The New Economy Fund®
Investment portfolio
August 31, 2023
Investment portfolio
August 31, 2023
unaudited
Common stocks 94.32% Information technology 30.63% | Shares | Value (000) | |
Microsoft Corp. | 4,743,266 | $1,554,653 | |
Broadcom, Inc. | 1,563,386 | 1,442,833 | |
Micron Technology, Inc. | 6,478,075 | 453,077 | |
Salesforce, Inc.1 | 1,799,202 | 398,451 | |
NVIDIA Corp. | 756,206 | 373,225 | |
Taiwan Semiconductor Manufacturing Company, Ltd. (ADR) | 2,900,667 | 271,416 | |
Taiwan Semiconductor Manufacturing Company, Ltd. | 5,731,000 | 98,796 | |
SK hynix, Inc. | 3,633,542 | 334,833 | |
Applied Materials, Inc. | 1,891,605 | 288,962 | |
Apple, Inc. | 1,511,814 | 284,025 | |
Adobe, Inc.1 | 466,096 | 260,706 | |
ASML Holding NV | 387,435 | 255,388 | |
Arista Networks, Inc.1 | 1,245,540 | 243,167 | |
Motorola Solutions, Inc. | 664,894 | 188,544 | |
Insight Enterprises, Inc.1 | 1,119,355 | 179,198 | |
ServiceNow, Inc.1 | 299,236 | 176,199 | |
Palo Alto Networks, Inc.1 | 643,131 | 156,474 | |
Shopify, Inc., Class A, subordinate voting shares1 | 2,337,310 | 155,408 | |
Wolfspeed, Inc.1 | 3,011,457 | 144,008 | |
TE Connectivity, Ltd. | 911,459 | 120,668 | |
Accenture PLC, Class A | 327,509 | 106,038 | |
MongoDB, Inc., Class A1 | 272,750 | 104,000 | |
Smartsheet, Inc., Class A1 | 2,478,606 | 103,432 | |
EPAM Systems, Inc.1 | 377,314 | 97,721 | |
Marvell Technology, Inc. | 1,580,588 | 92,069 | |
SAP SE | 625,497 | 87,373 | |
Snowflake, Inc., Class A1 | 552,318 | 86,631 | |
Globant SA1 | 399,127 | 81,610 | |
eMemory Technology, Inc. | 1,285,000 | 73,235 | |
MediaTek, Inc. | 3,037,400 | 67,240 | |
Synopsys, Inc.1 | 129,879 | 59,600 | |
RingCentral, Inc., Class A1 | 1,640,082 | 50,728 | |
Renesas Electronics Corp.1 | 2,994,800 | 50,440 | |
DoubleVerify Holdings, Inc.1 | 1,416,274 | 47,884 | |
Monday.com, Ltd.1 | 266,751 | 47,332 | |
Cloudflare, Inc., Class A1 | 602,437 | 39,176 | |
Keyence Corp. | 93,400 | 38,851 | |
HubSpot, Inc.1 | 60,686 | 33,166 | |
Datadog, Inc., Class A1 | 331,098 | 31,944 | |
Seagate Technology Holdings PLC | 440,860 | 31,209 | |
Atlassian Corp., Class A1 | 142,406 | 29,059 | |
Intuit, Inc. | 49,254 | 26,686 | |
Qorvo, Inc.1 | 231,785 | 24,891 | |
Constellation Software, Inc. | 12,100 | 24,854 | |
OBIC Co., Ltd. | 98,700 | 17,183 | |
Autodesk, Inc.1 | 72,507 | 16,092 |
The New Economy Fund — Page 1 of 9
unaudited
Common stocks (continued) Information technology (continued) | Shares | Value (000) | |
Stripe, Inc., Class B1,2,3 | 63,586 | $1,349 | |
GitLab, Inc., Class A1 | 2,909 | 138 | |
8,849,962 | |||
Health care 20.23% | |||
UnitedHealth Group, Inc. | 1,453,028 | 692,484 | |
Thermo Fisher Scientific, Inc. | 1,074,607 | 598,664 | |
Eli Lilly and Company | 966,367 | 535,561 | |
agilon health, Inc.1,4 | 19,874,941 | 352,184 | |
Alnylam Pharmaceuticals, Inc.1 | 1,425,506 | 281,994 | |
Vertex Pharmaceuticals, Inc.1 | 741,082 | 258,148 | |
Molina Healthcare, Inc.1 | 787,532 | 244,229 | |
Novo Nordisk AS, Class B | 1,288,084 | 238,760 | |
Abbott Laboratories | 2,161,050 | 222,372 | |
Align Technology, Inc.1 | 548,788 | 203,128 | |
Stryker Corp. | 663,659 | 188,181 | |
Catalent, Inc.1 | 3,559,948 | 177,891 | |
Insulet Corp.1 | 640,567 | 122,803 | |
Exact Sciences Corp.1 | 1,420,000 | 118,811 | |
WuXi AppTec Co., Ltd., Class H | 10,609,752 | 116,212 | |
Humana, Inc. | 242,782 | 112,075 | |
GE HealthCare Technologies, Inc. | 1,229,273 | 86,602 | |
ICON PLC1 | 328,854 | 85,482 | |
Zoetis, Inc., Class A | 440,104 | 83,844 | |
