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: 811-05888
SMALLCAP World Fund, Inc.
(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: September 30
Date of reporting period: March 31, 2014
Patrick F. Quan
SMALLCAP World Fund, Inc.
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
Copies to:
Mark D. Perlow
K&L Gates LLP
Four Embarcadero Center, Suite 1200
San Francisco, California 94111
(Counsel for the Registrant)
ITEM 1 – Reports to Stockholders
 | | SMALLCAP World Fund®
Semi-annual report
for the six months ended
March 31, 2014 |
SMALLCAP World Fund seeks long-term growth of capital through investments in smaller companies in the United States and around the world.
This fund is one of more than 40 offered by one of the nation’s largest mutual fund families, American Funds, from Capital Group. For more than 80 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. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended March 31, 2014:
| Class A shares | | 1 year | | | 5 years | | | 10 years | |
| | | | | | | | | | |
| Reflecting 5.75% maximum sales charge | | | 13.08% | | | | 21.34% | | | | 8.70% | |
For other share class results, visit americanfunds.com and americanfundsretirement.com.
The total annual fund operating expense ratio was 1.13% for Class A shares as of the prospectus dated December 1, 2013.
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 and political instability. These risks may be heightened in connection with investments in developing countries. Investing in small-capitalization stocks can involve greater risk than is customarily associated with investing in stocks of larger, more established companies. 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.
Fellow investors:
Concerns about slowing growth in China and other emerging markets marked an otherwise positive period for small-capitalization stocks around the world during the first six months of SMALLCAP World Fund’s current fiscal year.
For the six-month period ended March 31, 2014, the fund produced a total return of 6.8%, which included a one-time capital gains payment of $2.43 a share paid on December 26, 2013.
By way of comparison, the unmanaged MSCI All Country World Small Cap Index returned 9.9% for the period, while the fund’s peer group, as represented by the Lipper Global Small-/Mid-Cap Funds Average, returned 9.0%. The MSCI All Country World Small Cap Index does not include fees or expenses.
We strive to deliver robust long-term absolute returns for shareholders, and note that over five years, 10 years and the life of the fund, the average annual total returns have been 22.8%, 9.3% and 10.0%, respectively. This has been achieved despite the global financial crisis and deflationary pressures of the past decade.
Market overview
Equities continued to rally in developed markets around the world during the first six months of the fund’s fiscal year. U.S. stocks surged toward the end of the calendar year, and while some sectors became volatile in recent months, most indexes held on to their gains.
Results at a glance
For periods ended March 31, 2014, with all distributions reinvested
| | | Cumulative total returns | | | Average annual total returns |
| | | 6 months | | 1 year | | 5 years | | 10 years | | Lifetime
(since 4/30/90) |
| | | | | | | | | | | | | | | | |
| SMALLCAP World Fund (Class A shares) | | | 6.77 | % | | | 19.99 | % | | | 22.79 | % | | | 9.35 | % | | | 10.03 | % |
| MSCI All Country World Small Cap Index* | | | 9.91 | | | | 20.74 | | | | 23.77 | | | | 9.73 | | | | n/a | |
| Lipper Global Small-/Mid-Cap Funds Average | | | 9.00 | | | | 21.47 | | | | 21.47 | | | | 8.34 | | | | 9.81 | |
| * | The market index is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index. The market index is a free float-adjusted market capitalization weighted index that is designed to measure equity market results of smaller capitalization companies in both developed and emerging markets. Results reflect dividends net of withholding taxes. This index was not in existence as of the date the fund began investment operations; therefore, lifetime results are not available. |
Overseas, European markets likewise made gains. However, growing concern over China’s economic health weighed down stocks in the Asia-Pacific region. Many equities from emerging markets around the world saw declines due to concerns over slower economic growth.
Geopolitical worries also became more acute toward the end of the six-month period due to tension between Ukraine and Russia. Not only are both nations considered emerging markets, their influence over the energy sector, particularly in Europe, troubled many investors.
The fund’s holdings
The portfolio managers of SMALLCAP World Fund continue to invest in companies they believe will not only grow, but have the potential to be game-changers in their industries. To that end, the geography of those investments is a secondary, though still important, concern. The managers continue to hold a greater portion of the fund in emerging markets stocks than many of the fund’s peers because they believe these stocks will continue to provide growth at a reasonable discount to developed market stocks.
At the end of the reporting period, emerging markets stocks made up 13.6% of the portfolio, compared to 9.6% in the benchmark. In addition, the fund consisted of roughly 45% U.S. equities, less than that of the index. Roughly 19% of the fund’s equities were from Europe and 9% from developed Asian markets.
Where are SMALLCAP’s holdings located?
| | As of March 31, 2014 | | Percent of
net assets | |
| ▀ | United States | | | 44.9 | % |
| ▀ | Asia & Pacific Basin | | | 21.4 | |
| ▀ | Europe | | | 19.3 | |
| ▀ | Other (including Canada & Latin America) | | | 4.6 | |
| ▀ | Short-term securities & other assets less liabilities | | | 9.8 | |
| | As of September 30, 2013 | | Percent of
net assets | |
| ▀ | United States | | | 46.3 | % |
| ▀ | Asia & Pacific Basin | | | 20.6 | |
| ▀ | Europe | | | 20.3 | |
| ▀ | Other (including Canada & Latin America) | | | 4.9 | |
| ▀ | Short-term securities & other assets less liabilities | | | 7.9 | |
Holdings in the consumer staples and energy sectors negatively influenced returns. The fund’s holdings in health care and industrials stocks contributed to returns on an absolute basis.
As with geography, the portfolio managers seek out high-conviction investments across all sectors, with an eye toward the long term.
Looking ahead
As of this writing, we believe that the economic situation in most developed nations is improving. Certainly, the geopolitical situation in Ukraine will be monitored closely with an eye toward potential effects on European growth. In the U.S., the Federal Reserve’s continued efforts to reduce its participation in the bond markets likewise will be watched carefully.
China remains a formidable question mark, one that could affect other emerging markets, the Asia-Pacific region and, indeed, the entire world. While we do not believe that China’s economic growth will stop altogether, it does appear that a slowdown is inevitable. The short-term effects of this could increase volatility in equities around the world — but could also provide long-term opportunities for other companies around the world.
As always, while we take note of the economic environment and market trends, our investment decisions are based on bottom-up research on each individual company. We often prefer companies we believe have the potential to be innovators in their fields, ones that could disrupt established markets or create new ones entirely. It’s these companies, among others, we seek to include in SMALLCAP World Fund.
We do not take your support for granted, and we will continue to try to deliver solid long-term absolute results. We look forward to reporting to you again in six months.
Cordially,
Jonathan Knowles
Vice Chairman of the Board
Gregory W. Wendt
President
May 13, 2014
For current information about the fund, visit americanfunds.com.
| Summary investment portfolio March 31, 2014 | unaudited |
| Industry sector diversification | Percent of net assets |
| Country diversification | | Percent of
net assets | |
| United States | | | 44.9 | % |
| United Kingdom | | | 9.7 | |
| Euro zone* | | | 6.5 | |
| Japan | | | 4.6 | |
| China | | | 3.7 | |
| India | | | 2.9 | |
| Hong Kong | | | 2.7 | |
| Canada | | | 2.2 | |
| Philippines | | | 1.8 | |
| Australia | | | 1.4 | |
| Singapore | | | 1.3 | |
| Other countries | | | 8.5 | |
| Short-term securities & other assets less liabilities | | | 9.8 | |
| * | Countries using the euro as a common currency; those represented in the fund’s portfolio are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Slovenia and Spain. |
| Common stocks 89.56% | | Shares | | | Value
(000) | | | Percent of
net assets | |
| Consumer discretionary 19.72% | | | | | | | | | | | | |
| Netflix, Inc.1 | | | 998,743 | | | $ | 351,587 | | | | 1.33 | % |
| Domino’s Pizza, Inc.2 | | | 3,040,000 | | | | 233,989 | | | | .89 | |
| Melco International Development Ltd.3 | | | 56,695,000 | | | | 191,645 | | | | .73 | |
| Lions Gate Entertainment Corp.2 | | | 7,081,000 | | | | 189,275 | | | | .72 | |
| Paddy Power PLC3 | | | 2,237,300 | | | | 177,256 | | | | .67 | |
| ASOS PLC1,3 | | | 2,014,755 | | | | 174,406 | | | | .66 | |
| Tesla Motors, Inc.1 | | | 667,845 | | | | 139,212 | | | | .53 | |
| Mr Price Group Ltd.3 | | | 7,820,383 | | | | 116,934 | | | | .44 | |
| John Wiley & Sons, Inc., Class A | | | 1,971,083 | | | | 113,613 | | | | .43 | |
| Five Below, Inc.1 | | | 2,639,833 | | | | 112,140 | | | | .42 | |
| Ted Baker PLC2,3 | | | 3,024,993 | | | | 108,346 | | | | .41 | |
| TOD’S SpA3 | | | 655,000 | | | | 85,038 | | | | .32 | |
| Other securities | | | | | | | 3,210,096 | | | | 12.17 | |
| | | | | | | | 5,203,537 | | | | 19.72 | |
| | | | | | | | | | | | | |
| Health care 14.63% | | | | | | | | | | | | |
| Regeneron Pharmaceuticals, Inc.1 | | | 1,044,921 | | | | 313,769 | | | | 1.19 | |
| Incyte Corp.1 | | | 4,445,600 | | | | 237,929 | | | | .90 | |
| Endo International PLC1 | | | 1,745,100 | | | | 119,801 | | | | | |
| Endo International PLC (CAD denominated)1 | | | 1,343,224 | | | | 92,258 | | | | .80 | |
| Synageva BioPharma Corp.1,2 | | | 2,274,774 | | | | 188,738 | | | | .71 | |
| Myriad Genetics, Inc.1,2 | | | 5,503,956 | | | | 188,180 | | | | .71 | |
| Hikma Pharmaceuticals PLC3 | | | 5,625,153 | | | | 156,081 | | | | .59 | |
| Centene Corp.1 | | | 2,353,915 | | | | 146,531 | | | | .56 | |
| athenahealth, Inc.1 | | | 865,423 | | | | 138,675 | | | | .53 | |
| Molina Healthcare, Inc.1,2 | | | 3,417,000 | | | | 128,343 | | | | .49 | |
| Emeritus Corp.1,2 | | | 3,529,700 | | | | 110,974 | | | | .42 | |
| BioMarin Pharmaceutical Inc.1 | | | 1,422,500 | | | | 97,029 | | | | .37 | |
| Sysmex Corp.3 | | | 2,940,000 | | | | 94,328 | | | | .36 | |
| Illumina, Inc.1 | | | 626,000 | | | | 93,061 | | | | .35 | |
| Other securities | | | | | | | 1,753,632 | | | | 6.65 | |
| | | | | | | | 3,859,329 | | | | 14.63 | |
| | | | | | | | | | | | | |
| Information technology 11.64% | | | | | | | | | | | | |
| AAC Technologies Holdings Inc.3 | | | 29,287,250 | | | | 152,715 | | | | .58 | |
| OpenTable, Inc.1,2 | | | 1,590,000 | | | | 122,319 | | | | .46 | |
| TriQuint Semiconductor, Inc.1 | | | 7,735,000 | | | | 103,572 | | | | .39 | |
| Vistaprint NV1,2 | | | 1,860,000 | | | | 91,549 | | | | .35 | |
| Other securities | | | | | | | 2,600,936 | | | | 9.86 | |
| | | | | | | | 3,071,091 | | | | 11.64 | |
| | | | | | | | | | | | | |
| Industrials 11.45% | | | | | | | | | | | | |
| Moog Inc., Class A1 | | | 2,597,800 | | | | 170,182 | | | | .65 | |
| American Airlines Group Inc.1 | | | 4,627,000 | | | | 169,348 | | | | .64 | |
| ITT Corp. | | | 2,826,621 | | | | 120,866 | | | | .46 | |
| Intertek Group PLC3 | | | 1,825,000 | | | | 93,659 | | | | .35 | |
| Northgate PLC2,3 | | | 10,626,805 | | | | 92,188 | | | | .35 | |
| CIMC Enric Holdings Ltd.3 | | | 56,417,000 | | | | 79,742 | | | | .30 | |
| Other securities | | | | | | | 2,293,751 | | | | 8.70 | |
| | | | | | | | 3,019,736 | | | | 11.45 | |
| Common stocks | | Shares | | | Value
(000) | | | Percent of
net assets | |
| Financials 9.88% | | | | | | | | | | | | |
| SVB Financial Group1 | | | 1,355,900 | | | $ | 174,613 | | | | .66 | % |
| Financial Engines, Inc. | | | 2,238,430 | | | | 113,667 | | | | .43 | |
| Validus Holdings, Ltd. | | | 2,608,000 | | | | 98,348 | | | | .38 | |
| GT Capital Holdings, Inc.3 | | | 4,782,200 | | | | 83,792 | | | | .32 | |
| Other securities | | | | | | | 2,135,061 | | | | 8.09 | |
| | | | | | | | 2,605,481 | | | | 9.88 | |
| | | | | | | | | | | | | |
| Materials 4.83% | | | | | | | | | | | | |
| James Hardie Industries PLC (CDI)3 | | | 9,733,929 | | | | 129,457 | | | | .49 | |
| Chr. Hansen Holding A/S3 | | | 2,617,000 | | | | 103,826 | | | | .39 | |
| AptarGroup, Inc. | | | 1,400,000 | | | | 92,540 | | | | .35 | |
| Other securities | | | | | | | 949,193 | | | | 3.60 | |
| | | | | | | | 1,275,016 | | | | 4.83 | |
| | | | | | | | | | | | | |
| Consumer staples 4.72% | | | | | | | | | | | | |
| Super Group Ltd.2,3 | | | 44,597,000 | | | | 123,548 | | | | .47 | |
| Puregold Price Club, Inc.3 | | | 112,906,300 | | | | 111,068 | | | | .42 | |
| Raia Drogasil SA, ordinary nominative | | | 10,577,374 | | | | 91,509 | | | | .35 | |
| PZ Cussons PLC3 | | | 15,105,000 | | | | 88,734 | | | | .33 | |
| Emmi AG3 | | | 240,600 | | | | 86,743 | | | | .33 | |
| Other securities | | | | | | | 744,805 | | | | 2.82 | |
| | | | | | | | 1,246,407 | | | | 4.72 | |
| | | | | | | | | | | | | |
| Energy 4.45% | | | | | | | | | | | | |
| InterOil Corp.1 | | | 2,344,500 | | | | 151,830 | | | | .58 | |
| Ophir Energy PLC1,2,3 | | | 33,820,898 | | | | 135,290 | | | | .51 | |
| Other securities | | | | | | | 886,888 | | | | 3.36 | |
| | | | | | | | 1,174,008 | | | | 4.45 | |
| | | | | | | | | | | | | |
| Utilities 1.90% | | | | | | | | | | | | |
| ENN Energy Holdings Ltd.3 | | | 30,574,296 | | | | 213,749 | | | | .81 | |
| Other securities | | | | | | | 287,385 | | | | 1.09 | |
| | | | | | | | 501,134 | | | | 1.90 | |
| | | | | | | | | | | | | |
| Telecommunication services 1.39% | | | | | | | | | | | | |
| Other securities | | | | | | | 367,000 | | | | 1.39 | |
| | | | | | | | | | | | | |
| Miscellaneous 4.95% | | | | | | | | | | | | |
| Other common stocks in initial period of acquisition | | | | | | | 1,305,335 | | | | 4.95 | |
| | | | | | | | | | | | | |
| Total common stocks (cost: $16,236,771,000) | | | | | | | 23,628,074 | | | | 89.56 | |
| | | | | | | | | | | | | |
| Preferred securities 0.01% | | | | | | | | | | | | |
| Miscellaneous 0.01% | | | | | | | | | | | | |
| Other preferred securities in initial period of acquisition | | | | | | | 2,375 | | | | .01 | |
| | | | | | | | | | | | | |
| Total preferred securities (cost: $1,425,000) | | | | | | | 2,375 | | | | .01 | |
| Rights & warrants 0.06% | | | | | Value
(000) | | | Percent of
net assets | |
| Information technology 0.05% | | | | | | | | | | | | |
| Other securities | | | | | | $ | 11,812 | | | | .05 | % |
| | | | | | | | | | | | | |
| Miscellaneous 0.01% | | | | | | | | | | | | |
| Other rights & warrants in initial period of acquisition | | | | | | | 3,371 | | | | .01 | |
| | | | | | | | | | | | | |
| Total rights & warrants (cost: $926,000) | | | | | | | 15,183 | | | | .06 | |
| | | | | | | | | | | | | |
| Convertible securities 0.26% | | | | | | | | | | | | |
| Other 0.26% | | | | | | | | | | | | |
| Other securities | | | | | | | 68,857 | | | | .26 | |
| | | | | | | | | | | | | |
| Total convertible securities (cost: $66,833,000) | | | | | | | 68,857 | | | | .26 | |
| | | | | | | | | | | | | |
| Bonds, notes & other debt instruments 0.26% | | | | | | | | |
| Other 0.26% | | | | | | | | | | | | |
| Other securities | | | | | | | 69,968 | | | | .26 | |
| | | | | | | | | | | | | |
Total bonds, notes & other debt instruments
(cost: $70,783,000) | | | | | | | 69,968 | | | | .26 | |
| | | | | | | | | | |
| Short-term securities 9.84% | | Principal
amount
(000) | | | | | | | |
Federal Home Loan Bank 0.06%–0.165%
due 4/11–11/26/2014 | | $ | 321,518 | | | | 321,474 | | | | 1.22 | |
| Freddie Mac 0.095%–0.14% due 4/1–11/3/2014 | | | 320,800 | | | | 320,716 | | | | 1.22 | |
| Fannie Mae 0.05%–0.135% due 5/14–11/24/2014 | | | 302,800 | | | | 302,717 | | | | 1.15 | |
International Bank for Reconstruction and Development
0.10%–0.14% due 5/12–8/22/2014 | | | 272,500 | | | | 272,462 | | | | 1.03 | |
| Gotham Funding Corp. 0.145% due 4/8/20144 | | | 57,195 | | | | 57,193 | | | | | |
| Victory Receivables Corp. 0.16% due 4/11/20144 | | | 57,100 | | | | 57,097 | | | | | |
| Mitsubishi UFJ Trust and Banking Corp. 0.18% due 4/29/20144 | | | 50,000 | | | | 49,992 | | | | .62 | |
| Thunder Bay Funding, LLC 0.18% due 5/20–5/27/20144 | | | 50,000 | | | | 71,979 | | | | | |
| Old Line Funding, LLC 0.17%–0.18% due 5/27–6/11/20144 | | | 41,926 | | | | 41,921 | | | | .43 | |
| Svenska Handelsbanken Inc. 0.17% due 6/11–6/19/20144 | | | 105,400 | | | | 105,362 | | | | .40 | |
National Australia Funding (Delaware) Inc. 0.14%–0.16%
due 4/7–4/23/20144 | | | 105,000 | | | | 104,992 | | | | .40 | |
| U.S. Treasury Bills 0.058%–0.101% due 4/17–6/5/2014 | | | 93,000 | | | | 92,998 | | | | .35 | |
| KfW 0.11%–0.13% due 5/27–6/13/20144 | | | 82,000 | | | | 81,981 | | | | .31 | |
| Other securities | | | | | | | 715,025 | | | | 2.71 | |
| | | | | | | | | | | | | |
| Total short-term securities (cost: $2,595,745,000) | | | | | | | 2,595,909 | | | | 9.84 | |
| | | | | | | | | | | | | |
| Total investment securities (cost: $18,972,483,000) | | | | | | | 26,380,366 | | | | 99.99 | |
| Other assets less liabilities | | | | | | | 1,512 | | | | .01 | |
| | | | | | | | | | | | | |
| Net assets | | | | | | $ | 26,381,878 | | | | 100.00 | % |
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 of these securities (with an aggregate value of $87,817,000, an aggregate cost of $128,641,000, and which represented .33% of the net assets of the fund) were acquired from 10/5/2005 to 2/28/2014 through private placement transactions exempt from registration under the Securities Act of 1933, which may subject them to legal or contractual restrictions on resale.
