancillary benefits into account in evaluating the reasonableness of the advisory fees and other amounts paid to CRMC by the fund.
5. Adviser financial information
The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, including personnel, systems and resources of investment, compliance, trading, accounting and other administrative operations. They considered CRMC’s costs and related cost allocation methodology as well as its willingness to invest in technology, infrastructure and staff to maintain and expand services and capabilities, respond to industry and regulatory developments, and attract and retain qualified personnel. They noted information regarding the compensation structure for CRMC’s investment professionals. The board and the committee also compared CRMC’s profitability and compensation data to the reported results and data of several large, publicly held investment management companies. The board and the committee noted the competitiveness and cyclicality of both the mutual fund industry and the capital markets, and the importance in that environment of CRMC’s long-term profitability for maintaining its independence, company culture and management continuity. They further considered the breakpoint discounts in the fund’s advisory fee structure. The board and the committee concluded that the fund’s advisory fee structure reflected a reasonable sharing of benefits between CRMC and the fund’s shareholders.
34 | EuroPacific Growth Fund |
Board of trustees and other officers
Independent trustees1
Name and year of birth | Year first elected a trustee of the fund2 | Principal occupation(s) during past five years | Number of portfolios in fund complex overseen by trustee3 | Other directorships4 held by trustee | ||||
Elisabeth Allison, 1946 | 1991 | Trustee and Co-Director, The Stanton Foundation | 3 | None | ||||
Vanessa C. L. Chang, 1952 | 2005 | Former Director, EL & EL Investments (real estate) | 17 | Edison International; Sykes Enterprises; Transocean Ltd. | ||||
Nicholas Donatiello, Jr., 1960 Chairman of the Board (Independent and Non-Executive) | 2008 | President and CEO, Odyssey Ventures, Inc. (business strategy and marketing consulting); Lecturer, Graduate School of Business, Stanford University | 3 | Big 5 Sporting Goods Corporation; Dolby Laboratories, Inc. | ||||
Pablo R. González Guajardo, 1967 | 2014 | CEO, Kimberly-Clark de México, S.A.B. de C.V. | 7 | América Móvil, S.A.B. de C.V.; Grupo Lala, S.A.B. de C.V.; Grupo Sanborns, S.A.B. de C.V.; Kimberly-Clark de México, S.A.B. de C.V. | ||||
Martin Koehler, 1957 | 2015 | Independent management consultant; former Managing Director and Senior Advisor, The Boston Consulting Group | 3 | Deutsche Lufthansa AG | ||||
William I. Miller, 1956 | 1992 | President, The Wallace Foundation | 3 | Cummins, Inc. | ||||
Alessandro Ovi, 1944 | 2002 | Publisher and Editor, Technology Review; President, TechRev.srl | 3 | Landi Renzo SpA; ST Microelectronics SNV | ||||
Josette Sheeran, 1954 | 2015 | President and CEO, Asia Society; United Nations Special Envoy for Haiti; former Vice Chair, World Economic Forum | 3 | None |
William H. Kling retired from the fund on December 31, 2017. The trustees thank Mr. Kling for his wise counsel, outstanding service and dedication to the fund.
Interested trustee5,6
Name, year of birth and position with fund | Year first elected a trustee or officer of the fund2 | Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund | Number of portfolios in fund complex overseen by trustee3 | Other directorships4 held by trustee | ||||
Carl M. Kawaja, 1964 Vice Chairman of the Board and President | 2003 | Partner – Capital World Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.7 | 1 | None |
The fund’s statement of additional information includes further details about fund trustees and is available without charge upon request by calling American Funds Service Company at (800) 421-4225 or by visiting the American Funds website at americanfunds.com. The address for all trustees and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Secretary.
EuroPacific Growth Fund | 35 |
Other officers6
Name, year of birth and position with fund | Year first elected an officer of the fund2 | Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund | ||
Walter R. Burkley, 1966 Executive Vice President | 2012 | Senior Vice President and Senior Counsel — Fund Business Management Group, Capital Research and Management Company; Director, Capital Research Company7 | ||
Mark E. Denning, 1957 Executive Vice President | 1994 | Director, Capital Research and Management Company; Partner — Capital Research Global Investors, Capital Research Company;7 Partner — Capital Research Global Investors, Capital International, Inc.7 | ||
Jonathan Knowles, PhD, 1961 Senior Vice President | 2012 | Partner — Capital World Investors, Capital International, Inc.;7 Director, The Capital Group Companies, Inc.7 | ||
Sung Lee, 1966 Senior Vice President | 2003 | Partner — Capital Research Global Investors, Capital International, Inc.7 | ||
Christopher Thomsen, 1970 Senior Vice President | 2015 | Partner — Capital Research Global Investors, Capital Research Company7 | ||
Michael J. Downer, 1955 Vice President | 2004 | Director, Senior Vice President and Secretary, Capital Research and Management Company; Chairman of the Board, Capital Bank and Trust Company7 | ||
Nicholas J. Grace, 1966 Vice President | 2004 | Partner — Capital World Investors, Capital Research Company;7 Director, The Capital Group Companies, Inc.7 | ||
Leo Hee, 1971 Vice President | 2015 | Partner — Capital World Investors, Capital International, Inc.7 | ||
Jesper Lyckeus, 1967 Vice President | 2010 | Partner — Capital Research Global Investors, Capital Research Company7 | ||
Lara Pellini, 1975 Vice President | 2015 | Partner — Capital World Investors, Capital Research Company7 | ||
Joerg Sponer, 1972 Vice President | 2010 | Partner — Capital Research Global Investors, Capital Research Company7 | ||
Michael W. Stockton, 1967 Secretary | 2013 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Brian C. Janssen, 1972 Treasurer | 2010 | Vice President — Investment Operations, Capital Research and Management Company | ||
Jennifer L. Butler, 1966 Assistant Secretary | 2013 | Assistant Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Dori Laskin, 1951 Assistant Treasurer | 2010 | Vice President — Investment Operations, Capital Research and Management Company | ||
Gregory F. Niland, 1971 Assistant Treasurer | 2016 | Vice President — Investment Operations, Capital Research and Management Company |
1 | The term independent trustee refers to a trustee who is not an “interested person” of the fund within the meaning of the Investment Company Act of 1940. |
2 | Trustees and officers of the fund serve until their resignation, removal or retirement. |
3 | Funds managed by Capital Research and Management Company or its affiliates. |
4 | This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research and Management Company or its affiliates) that are held by each trustee as a trustee or director of a public company or a registered investment company. |
5 | The term interested trustee refers to a trustee who is an “interested person” within the meaning of the Investment Company Act of 1940, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter). |
6 | All of the trustees and/or officers listed, with the exception of Leo Hee, Lara Pellini and Joerg Sponer, are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser. |
7 | Company affiliated with Capital Research and Management Company. |
36 | EuroPacific Growth Fund |
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 92618-4518
Transfer agent for shareholder accounts
American Funds Service Company
(Write to the address near you.)