AbbVie, Inc. | 568,348 | 83,524 | |
WuXi Biologics (Cayman), Inc.1 | 14,780,000 | 83,207 | |
Rede D’Or Sao Luiz SA | 14,163,192 | 81,969 | |
Centene Corp.1 | 1,216,048 | 74,969 | |
Regeneron Pharmaceuticals, Inc.1 | 90,042 | 74,419 | |
iRhythm Technologies, Inc.1 | 680,971 | 70,392 | |
Argenx SE (ADR)1 | 134,874 | 67,773 | |
AstraZeneca PLC | 489,537 | 66,120 | |
Bachem Holding AG | 692,289 | 64,774 | |
EssilorLuxottica SA | 299,812 | 56,535 | |
Lonza Group AG | 98,908 | 54,742 | |
Revance Therapeutics, Inc.1 | 2,520,779 | 44,441 | |
Gilead Sciences, Inc. | 576,416 | 44,084 | |
Daiichi Sankyo Company, Ltd. | 1,349,345 | 39,870 | |
IQVIA Holdings, Inc.1 | 170,124 | 37,875 | |
DexCom, Inc.1 | 369,928 | 37,355 | |
NovoCure, Ltd.1 | 975,999 | 21,531 | |
Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | 548,656 | 20,320 | |
Penumbra, Inc.1 | 64,203 | 16,982 | |
Idorsia, Ltd.1,4 | 2,969,247 | 16,289 | |
HOYA Corp. | 128,700 | 14,290 | |
Siemens Healthineers AG | 271,159 | 13,599 | |
Sarepta Therapeutics, Inc.1 | 90,617 | 10,966 | |
Seagen, Inc.1 | 51,359 | 10,584 | |
BioMarin Pharmaceutical, Inc.1 | 114,393 | 10,453 | |
Revvity, Inc. | 57,918 | 6,778 | |
5,843,266 |
The New Economy Fund — Page 2 of 9
unaudited
Common stocks (continued) Financials 10.85% | Shares | Value (000) | |
Mastercard, Inc., Class A | 1,106,467 | $456,572 | |
Visa, Inc., Class A | 1,021,254 | 250,902 | |
Berkshire Hathaway, Inc., Class B1 | 575,902 | 207,440 | |
Fiserv, Inc.1 | 1,640,968 | 199,197 | |
KKR & Co., Inc. | 2,765,236 | 173,684 | |
AIA Group, Ltd. | 17,154,000 | 155,740 | |
RenaissanceRe Holdings, Ltd. | 819,435 | 153,964 | |
Nu Holdings, Ltd., Class A1 | 22,321,451 | 152,902 | |
Kotak Mahindra Bank, Ltd. | 6,792,143 | 144,295 | |
HDFC Bank, Ltd. (ADR) | 1,235,846 | 77,005 | |
HDFC Bank, Ltd. | 3,016,422 | 57,258 | |
ICICI Bank, Ltd. | 9,342,862 | 108,200 | |
Tradeweb Markets, Inc., Class A | 976,637 | 84,411 | |
Marsh & McLennan Companies, Inc. | 378,316 | 73,768 | |
Discover Financial Services | 765,002 | 68,904 | |
Block, Inc., Class A1 | 1,155,905 | 66,638 | |
Intercontinental Exchange, Inc. | 490,244 | 57,844 | |
Aon PLC, Class A | 169,342 | 56,457 | |
Affirm Holdings, Inc., Class A1 | 2,612,339 | 54,363 | |
CME Group, Inc., Class A | 266,102 | 53,933 | |
Blackstone, Inc. | 479,552 | 51,010 | |
Bajaj Finserv, Ltd. | 2,787,500 | 50,133 | |
Adyen NV1 | 53,699 | 44,981 | |
Star Health & Allied Insurance Co., Ltd.1 | 5,796,777 | 44,530 | |
MSCI, Inc. | 72,632 | 39,484 | |
Arch Capital Group, Ltd.1 | 477,816 | 36,725 | |
Morgan Stanley | 428,593 | 36,495 | |
JPMorgan Chase & Co. | 244,369 | 35,758 | |
LPL Financial Holdings, Inc. | 144,465 | 33,312 | |
Corebridge Financial, Inc. | 1,698,134 | 30,278 | |
Janus Henderson Group PLC | 1,049,020 | 28,817 | |
GMO Payment Gateway, Inc. | 389,300 | 24,691 | |
China Merchants Bank Co., Ltd., Class A | 4,900,973 | 21,210 | |
Jio Financial Services, Ltd.1 | 1,402,547 | 3,956 | |
3,134,857 | |||
Consumer discretionary 9.77% | |||
Amazon.com, Inc.1 | 4,351,875 | 600,602 | |
MercadoLibre, Inc.1 | 299,509 | 411,034 | |
Flutter Entertainment PLC1 | 1,109,833 | 202,059 | |
Home Depot, Inc. | 557,627 | 184,184 | |
LVMH Moët Hennessy-Louis Vuitton SE | 216,051 | 183,250 | |
Airbnb, Inc., Class A1 | 1,189,236 | 156,444 | |
Chipotle Mexican Grill, Inc.1 | 80,525 | 155,143 | |
Evolution AB | 1,361,628 | 147,524 | |
Hilton Worldwide Holdings, Inc. | 720,686 | 107,130 | |