Forward currency contracts
The fund has entered into forward currency contracts to sell currencies as shown in the following table. The average notional amount of open forward currency contracts was $215,631,000 over the prior 12-month period.
| | | | | | | | | | | Unrealized | |
| | | | | | | | | | | (depreciation) | |
| | | | | | | Contract amount | | appreciation | |
| | | | | | | Receive | | Deliver | | at 3/31/2014 | |
| | | Settlement date | | Counterparty | | (000) | | (000) | | | (000) | |
| Sales: | | | | | | | | | | | | |
| Australian dollars | | 4/4/2014 | | UBS AG | | $3,572 | | A$4,000 | | | $(136 | ) |
| Australian dollars | | 4/10/2014 | | Barclays Bank PLC | | $2,632 | | A$2,900 | | | (56 | ) |
| Euros | | 4/9/2014 | | HSBC Bank | | $9,556 | | €6,950 | | | (18 | ) |
| Japanese yen | | 4/7/2014 | | Bank of New York Mellon | | $8,565 | | ¥875,000 | | | 87 | |
| Japanese yen | | 4/11/2014 | | Bank of New York Mellon | | $9,634 | | ¥990,000 | | | 79 | |
| Japanese yen | | 4/17/2014 | | Bank of New York Mellon | | $7,728 | | ¥793,345 | | | 41 | |
| Japanese yen | | 4/30/2014 | | Barclays Bank PLC | | $63,026 | | ¥6,440,000 | | | 622 | |
| Japanese yen | | 5/14/2014 | | Bank of New York Mellon | | $39,521 | | ¥4,046,655 | | | 295 | |
| | | | | | | | | | | | $ 914 | |
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 six months ended March 31, 2014, appear below.
| | | Beginning
shares or
principal
amount | | | Additions | | | Reductions | | | Ending
shares or
principal
amount | | | Dividend
or interest
income
(000) | | | Value of
affiliates
at
3/31/2014
(000) | |
| Domino’s Pizza, Inc. | | | 2,940,000 | | | | 100,000 | | | | — | | | | 3,040,000 | | | $ | 1,348 | | | $ | 233,989 | |
| Lions Gate Entertainment Corp. | | | 7,381,000 | | | | 600,000 | | | | 900,000 | | | | 7,081,000 | | | | 630 | | | | 189,275 | |
| Synageva BioPharma Corp.1 | | | 2,230,074 | | | | 44,700 | | | | — | | | | 2,274,774 | | | | — | | | | 188,738 | |
| Myriad Genetics, Inc.1 | | | 2,758,800 | | | | 2,745,156 | | | | — | | | | 5,503,956 | | | | — | | | | 188,180 | |
| Ophir Energy PLC1,3 | | | 30,708,378 | | | | 5,918,400 | | | | 2,805,880 | | | | 33,820,898 | | | | — | | | | 135,290 | |
| | | Beginning
shares or
principal
amount | | | Additions | | | Reductions | | | Ending
shares or
principal
amount | | | Dividend
or interest
income
(000) | | | Value of
affiliates
at
3/31/2014
(000) | |
| Molina Healthcare, Inc.1 | | | 3,417,000 | | | | — | | | | — | | | | 3,417,000 | | | $ | — | | | $ | 128,343 | |
| Super Group Ltd.3 | | | 44,597,000 | | | | — | | | | — | | | | 44,597,000 | | | | — | | | | 123,548 | |
| OpenTable, Inc.1 | | | 1,490,000 | | | | 100,000 | | | | — | | | | 1,590,000 | | | | — | | | | 122,319 | |
| Emeritus Corp.1 | | | 2,729,700 | | | | 800,000 | | | | — | | | | 3,529,700 | | | | — | | | | 110,974 | |
| Ted Baker PLC3 | | | 2,882,993 | | | | 142,000 | | | | — | | | | 3,024,993 | | | | 438 | | | | 108,346 | |
| Northgate PLC3 | | | 10,626,805 | | | | — | | | | — | | | | 10,626,805 | | | | 559 | | | | 92,188 | |
| Vistaprint NV1 | | | 1,860,000 | | | | — | | | | — | | | | 1,860,000 | | | | — | | | | 91,549 | |
| Coupons.com Inc.1,3 | | | — | | | | 3,287,996 | | | | — | | | | 3,287,996 | | | | — | | | | 68,892 | |
| Coupons.com Inc.1 | | | — | | | | 600,000 | | | | — | | | | 600,000 | | | | — | | | | 14,790 | |
| Ultragenyx Pharmaceutical Inc.1,3 | | | — | | | | 889,970 | | | | — | | | | 889,970 | | | | — | | | | 36,984 | |
| Ultragenyx Pharmaceutical Inc.1 | | | — | | | | 668,987 | | | | — | | | | 668,987 | | | | — | | | | 32,707 | |
| Ultragenyx Pharmaceutical Inc., Series B, convertible preferred | | | 2,789,614 | | | | — | | | | 2,789,614 | | | | — | | | | 196 | | | | — | |
| OM Group, Inc. | | | 1,820,000 | | | | 89,000 | | | | — | | | | 1,909,000 | | | | 137 | | | | 63,417 | |
| Xoom Corp.1 | | | — | | | | 3,013,000 | | | | — | | | | 3,013,000 | | | | — | | | | 58,814 | |
| Stock Spirits Group PLC1,3 | | | — | | | | 11,690,000 | | | | — | | | | 11,690,000 | | | | — | | | | 57,440 | |
| KEYW Holding Corp.1 | | | 2,836,400 | | | | — | | | | — | | | | 2,836,400 | | | | — | | | | 53,069 | |
| Boer Power Holdings Ltd.3 | | | 39,202,000 | | | | — | | | | — | | | | 39,202,000 | | | | 858 | | | | 52,870 | |
| Galapagos NV1,3 | | | 2,378,928 | | | | — | | | | — | | | | 2,378,928 | | | | — | | | | 52,437 | |
| Goodpack Ltd.3 | | | 30,777,000 | | | | — | | | | — | | | | 30,777,000 | | | | 1,226 | | | | 52,421 |
| Continental Building Products, Inc.1 | | | — | | | | 2,705,000 | | | | — | | | | 2,705,000 | | | | — | | | | 50,962 | |
| Montage Technology Group Ltd.1 | | | 1,231,884 | | | | 967,916 | | | | — | | | | 2,199,800 | | | | — | | | | 44,040 | |
| bluebird bio, Inc.1 | | | 516,000 | | | | 1,387,048 | | | | — | | | | 1,903,048 | | | | — | | | | 43,275 | |
| bluebird bio, Inc. | | | 1,179,648 | | | | — | | | | 1,179,648 | | | | — | | | | — | | | | — | |
| ICG Group, Inc.1 | | | 1,137,000 | | | | 957,000 | | | | — | | | | 2,094,000 | | | | — | | | | 42,759 | |
| Orexigen Therapeutics, Inc.1 | | | 6,535,000 | | | | 550,200 | | | | 1,005,000 | | | | 6,080,200 | | | | — | | | | 39,521 | |
| Stock Building Supply Holdings, Inc.1 | | | 1,000,000 | | | | 685,000 | | | | — | | | | 1,685,000 | | | | — | | | | 34,239 | |
| Mistras Group, Inc.1 | | | 2,052,000 | | | | — | | | | 592,000 | | | | 1,460,000 | | | | — | | | | 33,244 | |
| Cox & Kings Ltd.3 | | | 10,592,000 | | | | — | | | | — | | | | 10,592,000 | | | | — | | | | 28,363 | |
| Cox & Kings Ltd. (GDR)3 | | | 330,000 | | | | — | | | | — | | | | 330,000 | | | | — | | | | 884 | |
| Takeuchi Mfg. Co., Ltd.3 | | | — | | | | 1,117,000 | | | | — | | | | 1,117,000 | | | | 121 | | | | 28,777 | |
| Greenko Group PLC1,3 | | | 9,748,155 | | | | — | | | | — | | | | 9,748,155 | | | | — | | | | 28,301 | |
| iEnergizer Ltd.1,3 | | | — | | | | 7,650,500 | | | | — | | | | 7,650,500 | | | | — | | | | 27,741 | |
| Gem Diamonds Ltd.1,3 | | | 7,750,000 | | | | 1,861,686 | | | | — | | | | 9,611,686 | | | | — | | | | 27,721 | |
| VST Industries Ltd.3 | | | 715,400 | | | | 288,000 | | | | — | | | | 1,003,400 | | | | — | | | | 27,663 | |
| Sirius Minerals PLC1,3 | | | 52,304,735 | | | | 87,228,725 | | | | — | | | | 139,533,460 | | | | — | | | | 25,005 | |
| Sirius Minerals PLC, warrants, expire 20151,3 | | | — | | | | 40,000,000 | | | | — | | | | 40,000,000 | | | | — | | | | 1,860 | |
| Neovasc Inc.1 | | | — | | | | 4,192,000 | | | | — | | | | 4,192,000 | | | | — | | | | 25,406 | |
| ARC Document Solutions, Inc.1 | | | 2,765,764 | | | | 1,375,692 | | | | 809,363 | | | | 3,332,093 | | | | — | | | | 24,791 | |
| XenoPort, Inc.1 | | | 3,620,000 | | | | 1,149,000 | | | | — | | | | 4,769,000 | | | | — | | | | 24,656 | |
| BNK Petroleum Inc.1 | | | 11,543,380 | | | | 1,261,534 | | | | — | | | | 12,804,914 | | | | — | | | | 23,629 | |
| Bizim Toptan Satis Magazalari AS, non-registered shares3 | | | 2,466,000 | | | | — | | | | — | | | | 2,466,000 | | | | — | | | | 23,619 | |
| | | Beginning
shares or
principal
amount | | | Additions | | | Reductions | | | Ending
shares or
Principal
amount | | | Dividend
or interest
income
(000) | | | Value of
affiliates
at
3/31/2014
(000) | |
| Rally Software Development Corp.1 | | | 656,217 | | | | 1,043,783 | | | | — | | | | 1,700,000 | | | $ | — | | | $ | 22,746 | |
| ChemoCentryx, Inc.1 | | | 3,131,800 | | | | 295,000 | | | | — | | | | 3,426,800 | | | | — | | | | 22,720 | |
| Home Federal Bancorp, Inc. | | | 1,384,249 | | | | — | | | | — | | | | 1,384,249 | | | | 166 | | | | 21,539 | |
| Manappuram Finance Ltd.3 | | | 54,930,986 | | | | — | | | | — | | | | 54,930,986 | | | | 792 | | | | 19,849 | |
| Frigoglass SAIC1,3 | | | 3,052,380 | | | | — | | | | — | | | | 3,052,380 | | | | — | | | | 19,782 | |
| Suprema Inc.1,3 | | | 868,200 | | | | — | | | | — | | | | 868,200 | | | | — | | | | 19,667 | |
| Agilysys, Inc.1 | | | 1,280,591 | | | | — | | | | — | | | | 1,280,591 | | | | — | | | | 17,160 | |
| TravelCenters of America LLC1 | | | 1,581,250 | | | | 442,500 | | | | — | | | | 2,023,750 | | | | — | | | | 16,494 | |
| NII Holdings, Inc., Class B1 | | | 5,595,000 | | | | 6,442,000 | | | | 995,000 | | | | 11,042,000 | | | | — | | | | 13,140 | |
| NII Capital Corp. 10.00% 2016 | | | — | | | $ | 5,000,000 | | | | — | | | $ | 5,000,000 | | | | 294 | | | | 2,062 | |
| NII Capital Corp. 7.625% 2021 | | | — | | | $ | 4,000,000 | | | | — | | | $ | 4,000,000 | | | | 31 | | | | 1,140 | |
| ValueVision Media, Inc., Class A1 | | | 3,440,761 | | | | — | | | | 256,591 | | | | 3,184,170 | | | | — | | | | 15,475 | |
| Mytrah Energy Ltd.1,3 | | | 10,418,000 | | | | — | | | | — | | | | 10,418,000 | | | | — | | | | 15,410 | |
| Houston Wire & Cable Co. | | | 1,678,900 | | | | — | | | | 528,900 | | | | 1,150,000 | | | | 311 | | | | 15,100 | |
| Lekoil Ltd. (CDI)1,3 | | | 14,070,000 | | | | 5,664,000 | | | | 2,731,575 | | | | 17,002,425 | | | | — | | | | 14,939 | |
| Mothercare PLC1,3 | | | 4,480,000 | | | | — | | | | 30,000 | | | | 4,450,000 | | | | — | | | | 13,947 | |
| First Southern Bancorp, Inc.1,5 | | | 1,344,915 | | | | — | | | | — | | | | 1,344,915 | | | | — | | | | 8,137 | |
| First Southern Bancorp, Inc., Series C, convertible preferred1,3,5 | | | 2,299 | | | | — | | | | — | | | | 2,299 | | | | — | | | | 5,383 | |
| Mahindra Lifespace Developers Ltd.3 | | | 2,157,380 | | | | — | | | | — | | | | 2,157,380 | | | | — | | | | 13,279 | |
| Tribhovandas Bhimji Zaveri Ltd.3 | | | 3,439,332 | | | | 896,400 | | | | — | | | | 4,335,732 | | | | — | | | | 9,542 | |
| San Leon Energy PLC1,3 | | | — | | | | 155,300,000 | | | | — | | | | 155,300,000 | | | | — | | | | 9,274 | |
| Tilaknager Industries Ltd.3 | | | 8,890,000 | | | | — | | | | — | | | | 8,890,000 | | | | — | | | | 8,295 | |
| Talwalkars Better Value Fitness Ltd.3 | | | 1,694,000 | | | | — | | | | — | | | | 1,694,000 | | | | — | | | | 4,583 | |
| Duluth Metals Ltd.1 | | | 7,699,700 | | | | — | | | | — | | | | 7,699,700 | | | | — | | | | 4,527 | |
| Cape Lambert Resources Ltd.1,3 | | | 47,330,825 | | | | — | | | | — | | | | 47,330,825 | | | | — | | | | 4,391 | |
| Powerland AG, non-registered shares1,3 | | | 1,200,000 | | | | — | | | | — | | | | 1,200,000 | | | | — | | | | 3,432 | |
| China High Precision Automation Group Ltd.1,3 | | | 67,422,000 | | | | — | | | | 14,390,000 | | | | 53,032,000 | | | | — | | | | 684 | |
| CEC Unet PLC1,3 | | | 35,100,775 | | | | — | | | | — | | | | 35,100,775 | | | | — | | | | — | |
| AIA Engineering Ltd.3,6 | | | 4,840,050 | | | | — | | | | 2,942,069 | | | | 1,897,981 | | | | — | | | | — | |
| ArthroCare Corp.1,6 | | | 2,232,950 | | | | 2,129 | | | | 1,406,354 | | | | 828,725 | | | | — | | | | — | |
| Autoneum Holding AG6 | | | 373,780 | | | | — | | | | 373,780 | | | | — | | | | — | | | | — | |
| Body Central Corp.6 | | | — | | | | 1,080,000 | | | | 1,080,000 | | | | — | | | | — | | | | — | |
| Cadence Pharmaceuticals, Inc.6 | | | 5,939,969 | | | | — | | | | 5,939,969 | | | | — | | | | — | | | | — | |
| Comfort Systems USA, Inc.6 | | | 2,476,000 | | | | — | | | | 2,476,000 | | | | — | | | | 136 | | | | — | |
| Coupons.com Inc., Series B, convertible preferred6 | | | 8,191,724 | | | | — | | | | 8,191,724 | | | | — | | | | — | | | | — | |
| Demandware, Inc.1,6 | | | 2,200,000 | | | | — | | | | 415,000 | | | | 1,785,000 | | | | — | | | | — | |
| Domino’s Pizza Enterprises Ltd.3,6 | | | 4,752,365 | | | | — | | | | 1,064,655 | | | | 3,687,710 | | | | 647 | | | | — | |
| Exelixis, Inc.6 | | | 9,216,800 | | | | 600,552 | | | | 9,817,352 | | | | — | | | | — | | | | — | |
| | | Beginning
shares or
principal
amount | | | Additions | | | Reductions | | | Ending
shares or
principal
amount | | | Dividend
or interest
income
(000) | | | Value of
affiliates
at
3/31/2014
(000) | |
| Falkland Oil and Gas Ltd.1,3,6 | | | 24,225,000 | | | | — | | | | — | | | | 24,225,000 | | | $ | — | | | $ | — | |
| Gran Colombia Gold SA6 | | | 906,700 | | | | — | | | | 906,700 | | | | — | | | | — | | | | — | |
| Iridium Communications Inc.1,6 | | | 4,721,812 | | | | — | | | | 2,674,524 | | | | 2,047,288 | | | | — | | | | — | |
| Iridium Communications Inc., Series A, convertible preferred4,6 | | | 60,000 | | | | — | | | | — | | | | 60,000 | | | | 210 | | | | — | |
| Kingdee International Software Group Co. Ltd.1,3,6 | | | 134,868,000 | | | | — | | | | 84,868,000 | | | | 50,000,000 | | | | — | | | | — | |
| LSL Property Services PLC3,6 | | | 5,956,350 | | | | — | | | | 964,956 | | | | 4,991,394 | | | | 667 | | | | — | |
| Manila Water Co., Inc.3,6 | | | 104,200,900 | | | | — | | | | 8,325,600 | | | | 95,875,300 | | | | 1,253 | | | | — | |
| MonotaRO Co., Ltd.3,6 | | | 3,348,300 | | | | 224,400 | | | | 1,018,900 | | | | 2,553,800 | | | | 150 | | | | — | |
| Mood Media Corp. (CDI)6 | | | 3,710,000 | | | | — | | | | 3,710,000 | | | | — | | | | — | | | | — | |
| Mood Media Corp.6 | | | 6,375,000 | | | | — | | | | 6,375,000 | | | | — | | | | — | | | | — | |
| Moog Inc., Class A1,6 | | | 2,282,800 | | | | 315,000 | | | | — | | | | 2,597,800 | | | | — | | | | — | |
| Mvelaserve Ltd.6 | | | 9,194,800 | | | | — | | | | 9,194,800 | | | | — | | | | — | | | | — | |
| Orthofix International NV1,6 | | | 1,116,826 | | | | — | | | | 739,826 | | | | 377,000 | | | | — | | | | — | |
| Petrodorado Energy Ltd.6 | | | 38,400,000 | | | | — | | | | 38,400,000 | | | | — | | | | — | | | | — | |
| Puregold Price Club, Inc.3,6 | | | 149,636,300 | | | | — | | | | 36,730,000 | | | | 112,906,300 | | | | 551 | | | | — | |
| Responsys, Inc.6 | | | 2,815,000 | | | | — | | | | 2,815,000 | | | | — | | | | — | | | | — | |
| Schweitzer-Mauduit International, Inc.6 | | | 1,742,800 | | | | — | | | | 1,038,382 | | | | 704,418 | | | | 715 | | | | — | |
| Tsukui Corp.3,6 | | | 2,595,000 | | | | — | | | | 1,700,000 | | | | 895,000 | | | | 70 | | | | — | |
| Vocus, Inc.1,6 | | | 1,513,538 | | | | — | | | | 654,205 | | | | 859,333 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | $ | 11,506 | | | $ | 3,185,733 | |
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.