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Counsel
Dechert LLP
One Bush Street, Suite 1600
San Francisco, CA 94104-4446
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors,
Inc. 333 South Hope Street
Los Angeles, CA 90071-1406
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at (800) 421-4225 or visit the American Funds website at americanfunds.com. Fund shares offered through American Funds Distributors, Inc.
“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.
A complete March 31, 2018, 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. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at (800) SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.
This report is for the information of shareholders of EuroPacific Growth Fund, but it also may be used as sales literature when preceded or accompanied by the current prospectus or summary prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after June 30, 2018, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
American Funds from Capital Group
The Capital Advantage®
Since 1931, American Funds, part of Capital Group, has helped investors pursue long-term investment success. Our consistent approach — in combination with The Capital SystemSM — has resulted in a superior long-term track record.
Aligned with investor success | |
We base our decisions on a long-term perspective, which we believe aligns our goals with the interests of our clients. Our portfolio managers average 27 years of investment experience, including 22 years at our company, reflecting a career commitment to our long-term approach.1 | |
The Capital System | |
The Capital System combines individual accountability with teamwork. Funds using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. An extensive global research effort is the backbone of our system. | |
American Funds’ superior long-term track record | |
Equity funds have beaten their Lipper peer indexes in 92% of 10-year periods and 99% of 20-year periods. Fixed income funds have beaten their Lipper indexes in 77% of 10-year periods and 80% of 20-year periods.2 Fund management fees have been among the lowest in the industry.3 |
1 | Portfolio manager experience as of December 31, 2017. | |
2 | Based on Class F-2 share results for rolling periods through December 31, 2017. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except Capital Income Builder and SMALLCAP World Fund, for which the Lipper average was used). Expenses differ for each share class, so results will vary. Class F-2 shares were first offered on August 1, 2008. Class F-2 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Results for certain funds with an inception date after August 1, 2008, also include hypothetical returns because those funds’ Class F-2 shares sold after the funds’ date of first offering. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale. | |
3 | On average, our management fees were in the lowest quintile 71% of the time, based on the 20-year period ended December 31, 2017, versus comparable Lipper categories, excluding funds of funds. |
ITEM 2 – Code of Ethics
The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made to American Funds Service Company at 800/421-9225 or to the Secretary of the Registrant, 333 South Hope Street, Los Angeles, California 90071.
ITEM 3 – Audit Committee Financial Expert
The Registrant’s board has determined that Elisabeth Allison, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.
ITEM 4 – Principal Accountant Fees and Services
Registrant: | ||
a) Audit Fees: | ||
Audit | 2017 | 140,000 |
2018 | 139,000 | |
b) Audit-Related Fees: | ||
2017 | 36,000 | |
2018 | 42,000 | |
c) Tax Fees: | ||
2017 | 36,000 | |
2018 | 33,000 | |
The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns. | ||
d) All Other Fees: | ||
2017 | None |
2018 | None | |
Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below): | ||
a) Audit Fees: | ||
Not Applicable | ||
b) Audit-Related Fees: | ||
2017 | 1,164,000 | |
2018 | 1,064,000 | |
The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Standards for Attestation Engagements Number 16 issued by the American Institute of Certified Public Accountants. | ||