Amadeus IT Group SA, Class A, non-registered shares | 1,158,751 | 79,536 | |
Booking Holdings, Inc.1 | 20,980 | 65,143 | |
Floor & Decor Holdings, Inc., Class A1 | 645,989 | 64,405 | |
Rivian Automotive, Inc., Class A1,4 | 2,558,730 | 58,160 | |
Tractor Supply Co. | 265,952 | 58,110 | |
Starbucks Corp. | 529,719 | 51,616 | |
Entain PLC | 3,488,143 | 51,147 | |
O’Reilly Automotive, Inc.1 | 54,149 | 50,884 | |
YUM! Brands, Inc. | 328,743 | 42,533 |
The New Economy Fund — Page 3 of 9
unaudited
Common stocks (continued) Consumer discretionary (continued) | Shares | Value (000) | |
NIKE, Inc., Class B | 394,293 | $40,104 | |
adidas AG | 177,164 | 35,428 | |
Aptiv PLC1 | 247,656 | 25,125 | |
DoorDash, Inc., Class A1 | 184,782 | 15,546 | |
Sony Group Corp. | 165,100 | 13,781 | |
International Game Technology PLC | 419,673 | 13,438 | |
Light & Wonder, Inc.1 | 118,888 | 9,115 | |
2,821,441 | |||
Industrials 9.15% | |||
Ceridian HCM Holding, Inc.1 | 5,092,365 | 369,298 | |
TransDigm Group, Inc.1 | 290,548 | 262,612 | |
Airbus SE, non-registered shares | 1,672,227 | 245,482 | |
General Electric Co. | 1,917,270 | 219,451 | |
Carrier Global Corp. | 3,193,544 | 183,469 | |
Safran SA | 1,100,476 | 176,966 | |
L3Harris Technologies, Inc. | 782,473 | 139,351 | |
Quanta Services, Inc. | 501,900 | 105,334 | |
Copart, Inc.1 | 2,219,888 | 99,518 | |
RTX Corp. | 936,226 | 80,553 | |
United Rentals, Inc. | 165,781 | 79,001 | |
CSX Corp. | 2,186,674 | 66,037 | |
Ryanair Holdings PLC (ADR)1 | 594,907 | 59,044 | |
Siemens AG | 338,884 | 51,034 | |
Recruit Holdings Co., Ltd. | 1,377,600 | 49,425 | |
Boeing Company1 | 220,381 | 49,372 | |
The Weir Group PLC | 1,941,474 | 45,119 | |
Huntington Ingalls Industries, Inc. | 202,400 | 44,593 | |
Rentokil Initial PLC | 5,777,105 | 44,042 | |
Canadian Pacific Kansas City, Ltd. | 531,504 | 42,191 | |
Old Dominion Freight Line, Inc. | 87,869 | 37,553 | |
Melrose Industries PLC | 5,727,894 | 37,195 | |
NIBE Industrier AB, Class B | 4,126,328 | 30,972 | |
Union Pacific Corp. | 132,000 | 29,115 | |
XPO, Inc.1 | 378,347 | 28,236 | |
Stericycle, Inc.1 | 590,133 | 26,090 | |
Shenzhen Inovance Technology Co., Ltd., Class A | 1,853,527 | 17,360 | |
Hefei Meyer Optoelectronic Technology, Inc., Class A | 4,996,184 | 16,057 | |
Grab Holdings, Ltd., Class A1 | 1,998,134 | 7,533 | |
2,642,003 | |||
Communication services 6.46% | |||
Alphabet, Inc., Class A1 | 3,399,188 | 462,867 | |
Alphabet, Inc., Class C1 | 2,786,485 | 382,724 | |
Meta Platforms, Inc., Class A1 | 1,234,707 | 365,337 | |
Netflix, Inc.1 | 635,509 | 275,608 | |
T-Mobile US, Inc.1 | 452,836 | 61,699 | |
Charter Communications, Inc., Class A1 | 129,879 | 56,903 | |
Comcast Corp., Class A | 1,064,606 | 49,781 | |
Warner Music Group Corp., Class A | 1,399,254 | 46,595 | |
New York Times Co., Class A | 1,015,052 | 44,936 | |
Epic Games, Inc.1,2,3 | 84,438 | 41,353 | |
Live Nation Entertainment, Inc.1 | 433,144 | 36,614 | |
Take-Two Interactive Software, Inc.1 | 243,453 | 34,619 |
The New Economy Fund — Page 4 of 9
unaudited
Common stocks (continued) Communication services (continued) | Shares | Value (000) | |
Activision Blizzard, Inc. | 40,962 | $3,768 | |
ZoomInfo Technologies, Inc.1 | 187,800 | 3,384 | |
1,866,188 | |||
Energy 3.56% | |||
Halliburton Co. | 4,383,107 | 169,276 | |
Transocean, Ltd.1 | 17,331,918 | 141,775 | |
Noble Corp. PLC, Class A | 2,308,010 | 121,724 | |
Gaztransport & Technigaz SA | 751,586 | 93,153 | |
Viper Energy Partners, LP | 3,212,000 | 89,358 | |