| 1 | Security did not produce income during the last 12 months. |
| 2 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
| 3 | Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in “Miscellaneous” and “Other securities,” was $10,905,263,000, which represented 41.34% of the net assets of the fund. This amount includes $10,616,129,000 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. |
| 4 | Acquired in a transaction exempt from registration under Rule 144A or 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, including those in “Other securities,” was $1,215,331,000, which represented 4.61% of the net assets of the fund. |
| 5 | This security was an unaffiliated issuer in its initial period of acquisition at 9/30/2013; it was not publicly disclosed. |
| 6 | Unaffiliated issuer at 3/31/2014. |
Key to abbreviations and symbols
CDI = CREST Depository Interest
GDR = Global Depositary Receipts
A$ = Australian dollars
CAD = Canadian dollars
€ = Euros
¥ = Japanese yen
See Notes to Financial Statements
Financial statements
| Statement of assets and liabilities | | unaudited | |
| at March 31, 2014 | | (dollars in thousands) | |
| | | | | | | | | |
| Assets: | | | | | | | | |
| Investment securities, at value: | | | | | | | | |
| Unaffiliated issuers (cost: $16,348,722) | | $ | 23,194,633 | | | | | |
| Affiliated issuers (cost: $2,623,761) | | | 3,185,733 | | | $ | 26,380,366 | |
| Cash | | | | | | | 514 | |
| Unrealized appreciation on open forward currency contracts | | | | | | | 1,124 | |
| Receivables for: | | | | | | | | |
| Sales of investments | | | 62,327 | | | | | |
| Sales of fund’s shares | | | 32,965 | | | | | |
| Closed forward currency contracts | | | 10 | | | | | |
| Dividends and interest | | | 24,789 | | | | 120,091 | |
| | | | | | | | 26,502,095 | |
| Liabilities: | | | | | | | | |
| Unrealized depreciation on open forward currency contracts | | | | | | | 210 | |
| Payables for: | | | | | | | | |
| Purchases of investments | | | 59,419 | | | | | |
| Repurchases of fund’s shares | | | 28,715 | | | | | |
| Closed forward currency contracts | | | 38 | | | | | |
| Investment advisory services | | | 14,266 | | | | | |
| Services provided by related parties | | | 10,145 | | | | | |
| Directors’ deferred compensation | | | 3,172 | | | | | |
| Other | | | 4,252 | | | | 120,007 | |
| Net assets at March 31, 2014 | | | | | | $ | 26,381,878 | |
| | | | | | | | | |
| Net assets consist of: | | | | | | | | |
| Capital paid in on shares of capital stock | | | | | | $ | 17,706,717 | |
| Accumulated net investment loss | | | | | | | (220,122 | ) |
| Undistributed net realized gain | | | | | | | 1,490,045 | |
| Net unrealized appreciation | | | | | | | 7,405,238 | |
| Net assets at March 31, 2014 | | | | | | $ | 26,381,878 | |
(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock — 1,000,000 shares,
$.01 par value (533,992 total shares outstanding)
| | | | | | Shares | | | Net asset value | |
| | | Net assets | | | outstanding | | | per share | |
| Class A | | $ | 17,563,845 | | | | 353,037 | | | $ | 49.75 | |
| Class B | | | 161,098 | | | | 3,463 | | | | 46.52 | |
| Class C | | | 955,102 | | | | 20,783 | | | | 45.96 | |
| Class F-1 | | | 998,312 | | | | 20,242 | | | | 49.32 | |
| Class F-2 | | | 753,256 | | | | 15,082 | | | | 49.94 | |
| Class 529-A | | | 962,937 | | | | 19,498 | | | | 49.39 | |
| Class 529-B | | | 21,896 | | | | 466 | | | | 46.98 | |
| Class 529-C | | | 293,623 | | | | 6,284 | | | | 46.72 | |
| Class 529-E | | | 51,690 | | | | 1,065 | | | | 48.55 | |
| Class 529-F-1 | | | 80,066 | | | | 1,615 | | | | 49.59 | |
| Class R-1 | | | 43,094 | | | | 916 | | | | 47.06 | |
| Class R-2 | | | 749,419 | | | | 15,928 | | | | 47.05 | |
| Class R-3 | | | 858,679 | | | | 17,714 | | | | 48.47 | |
| Class R-4 | | | 759,664 | | | | 15,375 | | | | 49.41 | |
| Class R-5 | | | 608,021 | | | | 12,060 | | | | 50.41 | |
| Class R-6 | | | 1,521,176 | | | | 30,464 | | | | 49.93 | |
See Notes to Financial Statements
| Statement of operations | | unaudited | |
| for the six months ended March 31, 2014 | | (dollars in thousands) | |
| | | | | | | | | |
| Investment income: | | | | | | | | |
| Income: | | | | | | | | |
| Dividends (net of non-U.S. taxes of $4,714; also includes $11,181 from affiliates) | | $ | 98,590 | | | | | |
| Interest (includes $325 from affiliates) | | | 2,554 | | | $ | 101,144 | |
| Fees and expenses*: | | | | | | | | |
| Investment advisory services | | | 80,628 | | | | | |
| Distribution services | | | 35,799 | | | | | |
| Transfer agent services | | | 20,117 | | | | | |
| Administrative services | | | 2,924 | | | | | |
| Reports to shareholders | | | 633 | | | | | |
| Registration statement and prospectus | | | 256 | | | | | |
| Directors’ compensation | | | 619 | | | | | |
| Auditing and legal | | | 66 | | | | | |
| Custodian | | | 1,646 | | | | | |
| Other | | | 779 | | | | 143,467 | |
| Net investment loss | | | | | | | (42,323 | ) |
| | | | | | | | | |
| Net realized gain and unrealized appreciation on investments, forward currency contracts and currency: | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | |
| Investments (net of non-U.S. taxes of $31; also includes $104,180 net gain from affiliates) | | | 1,515,639 | | | | | |
| Forward currency contracts | | | 5,122 | | | | | |
| Currency transactions | | | (1,083 | ) | | | 1,519,678 | |
| Net unrealized appreciation (depreciation) on: | | | | | | | | |
| Investments (net of non-U.S. taxes of $3,702) | | | 175,480 | | | | | |
| Forward currency contracts | | | 2,952 | | | | | |
| Currency translations | | | (41 | ) | | | 178,391 | |
| Net realized gain and unrealized appreciation on investments, forward currency contracts and currency | | | | | | | 1,698,069 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | | | | | $ | 1,655,746 | |
*Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.
See Notes to Financial Statements
Statements of changes in net assets
(dollars in thousands)
| | | Six months ended | | | Year ended | |
| | | March 31, | | | September 30, | |
| | | 2014* | | | 2013 | |
| Operations: | | | | | | | | |
| Net investment (loss) income | | $ | (42,323 | ) | | $ | 22,410 | |
| Net realized gain on investments, forward currency contracts and currency transactions | | | 1,519,678 | | | | 1,811,729 | |
| Net unrealized appreciation on investments, forward currency contracts and currency translations | | | 178,391 | | | | 3,230,899 | |
| Net increase in net assets resulting from operations | | | 1,655,746 | | | | 5,065,038 | |
| | | | | | | | | |
| Dividends and distributions paid to shareholders: | | | | | | | | |
| Dividends from net investment income | | | — | | | | (257,779 | ) |
| Distributions from net realized gain on investments | | | (1,231,151 | ) | | | — | |
| Total dividends and distributions paid to shareholders | | | (1,231,151 | ) | | | (257,779 | ) |
| | | | | | | | | |
| Net capital share transactions | | | 1,516,610 | | | | (27,946 | ) |
| | | | | | | | | |
| Total increase in net assets | | | 1,941,205 | | | | 4,779,313 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 24,440,673 | | | | 19,661,360 | |
| End of period (including distributions in excess of net investment income: $(220,122) and $(177,799), respectively) | | $ | 26,381,878 | | | $ | 24,440,673 | |
*Unaudited.
See Notes to Financial Statements
| Notes to financial statements | unaudited |
1. Organization
SMALLCAP World Fund, Inc. (the “fund”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks long-term growth of capital through investments in smaller companies in the U.S. and around the world. Shareholders approved a proposal to reorganize the fund from a Maryland corporation to a Delaware statutory trust. The reorganization may be completed in 2014; however, the fund reserves the right to delay the implementation.
The fund has 16 share classes consisting of five retail share classes (Classes A, B and C, as well as two F share classes, F-1 and F-2), five 529 college savings plan share classes (Classes 529-A, 529-B, 529-C, 529-E and 529-F-1) and six retirement plan share classes (Classes R-1, R-2, R-3, R-4, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education. The retirement plan share classes are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are further described:
| Share class | | Initial sales charge | | Contingent deferred sales
charge upon redemption | | Conversion feature |
| Classes A and 529-A | | Up to 5.75% | | None (except 1% for certain redemptions within one year of purchase without an initial sales charge) | | None |
| Classes B and 529-B* | | None | | Declines from 5% to 0% for redemptions within six years of purchase | | Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years |
| Class C | | None | | 1% for redemptions within one year of purchase | | Class C converts to Class F-1 after 10 years |
| Class 529-C | | None | | 1% for redemptions within one year of purchase | | None |
| Class 529-E | | None | | None | | None |
| Classes F-1, F-2 and 529-F-1 | | None | | None | | None |
| Classes R-1, R-2, R-3, R-4, R-5 and R-6 | | None | | None | | None |
*Class B and 529-B shares of the fund are not available for purchase.
Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each share class.
2. Significant accounting policies
The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The fund follows the significant accounting policies described in this section, as well as the valuation policies described in the next section on valuation.
Security transactions and related investment income — Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations — Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.
Dividends and distributions to shareholders — Dividends and distributions 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 accounting principles generally accepted in the United States of America. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs — The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.
Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are generally valued at prices obtained from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.
| Fixed-income class | | Examples of standard inputs |
| All | | Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”) |
Corporate bonds & notes;
convertible securities | | Standard inputs and underlying equity of the issuer |
Bonds & notes of governments &
government agencies | | Standard inputs and interest rate volatilities |
When the fund’s investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income securities will be valued in good faith at the mean quoted bid and ask prices that are reasonably and timely available (or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described for either equity or fixed-income securities, depending on which method is deemed most appropriate by the fund’s investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates fair value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days.
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 directors 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 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 directors 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 directors 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, 2014 (dollars in thousands):
| | | Investment securities | |
| | | Level 1 | | | Level 2* | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common stocks: | | | | | | | | | | | | | | | | |
| Consumer discretionary | | $ | 2,354,917 | | | $ | 2,779,698 | | | $ | 68,922 | | | $ | 5,203,537 | |
| Health care | | | 3,137,903 | | | | 684,442 | | | | 36,984 | | | | 3,859,329 | |
| Information technology | | | 1,948,997 | | | | 1,121,410 | | | | 684 | | | | 3,071,091 | |
| Industrials | | | 1,341,912 | | | | 1,677,824 | | | | — | | | | 3,019,736 | |
| Financials | | | 1,743,045 | | | | 862,436 | | | | — | | | | 2,605,481 | |
| Materials | | | 454,077 | | | | 819,624 | | | | 1,315 | | | | 1,275,016 | |
| Consumer staples | | | 273,079 | | | | 973,328 | | | | — | | | | 1,246,407 | |
| Energy | | | 719,266 | | | | 454,742 | | | | — | | | | 1,174,008 | |
| Utilities | | | 76,886 | | | | 424,248 | | | | — | | | | 501,134 | |
| Telecommunication services | | | 224,373 | | | | 127,682 | | | | 14,945 | | | | 367,000 | |
| Miscellaneous | | | 506,922 | | | | 796,490 | | | | 1,923 | | | | 1,305,335 | |
| Preferred securities | | | 2,375 | | | | — | | | | — | | | | 2,375 | |
| Rights & warrants | | | — | | | | 1,860 | | | | 13,323 | | | | 15,183 | |
| Convertible securities | | | — | | | | 30,857 | | | | 38,000 | | | | 68,857 | |
| Bonds, notes & other debt instruments | | | — | | | | 69,968 | | | | — | | | | 69,968 | |
| Short-term securities | | | — | | | | 2,595,909 | | | | — | | | | 2,595,909 | |
| Total | | $ | 12,783,752 | | | $ | 13,420,518 | | | $ | 176,096 | | | $ | 26,380,366 | |
| | | Other investments† | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
Unrealized appreciation on open forward currency
contracts | | $ | — | | | $ | 1,124 | | | $ | — | | | $ | 1,124 | |
| Liabilities: | | | | | | | | | | | | | | | | |
Unrealized depreciation on open forward currency
contracts | | | — | | | | (210 | ) | | | — | | | | (210 | ) |
| Total | | $ | — | | | $ | 914 | | | $ | — | | | $ | 914 | |
| * | Securities with a value of $9,097,221,000, which represented 34.48% 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. |
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 securities held by the fund may decline due to market conditions and other factors, including those directly involving the issuers of securities held by the fund.
Investing in growth-oriented stocks — Growth-oriented stocks may involve larger price swings and greater potential for loss than other types of investments. These risks may be even greater in the case of smaller capitalization stocks.
Investing in small companies — Investing in smaller companies may pose additional risks. For example, it is often more difficult to value or dispose of small company stocks and more difficult to obtain information about smaller companies than about larger companies. In addition, the prices of these stocks may be more volatile than stocks of larger, more established companies.
Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations outside the U.S., may lose value because of adverse political, social, economic or market developments in the countries or regions in which the issuers operate. 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. 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 settlement and accounting practices and different regulatory, legal and reporting standards, and may be more difficult to value, than those in the U.S. 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. 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 currency contracts and net unrealized appreciation or depreciation from open forward currency contracts are recorded in the fund’s statement of operations.
The following tables present the financial statement impacts resulting from the fund’s use of forward currency contracts as of March 31, 2014 (dollars in thousands):
| | | Asset | | | Liability | |
| Contract | | Location on statement
of assets and liabilities | | Value | | | Location on statement
of assets and liabilities | | Value | |
| Forward currency | | Unrealized appreciation on open forward currency contracts | | $ | 1,124 | | | Unrealized depreciation on open forward currency contracts | | $ | 210 | |
| Forward currency | | Receivables for closed forward currency contracts | | | 10 | | | Payables for closed forward currency contracts | | | 38 | |
| | | | | $ | 1,134 | | | | | $ | 248 | |
| | | Net realized gain | | | Net unrealized appreciation | |
| Contract | | Location on statement
of operations | | Value | | | Location on statement
of operations | | Value | |
| Forward currency | | Net realized gain on forward currency contracts | | $ | 5,122 | | | Net unrealized appreciation on forward currency contracts | | $ | 2,952 | |
Collateral — The fund has entered into a collateral program due to its use of forward currency contracts. The program calls for the fund to either receive or pledge 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 obligations.
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, 2014, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2009, by state tax authorities for tax years before 2008 and by tax authorities outside the U.S. for tax years before 2006.
Non-U.S. taxation — Dividend and interest income are recorded net of non-U.S. taxes paid. Gains realized by the fund on the sale of securities in certain countries are subject to non-U.S. taxes. The fund records a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
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 components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of September 30, 2013, the fund had tax basis late year ordinary loss deferral of $43,980,000 and undistributed long-term capital gains of $1,229,754,000.