c) Tax Fees: | ||
2017 | None | |
2018 | None | |
The tax fees consist of consulting services relating to the Registrant’s investments. | ||
d) All Other Fees: | ||
2017 | None | |
2018 | None | |
The other fees consist of subscription services related to an accounting research tool. | ||
All audit and permissible non-audit services that the Registrant’s audit committee considers compatible with maintaining the independent registered public accounting firm’s independence are required to be pre-approved by the committee. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser and affiliates. | ||
Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant, adviser and affiliates that provide ongoing services to the Registrant, were $1,378,000 for fiscal year 2017 and $1,197,000 for fiscal year 2018. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence. |
ITEM 5 – Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 – Schedule of Investments
Common stocks 93.97% Information technology 18.85% | Shares | Value (000) |
Samsung Electronics Co., Ltd. | 1,718,745 | $3,968,319 |
Samsung Electronics Co., Ltd., nonvoting preferred | 48,800 | 93,397 |
Taiwan Semiconductor Manufacturing Co., Ltd. | 369,400,649 | 3,135,668 |
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 8,247,523 | 360,911 |
Alibaba Group Holding Ltd. (ADR)1 | 17,537,795 | 3,218,887 |
Nintendo Co., Ltd. | 6,797,026 | 2,992,658 |
ASML Holding NV2 | 12,721,811 | 2,516,153 |
Tencent Holdings Ltd.2 | 43,446,711 | 2,312,604 |
Baidu, Inc., Class A (ADR)1 | 7,606,062 | 1,697,597 |
SK hynix, Inc. | 19,770,500 | 1,507,967 |
Murata Manufacturing Co., Ltd. | 10,765,526 | 1,473,773 |
Hangzhou Hikvision Digital Technology Co., Ltd., Class A | 134,849,288 | 885,178 |
AAC Technologies Holdings Inc.2 | 42,638,799 | 779,622 |
Keyence Corp. | 1,122,700 | 696,637 |
Infineon Technologies AG2 | 23,415,947 | 627,110 |
Amadeus IT Group SA, Class A, non-registered shares2 | 7,766,123 | 573,943 |
MercadoLibre, Inc. | 1,602,500 | 571,115 |
Just Eat PLC1,2,3 | 51,012,545 | 499,884 |
Renesas Electronics Corp.1 | 44,066,756 | 443,028 |
Largan Precision Co., Ltd. | 3,783,000 | 434,649 |
Tokyo Electron Ltd. | 2,056,000 | 386,647 |
SAP SE2 | 3,380,000 | 353,589 |
Worldpay, Inc., Class A (GBP denominated)1,2 | 4,020,941 | 324,467 |
TEMENOS Group AG (Switzerland)2 | 2,621,524 | 314,433 |
OMRON Corp. | 4,618,500 | 271,651 |
Hamamatsu Photonics KK | 5,846,100 | 220,815 |
Hexagon AB, Class B2 | 3,346,720 | 200,163 |
Halma PLC2 | 11,480,157 | 189,987 |
TDK Corp. | 1,479,000 | 133,267 |
TravelSky Technology Ltd., Class H2 | 39,313,000 | 115,171 |
Samsung SDI Co., Ltd. | 622,361 | 112,397 |
31,411,687 | ||
Financials 16.68% | ||
AIA Group Ltd.2 | 463,164,600 | 3,953,776 |
HDFC Bank Ltd.2 | 98,865,874 | 2,934,224 |
HDFC Bank Ltd. (ADR) | 6,073,800 | 599,909 |
UniCredit SpA1,2 | 101,312,152 | 2,125,054 |
Prudential PLC2 | 78,186,496 | 1,952,781 |
Kotak Mahindra Bank Ltd.2 | 94,161,246 | 1,527,106 |
Barclays PLC2 | 491,999,185 | 1,435,638 |
Sberbank of Russia PJSC (ADR)2 | 59,071,716 | 1,103,225 |
DBS Group Holdings Ltd2 | 42,819,000 | 903,367 |
Housing Development Finance Corp. Ltd.2 | 31,813,425 | 894,781 |
Credit Suisse Group AG2 | 43,429,553 | 728,419 |
B3 SA - Brasil, Bolsa, Balcao | 79,420,000 | 641,406 |
Banco Santander, SA2 | 85,167,756 | 555,289 |
Common stocks Financials (continued) | Shares | Value (000) |
BNP Paribas SA2 | 6,810,854 | $504,830 |
Axis Bank Ltd.2,4,5 | 64,266,857 | 472,514 |
Axis Bank Ltd.2 | 1,321,000 | 10,407 |
Bank Central Asia Tbk PT2 | 276,478,400 | 469,409 |
Bank of China Ltd., Class H2 | 755,412,555 | 410,535 |
Bank of Ireland Group PLC1,2 | 46,851,951 | 408,596 |
Toronto-Dominion Bank (CAD denominated) | 7,075,000 | 401,470 |
State Bank of India2 | 98,147,000 | 378,334 |
Industrial and Commercial Bank of China Ltd., Class H2 | 436,261,000 | 378,290 |
Itaú Unibanco Holding SA, preferred nominative (ADR) | 24,204,500 | 377,590 |
Société Générale2 | 6,675,872 | 363,085 |
Fairfax Financial Holdings Ltd., subordinate voting (CAD denominated) | 563,951 | 285,858 |
Fairfax Financial Holdings Ltd., subordinate voting | 151,291 | 77,007 |