TechnipFMC PLC | 4,283,000 | 81,548 | |
Neste OYJ | 2,169,337 | 79,461 | |
Schlumberger NV | 1,238,843 | 73,042 | |
Weatherford International1 | 785,991 | 69,576 | |
Baker Hughes Co., Class A | 1,916,474 | 69,357 | |
Reliance Industries, Ltd. | 1,402,547 | 40,779 | |
1,029,049 | |||
Consumer staples 1.86% | |||
Dollar Tree Stores, Inc.1 | 914,146 | 111,855 | |
Performance Food Group Co.1 | 1,606,500 | 99,812 | |
Dollar General Corp. | 536,950 | 74,368 | |
Kroger Co. | 1,404,189 | 65,140 | |
Ocado Group PLC1 | 4,795,032 | 52,944 | |
Costco Wholesale Corp. | 82,323 | 45,218 | |
Monster Beverage Corp.1 | 719,328 | 41,297 | |
Seven & i Holdings Co., Ltd.4 | 674,900 | 27,744 | |
Target Corp. | 142,524 | 18,036 | |
536,414 | |||
Materials 1.08% | |||
Linde PLC | 253,463 | 98,100 | |
Air Liquide SA, non-registered shares | 466,997 | 84,496 | |
Corteva, Inc. | 1,464,333 | 73,964 | |
Air Products and Chemicals, Inc. | 188,124 | 55,589 | |
312,149 | |||
Utilities 0.59% | |||
PG&E Corp.1 | 9,473,836 | 154,424 | |
NextEra Energy, Inc. | 251,983 | 16,832 | |
171,256 | |||
Real estate 0.14% | |||
Zillow Group, Inc., Class C, nonvoting shares1 | 406,420 | 21,199 | |
Extra Space Storage, Inc. REIT | 82,000 | 10,552 | |
Equinix, Inc. REIT | 9,603 | 7,503 | |
39,254 | |||
Total common stocks (cost: $18,640,496,000) | 27,245,839 |
The New Economy Fund — Page 5 of 9
unaudited
Preferred securities 0.16% Consumer discretionary 0.14% | Shares | Value (000) | |
Maplebear, Inc., Series H, noncumulative preferred shares1,2,3 | 830,425 | $26,989 | |
Maplebear, Inc., Series I, noncumulative preferred shares1,2,3 | 398,330 | 12,946 | |
39,935 | |||
Information technology 0.02% | |||
Stripe, Inc., Series BB-1, 6.00% noncumulative preferred shares1,2,3 | 218,360 | 4,634 | |
Stripe, Inc., Series BB, 6.00% noncumulative preferred shares1,2,3 | 77,454 | 1,643 | |
Stripe, Inc., Series H, 6.00% noncumulative preferred shares1,2,3 | 22,617 | 480 | |
6,757 | |||
Total preferred securities (cost: $106,896,000) | 46,692 | ||
Rights & warrants 0.00% Information technology 0.00% | |||
Constellation Software, Inc., rights, expire 9/29/20231 | 12,100 | 7 | |
Total rights & warrants (cost: $6,000) | 7 | ||
Convertible stocks 0.11% Information technology 0.11% | |||
Tarana Wireless, Inc., Series 6, noncumulative convertible preferred shares2,3 | 30,562,347 | 32,683 | |
Tarana Wireless, Inc., Series 7, noncumulative convertible preferred shares2,3 | 922,043 | 986 | |
Total convertible stocks (cost: $25,986,000) | 33,669 | ||
Convertible bonds & notes 0.05% Consumer discretionary 0.05% | Principal amount (000) | ||
Rivian Automotive, Inc., convertible notes, 4.625% 3/15/20295 | USD9,991 | 13,853 | |
Total convertible bonds & notes (cost: $9,991,000) | 13,853 | ||
Short-term securities 5.57% Money market investments 5.37% | Shares | ||
Capital Group Central Cash Fund 5.39%6,7 | 15,492,430 | 1,549,243 | |
Money market investments purchased with collateral from securities on loan 0.20% | |||
Capital Group Central Cash Fund 5.39%6,7,8 | 421,915 | 42,192 | |
Invesco Short-Term Investments Trust – Government & Agency Portfolio, Institutional Class 5.25%6,8 | 15,973,418 | 15,973 | |
Goldman Sachs Financial Square Government Fund, Institutional Shares 5.23%6,8 | 272,204 | 272 | |
58,437 | |||
Total short-term securities (cost: $1,607,393,000) | 1,607,680 | ||
Total investment securities 100.21% (cost: $20,390,768,000) | 28,947,740 | ||
Other assets less liabilities (0.21)% | (59,835 ) | ||