As of March 31, 2014, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows (dollars in thousands):
| Gross unrealized appreciation on investment securities | | $ | 8,285,331 | |
| Gross unrealized depreciation on investment securities | | | (1,042,927 | ) |
| Net unrealized appreciation on investment securities | | | 7,242,404 | |
| Cost of investment securities | | | 19,137,962 | |
The tax character of distributions paid to shareholders was as follows (dollars in thousands):
| | | Six months ended March 31, 2014 | | | Year ended September 30, 2013 | |
| | | Ordinary | | | Long-term
capital | | | Total
distributions | | | Ordinary | | | Long-term
capital | | | Total
distributions | |
| Share class | | income | | | gains | | | paid | | | income | | | gains | | | paid | |
| Class A | | $ | — | | | $ | 819,307 | | | $ | 819,307 | | | $ | 182,045 | | | $ | — | | | $ | 182,045 | |
| Class B | | | — | | | | 8,984 | | | | 8,984 | | | | 999 | | | | — | | | | 999 | |
| Class C | | | — | | | | 48,666 | | | | 48,666 | | | | 5,125 | | | | — | | | | 5,125 | |
| Class F-1 | | | — | | | | 45,043 | | | | 45,043 | | | | 8,428 | | | | — | | | | 8,428 | |
| Class F-2 | | | — | | | | 32,777 | | | | 32,777 | | | | 7,141 | | | | — | | | | 7,141 | |
| Class 529-A | | | — | | | | 44,604 | | | | 44,604 | | | | 9,344 | | | | — | | | | 9,344 | |
| Class 529-B | | | — | | | | 1,211 | | | | 1,211 | | | | 97 | | | | — | | | | 97 | |
| Class 529-C | | | — | | | | 14,431 | | | | 14,431 | | | | 1,428 | | | | — | | | | 1,428 | |
| Class 529-E | | | — | | | | 2,446 | | | | 2,446 | | | | 423 | | | | — | | | | 423 | |
| Class 529-F-1 | | | — | | | | 3,682 | | | | 3,682 | | | | 843 | | | | — | | | | 843 | |
| Class R-1 | | | — | | | | 2,147 | | | | 2,147 | | | | 253 | | | | — | | | | 253 | |
| Class R-2 | | | — | | | | 37,717 | | | | 37,717 | | | | 4,501 | | | | — | | | | 4,501 | |
| Class R-3 | | | — | | | | 42,124 | | | | 42,124 | | | | 7,719 | | | | — | | | | 7,719 | |
| Class R-4 | | | — | | | | 34,905 | | | | 34,905 | | | | 8,016 | | | | — | | | | 8,016 | |
| Class R-5 | | | — | | | | 27,390 | | | | 27,390 | | | | 7,046 | | | | — | | | | 7,046 | |
| Class R-6 | | | — | | | | 65,717 | | | | 65,717 | | | | 14,371 | | | | — | | | | 14,371 | |
| Total | | $ | — | | | $ | 1,231,151 | | | $ | 1,231,151 | | | $ | 257,779 | | | $ | — | | | $ | 257,779 | |
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 0.800% on the first $1 billion of daily net assets and decreasing to 0.595% on such assets in excess of $27 billion. For the six months ended March 31, 2014, the investment advisory services fee was $80,628,000, which was equivalent to an annualized rate of 0.630% of average daily net assets.
Class-specific fees and expenses — Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:
Distribution services — The fund has plans of distribution for all share classes, except Class F-2, R-5 and R-6 shares. Under the plans, the board of directors 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 0.30% to 1.00% as noted in this section. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
For 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 limit of 0.30% is not exceeded. As of March 31, 2014, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A shares.
| Share class | | Currently approved limits | | Plan limits |
| Class A | | | 0.30 | % | | | 0.30 | % |
| Class 529-A | | | 0.30 | | | | 0.50 | |
| Classes B and 529-B | | | 1.00 | | | | 1.00 | |
| Classes C, 529-C and R-1 | | | 1.00 | | | | 1.00 | |
| Class R-2 | | | 0.75 | | | | 1.00 | |
| Classes 529-E and R-3 | | | 0.50 | | | | 0.75 | |
| Classes F-1, 529-F-1 and R-4 | | | 0.25 | | | | 0.50 | |
Transfer agent services — The fund has a shareholder services agreement with AFS under which the fund compensates AFS for providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.
Administrative services — The fund has an administrative services agreement with CRMC under which the fund compensates CRMC for providing administrative services to Class A, C, F, 529 and R shares. These services include, but are not limited to, coordinating, monitoring, assisting and overseeing third parties that provide services to fund shareholders. Under the agreement, Class A shares pay an annual fee of 0.01% and Class C, 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 Commonwealth of Virginia for the maintenance of the 529 college savings plan. For the six months ended March 31, 2014, the quarterly fee was based on a series of decreasing annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. Effective April 1, 2014, the quarterly fee was amended to provide for reduced annual rates of 0.07%, 0.06% and 0.05% over $30 billion, $50 billion and $70 billion, respectively, of the net assets invested in Class 529 shares of the American Funds. 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. The Commonwealth of Virginia is not considered a related party.
For the six months ended March 31, 2014, 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 | | $20,389 | | | $14,509 | | | $857 | | | Not applicable |
| Class B | | 873 | | | 156 | | | Not applicable | | | Not applicable |
| Class C | | 4,708 | | | 815 | | | 236 | | | Not applicable |
| Class F-1 | | 1,165 | | | 586 | | | 233 | | | Not applicable |
| Class F-2 | | Not applicable | | | 373 | | | 173 | | | Not applicable |
| Class 529-A | | 983 | | | 645 | | | 232 | | | $451 |
| Class 529-B | | 118 | | | 19 | | | 6 | | | 12 |
| Class 529-C | | 1,416 | | | 211 | | | 71 | | | 139 |
| Class 529-E | | 125 | | | 23 | | | 12 | | | 24 |
| Class 529-F-1 | | — | | | 54 | | | 19 | | | 37 |
| Class R-1 | | 211 | | | 28 | | | 11 | | | Not applicable |
| Class R-2 | | 2,769 | | | 1,395 | | | 186 | | | Not applicable |
| Class R-3 | | 2,126 | | | 771 | | | 214 | | | Not applicable |
| Class R-4 | | 916 | | | 379 | | | 184 | | | Not applicable |
| Class R-5 | | Not applicable | | | 148 | | | 146 | | | Not applicable |
| Class R-6 | | Not applicable | | | 5 | | | 344 | | | Not applicable |
| Total class-specific expenses | | $35,799 | | | $20,117 | | | $2,924 | | | $663 |
Directors’ deferred compensation — Directors’ compensation of $619,000 in the fund’s statement of operations includes $179,000 in current fees (either paid in cash or deferred) and a net increase of $440,000 in the value of the deferred amounts.
Affiliated officers and directors — Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFD and AFS. No affiliated officers or directors received any compensation directly from the fund.
8. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
| | | Sales* | | | Reinvestments
of dividends
and distributions | | | Repurchases* | | | Net increase
(decrease) | |
| Share class | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Six months ended March 31, 2014 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 1,012,718 | | | | 20,359 | | | $ | 806,616 | | | | 16,542 | | | $ | (1,005,463 | ) | | | (20,247 | ) | | $ | 813,871 | | | | 16,654 | |
| Class B | | | 2,507 | | | | 54 | | | | 8,918 | | | | 195 | | | | (37,610 | ) | | | (805 | ) | | | (26,185 | ) | | | (556 | ) |
| Class C | | | 82,977 | | | | 1,799 | | | | 48,176 | | | | 1,068 | | | | (105,333 | ) | | | (2,286 | ) | | | 25,820 | | | | 581 | |
| Class F-1 | | | 172,509 | | | | 3,496 | | | | 44,660 | | | | 924 | | | | (101,553 | ) | | | (2,070 | ) | | | 115,616 | | | | 2,350 | |
| Class F-2 | | | 138,582 | | | | 2,775 | | | | 30,757 | | | | 629 | | | | (57,144 | ) | | | (1,149 | ) | | | 112,195 | | | | 2,255 | |
| Class 529-A | | | 66,060 | | | | 1,338 | | | | 44,593 | | | | 921 | | | | (46,765 | ) | | | (947 | ) | | | 63,888 | | | | 1,312 | |
| Class 529-B | | | 417 | | | | 8 | | | | 1,211 | | | | 26 | | | | (5,489 | ) | | | (116 | ) | | | (3,861 | ) | | | (82 | ) |
| Class 529-C | | | 21,738 | | | | 463 | | | | 14,426 | | | | 314 | | | | (18,057 | ) | | | (385 | ) | | | 18,107 | | | | 392 | |
| Class 529-E | | | 3,510 | | | | 72 | | | | 2,446 | | | | 52 | | | | (2,702 | ) | | | (56 | ) | | | 3,254 | | | | 68 | |
| Class 529-F-1 | | | 8,894 | | | | 179 | | | | 3,680 | | | | 76 | | | | (7,268 | ) | | | (146 | ) | | | 5,306 | | | | 109 | |
| Class R-1 | | | 5,510 | | | | 117 | | | | 2,139 | | | | 47 | | | | (6,719 | ) | | | (143 | ) | | | 930 | | | | 21 | |
| Class R-2 | | | 83,317 | | | | 1,765 | | | | 37,700 | | | | 816 | | | | (116,505 | ) | | | (2,474 | ) | | | 4,512 | | | | 107 | |
| Class R-3 | | | 112,516 | | | | 2,321 | | | | 42,110 | | | | 885 | | | | (144,213 | ) | | | (2,979 | ) | | | 10,413 | | | | 227 | |
| Class R-4 | | | 108,909 | | | | 2,207 | | | | 34,902 | | | | 721 | | | | (108,811 | ) | | | (2,208 | ) | | | 35,000 | | | | 720 | |
| Class R-5 | | | 67,772 | | | | 1,351 | | | | 27,377 | | | | 554 | | | | (48,224 | ) | | | (960 | ) | | | 46,925 | | | | 945 | |
| Class R-6 | | | 269,538 | | | | 5,408 | | | | 65,716 | | | | 1,344 | | | | (44,435 | ) | | | (895 | ) | | | 290,819 | | | | 5,857 | |
| Total net increase (decrease) | | $ | 2,157,474 | | | | 43,712 | | | $ | 1,215,427 | | | | 25,114 | | | $ | (1,856,291 | ) | | | (37,866 | ) | | $ | 1,516,610 | | | | 30,960 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year ended September 30, 2013 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Class A | | $ | 1,557,151 | | | | 36,059 | | | $ | 178,221 | | | | 4,529 | | | $ | (2,101,305 | ) | | | (49,421 | ) | | $ | (365,933 | ) | | | (8,833 | ) |
| Class B | | | 5,244 | | | | 129 | | | | 990 | | | | 26 | | | | (78,159 | ) | | | (1,942 | ) | | | (71,925 | ) | | | (1,787 | ) |
| Class C | | | 115,494 | | | | 2,852 | | | | 5,050 | | | | 137 | | | | (163,006 | ) | | | (4,082 | ) | | | (42,462 | ) | | | (1,093 | ) |
| Class F-1 | | | 230,756 | | | | 5,343 | | | | 8,312 | | | | 213 | | | | (183,653 | ) | | | (4,490 | ) | | | 55,415 | | | | 1,066 | |
| Class F-2 | | | 261,399 | | | | 6,191 | | | | 6,474 | | | | 164 | | | | (98,197 | ) | | | (2,254 | ) | | | 169,676 | | | | 4,101 | |
| Class 529-A | | | 105,543 | | | | 2,476 | | | | 9,343 | | | | 239 | | | | (93,329 | ) | | | (2,193 | ) | | | 21,557 | | | | 522 | |
| Class 529-B | | | 680 | | | | 17 | | | | 97 | | | | 3 | | | | (10,704 | ) | | | (264 | ) | | | (9,927 | ) | | | (244 | ) |
| Class 529-C | | | 31,723 | | | | 779 | | | | 1,427 | | | | 38 | | | | (35,946 | ) | | | (884 | ) | | | (2,796 | ) | | | (67 | ) |
| Class 529-E | | | 5,599 | | | | 134 | | | | 422 | | | | 11 | | | | (5,392 | ) | | | (130 | ) | | | 629 | | | | 15 | |
| Class 529-F-1 | | | 15,329 | | | | 359 | | | | 842 | | | | 21 | | | | (9,884 | ) | | | (230 | ) | | | 6,287 | | | | 150 | |
| Class R-1 | | | 8,611 | | | | 209 | | | | 252 | | | | 7 | | | | (12,509 | ) | | | (308 | ) | | | (3,646 | ) | | | (92 | ) |
| Class R-2 | | | 155,700 | | | | 3,807 | | | | 4,497 | | | | 120 | | | | (221,139 | ) | | | (5,411 | ) | | | (60,942 | ) | | | (1,484 | ) |
| Class R-3 | | | 212,178 | | | | 5,045 | | | | 7,712 | | | | 200 | | | | (244,770 | ) | | | (5,852 | ) | | | (24,880 | ) | | | (607 | ) |
| Class R-4 | | | 189,212 | | | | 4,445 | | | | 8,015 | | | | 205 | | | | (173,149 | ) | | | (4,082 | ) | | | 24,078 | | | | 568 | |
| Class R-5 | | | 151,856 | | | | 3,552 | | | | 7,030 | | | | 177 | | | | (99,358 | ) | | | (2,287 | ) | | | 59,528 | | | | 1,442 | |
| Class R-6 | | | 282,881 | | | | 6,554 | | | | 14,371 | | | | 366 | | | | (79,857 | ) | | | (1,824 | ) | | | 217,395 | | | | 5,096 | |
| Total net increase (decrease) | | $ | 3,329,356 | | | | 77,951 | | | $ | 253,055 | | | | 6,456 | | | $ | (3,610,357 | ) | | | (85,654 | ) | | $ | (27,946 | ) | | | (1,247 | ) |
| * | Includes exchanges between share classes of the 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 $4,594,654,000 and $5,017,113,000, respectively, during the six months ended March 31, 2014.