KB Financial Group Inc. | 6,088,000 | 346,695 |
Hana Financial Group Inc. | 7,026,000 | 301,566 |
Banco BPM SPA1,2 | 73,427,284 | 255,512 |
ABN AMRO Group NV, depository receipts2 | 8,460,361 | 254,995 |
Crédit Agricole SA2 | 15,100,000 | 245,612 |
Ayala Corp.2 | 12,080,000 | 220,863 |
Zurich Insurance Group AG1,2 | 640,500 | 210,082 |
Svenska Handelsbanken AB, Class A2 | 13,841,154 | 173,361 |
Brookfield Asset Management Inc., Class A | 4,400,000 | 171,600 |
Sumitomo Mitsui Financial Group, Inc. | 3,943,400 | 165,176 |
ICICI Bank Ltd.2 | 32,977,114 | 141,703 |
ICICI Bank Ltd. (ADR) | 1,380,241 | 12,215 |
Intesa Sanpaolo SpA2 | 40,612,000 | 148,055 |
AXA SA2 | 5,430,000 | 144,510 |
Metropolitan Bank & Trust Co.2 | 84,220,000 | 139,036 |
KASIKORNBANK PCL, foreign registered | 10,575,200 | 71,696 |
KASIKORNBANK PCL, nonvoting depository receipts | 8,809,800 | 59,728 |
UBS Group AG2 | 7,396,724 | 130,188 |
Capitec Bank Holdings Ltd.2 | 1,470,000 | 108,281 |
RSA Insurance Group PLC2 | 12,067,706 | 106,665 |
Eurobank Ergasias SA1,2 | 108,860,228 | 103,859 |
Bankia, SA1,2 | 21,000,000 | 94,081 |
Royal Bank of Canada | 1,000,000 | 77,243 |
ORIX Corp. | 3,680,000 | 64,883 |
Grupo Financiero Banorte, SAB de CV, Series O | 9,439,000 | 57,676 |
Commerzbank AG, non-registered shares1,2 | 2,917,000 | 37,886 |
Haci Ömer Sabanci Holding AS | 12,328,442 | 32,832 |
Aditya Birla Capital Ltd.1,2 | 13,593,959 | 30,678 |
Bangkok Bank PCL, nonvoting depository receipt | 487,200 | 3,069 |
27,802,646 | ||
Consumer discretionary 11.02% | ||
Sony Corp. | 46,244,000 | 2,235,945 |
Naspers Ltd., Class N2 | 5,764,722 | 1,412,107 |
LVMH Moët Hennessy-Louis Vuitton SE2 | 3,679,000 | 1,134,194 |
adidas AG2 | 4,389,373 | 1,062,678 |
Industria de Diseño Textil, SA2 | 31,680,512 | 992,612 |
Galaxy Entertainment Group Ltd.2 | 93,299,000 | 855,205 |
Altice NV, Class A1,2,3 | 69,114,355 | 571,456 |
Altice NV, Class B1,2,3 | 16,341,536 | 134,892 |
Paddy Power Betfair PLC2,3 | 6,722,677 | 690,494 |
ASOS PLC1,2,3 | 6,690,380 | 654,037 |
Common stocks Consumer discretionary (continued) | Shares | Value (000) |
Hyundai Motor Co. | 4,839,600 | $651,546 |
Kering SA2 | 1,349,000 | 646,628 |
Ctrip.com International, Ltd. (ADR)1 | 12,218,817 | 569,641 |
Accor SA2 | 8,535,000 | 460,905 |
Techtronic Industries Co. Ltd.2 | 67,168,500 | 396,743 |
Suzuki Motor Corp. | 7,343,000 | 395,334 |
Hyundai Mobis Co., Ltd. | 1,716,800 | 385,752 |
Sands China Ltd.2 | 70,225,200 | 381,303 |
Kroton Educacional SA, ordinary nominative3 | 90,424,000 | 372,115 |
Melco Resorts & Entertainment Ltd. (ADR) | 12,814,000 | 371,350 |
Valeo SA, non-registered shares2 | 5,280,000 | 349,050 |
Axel Springer SE2 | 3,830,568 | 320,593 |
Ryohin Keikaku Co., Ltd. | 923,000 | 309,603 |
Carnival Corp., units | 4,336,000 | 284,355 |
Luxottica Group SpA2 | 4,543,029 | 282,631 |
ProSiebenSat.1 Media SE2 | 7,825,270 | 271,323 |
William Hill PLC2,3 | 55,379,159 | 256,686 |
B&M European Value Retail SA2 | 37,835,751 | 207,811 |
Samsonite International SA2 | 43,855,500 | 200,526 |
Continental AG2 | 680,000 | 187,772 |
Hermès International2 | 315,000 | 186,715 |
Mahindra & Mahindra Ltd.2 | 15,700,000 | 178,325 |
Merlin Entertainments PLC2 | 35,160,000 | 170,965 |
Li & Fung Ltd.2 | 335,850,000 | 165,822 |
Motherson Sumi Systems Ltd.2 | 33,395,000 | 160,212 |
ITV PLC2 | 74,661,277 | 151,100 |
Peugeot SA2 | 3,980,000 | 95,816 |
Toyota Motor Corp. | 1,347,500 | 86,411 |
Maruti Suzuki India Ltd.2 | 575,000 | 78,552 |
Global Brands Group Holding Ltd.1,2,3 | 487,835,358 | 27,587 |
HUGO BOSS AG2 | 246,134 | 21,445 |
18,368,237 | ||
Materials 9.31% | ||
Vale SA, ordinary nominative (ADR) | 101,729,456 | 1,293,999 |
Vale SA, ordinary nominative | 33,786,278 | 431,529 |
Glencore PLC2 | 340,229,000 | 1,691,464 |
Teck Resources Ltd., Class B | 36,999,000 | 952,830 |
LG Chem, Ltd. | 1,856,417 | 671,403 |
ArcelorMittal SA1,2 | 20,610,000 | 653,499 |
Chr. Hansen Holding A/S2,3 | 7,491,364 | 647,058 |
Rio Tinto PLC2 | 12,683,000 | 643,388 |
Asahi Kasei Corp. | 45,607,100 | 599,496 |
First Quantum Minerals Ltd.3 | 41,611,001 | 584,246 |
Koninklijke DSM NV2 | 5,817,619 | 578,296 |
HeidelbergCement AG2 | 5,304,684 | 521,028 |