Net assets 100.00% | $28,887,905 |
The New Economy Fund — Page 6 of 9
unaudited
Investments in affiliates7
Value of affiliates at 12/1/2022 (000) | Additions (000) | Reductions (000) | Net realized gain (000) | Net unrealized appreciation (000) | Value of affiliates at 8/31/2023 (000) | Dividend income (000) | |
Short-term securities 5.52% | |||||||
Money market investments 5.37% | |||||||
Capital Group Central Cash Fund 5.39%6 | $2,988,551 | $2,918,204 | $4,357,738 | $103 | $123 | $1,549,243 | $76,259 |
Money market investments purchased with collateral from securities on loan 0.15% | |||||||
Capital Group Central Cash Fund 5.39%6,8 | 32,169 | 10,023 9 | 42,192 | — 10 | |||
Total 5.52% | $103 | $123 | $1,591,435 | $76,259 |
Restricted securities3
Acquisition date(s) | Cost (000) | Value (000) | Percent of net assets | |
Epic Games, Inc.1,2 | 3/29/2021 | $74,728 | $41,353 | .14 % |
Maplebear, Inc., Series H, noncumulative preferred shares1,2 | 11/13/2020 | 49,826 | 26,989 | .09 |
Maplebear, Inc., Series I, noncumulative preferred shares1,2 | 2/26/2021 | 49,791 | 12,946 | .05 |
Tarana Wireless, Inc., Series 6, noncumulative convertible preferred shares2 | 2/18/2022 | 25,000 | 32,683 | .11 |
Tarana Wireless, Inc., Series 7, noncumulative convertible preferred shares2 | 6/27/2023 | 986 | 986 | .00 11 |
Stripe, Inc., Series BB-1, 6.00% noncumulative preferred shares1,2 | 8/24/2023 | 4,703 | 4,634 | .02 |
Stripe, Inc., Series BB, 6.00% noncumulative preferred shares1,2 | 8/24/2023 | 1,668 | 1,643 | .01 |
Stripe, Inc., Class B1,2 | 5/6/2021 - 8/24/2023 | 2,346 | 1,349 | .01 |
Stripe, Inc., Series H, 6.00% noncumulative preferred shares1,2 | 3/15/2021 | 908 | 480 | .00 11 |
Total | $209,956 | $123,063 | .43 % |
1 | Security did not produce income during the last 12 months. |
2 | Value determined using significant unobservable inputs. |
3 | Restricted security, other than Rule 144A securities or commercial paper issued pursuant to Section 4(a)(2) of the Securities Act of 1933. The total value of all such restricted securities was $123,063,000, which represented .43% of the net assets of the fund. |
4 | All or a portion of this security was on loan. The total value of all such securities was $62,444,000, which represented .22% of the net assets of the fund. |
5 | Acquired in a transaction exempt from registration under Rule 144A or, for commercial paper, Section 4(a)(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 $13,853,000, which represented .05% of the net assets of the fund. |
6 | Rate represents the seven-day yield at 8/31/2023. |
7 | Part of the same “group of investment companies“ as the fund as defined under the Investment Company Act of 1940, as amended. |
8 | Security purchased with cash collateral from securities on loan. |
9 | Represents net activity. |
10 | Dividend income is included with securities lending income and is not shown in this table. |
11 | Amount less than .01%. |
Valuation disclosures
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by accounting principles generally accepted in the United States of America. The net asset value per share is calculated once daily as of the close of regular trading on the New York Stock Exchange, normally 4 p.m. New York time, each day the New York Stock Exchange is open. Security transactions are recorded by the fund as of the date the trades are executed with brokers. 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.
The New Economy Fund — Page 7 of 9
unaudited