Financial highlights
| | | | | | | | Income (loss) from investment operations1 | |
| | | | | Net asset | | | | | | Net gains (losses) | | | | |
| | | | | value, | | | Net | | | on securities | | | Total from | |
| | | | | beginning | | | investment | | | (both realized | | | investment | |
| | | | | of period | | | (loss) income | | | and unrealized) | | | operations | |
| Class A: | | Six months ended 3/31/20144,5 | | $ | 48.91 | | | $ | (.07 | ) | | $ | 3.34 | | | $ | 3.27 | |
| | | Year ended 9/30/2013 | | | 39.27 | | | | .06 | | | | 10.12 | | | | 10.18 | |
| | | Year ended 9/30/2012 | | | 31.45 | | | | .08 | | | | 7.85 | | | | 7.93 | |
| | | Year ended 9/30/2011 | | | 35.82 | | | | .09 | | | | (3.94 | ) | | | (3.85 | ) |
| | | Year ended 9/30/2010 | | | 30.26 | | | | .14 | | | | 5.62 | | | | 5.76 | |
| | | Year ended 9/30/2009 | | | 28.46 | | | | .19 | | | | 1.61 | | | | 1.80 | |
| Class B: | | Six months ended 3/31/20144,5 | | | 46.06 | | | | (.24 | ) | | | 3.13 | | | | 2.89 | |
| | | Year ended 9/30/2013 | | | 36.95 | | | | (.26 | ) | | | 9.56 | | | | 9.30 | |
| | | Year ended 9/30/2012 | | | 29.72 | | | | (.20 | ) | | | 7.43 | | | | 7.23 | |
| | | Year ended 9/30/2011 | | | 33.87 | | | | (.20 | ) | | | (3.71 | ) | | | (3.91 | ) |
| | | Year ended 9/30/2010 | | | 28.66 | | | | (.11 | ) | | | 5.32 | | | | 5.21 | |
| | | Year ended 9/30/2009 | | | 27.16 | | | | .01 | | | | 1.49 | | | | 1.50 | |
| Class C: | | Six months ended 3/31/20144,5 | | | 45.54 | | | | (.25 | ) | | | 3.10 | | | | 2.85 | |
| | | Year ended 9/30/2013 | | | 36.60 | | | | (.26 | ) | | | 9.45 | | | | 9.19 | |
| | | Year ended 9/30/2012 | | | 29.44 | | | | (.19 | ) | | | 7.35 | | | | 7.16 | |
| | | Year ended 9/30/2011 | | | 33.61 | | | | (.19 | ) | | | (3.69 | ) | | | (3.88 | ) |
| | | Year ended 9/30/2010 | | | 28.44 | | | | (.10 | ) | | | 5.28 | | | | 5.18 | |
| | | Year ended 9/30/2009 | | | 26.93 | | | | .03 | | | | 1.48 | | | | 1.51 | |
| Class F-1: | | Six months ended 3/31/20144,5 | | | 48.51 | | | | (.07 | ) | | | 3.31 | | | | 3.24 | |
| | | Year ended 9/30/2013 | | | 38.94 | | | | .09 | | | | 10.03 | | | | 10.12 | |
| | | Year ended 9/30/2012 | | | 31.18 | | | | .09 | | | | 7.78 | | | | 7.87 | |
| | | Year ended 9/30/2011 | | | 35.53 | | | | .10 | | | | (3.92 | ) | | | (3.82 | ) |
| | | Year ended 9/30/2010 | | | 30.03 | | | | .15 | | | | 5.57 | | | | 5.72 | |
| | | Year ended 9/30/2009 | | | 28.21 | | | | .21 | | | | 1.61 | | | | 1.82 | |
| Class F-2: | | Six months ended 3/31/20144,5 | | | 49.03 | | | | — | 7 | | | 3.34 | | | | 3.34 | |
| | | Year ended 9/30/2013 | | | 39.38 | | | | .21 | | | | 10.12 | | | | 10.33 | |
| | | Year ended 9/30/2012 | | | 31.54 | | | | .20 | | | | 7.86 | | | | 8.06 | |
| | | Year ended 9/30/2011 | | | 35.93 | | | | .20 | | | | (3.96 | ) | | | (3.76 | ) |
| | | Year ended 9/30/2010 | | | 30.39 | | | | .25 | | | | 5.63 | | | | 5.88 | |
| | | Year ended 9/30/2009 | | | 28.47 | | | | .23 | | | | 1.69 | | | | 1.92 | |
| Dividends and distributions | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Ratio of | | | Ratio of | | | Ratio of | |
| Dividends | | | | | | Total | | | | | | | | | | | | expenses to | | | expenses to | | | net (loss) | |
| (from net | | | Distributions | | | dividends | | | Net asset | | | | | | Net assets, | | | average net | | | average net | | | income to | |
| investment | | | (from capital | | | and | | | value, end | | | Total | | | end of period | | | assets before | | | assets after | | | average net | |
| income) | | | gains) | | | distributions | | | of period | | | return2,3 | | | (in millions) | | | waivers | | | waivers3 | | | assets3 | |
| $ | — | | | $ | (2.43 | ) | | $ | (2.43 | ) | | $ | 49.75 | | | | 6.77 | % | | $ | 17,564 | | | | 1.07 | %6 | | | 1.07 | %6 | | | (.28 | )%6 |
| | (.54 | ) | | | — | | | | (.54 | ) | | | 48.91 | | | | 26.29 | | | | 16,454 | | | | 1.13 | | | | 1.13 | | | | .15 | |
| | (.11 | ) | | | — | | | | (.11 | ) | | | 39.27 | | | | 25.26 | | | | 13,557 | | | | 1.14 | | | | 1.14 | | | | .23 | |
| | (.52 | ) | | | — | | | | (.52 | ) | | | 31.45 | | | | (11.01 | ) | | | 11,926 | | | | 1.09 | | | | 1.09 | | | | .23 | |
| | (.20 | ) | | | — | | | | (.20 | ) | | | 35.82 | | | | 19.11 | | | | 14,432 | | | | 1.13 | | | | 1.13 | | | | .43 | |
| | — | | | | — | | | | — | | | | 30.26 | | | | 6.32 | | | | 12,814 | | | | 1.25 | | | | 1.24 | | | | .82 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 46.52 | | | | 6.38 | | | | 161 | | | | 1.83 | 6 | | | 1.83 | 6 | | | (1.05 | )6 |
| | (.19 | ) | | | — | | | | (.19 | ) | | | 46.06 | | | | 25.29 | | | | 185 | | | | 1.89 | | | | 1.89 | | | | (.63 | ) |
| | — | | | | — | | | | — | | | | 36.95 | | | | 24.33 | | | | 214 | | | | 1.90 | | | | 1.90 | | | | (.58 | ) |
| | (.24 | ) | | | — | | | | (.24 | ) | | | 29.72 | | | | (11.68 | ) | | | 266 | | | | 1.86 | | | | 1.86 | | | | (.55 | ) |
| | — | | | | — | | | | — | | | | 33.87 | | | | 18.18 | | | | 397 | | | | 1.89 | | | | 1.89 | | | | (.37 | ) |
| | — | | | | — | | | | — | | | | 28.66 | | | | 5.52 | | | | 428 | | | | 2.02 | | | | 2.00 | | | | .06 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 45.96 | | | | 6.36 | | | | 955 | | | | 1.88 | 6 | | | 1.88 | 6 | | | (1.09 | )6 |
| | (.25 | ) | | | — | | | | (.25 | ) | | | 45.54 | | | | 25.26 | | | | 920 | | | | 1.93 | | | | 1.93 | | | | (.65 | ) |
| | — | | | | — | | | | — | | | | 36.60 | | | | 24.32 | | | | 779 | | | | 1.93 | | | | 1.93 | | | | (.56 | ) |
| | (.29 | ) | | | — | | | | (.29 | ) | | | 29.44 | | | | (11.70 | ) | | | 725 | | | | 1.86 | | | | 1.86 | | | | (.53 | ) |
| | (.01 | ) | | | — | | | | (.01 | ) | | | 33.61 | | | | 18.19 | | | | 865 | | | | 1.88 | | | | 1.88 | | | | (.32 | ) |
| | — | | | | — | | | | — | | | | 28.44 | | | | 5.64 | | | | 738 | | | | 1.94 | | | | 1.92 | | | | .13 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 49.32 | | | | 6.78 | | | | 998 | | | | 1.08 | 6 | | | 1.08 | 6 | | | (.29 | )6 |
| | (.55 | ) | | | — | | | | (.55 | ) | | | 48.51 | | | | 26.33 | | | | 868 | | | | 1.07 | | | | 1.07 | | | | .21 | |
| | (.11 | ) | | | — | | | | (.11 | ) | | | 38.94 | | | | 25.30 | | | | 655 | | | | 1.12 | | | | 1.12 | | | | .25 | |
| | (.53 | ) | | | — | | | | (.53 | ) | | | 31.18 | | | | (11.02 | ) | | | 583 | | | | 1.08 | | | | 1.08 | | | | .25 | |
| | (.22 | ) | | | — | | | | (.22 | ) | | | 35.53 | | | | 19.16 | | | | 654 | | | | 1.10 | | | | 1.10 | | | | .46 | |
| | — | | | | — | | | | — | | | | 30.03 | | | | 6.45 | | | | 543 | | | | 1.14 | | | | 1.13 | | | | .94 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 49.94 | | | | 6.90 | | | | 753 | | | | .81 | 6 | | | .81 | 6 | | | (.02 | )6 |
| | (.68 | ) | | | — | | | | (.68 | ) | | | 49.03 | | | | 26.68 | | | | 629 | | | | .82 | | | | .82 | | | | .48 | |
| | (.22 | ) | | | — | | | | (.22 | ) | | | 39.38 | | | | 25.69 | | | | 344 | | | | .83 | | | | .83 | | | | .55 | |
| | (.63 | ) | | | — | | | | (.63 | ) | | | 31.54 | | | | (10.79 | ) | | | 266 | | | | .82 | | | | .82 | | | | .53 | |
| | (.34 | ) | | | — | | | | (.34 | ) | | | 35.93 | | | | 19.46 | | | | 246 | | | | .81 | | | | .81 | | | | .78 | |
| | — | | | | — | | | | — | | | | 30.39 | | | | 6.78 | | | | 158 | | | | .87 | | | | .87 | | | | .91 | |
See page 33 for footnotes.
Financial highlights (continued)
| | | | | | | | Income (loss) from investment operations1 | |
| | | | | Net asset | | | | | | Net gains (losses) | | | | |
| | | | | value, | | | Net | | | on securities | | | Total from | |
| | | | | beginning | | | investment | | | (both realized | | | investment | |
| | | | | of period | | | (loss) income | | | and unrealized) | | | operations | |
| Class 529-A: | | Six months ended 3/31/20144,5 | | $ | 48.59 | | | $ | (.09 | ) | | $ | 3.32 | | | $ | 3.23 | |
| | | Year ended 9/30/2013 | | | 39.03 | | | | .04 | | | | 10.05 | | | | 10.09 | |
| | | Year ended 9/30/2012 | | | 31.27 | | | | .07 | | | | 7.80 | | | | 7.87 | |
| | | Year ended 9/30/2011 | | | 35.63 | | | | .08 | | | | (3.92 | ) | | | (3.84 | ) |
| | | Year ended 9/30/2010 | | | 30.13 | | | | .13 | | | | 5.58 | | | | 5.71 | |
| | | Year ended 9/30/2009 | | | 28.32 | | | | .19 | | | | 1.62 | | | | 1.81 | |
| Class 529-B: | | Six months ended 3/31/20144,5 | | | 46.52 | | | | (.28 | ) | | | 3.17 | | | | 2.89 | |
| | | Year ended 9/30/2013 | | | 37.30 | | | | (.30 | ) | | | 9.66 | | | | 9.36 | |
| | | Year ended 9/30/2012 | | | 30.03 | | | | (.23 | ) | | | 7.50 | | | | 7.27 | |
| | | Year ended 9/30/2011 | | | 34.23 | | | | (.23 | ) | | | (3.76 | ) | | | (3.99 | ) |
| | | Year ended 9/30/2010 | | | 28.98 | | | | (.13 | ) | | | 5.38 | | | | 5.25 | |
| | | Year ended 9/30/2009 | | | 27.47 | | | | .01 | | | | 1.50 | | | | 1.51 | |
| Class 529-C: | | Six months ended 3/31/20144,5 | | | 46.27 | | | | (.27 | ) | | | 3.15 | | | | 2.88 | |
| | | Year ended 9/30/2013 | | | 37.20 | | | | (.29 | ) | | | 9.60 | | | | 9.31 | |
| | | Year ended 9/30/2012 | | | 29.95 | | | | (.21 | ) | | | 7.46 | | | | 7.25 | |
| | | Year ended 9/30/2011 | | | 34.19 | | | | (.22 | ) | | | (3.76 | ) | | | (3.98 | ) |
| | | Year ended 9/30/2010 | | | 28.94 | | | | (.12 | ) | | | 5.37 | | | | 5.25 | |
| | | Year ended 9/30/2009 | | | 27.43 | | | | .01 | | | | 1.50 | | | | 1.51 | |
| Class 529-E: | | Six months ended 3/31/20144,5 | | | 47.87 | | | | (.15 | ) | | | 3.26 | | | | 3.11 | |
| | | Year ended 9/30/2013 | | | 38.45 | | | | (.06 | ) | | | 9.91 | | | | 9.85 | |
| | | Year ended 9/30/2012 | | | 30.79 | | | | (.03 | ) | | | 7.70 | | | | 7.67 | |
| | | Year ended 9/30/2011 | | | 35.11 | | | | (.03 | ) | | | (3.87 | ) | | | (3.90 | ) |
| | | Year ended 9/30/2010 | | | 29.70 | | | | .04 | | | | 5.50 | | | | 5.54 | |
| | | Year ended 9/30/2009 | | | 28.00 | | | | .12 | | | | 1.58 | | | | 1.70 | |
| Class 529-F-1: | | Six months ended 3/31/20144,5 | | | 48.73 | | | | (.04 | ) | | | 3.33 | | | | 3.29 | |
| | | Year ended 9/30/2013 | | | 39.14 | | | | .13 | | | | 10.07 | | | | 10.20 | |
| | | Year ended 9/30/2012 | | | 31.35 | | | | .14 | | | | 7.83 | | | | 7.97 | |
| | | Year ended 9/30/2011 | | | 35.72 | | | | .15 | | | | (3.94 | ) | | | (3.79 | ) |
| | | Year ended 9/30/2010 | | | 30.20 | | | | .20 | | | | 5.59 | | | | 5.79 | |
| | | Year ended 9/30/2009 | | | 28.33 | | | | .24 | | | | 1.63 | | | | 1.87 | |
| Dividends and distributions | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Ratio of | | | Ratio of | | | Ratio of | |
| Dividends | | | | | | Total | | | | | | | | | | | | expenses to | | | expenses to | | | net (loss) | |
| (from net | | | Distributions | | | dividends | | | Net asset | | | | | | Net assets, | | | average net | | | average net | | | income to | |
| investment | | | (from capital | | | and | | | value, end | | | Total | | | end of period | | | assets before | | | assets after | | | average net | |
| income) | | | gains) | | | distributions | | | of period | | | return2,3 | | | (in millions) | | | waivers | | | waivers3 | | | assets3 | |
| $ | — | | | $ | (2.43 | ) | | $ | (2.43 | ) | | $ | 49.39 | | | | 6.75 | % | | $ | 963 | | | | 1.15 | %6 | | | 1.15 | %6 | | | (.36 | )%6 |
| | (.53 | ) | | | — | | | | (.53 | ) | | | 48.59 | | | | 26.18 | | | | 884 | | | | 1.19 | | | | 1.19 | | | | .09 | |
| | (.11 | ) | | | — | | | | (.11 | ) | | | 39.03 | | | | 25.22 | | | | 689 | | | | 1.19 | | | | 1.19 | | | | .19 | |
| | (.52 | ) | | | — | | | | (.52 | ) | | | 31.27 | | | | (11.05 | ) | | | 541 | | | | 1.14 | | | | 1.14 | | | | .20 | |
| | (.21 | ) | | | — | | | | (.21 | ) | | | 35.63 | | | | 19.06 | | | | 548 | | | | 1.16 | | | | 1.16 | | | | .41 | |
| | — | | | | — | | | | — | | | | 30.13 | | | | 6.39 | | | | 421 | | | | 1.22 | | | | 1.21 | | | | .84 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 46.98 | | | | 6.31 | | | | 22 | | | | 1.96 | 6 | | | 1.96 | 6 | | | (1.18 | )6 |
| | (.14 | ) | | | — | | | | (.14 | ) | | | 46.52 | | | | 25.17 | | | | 25 | | | | 1.99 | | | | 1.99 | | | | (.73 | ) |
| | — | | | | — | | | | — | | | | 37.30 | | | | 24.21 | | | | 30 | | | | 2.01 | | | | 2.01 | | | | (.68 | ) |
| | (.21 | ) | | | — | | | | (.21 | ) | | | 30.03 | | | | (11.78 | ) | | | 36 | | | | 1.95 | | | | 1.95 | | | | (.63 | ) |
| | — | | | | — | | | | — | | | | 34.23 | | | | 18.12 | | | | 52 | | | | 1.97 | | | | 1.97 | | | | (.44 | ) |
| | — | | | | — | | | | — | | | | 28.98 | | | | 5.50 | | | | 51 | | | | 2.05 | | | | 2.03 | | | | .02 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 46.72 | | | | 6.30 | | | | 294 | | | | 1.94 | 6 | | | 1.94 | 6 | | | (1.15 | )6 |
| | (.24 | ) | | | — | | | | (.24 | ) | | | 46.27 | | | | 25.21 | | | | 273 | | | | 1.98 | | | | 1.98 | | | | (.70 | ) |
| | — | | | | — | | | | — | | | | 37.20 | | | | 24.21 | | | | 222 | | | | 2.00 | | | | 2.00 | | | | (.62 | ) |
| | (.26 | ) | | | — | | | | (.26 | ) | | | 29.95 | | | | (11.77 | ) | | | 186 | | | | 1.94 | | | | 1.94 | | | | (.61 | ) |
| | — | | | | — | | | | — | | | | 34.19 | | | | 18.10 | | | | 194 | | | | 1.97 | | | | 1.97 | | | | (.40 | ) |
| | — | | | | — | | | | — | | | | 28.94 | | | | 5.54 | | | | 155 | | | | 2.04 | | | | 2.03 | | | | .02 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 48.55 | | | | 6.60 | | | | 52 | | | | 1.40 | 6 | | | 1.40 | 6 | | | (.60 | )6 |
| | (.43 | ) | | | — | | | | (.43 | ) | | | 47.87 | | | | 25.90 | | | | 48 | | | | 1.43 | | | | 1.43 | | | | (.15 | ) |
| | (.01 | ) | | | — | | | | (.01 | ) | | | 38.45 | | | | 24.90 | | | | 38 | | | | 1.45 | | | | 1.45 | | | | (.07 | ) |
| | (.42 | ) | | | — | | | | (.42 | ) | | | 30.79 | | | | (11.32 | ) | | | 31 | | | | 1.43 | | | | 1.43 | | | | (.08 | ) |
| | (.13 | ) | | | — | | | | (.13 | ) | | | 35.11 | | | | 18.71 | | | | 31 | | | | 1.46 | | | | 1.46 | | | | .11 | |
| | — | | | | — | | | | — | | | | 29.70 | | | | 6.07 | | | | 25 | | | | 1.52 | | | | 1.51 | | | | .54 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 49.59 | | | | 6.86 | | | | 80 | | | | .94 | 6 | | | .94 | 6 | | | (.15 | )6 |
| | (.61 | ) | | | — | | | | (.61 | ) | | | 48.73 | | | | 26.43 | | | | 73 | | | | .98 | | | | .98 | | | | .30 | |
| | (.18 | ) | | | — | | | | (.18 | ) | | | 39.14 | | | | 25.51 | | | | 53 | | | | .99 | | | | .99 | | | | .39 | |
| | (.58 | ) | | | — | | | | (.58 | ) | | | 31.35 | | | | (10.90 | ) | | | 43 | | | | .94 | | | | .94 | | | | .40 | |
| | (.27 | ) | | | — | | | | (.27 | ) | | | 35.72 | | | | 19.31 | | | | 47 | | | | .95 | | | | .95 | | | | .62 | |
| | — | | | | — | | | | — | | | | 30.20 | | | | 6.60 | | | | 35 | | | | 1.02 | | | | 1.01 | | | | 1.04 | |
See page 33 for footnotes.