Norsk Hydro ASA2 | 88,365,000 | 520,875 |
China Molybdenum Co., Ltd., Class A | 241,099,865 | 324,956 |
China Molybdenum Co., Ltd., Class H2 | 255,673,000 | 195,613 |
China Hongqiao Group Ltd.2 | 405,793,000 | 445,452 |
Yara International ASA2 | 9,702,420 | 412,005 |
CCL Industries Inc., Class B, nonvoting | 7,986,715 | 403,179 |
Sika AG, non-registered shares2 | 50,000 | 391,746 |
Shin-Etsu Chemical Co., Ltd. | 3,600,000 | 372,245 |
South32 Ltd.2 | 119,000,000 | 296,506 |
Common stocks Materials (continued) | Shares | Value (000) |
Klabin SA, units | 46,863,500 | $293,535 |
Nitto Denko Corp. | 3,524,400 | 264,189 |
Akzo Nobel NV2 | 2,763,051 | 261,126 |
Linde AG, non-registered shares1,2 | 1,059,000 | 222,866 |
Grasim Industries Ltd.2 | 13,665,389 | 221,315 |
Agnico Eagle Mines Ltd. | 5,003,412 | 210,494 |
LafargeHolcim Ltd.2 | 3,813,000 | 208,752 |
Ambuja Cements Ltd.2 | 52,190,000 | 187,608 |
James Hardie Industries PLC (CDI)2 | 10,587,000 | 186,965 |
Southern Copper Corp. | 3,410,166 | 184,763 |
UltraTech Cement Ltd.2 | 3,021,144 | 183,676 |
Air Liquide SA, non-registered shares2 | 1,048,800 | 128,562 |
Evonik Industries AG2 | 3,212,000 | 113,293 |
BASF SE2 | 672,500 | 68,325 |
ACC Ltd.2 | 2,340,000 | 54,289 |
Fortescue Metals Group Ltd.2 | 15,584,000 | 52,141 |
Barrick Gold Corp. (CAD denominated) | 3,145,971 | 39,190 |
15,511,902 | ||
Industrials 8.87% | ||
Airbus SE, non-registered shares2 | 30,053,105 | 3,476,125 |
Ryanair Holdings PLC (ADR)1,3 | 17,974,744 | 2,208,197 |
International Consolidated Airlines Group, SA (CDI)2,3 | 150,105,675 | 1,295,335 |
Komatsu Ltd. | 23,964,600 | 798,670 |
Rolls-Royce Holdings PLC1,2 | 61,465,533 | 752,207 |
SMC Corp. | 1,594,800 | 645,382 |
DCC PLC2 | 4,424,045 | 407,305 |
Safran SA2 | 3,693,000 | 391,224 |
SK Holdings Co., Ltd. | 1,351,955 | 375,437 |
Recruit Holdings Co., Ltd. | 15,102,000 | 375,244 |
Nidec Corp. | 2,301,000 | 354,349 |
Airports of Thailand PCL, foreign registered | 159,136,000 | 343,514 |
KONE OYJ, Class B2 | 6,411,000 | 320,128 |
Edenred SA2 | 8,850,000 | 307,847 |
Eicher Motors Ltd.2 | 646,049 | 282,408 |
Schindler Holding AG, participation certificate2 | 1,300,000 | 280,282 |
Schindler Holding AG2 | 2,000 | 418 |
Siemens AG2 | 2,130,000 | 271,594 |
MTU Aero Engines AG2 | 1,603,000 | 270,118 |
Jardine Matheson Holdings Ltd.2 | 4,367,800 | 269,422 |
Hyundai Heavy Industries Co., Ltd.1 | 1,842,193 | 228,135 |
ASSA ABLOY AB, Class B2 | 9,541,000 | 206,798 |
BAE Systems PLC2 | 25,138,000 | 205,163 |
Thales2 | 1,676,500 | 204,220 |
Eiffage SA2 | 1,538,000 | 175,146 |
Babcock International Group PLC2 | 15,562,062 | 146,091 |
Air France-KLM1,2 | 9,233,795 | 102,554 |
Geberit AG2 | 132,000 | 58,353 |
Alliance Global Group, Inc.1,2 | 150,350,000 | 38,148 |
14,789,814 | ||
Consumer staples 7.55% | ||
British American Tobacco PLC2 | 56,772,250 | 3,292,873 |
Pernod Ricard SA2 | 8,893,013 | 1,480,956 |
Nestlé SA2 | 16,481,299 | 1,304,219 |
Common stocks Consumer staples (continued) | Shares | Value (000) |
Associated British Foods PLC2 | 29,942,423 | $1,045,891 |
Kao Corp. | 13,629,200 | 1,022,030 |
CP ALL PCL, foreign registered | 348,535,000 | 980,847 |
AMOREPACIFIC Corp. | 1,461,068 | 434,524 |
Alimentation Couche-Tard Inc., Class B | 8,885,000 | 397,701 |
Uni-Charm Corp. | 11,385,000 | 324,017 |
Kirin Holdings Co., Ltd. | 11,976,200 | 318,731 |
Thai Beverage PCL2 | 521,390,000 | 310,956 |
Treasury Wine Estates Ltd.2 | 19,924,663 | 260,107 |
Meiji Holdings Co., Ltd. | 3,218,000 | 244,910 |
AMOREPACIFIC Group | 1,644,668 | 219,104 |
Coca-Cola European Partners plc | 4,291,645 | 178,790 |
Ambev SA | 23,931,000 | 174,298 |
JBS SA, ordinary nominative | 54,094,704 | 153,046 |
Coca-Cola HBC AG (CDI)2 | 3,562,746 | 131,707 |
Wal-Mart de México, SAB de CV, Series V | 37,900,000 | 96,402 |
Glanbia PLC2 | 4,587,598 | 79,235 |
Japan Tobacco Inc. | 2,455,000 | 70,723 |
Seven & i Holdings Co., Ltd. | 1,492,000 | 63,981 |
12,585,048 | ||
Health care 6.31% | ||
Shire PLC2 | 29,280,500 | 1,458,361 |
Novartis AG2 | 13,586,000 | 1,098,675 |
Teva Pharmaceutical Industries Ltd. (ADR) | 50,202,159 | 857,955 |
Daiichi Sankyo Co., Ltd. | 21,006,000 | 695,924 |