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, including depositary receipts, 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 evaluated prices obtained from third-party 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 & loans; convertible securities | Standard inputs and underlying equity of the issuer |
Bonds & notes of governments & government agencies | Standard inputs and interest rate volatilities |
Mortgage-backed; asset-backed obligations | Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information |
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. The Capital Group Central Cash Fund (“CCF”), a fund within the Capital Group Central Fund Series (“Central Funds“), is valued based upon a floating net asset value, which fluctuates with changes in the value of CCF’s portfolio securities. The underlying securities are valued based on the policies and procedures in CCF’s statement of additional information.
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 the fund’s investment adviser and approved by the 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, dealer or broker quotes, 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 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 designated 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 “Committee”) to administer, implement and oversee the fair valuation process and to make fair value decisions. The Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation team. The Committee reviews changes in fair value measurements from period to period, pricing vendor information and market data, and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews facilitated by the investment adviser’s global risk management group. The Committee reports changes to the fair valuation guidelines to the board of trustees. The fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.
The New Economy Fund — Page 8 of 9
unaudited
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 table presents the fund’s valuation levels as of August 31, 2023 (dollars in thousands):
Investment securities | ||||
Level 1 | Level 2 | Level 3 | Total | |
Assets: | ||||
Common stocks: | ||||
Information technology | $8,848,613 | $— | $1,349 | $8,849,962 |
Health care | 5,843,266 | — | — | 5,843,266 |
Financials | 3,134,857 | — | — | 3,134,857 |
Consumer discretionary | 2,821,441 | — | — | 2,821,441 |
Industrials | 2,642,003 | — | — | 2,642,003 |
Communication services | 1,824,835 | — | 41,353 | 1,866,188 |
Energy | 1,029,049 | — | — | 1,029,049 |
Consumer staples | 536,414 | — | — | 536,414 |
Materials | 312,149 | — | — | 312,149 |
Utilities | 171,256 | — | — | 171,256 |
Real estate | 39,254 | — | — | 39,254 |
Preferred securities | — | — | 46,692 | 46,692 |
Rights & warrants | 7 | — | — | 7 |
Convertible stocks | — | — | 33,669 | 33,669 |
Convertible bonds & notes | — | 13,853 | — | 13,853 |
Short-term securities | 1,607,680 | — | — | 1,607,680 |
Total | $28,810,824 | $13,853 | $123,063 | $28,947,740 |
Key to abbreviations |
ADR = American Depositary Receipts |
REIT = Real Estate Investment Trust |
USD = U.S. dollars |
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider 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 Capital Group website at capitalgroup.com.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
American Funds Distributors, Inc., member FINRA.
© 2023 Capital Group. All rights reserved.
MFGEFP3-014-1023O-S96428
The New Economy Fund — Page 9 of 9