Financial highlights (continued)
| | | | | | | | Income (loss) from investment operations1 | |
| | | | | Net asset | | | | | | Net gains (losses) | | | | |
| | | | | value, | | | Net | | | on securities | | | Total from | |
| | | | | beginning | | | investment | | | (both realized | | | investment | |
| | | | | of period | | | (loss) income | | | and unrealized) | | | operations | |
| Class R-1: | | Six months ended 3/31/20144,5 | | $ | 46.56 | | | $ | (.24 | ) | | $ | 3.17 | | | $ | 2.93 | |
| | | Year ended 9/30/2013 | | | 37.40 | | | | (.23 | ) | | | 9.66 | | | | 9.43 | |
| | | Year ended 9/30/2012 | | | 30.07 | | | | (.17 | ) | | | 7.50 | | | | 7.33 | |
| | | Year ended 9/30/2011 | | | 34.32 | | | | (.19 | ) | | | (3.77 | ) | | | (3.96 | ) |
| | | Year ended 9/30/2010 | | | 29.05 | | | | (.09 | ) | | | 5.39 | | | | 5.30 | |
| | | Year ended 9/30/2009 | | | 27.51 | | | | .02 | | | | 1.52 | | | | 1.54 | |
| Class R-2: | | Six months ended 3/31/20144,5 | | | 46.56 | | | | (.24 | ) | | | 3.16 | | | | 2.92 | |
| | | Year ended 9/30/2013 | | | 37.39 | | | | (.23 | ) | | | 9.67 | | | | 9.44 | |
| | | Year ended 9/30/2012 | | | 30.07 | | | | (.18 | ) | | | 7.50 | | | | 7.32 | |
| | | Year ended 9/30/2011 | | | 34.30 | | | | (.20 | ) | | | (3.76 | ) | | | (3.96 | ) |
| | | Year ended 9/30/2010 | | | 29.03 | | | | (.11 | ) | | | 5.38 | | | | 5.27 | |
| | | Year ended 9/30/2009 | | | 27.55 | | | | (.02 | ) | | | 1.50 | | | | 1.48 | |
| Class R-3: | | Six months ended 3/31/20144,5 | | | 47.79 | | | | (.14 | ) | | | 3.25 | | | | 3.11 | |
| | | Year ended 9/30/2013 | | | 38.39 | | | | (.05 | ) | | | 9.89 | | | | 9.84 | |
| | | Year ended 9/30/2012 | | | 30.73 | | | | (.02 | ) | | | 7.68 | | | | 7.66 | |
| | | Year ended 9/30/2011 | | | 35.03 | | | | (.03 | ) | | | (3.84 | ) | | | (3.87 | ) |
| | | Year ended 9/30/2010 | | | 29.64 | | | | .04 | | | | 5.49 | | | | 5.53 | |
| | | Year ended 9/30/2009 | | | 27.94 | | | | .12 | | | | 1.58 | | | | 1.70 | |
| Class R-4: | | Six months ended 3/31/20144,5 | | | 48.59 | | | | (.07 | ) | | | 3.32 | | | | 3.25 | |
| | | Year ended 9/30/2013 | | | 39.03 | | | | .09 | | | | 10.04 | | | | 10.13 | |
| | | Year ended 9/30/2012 | | | 31.25 | | | | .11 | | | | 7.80 | | | | 7.91 | |
| | | Year ended 9/30/2011 | | | 35.60 | | | | .10 | | | | (3.91 | ) | | | (3.81 | ) |
| | | Year ended 9/30/2010 | | | 30.12 | | | | .15 | | | | 5.58 | | | | 5.73 | |
| | | Year ended 9/30/2009 | | | 28.29 | | | | .20 | | | | 1.63 | | | | 1.83 | |
| Class R-5: | | Six months ended 3/31/20144,5 | | | 49.46 | | | | .01 | | | | 3.37 | | | | 3.38 | |
| | | Year ended 9/30/2013 | | | 39.71 | | | | .22 | | | | 10.22 | | | | 10.44 | |
| | | Year ended 9/30/2012 | | | 31.80 | | | | .22 | | | | 7.93 | | | | 8.15 | |
| | | Year ended 9/30/2011 | | | 36.21 | | | | .22 | | | | (3.99 | ) | | | (3.77 | ) |
| | | Year ended 9/30/2010 | | | 30.60 | | | | .26 | | | | 5.66 | | | | 5.92 | |
| | | Year ended 9/30/2009 | | | 28.64 | | | | .28 | | | | 1.68 | | | | 1.96 | |
| Class R-6: | | Six months ended 3/31/20144,5 | | | 49.00 | | | | .02 | | | | 3.34 | | | | 3.36 | |
| | | Year ended 9/30/2013 | | | 39.34 | | | | .25 | | | | 10.12 | | | | 10.37 | |
| | | Year ended 9/30/2012 | | | 31.52 | | | | .24 | | | | 7.84 | | | | 8.08 | |
| | | Year ended 9/30/2011 | | | 35.89 | | | | .24 | | | | (3.96 | ) | | | (3.72 | ) |
| | | Year ended 9/30/2010 | | | 30.31 | | | | .27 | | | | 5.62 | | | | 5.89 | |
| | | Period from 5/1/2009 to 9/30/20094,8 | | | 22.33 | | | | .13 | | | | 7.85 | | | | 7.98 | |
| | | Six months
ended
March 31, | | Year ended September 30 |
| | | 20144,5 | | 2013 | | 2012 | | 2011 | | 2010 | | 2009 |
| Portfolio turnover rate for all share classes | | | 20 | % | | | 37 | % | | | 35 | % | | | 39 | % | | | 45 | % | | | 56 | % |
| Dividends and distributions | | | | | | | | | | | | Ratio of | | | Ratio of | | | Ratio of | |
| Dividends | | | | | | Total | | | | | | | | | | | | expenses to | | | expenses to | | | net (loss) | |
| (from net | | | Distributions | | | dividends | | | Net asset | | | | | | Net assets, | | | average net | | | average net | | | income to | |
| investment | | | (from capital | | | and | | | value, end | | | Total | | | end of period | | | assets before | | | assets after | | | average net | |
| income) | | | gains) | | | distributions | | | of period | | | return2,3 | | | (in millions) | | | waivers | | | waivers3 | | | assets3 | |
| $ | — | | | $ | (2.43 | ) | | $ | (2.43 | ) | | $ | 47.06 | | | | 6.39 | % | | $ | 43 | | | | 1.82 | %6 | | | 1.82 | %6 | | | (1.04 | )%6 |
| | (.27 | ) | | | — | | | | (.27 | ) | | | 46.56 | | | | 25.37 | | | | 42 | | | | 1.84 | | | | 1.84 | | | | (.57 | ) |
| | — | | | | — | | | | — | | | | 37.40 | | | | 24.38 | | | | 37 | | | | 1.86 | | | | 1.86 | | | | (.50 | ) |
| | (.29 | ) | | | — | | | | (.29 | ) | | | 30.07 | | | | (11.68 | ) | | | 35 | | | | 1.84 | | | | 1.84 | | | | (.52 | ) |
| | (.03 | ) | | | — | | | | (.03 | ) | | | 34.32 | | | | 18.25 | | | | 43 | | | | 1.87 | | | | 1.87 | | | | (.30 | ) |
| | — | | | | — | | | | — | | | | 29.05 | | | | 5.60 | | | | 36 | | | | 1.94 | | | | 1.93 | | | | .11 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 47.05 | | | | 6.37 | | | | 749 | | | | 1.82 | 6 | | | 1.82 | 6 | | | (1.03 | )6 |
| | (.27 | ) | | | — | | | | (.27 | ) | | | 46.56 | | | | 25.41 | | | | 736 | | | | 1.83 | | | | 1.83 | | | | (.55 | ) |
| | — | | | | — | | | | — | | | | 37.39 | | | | 24.34 | | | | 647 | | | | 1.89 | | | | 1.89 | | | | (.52 | ) |
| | (.27 | ) | | | — | | | | (.27 | ) | | | 30.07 | | | | (11.72 | ) | | | 581 | | | | 1.86 | | | | 1.86 | | | | (.54 | ) |
| | — | | | | — | | | | — | | | | 34.30 | | | | 18.19 | | | | 712 | | | | 1.93 | | | | 1.93 | | | | (.37 | ) |
| | — | | | | — | | | | — | | | | 29.03 | | | | 5.37 | | | | 603 | | | | 2.15 | | | | 2.14 | | | | (.09 | ) |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 48.47 | | | | 6.61 | | | | 859 | | | | 1.38 | 6 | | | 1.38 | 6 | | | (.60 | )6 |
| | (.44 | ) | | | — | | | | (.44 | ) | | | 47.79 | | | | 25.90 | | | | 836 | | | | 1.40 | | | | 1.40 | | | | (.12 | ) |
| | — | | | | — | | | | — | | | | 38.39 | | | | 24.92 | | | | 694 | | | | 1.42 | | | | 1.42 | | | | (.05 | ) |
| | (.43 | ) | | | — | | | | (.43 | ) | | | 30.73 | | | | (11.28 | ) | | | 586 | | | | 1.41 | | | | 1.41 | | | | (.08 | ) |
| | (.14 | ) | | | — | | | | (.14 | ) | | | 35.03 | | | | 18.71 | | | | 667 | | | | 1.44 | | | | 1.44 | | | | .13 | |
| | — | | | | — | | | | — | | | | 29.64 | | | | 6.05 | | | | 534 | | | | 1.53 | | | | 1.51 | | | | .53 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 49.41 | | | | 6.79 | | | | 760 | | | | 1.06 | 6 | | | 1.06 | 6 | | | (.27 | )6 |
| | (.57 | ) | | | — | | | | (.57 | ) | | | 48.59 | | | | 26.31 | | | | 712 | | | | 1.07 | | | | 1.07 | | | | .21 | |
| | (.13 | ) | | | — | | | | (.13 | ) | | | 39.03 | | | | 25.38 | | | | 550 | | | | 1.08 | | | | 1.08 | | | | .30 | |
| | (.54 | ) | | | — | | | | (.54 | ) | | | 31.25 | | | | (10.98 | ) | | | 441 | | | | 1.07 | | | | 1.07 | | | | .26 | |
| | (.25 | ) | | | — | | | | (.25 | ) | | | 35.60 | | | | 19.15 | | | | 486 | | | | 1.09 | | | | 1.09 | | | | .48 | |
| | — | | | | — | | | | — | | | | 30.12 | | | | 6.47 | | | | 378 | | | | 1.14 | | | | 1.13 | | | | .88 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 50.41 | | | | 6.94 | | | | 608 | | | | .76 | 6 | | | .76 | 6 | | | .03 | 6 |
| | (.69 | ) | | | — | | | | (.69 | ) | | | 49.46 | | | | 26.72 | | | | 550 | | | | .77 | | | | .77 | | | | .51 | |
| | (.24 | ) | | | — | | | | (.24 | ) | | | 39.71 | | | | 25.77 | | | | 384 | | | | .78 | | | | .78 | | | | .60 | |
| | (.64 | ) | | | — | | | | (.64 | ) | | | 31.80 | | | | (10.74 | ) | | | 314 | | | | .77 | | | | .77 | | | | .56 | |
| | (.31 | ) | | | — | | | | (.31 | ) | | | 36.21 | | | | 19.50 | | | | 347 | | | | .78 | | | | .78 | | | | .79 | |
| | — | | | | — | | | | — | | | | 30.60 | | | | 6.84 | | | | 260 | | | | .82 | | | | .80 | | | | 1.26 | |
| | — | | | | (2.43 | ) | | | (2.43 | ) | | | 49.93 | | | �� | 6.97 | | | | 1,521 | | | | .71 | 6 | | | .71 | 6 | | | .09 | 6 |
| | (.71 | ) | | | — | | | | (.71 | ) | | | 49.00 | | | | 26.80 | | | | 1,206 | | | | .72 | | | | .72 | | | | .57 | |
| | (.26 | ) | | | — | | | | (.26 | ) | | | 39.34 | | | | 25.79 | | | | 768 | | | | .73 | | | | .73 | | | | .67 | |
| | (.65 | ) | | | — | | | | (.65 | ) | | | 31.52 | | | | (10.68 | ) | | | 494 | | | | .72 | | | | .72 | | | | .64 | |
| | (.31 | ) | | | — | | | | (.31 | ) | | | 35.89 | | | | 19.57 | | | | 411 | | | | .73 | | | | .73 | | | | .84 | |
| | — | | | | — | | | | — | | | | 30.31 | | | | 35.74 | | | | 317 | | | | .33 | | | | .33 | | | | .51 | |
| 1 | Based on average shares outstanding. |
| 2 | Total returns exclude any applicable sales charges, including contingent deferred sales charges. |
| 3 | This column reflects the impact, if any, of certain waivers from CRMC. During one of the periods shown, CRMC reduced fees for investment advisory services. |
| 4 | Based on operations for the period shown and, accordingly, is not representative of a full year. |
| 5 | Unaudited. |
| 6 | Annualized. |
| 7 | Amount less than $.01. |
| 8 | Class R-6 shares were offered beginning May 1, 2009. |
See Notes to Financial Statements
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, 2013, through March 31, 2014).
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 entitled “Expenses paid during period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the 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:
There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually), that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would 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.
| | | Beginning
account value
10/1/2013 | | | Ending
account value
3/31/2014 | | | Expenses
paid during
period* | | | Annualized
expense
ratio | |
| Class A — actual return | | $ | 1,000.00 | | | $ | 1,067.73 | | | $ | 5.52 | | | | 1.07 | % |
| Class A — assumed 5% return | | | 1,000.00 | | | | 1,019.60 | | | | 5.39 | | | | 1.07 | |
| Class B — actual return | | | 1,000.00 | | | | 1,063.77 | | | | 9.42 | | | | 1.83 | |
| Class B — assumed 5% return | | | 1,000.00 | | | | 1,015.81 | | | | 9.20 | | | | 1.83 | |
| Class C — actual return | | | 1,000.00 | | | | 1,063.61 | | | | 9.67 | | | | 1.88 | |
| Class C — assumed 5% return | | | 1,000.00 | | | | 1,015.56 | | | | 9.45 | | | | 1.88 | |
| Class F-1 — actual return | | | 1,000.00 | | | | 1,067.83 | | | | 5.57 | | | | 1.08 | |
| Class F-1 — assumed 5% return | | | 1,000.00 | | | | 1,019.55 | | | | 5.44 | | | | 1.08 | |
| Class F-2 — actual return | | | 1,000.00 | | | | 1,069.02 | | | | 4.18 | | | | .81 | |
| Class F-2 — assumed 5% return | | | 1,000.00 | | | | 1,020.89 | | | | 4.08 | | | | .81 | |
| Class 529-A — actual return | | | 1,000.00 | | | | 1,067.52 | | | | 5.93 | | | | 1.15 | |
| Class 529-A — assumed 5% return | | | 1,000.00 | | | | 1,019.20 | | | | 5.79 | | | | 1.15 | |
| Class 529-B — actual return | | | 1,000.00 | | | | 1,063.11 | | | | 10.08 | | | | 1.96 | |
| Class 529-B — assumed 5% return | | | 1,000.00 | | | | 1,015.16 | | | | 9.85 | | | | 1.96 | |
| Class 529-C — actual return | | | 1,000.00 | | | | 1,063.02 | | | | 9.98 | | | | 1.94 | |
| Class 529-C — assumed 5% return | | | 1,000.00 | | | | 1,015.26 | | | | 9.75 | | | | 1.94 | |
| Class 529-E — actual return | | | 1,000.00 | | | | 1,066.01 | | | | 7.21 | | | | 1.40 | |
| Class 529-E — assumed 5% return | | | 1,000.00 | | | | 1,017.95 | | | | 7.04 | | | | 1.40 | |
| Class 529-F-1 — actual return | | | 1,000.00 | | | | 1,068.57 | | | | 4.85 | | | | .94 | |
| Class 529-F-1 — assumed 5% return | | | 1,000.00 | | | | 1,020.24 | | | | 4.73 | | | | .94 | |
| Class R-1 — actual return | | | 1,000.00 | | | | 1,063.93 | | | | 9.37 | | | | 1.82 | |
| Class R-1 — assumed 5% return | | | 1,000.00 | | | | 1,015.86 | | | | 9.15 | | | | 1.82 | |
| Class R-2 — actual return | | | 1,000.00 | | | | 1,063.71 | | | | 9.36 | | | | 1.82 | |
| Class R-2 — assumed 5% return | | | 1,000.00 | | | | 1,015.86 | | | | 9.15 | | | | 1.82 | |
| Class R-3 — actual return | | | 1,000.00 | | | | 1,066.10 | | | | 7.11 | | | | 1.38 | |
| Class R-3 — assumed 5% return | | | 1,000.00 | | | | 1,018.05 | | | | 6.94 | | | | 1.38 | |
| Class R-4 — actual return | | | 1,000.00 | | | | 1,067.95 | | | | 5.47 | | | | 1.06 | |
| Class R-4 — assumed 5% return | | | 1,000.00 | | | | 1,019.65 | | | | 5.34 | | | | 1.06 | |
| Class R-5 — actual return | | | 1,000.00 | | | | 1,069.40 | | | | 3.92 | | | | .76 | |
| Class R-5 — assumed 5% return | | | 1,000.00 | | | | 1,021.14 | | | | 3.83 | | | | .76 | |
| Class R-6 — actual return | | | 1,000.00 | | | | 1,069.65 | | | | 3.66 | | | | .71 | |
| Class R-6 — assumed 5% return | | | 1,000.00 | | | | 1,021.39 | | | | 3.58 | | | | .71 | |
*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).
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
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Counsel
K&L Gates LLP
Four Embarcadero Center, Suite 1200
San Francisco, CA 94111-5994
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at (800) 421-4225 or visit the American Funds website at americanfunds.com.
“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.
A complete March 31, 2014, portfolio of SMALLCAP World Fund’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
SMALLCAP World 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 SMALLCAP World 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, 2014, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
The American Funds 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 25 years of investment experience, including 21 years at our company, reflecting a career commitment to our long-term approach.1 |
| | |
| | The Capital SystemSM |
| | Our investment process, The Capital System, combines individual accountability with teamwork. Each fund is 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. |
| | |
| | Superior long-term track record |
| | Our equity funds have beaten their Lipper peer indexes in 90% of 10-year periods and 96% of 20-year periods. Our fixed-income funds have beaten their Lipper indexes in 56% of 10-year periods and 57% of 20-year periods.2 Our fund management fees have been among the lowest in the industry.3 |
| | 1 | Portfolio manager experience as of December 31, 2013. |
| | 2 | Based on Class A share results for rolling periods through December 31, 2013. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except SMALLCAP World Fund, for which the Lipper average was used). |
| | 3 | Based on management fees for the 20-year period ended December 31, 2013, versus comparable Lipper categories, excluding funds of funds. |
 | Printed on paper containing 10% post-consumer waste Printed with inks containing soy and/or vegetable oil |
| Lit. No. MFGESRX-035-0514P Litho in USA BBC/UNL/8094-S37086 |
ITEM 2 – Code of Ethics
Not applicable for filing of semi-annual reports to shareholders.
ITEM 3 – Audit Committee Financial Expert
Not applicable for filing of semi-annual reports to shareholders.
ITEM 4 – Principal Accountant Fees and Services
Not applicable for filing of semi-annual reports to shareholders.