HOYA Corp. | 13,504,200 | 673,116 |
Fresenius SE & Co. KGaA2 | 7,529,000 | 574,900 |
CSL Ltd.2 | 4,640,000 | 557,726 |
Sysmex Corp. | 5,847,000 | 529,598 |
Takeda Pharmaceutical Co. Ltd. | 10,608,600 | 516,625 |
Grifols, SA, Class B, preferred nonvoting, non-registered shares2 | 9,697,000 | 206,402 |
Grifols, SA, Class A, non-registered shares2 | 6,401,000 | 181,250 |
Grifols, SA, Class B (ADR) | 3,541,478 | 75,079 |
Novo Nordisk A/S, Class B2 | 7,748,500 | 381,135 |
Eurofins Scientific SE, non-registered shares2 | 696,415 | 368,017 |
AstraZeneca PLC2 | 4,988,000 | 342,788 |
UCB SA2 | 3,695,790 | 301,381 |
Chugai Pharmaceutical Co., Ltd. | 5,818,000 | 294,098 |
Hikma Pharmaceuticals PLC2,3 | 15,323,773 | 259,704 |
Fresenius Medical Care AG & Co. KGaA2 | 2,398,000 | 244,771 |
Essilor International SA2 | 1,707,983 | 230,484 |
Merck KGaA2 | 1,968,500 | 188,787 |
Roche Holding AG, non-registered shares, nonvoting2 | 595,500 | 136,527 |
Galapagos NV1,2 | 1,350,000 | 135,331 |
Straumann Holding AG2 | 190,000 | 119,747 |
Bayer AG2 | 413,120 | 46,698 |
Hypera SA, ordinary nominative | 4,229,700 | 46,280 |
10,521,359 | ||
Energy 4.51% | ||
Reliance Industries Ltd.2 | 209,106,942 | 2,843,417 |
Petróleo Brasileiro SA (Petrobras), ordinary nominative (ADR)1 | 42,895,000 | 606,535 |
Petróleo Brasileiro SA (Petrobras), preferred nominative (ADR)1 | 32,042,000 | 416,226 |
Petróleo Brasileiro SA (Petrobras), preferred nominative1 | 14,420,000 | 93,419 |
Common stocks Energy (continued) | Shares | Value (000) |
Royal Dutch Shell PLC, Class B2 | 12,699,544 | $408,892 |
Royal Dutch Shell PLC, Class A2 | 9,586,976 | 300,579 |
Royal Dutch Shell PLC, Class A (EUR denominated)2 | 122,980 | 3,921 |
Canadian Natural Resources, Ltd. (CAD denominated) | 13,034,225 | 409,722 |
Canadian Natural Resources, Ltd. | 500,000 | 15,735 |
Schlumberger Ltd. | 6,324,700 | 409,714 |
Enbridge Inc. (CAD denominated) | 12,852,964 | 404,224 |
Oil Search Ltd.2 | 66,700,452 | 368,422 |
TOTAL SA2 | 5,315,345 | 301,992 |
Tourmaline Oil Corp.3 | 16,547,000 | 280,621 |
Cenovus Energy Inc. | 27,333,400 | 232,729 |
Suncor Energy Inc. | 6,471,000 | 223,451 |
Seven Generations Energy Ltd., Class A1 | 15,152,900 | 188,176 |
Tullow Oil PLC1,2 | 5,273,800 | 14,518 |
7,522,293 | ||
Utilities 2.51% | ||
Ørsted AS2,3 | 24,649,666 | 1,604,405 |
China Gas Holdings Ltd.2 | 211,940,000 | 777,427 |
Enel SPA2 | 78,250,000 | 479,295 |
ENN Energy Holdings Ltd.2 | 50,122,000 | 449,516 |
ENGIE SA2 | 12,153,000 | 202,968 |
CK Infrastructure Holdings Ltd.2 | 22,171,500 | 182,219 |
EDP - Energias de Portugal, SA2 | 35,305,719 | 134,215 |
China Resources Gas Group Ltd.2 | 37,844,000 | 132,167 |
Guangdong Investment Ltd.2 | 76,500,000 | 121,184 |
Power Grid Corp. of India Ltd.2 | 33,232,758 | 99,003 |
SSE PLC2 | 67,814 | 1,214 |
4,183,613 | ||
Telecommunication services 2.46% | ||
SoftBank Group Corp. | 33,646,406 | 2,513,285 |
Nippon Telegraph and Telephone Corp. | 13,880,000 | 639,030 |
China Unicom (Hong Kong) Ltd.1,2 | 271,360,000 | 345,979 |
Advanced Info Service PCL, foreign registered | 44,060,000 | 293,076 |
BT Group PLC2 | 57,000,128 | 181,978 |
Intouch Holdings PCL, foreign registered | 36,860,000 | 68,368 |
TalkTalk Telecom Group PLC2 | 35,499,000 | 57,741 |
4,099,457 | ||
Real estate 0.93% | ||
CK Asset Holdings Ltd.2 | 51,271,164 | 433,840 |
Ayala Land, Inc.2 | 329,639,300 | 260,463 |
Ayala Land, Inc., preference shares2,6 | 481,283,600 | 830 |
Henderson Land Development Co. Ltd.2 | 37,307,249 | 244,414 |
Vonovia SE2 | 4,921,229 | 243,976 |
Sun Hung Kai Properties Ltd.2 | 14,720,083 | 234,477 |
Daiwa House Industry Co., Ltd. | 3,530,000 | 135,986 |
1,553,986 | ||
Miscellaneous 4.97% | ||
Other common stocks in initial period of acquisition | 8,275,114 | |
Total common stocks (cost: $106,488,944,000) | 156,625,156 |
Bonds, notes & other debt instruments 0.09% Bonds & notes of governments & government agencies outside the U.S. 0.06% | Principal amount (000) | Value (000) |
Brazil (Federative Republic of) 0% 2021 | BRL335,001 | $78,466 |
Brazil (Federative Republic of) Global 4.875% 2021 | $5,325 | 5,549 |
Brazil (Federative Republic of) 10.00% 2027 | BRL62,560 | 19,560 |