ITEM 5 – Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 – Schedule of Investments
 | SMALLCAP World Fund® Investment portfolio March 31, 2014 |
unaudited
| Common stocks 89.56% | | |
| | | Value |
| Consumer discretionary 19.72% | Shares | (000) |
| | | |
| Netflix, Inc.1 | 998,743 | $351,587 |
| Domino’s Pizza, Inc.2 | 3,040,000 | 233,989 |
| Melco International Development Ltd.3 | 56,695,000 | 191,645 |
| Lions Gate Entertainment Corp.2 | 7,081,000 | 189,275 |
| Paddy Power PLC3 | 2,237,300 | 177,256 |
| ASOS PLC1,3 | 2,014,755 | 174,406 |
| Tesla Motors, Inc.1 | 667,845 | 139,212 |
| Mr Price Group Ltd.3 | 7,820,383 | 116,934 |
| John Wiley & Sons, Inc., Class A | 1,971,083 | 113,613 |
| Five Below, Inc.1 | 2,639,833 | 112,140 |
| Ted Baker PLC2,3 | 3,024,993 | 108,346 |
| TOD’S SpA3 | 655,000 | 85,038 |
| Coupons.com Inc.1,2,3 | 3,287,996 | 68,892 |
| Coupons.com Inc.1,2 | 600,000 | 14,790 |
| Dollarama Inc. | 1,039,000 | 79,154 |
| START TODAY Co., Ltd.3 | 3,078,000 | 78,692 |
| Melco Crown Entertainment Ltd. (ADR)1 | 2,000,000 | 77,300 |
| Entertainment One Ltd.1,3 | 13,659,782 | 75,195 |
| Jumbo SA1,3 | 3,997,964 | 71,698 |
| Rightmove PLC3 | 1,602,000 | 70,538 |
| Inchcape PLC3 | 6,465,600 | 69,794 |
| Domino’s Pizza Enterprises Ltd.3 | 3,687,710 | 68,451 |
| Brinker International, Inc. | 1,262,500 | 66,218 |
| Ocado Group PLC1,3 | 8,533,708 | 65,626 |
| Brunello Cucinelli SpA3 | 2,468,086 | 65,308 |
| SeaWorld Entertainment, Inc. | 2,154,500 | 65,131 |
| Penske Automotive Group, Inc. | 1,502,000 | 64,226 |
| ASKUL Corp.3 | 2,038,600 | 64,130 |
| Chow Sang Sang Holdings International Ltd.3 | 26,541,000 | 62,824 |
| Eclat Textile Co., Ltd.3 | 5,279,000 | 62,240 |
| Gentex Corp. | 1,954,567 | 61,627 |
| Tiffany & Co. | 667,000 | 57,462 |
| L’Occitane International SA3 | 23,219,500 | 57,347 |
| YOOX SpA1,3 | 1,641,469 | 56,206 |
| PT Matahari Department Store Tbk1,3 | 44,070,000 | 54,088 |
| OSIM International Ltd3 | 25,500,000 | 52,575 |
| Jarden Corp.1 | 862,500 | 51,603 |
| Valeo SA, non-registered shares3 | 365,000 | 51,486 |
| Minth Group Ltd.3 | 25,142,000 | 51,232 |
| Liberty Global PLC, Class C1 | 877,628 | 35,728 |
| Liberty Global PLC, Class A1 | 351,978 | 14,642 |
| Arcos Dorados Holdings Inc., Class A | 4,735,000 | 47,729 |
| Group 1 Automotive, Inc. | 702,600 | 46,133 |
| Moncler SpA1,3 | 2,662,600 | 45,574 |
| Zee Entertainment Enterprises Ltd.3 | 9,270,000 | 42,098 |
| | | |
| Common stocks | | |
| | | Value |
| Consumer discretionary (continued) | Shares | (000) |
| | | |
| Gourmet Master Co., Ltd.3 | 5,215,000 | $40,501 |
| Jubilant FoodWorks Ltd.1,3 | 2,220,098 | 39,531 |
| Unibet Group PLC (SDR)3 | 713,500 | 35,845 |
| Bloomin’ Brands, Inc.1 | 1,400,000 | 33,740 |
| Home Inns & Hotels Management Inc. (ADR)1 | 1,006,000 | 32,484 |
| Daily Mail and General Trust PLC, Class A, nonvoting3 | 2,210,000 | 32,012 |
| Zhongsheng Group Holdings Ltd.3 | 22,854,000 | 31,500 |
| Navitas Ltd.3 | 4,625,000 | 31,419 |
| Ctrip.com International, Ltd. (ADR)1 | 588,300 | 29,662 |
| Cox & Kings Ltd.2,3 | 10,592,000 | 28,363 |
| Cox & Kings Ltd. (GDR)2,3 | 330,000 | 884 |
| Bloomberry Resorts Corp.1,3 | 122,594,600 | 27,481 |
| Boyd Gaming Corp.1 | 2,049,000 | 27,047 |
| Playmates Toys Ltd.1,3 | 57,268,000 | 26,891 |
| zulily, inc., Class A1 | 534,000 | 26,801 |
| CJ Home Shopping Co., Ltd.3 | 76,100 | 26,080 |
| Oxford Industries, Inc. | 318,000 | 24,868 |
| Quiksilver, Inc.1 | 3,268,300 | 24,545 |
| Lennar Corp., Class A | 619,000 | 24,525 |
| Merida Industry Co., Ltd.3 | 3,462,000 | 23,014 |
| Sotheby’s Holdings, Inc. | 525,000 | 22,864 |
| Redrow PLC3 | 4,185,000 | 22,715 |
| Giordano International Ltd.3 | 35,020,000 | 22,661 |
| Chipotle Mexican Grill, Inc.1 | 39,890 | 22,660 |
| Eros International PLC, Class A1 | 1,371,666 | 22,043 |
| Stella International Holdings Ltd.3 | 9,040,500 | 21,616 |
| Murphy USA Inc.1 | 510,000 | 20,701 |
| Don Quijote Holdings Co., Ltd.3 | 401,000 | 20,683 |
| China Lodging Group, Ltd. (ADR)1 | 840,000 | 20,639 |
| PT Multipolar Tbk3 | 497,040,000 | 19,651 |
| Dick Smith Holdings Ltd.1,3 | 9,090,940 | 18,411 |
| DSW Inc., Class A | 500,000 | 17,930 |
| TAKKT AG3 | 801,778 | 17,685 |
| Parkson Retail Asia Ltd.3 | 23,182,000 | 17,323 |
| Golden Eagle Retail Group Ltd.3 | 12,356,000 | 17,164 |
| Toll Brothers, Inc.1 | 471,800 | 16,938 |
| TravelCenters of America LLC1,2 | 2,023,750 | 16,494 |
| Coway Co., Ltd.3 | 235,000 | 16,487 |
| Installed Building Products, Inc.1 | 1,178,806 | 16,444 |
| Topps Tiles PLC3 | 7,000,000 | 16,090 |
| Cavco Industries, Inc.1 | 204,000 | 16,004 |
| Grand Korea Leisure Co. Ltd.3 | 385,000 | 15,819 |
| ValueVision Media, Inc., Class A1,2 | 3,184,170 | 15,475 |
| Container Store Group, Inc.1 | 440,000 | 14,938 |
| SHW AG, non-registered shares3 | 230,000 | 14,790 |
| Mothercare PLC1,2,3 | 4,450,000 | 13,947 |
| Major Cineplex Group PCL3 | 23,845,000 | 13,922 |
| Hankook Tire Co., Ltd.3 | 233,473 | 13,278 |
| HUGO BOSS AG3 | 99,231 | 13,216 |
| Intercontinental Hotels Group PLC3 | 401,966 | 12,938 |
| CTC Media, Inc. | 1,365,922 | 12,580 |
| I.T Limited3 | 46,310,000 | 12,180 |
| zooplus AG, non-registered shares1,3 | 148,400 | 11,896 |
| Common stocks | | |
| | | Value |
| Consumer discretionary (continued) | Shares | (000) |
| | | |
| William Hill PLC3 | 2,047,800 | $ 11,650 |
| eLong, Inc. (ADR)1 | 690,000 | 11,144 |
| Ripley Corp SA | 17,726,000 | 11,077 |
| D.R. Horton, Inc. | 490,000 | 10,609 |
| PT Ace Hardware Indonesia Tbk3 | 156,400,000 | 10,383 |
| GVC Holdings PLC3 | 1,663,694 | 10,370 |
| Techtronic Industries Co. Ltd.3 | 3,570,000 | 9,942 |
| Tribhovandas Bhimji Zaveri Ltd.2,3 | 4,335,732 | 9,542 |
| American Axle & Manufacturing Holdings, Inc.1 | 505,000 | 9,353 |
| Mando Corp.3 | 72,600 | 9,195 |
| POLYTEC Holding AG, non-registered shares3 | 834,369 | 9,058 |
| Weight Watchers International, Inc. | 382,000 | 7,846 |
| Bright Horizons Family Solutions Inc.1 | 180,400 | 7,055 |
| Mood Media Corp.1 | 6,375,000 | 4,325 |
| Mood Media Corp. (CDI)1 | 3,710,000 | 2,517 |
| Café de Coral Holdings Ltd.3 | 2,240,000 | 6,780 |
| China Zenix Auto International Ltd. (ADR) 1 | 2,152,000 | 5,552 |
| Talwalkars Better Value Fitness Ltd.2,3 | 1,694,000 | 4,583 |
| Alpargatas SA, preferred nominative | 810,020 | 4,498 |
| Powerland AG, non-registered shares1,2,3 | 1,200,000 | 3,432 |
| Ten Alps PLC1,3 | 3,439,001 | 43 |
| Five Star Travel Corp.1,3,4 | 96,033 | 30 |
| CEC Unet PLC1,2,3 | 35,100,775 | — |
| Spot Runner, Inc.1,3,5 | 2,980,544 | — |
| Fontainebleau Resorts LLC, Class A, nonvoting units1,3,5 | 1,900,000 | — |
| | | 5,203,537 |
| | | |
| Health care 14.63% | | |
| | | |
| Regeneron Pharmaceuticals, Inc.1 | 1,044,921 | 313,769 |
| Incyte Corp.1 | 4,445,600 | 237,929 |
| Endo International PLC1 | 1,745,100 | 119,801 |
| Endo International PLC (CAD denominated)1 | 1,343,224 | 92,258 |
| Synageva BioPharma Corp.1,2 | 2,274,774 | 188,738 |
| Myriad Genetics, Inc.1,2 | 5,503,956 | 188,180 |
| Hikma Pharmaceuticals PLC3 | 5,625,153 | 156,081 |
| Centene Corp.1 | 2,353,915 | 146,531 |
| athenahealth, Inc.1 | 865,423 | 138,675 |
| Molina Healthcare, Inc.1,2 | 3,417,000 | 128,343 |
| Emeritus Corp.1,2 | 3,529,700 | 110,974 |
| BioMarin Pharmaceutical Inc.1 | 1,422,500 | 97,029 |
| Sysmex Corp.3 | 2,940,000 | 94,328 |
| Illumina, Inc.1 | 626,000 | 93,061 |
| Ultragenyx Pharmaceutical Inc.1,2,3 | 889,970 | 36,984 |
| Ultragenyx Pharmaceutical Inc.1,2 | 668,987 | 32,707 |
| Intuitive Surgical, Inc.1 | 155,000 | 67,888 |
| NuVasive, Inc.1 | 1,629,436 | 62,587 |
| Insulet Corp.1 | 1,308,000 | 62,025 |
| Grifols, SA, Class A, non-registered shares3 | 765,000 | 41,999 |
| Grifols, SA, Class B, non-registered shares3 | 463,950 | 19,128 |
| Novadaq Technologies Inc.1 | 2,630,948 | 58,618 |
| Alnylam Pharmaceuticals, Inc.1 | 864,700 | 58,056 |
| Theravance, Inc.1 | 1,797,000 | 55,599 |
| GN Store Nord AS3 | 2,137,699 | 53,147 |
| Common stocks | | |
| | | Value |
| Health care (continued) | Shares | (000) |
| | | |
| Galapagos NV1,2,3 | 2,378,928 | $ 52,437 |
| Teleflex Inc. | 460,700 | 49,406 |
| Genomma Lab Internacional, SAB de CV, Series B1 | 18,433,000 | 47,397 |
| Fleury SA, ordinary nominative | 5,540,900 | 47,082 |
| Nihon Kohden Corp.3 | 1,129,600 | 44,969 |
| bluebird bio, Inc.1,2 | 1,903,048 | 43,275 |
| GW Pharmaceuticals PLC (ADR)1 | 726,500 | 43,132 |
| Hologic, Inc.1 | 1,965,000 | 42,248 |
| Covance Inc.1 | 400,000 | 41,560 |
| ArthroCare Corp.1 | 828,725 | 39,936 |
| Orexigen Therapeutics, Inc.1,2 | 6,080,200 | 39,521 |
| Virbac SA3 | 160,200 | 35,777 |
| Fisher & Paykel Healthcare Corp. Ltd.3 | 9,663,437 | 35,710 |
| PerkinElmer, Inc. | 745,000 | 33,570 |
| Prothena Corp. PLC1 | 826,620 | 31,668 |
| Sirona Dental Systems, Inc.1 | 420,000 | 31,361 |
| MD Medical Group Investments PLC (GDR)3 | 2,272,000 | 19,289 |
| MD Medical Group Investments PLC (GDR)3,4 | 1,176,761 | 9,991 |
| Team Health Holdings, Inc.1 | 637,300 | 28,519 |
| Pharmacyclics, Inc.1 | 283,656 | 28,428 |
| HeartWare International, Inc.1 | 300,000 | 28,134 |
| Tong Ren Tang Technologies Co., Ltd., Class H3 | 8,435,000 | 27,174 |
| Zeltiq Aesthetics, Inc.1 | 1,300,331 | 25,500 |
| Neovasc Inc.1,2 | 4,192,000 | 25,406 |
| XenoPort, Inc.1,2 | 4,769,000 | 24,656 |
| Premier, Inc., Class A1 | 725,000 | 23,889 |
| ChemoCentryx, Inc.1,2 | 3,426,800 | 22,720 |
| Eurofins Scientific SE, non-registered shares3 | 73,500 | 22,011 |
| KYTHERA Biopharmaceuticals, Inc.1 | 547,300 | 21,761 |
| Ironwood Pharmaceuticals, Inc., Class A1 | 1,650,000 | 20,328 |
| QIAGEN NV1,3 | 968,751 | 20,318 |
| Nobel Biocare Holding AG3 | 1,350,000 | 19,442 |
| Neurocrine Biosciences, Inc.1 | 1,150,200 | 18,518 |
| Seattle Genetics, Inc.1 | 372,000 | 16,948 |
| Brookdale Senior Living Inc.1 | 490,000 | 16,420 |
| Castlight Health, Inc., Class B1 | 747,900 | 15,870 |
| CONMED Corp. | 365,000 | 15,859 |
| Wright Medical Group, Inc.1 | 438,485 | 13,624 |
| Achillion Pharmaceuticals, Inc.1 | 4,130,000 | 13,588 |
| Idenix Pharmaceuticals, Inc.1 | 2,180,000 | 13,145 |
| Orthofix International NV1 | 377,000 | 11,367 |
| Medivation, Inc.1 | 160,000 | 10,299 |
| Tsukui Corp.3 | 895,000 | 8,710 |
| Krka, dd, Novo mesto3 | 99,787 | 8,299 |
| Pharmstandard OJSC (GDR)1,3 | 924,610 | 8,045 |
| Tsumura & Co.3 | 315,000 | 7,587 |
| | | 3,859,329 |
| | | |
| Information technology 11.64% | | |
| | | |
| AAC Technologies Holdings Inc.3 | 29,287,250 | 152,715 |
| OpenTable, Inc.1,2 | 1,590,000 | 122,319 |
| Demandware, Inc.1,2 | 1,785,000 | 114,347 |
| TriQuint Semiconductor, Inc.1 | 7,735,000 | 103,572 |
| Common stocks | | |
| | | Value |
| Information technology (continued) | Shares | (000) |
| | | |
| Vistaprint NV1,2 | 1,860,000 | $91,549 |
| Concur Technologies, Inc.1 | 799,869 | 79,243 |
| Palo Alto Networks, Inc.1 | 1,132,350 | 77,679 |
| Hamamatsu Photonics KK3 | 1,665,100 | 75,395 |
| National Instruments Corp. | 2,594,264 | 74,429 |
| MercadoLibre, Inc. | 751,000 | 71,428 |
| Playtech PLC3 | 6,084,421 | 68,597 |
| Topcon Corp.3 | 4,002,900 | 65,451 |
| Halma PLC3 | 6,790,105 | 65,257 |
| ASM International NV3 | 1,574,000 | 63,266 |
| MICROS Systems, Inc.1 | 1,149,000 | 60,817 |
| Finisar Corp.1 | 2,232,100 | 59,173 |
| Xoom Corp.1,2 | 3,013,000 | 58,814 |
| CDW Corp. | 2,060,000 | 56,526 |
| Dolby Laboratories, Inc., Class A1 | 1,268,400 | 56,444 |
| Semiconductor Manufacturing International Corp.1,3 | 717,250,000 | 53,644 |
| Anritsu Corp.3 | 4,555,000 | 52,209 |
| Spectris PLC3 | 1,314,600 | 50,927 |
| OBIC Co., Ltd.3 | 1,583,300 | 49,907 |
| Hittite Microwave Corp. | 760,950 | 47,970 |
| Alcatel-Lucent1,3 | 11,726,125 | 46,333 |
| Oxford Instruments PLC3 | 2,102,800 | 44,478 |
| Montage Technology Group Ltd.1,2 | 2,199,800 | 44,040 |
| International Rectifier Corp.1 | 1,497,734 | 41,038 |
| Info Edge (India) Ltd.3 | 3,860,000 | 40,083 |
| ASML Holding NV (New York registered) | 408,321 | 38,121 |
| Ellie Mae, Inc.1 | 1,191,000 | 34,348 |
| Zebra Technologies Corp., Class A1 | 486,475 | 33,766 |
| Trimble Navigation Ltd.1 | 840,000 | 32,651 |
| FireEye, Inc.1 | 517,100 | 31,838 |
| Power Integrations, Inc. | 477,100 | 31,384 |
| QIWI PLC, Class B (ADR) | 870,000 | 30,145 |
| Autodesk, Inc.1 | 605,000 | 29,754 |
| Cray Inc.1 | 795,229 | 29,678 |
| Itron, Inc.1 | 815,000 | 28,965 |
| iEnergizer Ltd.1,2,3 | 7,650,500 | 27,741 |
| CoStar Group, Inc.1 | 147,700 | 27,581 |
| Ultimate Software Group, Inc.1 | 193,600 | 26,523 |
| SUNeVision Holdings Ltd.3 | 78,800,000 | 25,812 |
| AVEVA Group PLC3 | 736,800 | 25,756 |
| Cvent, Inc.1 | 670,000 | 24,220 |
| Liquidity Services, Inc.1 | 925,000 | 24,096 |
| KLA-Tencor Corp. | 340,650 | 23,553 |
| Inphi Corp.1 | 1,461,199 | 23,511 |
| Compuware Corp. | 2,186,752 | 22,961 |