103,575 | ||
U.S. Treasury bonds & notes 0.03% U.S. Treasury 0.03% | ||
U.S. Treasury 0.875% 20187 | $50,000 | 49,868 |
Total U.S. Treasury bonds & notes | 49,868 | |
Total bonds, notes & other debt instruments (cost: $151,629,000) | 153,443 | |
Short-term securities 5.64% | ||
American Honda Finance Corp. 1.67% due 4/23/2018 | 30,000 | 29,961 |
Apple Inc. 1.68% due 4/24/20185 | 50,000 | 49,934 |
Bank of Montreal 1.80% due 5/9/2018 | 50,000 | 49,894 |
BMW U.S. Capital LLC 1.79% due 4/6/20185 | 30,000 | 29,988 |
BNP Paribas, New York Branch 1.58% due 4/12/2018 | 50,000 | 49,968 |
CAFCO, LLC 1.79%–1.95% due 4/24/2018–5/24/20185 | 211,800 | 211,299 |
Caisse d’Amortissement de la Dette Sociale 1.72%–1.90% due 4/3/2018–4/10/20185 | 125,000 | 124,961 |
Canadian Imperial Bank of Commerce 1.66%–1.98% due 4/9/2018–8/15/20185 | 180,000 | 178,890 |
Chariot Funding, LLC 2.31% due 7/3/20185 | 25,000 | 24,845 |
Chevron Corp. 1.74% due 4/12/20185 | 50,000 | 49,965 |
Coca-Cola Co. 1.60%–1.62% due 4/5/2018–4/19/20185 | 100,000 | 99,923 |
Commonwealth Bank of Australia 1.65% due 4/11/20185 | 50,000 | 49,966 |
CPPIB Capital Inc. 1.56% due 4/13/20185 | 35,000 | 34,974 |
Essilor International 1.85% due 4/18/2018–5/11/20185 | 60,000 | 59,899 |
Export Development Canada 1.68%–1.70% due 5/3/2018–5/10/2018 | 108,000 | 107,783 |
Fairway Finance Corp. 1.77% due 5/2/20185 | 17,800 | 17,766 |
Fannie Mae 1.67%–1.75% due 6/4/2018–6/18/2018 | 150,000 | 149,516 |
Federal Farm Credit Banks 1.59%–1.80% due 5/1/2018–12/18/2018 | 176,200 | 175,399 |
Federal Home Loan Bank 1.42%–1.79% due 4/6/2018–8/3/2018 | 2,828,499 | 2,824,107 |
Freddie Mac 1.31% due 4/11/2018 | 92,200 | 92,162 |
Gotham Funding Corp. 1.66% due 4/9/20185 | 25,000 | 24,987 |
Hydro-Québec 1.63% due 4/23/20185 | 55,000 | 54,930 |
IBM Credit LLC 1.82% due 4/3/20185 | 25,000 | 24,994 |
ING (U.S.) Funding LLC 1.71%–1.76% due 5/2/2018–6/1/2018 | 150,000 | 149,536 |
International Bank for Reconstruction and Development 1.76% due 5/1/2018 | 68,900 | 68,800 |
Kells Funding, LLC 1.74% due 4/26/20185 | 50,000 | 49,926 |
KfW 1.68%–1.69% due 4/2/2018–4/24/20185 | 100,000 | 99,927 |
Liberty Street Funding Corp. 1.80%–1.83% due 4/26/2018–5/18/20185 | 125,000 | 124,728 |
Mitsubishi UFJ Trust and Banking Corp. 1.72% due 4/6/20185 | 50,000 | 49,981 |
Mizuho Bank, Ltd. 2.00% due 5/25/20185 | 100,000 | 99,683 |
National Australia Bank Ltd. 2.23% due 6/19/20185 | 30,000 | 29,850 |
Nestlé Capital Corp. 1.61%–1.79% due 4/5/2018–5/16/20185 | 143,600 | 143,417 |
Novartis Finance Corp. 1.85% due 4/18/20185 | 53,000 | 52,947 |
Old Line Funding, LLC 1.73% due 5/15/20185 | 25,000 | 24,935 |
Procter & Gamble Co. 1.59% due 4/18/20185 | 50,000 | 49,950 |
Province of Alberta 1.63%–1.67% due 4/5/2018–4/10/20185 | 150,000 | 149,937 |
Province of Ontario 1.49%–1.79% due 4/3/2018–4/17/2018 | 238,000 | 237,874 |
Sanofi 1.74% due 5/4/20185 | 65,500 | 65,375 |
Starbird Funding Corp. 1.80%–2.00% due 5/10/2018–5/21/20185 | 100,000 | 99,737 |
Statoil ASA 1.61% due 4/23/20185 | 50,000 | 49,936 |
Sumitomo Mitsui Banking Corp. 1.66%–2.00% due 4/4/2018–5/21/20185 | 150,000 | 149,825 |
Short-term securities | Principal amount (000) | Value (000) |
Svenska Handelsbanken Inc. 1.62%–1.96% due 4/4/2018–5/25/20185 | $200,000 | $199,697 |
Swedbank AB 1.77%–1.91% due 5/9/2018–7/25/2018 | 145,000 | 144,446 |
Thunder Bay Funding, LLC 1.84% due 4/27/20185 | 30,000 | 29,954 |
Toronto-Dominion Bank 1.72%–1.95% due 5/7/2018–5/23/20185 | 100,000 | 99,759 |
Total Capital Canada Ltd. 1.66%–1.74% due 4/9/2018–5/9/20185 | 150,000 | 149,744 |
Toyota Industries Commercial Finance, Inc. 1.59%–1.75% due 4/2/2018–4/23/20185 | 79,000 | 78,934 |
Toyota Motor Credit Corp. 1.67%–1.98% due 4/16/2018–5/23/2018 | 80,000 | 79,868 |
U.S. Treasury Bills 1.22%–1.87% due 4/19/2018–11/8/2018 | 2,108,200 | 2,100,473 |
Victory Receivables Corp. 1.68%–1.76% due 4/4/2018–4/17/20185 | 200,000 | 199,875 |
Wal-Mart Stores, Inc. 1.66%–1.90% due 4/17/2018–4/30/20185 | 103,700 | 103,561 |
Total short-term securities (cost: $9,400,668,000) | 9,398,786 | |
Total investment securities 99.70% (cost: $116,041,241,000) | 166,177,385 | |
Other assets less liabilities 0.30% | 492,437 | |
Net assets 100.00% | $166,669,822 |
Contract amount | Counterparty | Settlement date | Unrealized appreciation (depreciation) at 3/31/2018 (000) | |
Purchases (000) | Sales (000) | |||
USD173,622 | INR11,337,161 | Bank of America, N.A. | 4/16/2018 | $170 |
USD34,231 | JPY3,669,900 | Bank of America, N.A. | 4/16/2018 | (287) |
USD224,421 | GBP160,279 | UBS AG | 4/23/2018 | (487) |
USD338,206 | GBP239,992 | Citibank | 4/24/2018 | 1,428 |
USD6,286 | JPY664,700 | JPMorgan Chase | 5/11/2018 | 23 |
USD46,332 | JPY4,900,000 | JPMorgan Chase | 5/21/2018 | 136 |
$983 |
1 | Security did not produce income during the last 12 months. |
2 | Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous,“ was $94,008,068,000, which represented 56.40% of the net assets of the fund. This amount includes $90,598,979,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading. |
3 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
4 | Acquired through a private placement transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale. Further details on this holding appear below. |
5 | Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $3,611,513,000, which represented 2.17% of the net assets of the fund. |
6 | Value determined using significant unobservable inputs. |
7 | A portion of this security was pledged as collateral. The total value of pledged collateral was $2,774,000, which represented less than .01% of the net assets of the fund. |
Private placement security | Acquisition dates | Cost (000) | Value (000) | Percent of net assets |
Axis Bank Ltd. | 11/14/2017—12/18/2017 | $421,557 | $472,514 | .28% |
Key to abbreviations and symbol |
ADR = American Depositary Receipts |
BRL = Brazilian reais |
CAD = Canadian dollars |
CDI = CREST Depository Interest |
EUR = Euros |
GBP = British pounds |
INR = Indian rupees |
JPY = Japanese yen |
USD/$ = U.S. dollars |
MFGEFPX-016-0518O-S60669 | EuroPacific Growth Fund — Page 9 of 9 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO
To the Shareholders and Board of Trustees of EuroPacific Growth Fund:
Opinion on the Investment Portfolio
We have audited the accompanying investment portfolio of EuroPacific Growth Fund (the “Fund”), as of March 31, 2018, and the related notes (“investment portfolio”) (included in Item 6 of this Form N-CSR). In our opinion, the investment portfolio presents fairly, in all material respects, the investments in securities of the Fund as of March 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
The investment portfolio is the responsibility of the Fund’s management. Our responsibility is to express an opinion on the investment portfolio based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the investment portfolio is free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the investment portfolio, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the investment portfolio. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the investment portfolio. We believe that our audit provides a reasonable basis for our opinion.
Costa Mesa, California
May 11, 2018
We have served as the auditor of one or more American Funds investment companies since 1956.
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 10 – Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating and governance committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating and governance committee.
ITEM 11 – Controls and Procedures
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule. |
(b) | There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
ITEM 12 – Exhibits
(a)(1) | The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto. |
(a)(2) | The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EUROPACIFIC GROWTH FUND | |
By /s/ Walter R. Burkley | |
Walter R. Burkley, Executive Vice President and Principal Executive Officer | |
Date: May 31, 2018 |
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/ Walter R. Burkley |
Walter R. Burkley, Executive Vice President and Principal Executive Officer |
Date: May 31, 2018 |
By /s/ Brian C. Janssen |
Brian C. Janssen, Treasurer and Principal Financial Officer |
Date: May 31, 2018 |