| Rally Software Development Corp.1,2 | 1,700,000 | 22,746 |
| Nemetschek AG3 | 274,258 | 22,671 |
| Blackhawk Network Holdings, Inc., Class A1 | 923,977 | 22,536 |
| Hana Microelectronics PCL3 | 23,935,000 | 22,497 |
| ASM Pacific Technology Ltd.3 | 2,314,700 | 22,471 |
| Belden Inc. | 300,000 | 20,880 |
| NHN Entertainment Corp.1,3 | 231,000 | 20,876 |
| Pandora Media, Inc.1 | 675,000 | 20,466 |
| Common stocks | | |
| | | Value |
| Information technology (continued) | Shares | (000) |
| | | |
| SciQuest, Inc.1 | 740,000 | $ 19,991 |
| Suprema Inc.1,2,3 | 868,200 | 19,667 |
| Kingdee International Software Group Co. Ltd.1,3 | 50,000,000 | 19,226 |
| Guidewire Software, Inc.1 | 350,000 | 17,167 |
| Agilysys, Inc.1,2 | 1,280,591 | 17,160 |
| Persistent Systems Ltd.3 | 956,000 | 16,799 |
| MagnaChip Semiconductor Corp.1 | 1,200,000 | 16,728 |
| DeNA Co., Ltd.3 | 917,000 | 16,537 |
| Gogo Inc.1 | 800,000 | 16,432 |
| Semtech Corp.1 | 620,000 | 15,711 |
| Alten SA, non-registered shares3 | 250,000 | 13,434 |
| Demand Media, Inc.1 | 2,696,660 | 13,079 |
| Kapsch TrafficCom AG, non-registered shares3 | 227,001 | 12,483 |
| SINA Corp.1 | 204,000 | 12,324 |
| SPS Commerce, Inc.1 | 200,000 | 12,290 |
| Immersion Corp.1 | 1,105,365 | 11,662 |
| Vocus, Inc.1 | 859,333 | 11,455 |
| Covisint Corp.1 | 1,472,000 | 10,790 |
| Wacom Co., Ltd.3 | 1,415,000 | 9,917 |
| Youku Tudou Inc., Class A (ADR)1 | 300,000 | 8,412 |
| Angie’s List, Inc.1 | 660,000 | 8,039 |
| Tangoe, Inc.1 | 422,400 | 7,852 |
| PChome Online Inc.3 | 954,788 | 7,154 |
| Cognex Corp. | 161,202 | 5,458 |
| Yaskawa Electric Corp.3 | 375,000 | 5,172 |
| Kingboard Laminates Holdings Ltd.3 | 13,477,281 | 4,935 |
| NetSuite Inc.1 | 50,000 | 4,741 |
| China High Precision Automation Group Ltd.1,2,3 | 53,032,000 | 684 |
| Remark Media, Inc.1 | 108,065 | 595 |
| | | 3,071,091 |
| Industrials 11.45% | | |
| | | |
| Moog Inc., Class A1 | 2,597,800 | 170,182 |
| American Airlines Group Inc.1 | 4,627,000 | 169,348 |
| ITT Corp. | 2,826,621 | 120,866 |
| Intertek Group PLC3 | 1,825,000 | 93,659 |
| Northgate PLC2,3 | 10,626,805 | 92,188 |
| CIMC Enric Holdings Ltd.3 | 56,417,000 | 79,742 |
| Oshkosh Corp. | 1,340,000 | 78,886 |
| BELIMO Holding AG3 | 28,050 | 77,749 |
| Loomis AB, Class B3 | 2,883,452 | 74,129 |
| MonotaRO Co., Ltd.3 | 2,553,800 | 65,385 |
| IDEX Corp. | 875,000 | 63,779 |
| MITIE Group PLC3 | 11,709,000 | 63,670 |
| KEYW Holding Corp.1,2 | 2,836,400 | 53,069 |
| Waste Connections, Inc. | 1,206,000 | 52,895 |
| Boer Power Holdings Ltd.2,3 | 39,202,000 | 52,870 |
| OSG Corp.3 | 3,028,300 | 52,823 |
| PARK24 Co., Ltd.3 | 2,765,000 | 52,485 |
| Spirax-Sarco Engineering PLC3 | 1,078,000 | 52,074 |
| AirAsia Bhd.3 | 65,888,700 | 51,441 |
| Continental Building Products, Inc.1,2 | 2,705,000 | 50,962 |
| Clean Harbors, Inc.1 | 919,500 | 50,379 |
| Common stocks | | |
| | | Value |
| Industrials (continued) | Shares | (000) |
| | | |
| Polypore International, Inc.1 | 1,397,100 | $47,795 |
| Jaiprakash Associates Ltd.3 | 52,425,000 | 47,078 |
| Landstar System, Inc. | 791,000 | 46,843 |
| NORMA Group SE, non-registered shares3 | 872,600 | 46,280 |
| Exponent, Inc. | 616,400 | 46,267 |
| Alliance Global Group, Inc.3 | 66,295,000 | 42,135 |
| Globaltrans Investment PLC (GDR)3 | 2,095,703 | 24,167 |
| Globaltrans Investment PLC (GDR)3,4 | 1,529,400 | 17,637 |
| Danieli & C. Officine Meccaniche SpA, nonconvertible shares3 | 1,697,903 | 39,060 |
| Harmonic Drive Systems Inc.3 | 1,232,400 | 37,459 |
| Masco Corp. | 1,625,000 | 36,091 |
| Chart Industries, Inc.1 | 443,700 | 35,296 |
| TransDigm Group Inc. | 190,000 | 35,188 |
| Japan Airport Terminal Co. Ltd.3 | 1,356,000 | 35,142 |
| Watsco, Inc. | 350,000 | 34,969 |
| Stock Building Supply Holdings, Inc.1,2 | 1,685,000 | 34,239 |
| King Slide Works Co., Ltd.3 | 2,459,000 | 33,572 |
| Mistras Group, Inc.1,2 | 1,460,000 | 33,244 |
| Johnson Electric Holdings Ltd.3 | 31,420,000 | 29,057 |
| Takeuchi Mfg. Co., Ltd.2,3 | 1,117,000 | 28,777 |
| Meggitt PLC3 | 3,470,000 | 27,817 |
| Hamburger Hafen und Logistik AG3 | 1,074,130 | 25,829 |
| Graco Inc. | 340,000 | 25,412 |
| Pegasus Hava Tasimaciligi AS1,3 | 1,885,000 | 25,250 |
| ARC Document Solutions, Inc.1,2 | 3,332,093 | 24,791 |
| Mills Estruturas e Serviços de Engenharia SA, ordinary nominative | 1,905,000 | 23,508 |
| Regus PLC3 | 6,205,000 | 22,829 |
| Flughafen Zürich AG3 | 35,400 | 22,761 |
| BTS Rail Mass Transit Growth Infrastructure Fund3 | 71,183,700 | 20,974 |
| Avis Budget Group, Inc.1 | 420,000 | 20,454 |
| Frigoglass SAIC1,2,3 | 3,052,380 | 19,782 |
| Carborundum Universal Ltd.3 | 7,985,000 | 19,628 |
| Beacon Roofing Supply, Inc.1 | 500,000 | 19,330 |
| AIA Engineering Ltd.3 | 1,897,981 | 17,753 |
| PT AKR Corporindo Tbk3 | 40,759,000 | 17,456 |
| Okabe Co., Ltd.3 | 1,208,000 | 17,346 |
| Wienerberger AG3 | 868,000 | 16,585 |
| SATS Ltd.3 | 6,770,000 | 16,396 |
| Nok Airlines PCL3 | 26,730,400 | 15,481 |
| Houston Wire & Cable Co.2 | 1,150,000 | 15,100 |
| Gujarat Pipavav Port Ltd.1,3 | 10,180,000 | 14,989 |
| Amara Raja Batteries Ltd.3 | 2,173,886 | 14,351 |
| DKSH Holding AG3 | 179,551 | 14,291 |
| Cummins India Ltd.3 | 1,418,800 | 14,173 |
| Robert Half International Inc. | 337,000 | 14,137 |
| Geberit AG3 | 41,000 | 13,443 |
| USG Corp.1 | 397,000 | 12,990 |
| Singamas Container Holdings Ltd.3 | 56,310,000 | 12,922 |
| MTU Aero Engines AG3 | 134,000 | 12,463 |
| MSA Safety Inc. | 216,000 | 12,312 |
| SAI Global Ltd.3 | 3,158,843 | 12,015 |
| Teleperformance SA3 | 204,247 | 11,860 |
| Cebu Air, Inc.3 | 10,800,000 | 11,558 |
| Common stocks | | |
| | | Value |
| Industrials (continued) | Shares | (000) |
| | | |
| National Express Group PLC3 | 2,363,800 | $ 11,045 |
| Proto Labs, Inc.1 | 160,452 | 10,858 |
| Andritz AG3 | 170,000 | 10,515 |
| Shun Tak Holdings Ltd.3 | 19,636,000 | 10,110 |
| SIA Engineering Co. Ltd.3 | 2,196,000 | 8,457 |
| Pfeiffer Vacuum Technology AG, non-registered shares3 | 64,000 | 7,818 |
| Pacific Basin Shipping Ltd.3 | 11,650,000 | 7,468 |
| Pipavav Defence and Offshore Engineering Co. Ltd.1,3 | 9,925,000 | 5,896 |
| TD Power Systems Ltd.3 | 1,209,982 | 5,446 |
| China Automation Group Ltd.3 | 27,000,000 | 4,538 |
| Blount International, Inc.1 | 228,725 | 2,722 |
| | | 3,019,736 |
| | | |
| Financials 9.88% | | |
| | | |
| SVB Financial Group1 | 1,355,900 | 174,613 |
| Financial Engines, Inc. | 2,238,430 | 113,667 |
| Validus Holdings, Ltd. | 2,608,000 | 98,348 |
| GT Capital Holdings, Inc.3 | 4,782,200 | 83,792 |
| Onex Corp. | 1,380,600 | 76,654 |
| Ocwen Financial Corp.1 | 1,900,000 | 74,442 |
| Altisource Residential Corp. | 2,244,910 | 70,849 |
| Altisource Asset Management Corp.1 | 64,707 | 69,537 |
| East West Bancorp, Inc. | 1,855,000 | 67,707 |
| Tokyo Tatemono Co., Ltd.3 | 7,865,000 | 67,300 |
| Greenhill & Co., Inc. | 1,263,500 | 65,677 |
| Kotak Mahindra Bank Ltd.3 | 4,940,000 | 64,549 |
| First Republic Bank | 1,141,825 | 61,647 |
| PacWest Bancorp | 1,331,000 | 57,246 |
| HCC Insurance Holdings, Inc. | 1,257,000 | 57,181 |
| Sterling Financial Corp.4 | 1,666,668 | 55,550 |
| Sterling Financial Corp. | 42,500 | 1,417 |
| Fibra Uno Administración, SA de CV | 15,355,891 | 49,671 |
| Umpqua Holdings Corp. | 2,648,000 | 49,359 |
| BOK Financial Corp. | 680,000 | 46,954 |
| VZ Holding AG3 | 263,200 | 44,675 |
| Foxtons Group PLC1,3 | 7,153,390 | 42,938 |
| ICG Group, Inc.1,2 | 2,094,000 | 42,759 |
| Talmer Bancorp, Inc., Class A1,3 | 3,068,056 | 42,671 |
| Home Loan Servicing Solutions, Ltd. | 1,969,000 | 42,530 |
| EFG International AG3 | 3,208,754 | 41,731 |
| Kemper Corp. | 1,000,000 | 39,170 |
| Springleaf Holdings, Inc.1 | 1,464,200 | 36,825 |
| LSL Property Services PLC3 | 4,991,394 | 36,204 |
| ING Vysya Bank Ltd.3 | 3,271,217 | 34,775 |
| Banco Espírito Santo, SA1,3 | 18,202,870 | 34,184 |
| Altisource Portfolio Solutions SA1 | 273,000 | 33,213 |
| East West Banking Corp.1,3 | 49,110,000 | 31,321 |
| Avanza Bank Holding AB3 | 805,000 | 30,930 |
| Leucadia National Corp. | 1,104,516 | 30,926 |
| Texas Capital Bancshares, Inc.1 | 461,700 | 29,983 |
| Security Bank Corp.3 | 12,645,572 | 29,891 |
| Shriram Transport Finance Co. Ltd.3 | 2,300,363 | 29,640 |
| Janus Capital Group Inc. | 2,543,000 | 27,642 |
| Common stocks | | |
| | | Value |
| Financials (continued) | Shares | (000) |
| | | |
| GRUH Finance Ltd.3 | 5,450,000 | $ 26,979 |
| Old Republic International Corp. | 1,635,000 | 26,814 |
| K. Wah International Holdings Ltd.3 | 33,688,046 | 22,688 |
| IDFC Ltd.3 | 11,000,000 | 22,632 |
| Mercury General Corp. | 500,000 | 22,540 |
| Redwood Trust, Inc. | 1,110,000 | 22,511 |
| Tune Ins Holdings Bhd.1,3 | 36,816,000 | 22,209 |
| Banca Generali SpA3 | 673,069 | 22,204 |
| Home Federal Bancorp, Inc.2 | 1,384,249 | 21,539 |
| Endurance Specialty Holdings Ltd. | 400,000 | 21,532 |
| Popular, Inc.1 | 656,000 | 20,329 |
| RenaissanceRe Holdings Ltd. | 205,000 | 20,008 |
| Manappuram Finance Ltd.2,3 | 54,930,986 | 19,849 |
| Signature Bank1 | 157,800 | 19,818 |
| Bank of Ireland1,3 | 45,456,798 | 19,448 |
| CapitalSource, Inc. | 1,285,000 | 18,748 |
| Crédito Real, SAB de CV | 10,961,030 | 18,034 |
| Chailease Holding Co. Ltd.3 | 6,420,000 | 15,467 |
| TCS Group Holding PLC (GDR)1,3,4 | 1,046,200 | 8,484 |
| TCS Group Holding PLC (GDR)1,3 | 839,700 | 6,810 |
| Inversiones La Construcción SA | 1,122,644 | 15,149 |
| CenterState Banks, Inc. | 1,375,400 | 15,019 |
| Mahindra Lifespace Developers Ltd.2,3 | 2,157,380 | 13,279 |
| Macquarie Mexican REIT | 6,141,000 | 11,515 |
| Kenedix, Inc.1,3 | 3,110,000 | 10,026 |
| Sino-Ocean Land Holdings Ltd.3 | 18,296,400 | 10,024 |
| Bao Viet Holdings3 | 4,137,486 | 8,846 |
| First Southern Bancorp, Inc.1,2,5 | 1,344,915 | 8,137 |
| Mapletree Greater China Commercial Trust3 | 12,089,000 | 7,843 |
| Starwood Property Trust, Inc. | 330,000 | 7,785 |
| Metropolitan Bank & Trust Co.1,3 | 3,252,015 | 5,620 |
| Soundwill Holdings Ltd.3 | 2,960,000 | 5,427 |
| | | 2,605,481 |
| Materials 4.83% | | |
| | | |
| James Hardie Industries PLC (CDI)3 | 9,733,929 | 129,457 |
| Chr. Hansen Holding A/S3 | 2,617,000 | 103,826 |
| AptarGroup, Inc. | 1,400,000 | 92,540 |
| Silgan Holdings Inc. | 1,439,500 | 71,284 |
| OM Group, Inc.2 | 1,909,000 | 63,417 |
| PolyOne Corp. | 1,717,000 | 62,945 |
| Goodpack Ltd.2,3 | 30,777,000 | 52,421 |
| Synthomer PLC3 | 10,400,000 | 49,134 |
| Yingde Gases Group Co. Ltd.3 | 46,640,000 | 44,786 |
| Boral Ltd.3 | 7,960,000 | 41,741 |
| Sealed Air Corp. | 1,135,000 | 37,307 |
| CPMC Holdings Ltd.3 | 46,500,000 | 36,986 |
| FUCHS PETROLUB SE3 | 358,647 | 31,643 |
| Mayr-Melnhof Karton AG, non-registered shares3 | 240,300 | 30,069 |
| Schweitzer-Mauduit International, Inc. | 704,418 | 30,001 |
| Stillwater Mining Co.1 | 1,990,000 | 29,472 |
| African Minerals Ltd.1,3 | 11,233,121 | 29,317 |
| Gem Diamonds Ltd.1,2,3 | 9,611,686 | 27,721 |
| Common stocks | | |
| | | Value |
| Materials (continued) | Shares | (000) |
| | | |
| United States Steel Corp. | 953,600 | $ 26,329 |
| Kenmare Resources PLC1,3 | 109,972,782 | 25,663 |
| Sirius Minerals PLC1,2,3 | 139,533,460 | 25,005 |
| Nampak Ltd.3 | 7,217,000 | 24,589 |
| Valspar Corp. | 333,700 | 24,066 |
| Tiangong International Co. Ltd.3 | 96,106,000 | 23,170 |
| Symrise AG3 | 416,000 | 20,795 |
| Arkema SA3 | 180,000 | 20,417 |
| Croda International PLC3 | 470,000 | 20,013 |
| Huhtamäki Oyj3 | 724,000 | 19,884 |
| Yip’s Chemical Holdings Ltd.3 | 26,888,000 | 18,615 |
| Lonmin PLC1,3 | 2,910,000 | 13,901 |
| Mountain Province Diamonds Inc.1 | 2,222,222 | 10,533 |
| UPL Ltd.3 | 2,950,000 | 9,125 |
| Greatview Aseptic Packaging Co. Ltd.3 | 14,771,000 | 7,846 |
| J.K. Cement Ltd.3 | 1,817,212 | 7,295 |
| Duluth Metals Ltd.1,2 | 7,699,700 | 4,527 |
| Cape Lambert Resources Ltd.1,2,3 | 47,330,825 | 4,391 |
| Hummingbird Resources PLC1,3 | 1,650,000 | 1,472 |
| China Forestry Holdings Co., Ltd.1,3 | 29,142,000 | 1,315 |
| Eastern Platinum Ltd.1 | 13,500,000 | 977 |
| Rusoro Mining Ltd.1 | 21,437,000 | 679 |
| Vatukoula Gold Mines PLC1,3 | 3,214,081 | 342 |
| | | 1,275,016 |
| Consumer staples 4.72% | | |
| | | |
| Super Group Ltd.2,3 | 44,597,000 | 123,548 |
| Puregold Price Club, Inc.3 | 112,906,300 | 111,068 |
| Raia Drogasil SA, ordinary nominative | 10,577,374 | 91,509 |
| PZ Cussons PLC3 | 15,105,000 | 88,734 |
| Emmi AG3 | 240,600 | 86,743 |
| Glanbia PLC3 | 4,737,600 | 72,725 |
| Stock Spirits Group PLC1,2,3 | 11,690,000 | 57,440 |
| Emami Ltd.3 | 7,815,000 | 56,950 |
| Hypermarcas SA, ordinary nominative | 7,392,600 | 53,465 |
| Davide Campari-Milano SpA3 | 5,388,500 | 44,175 |
| Nu Skin Enterprises, Inc., Class A | 490,200 | 40,613 |
| LT Group, Inc.3 | 81,670,000 | 31,762 |
| Origin Enterprises PLC3 | 2,896,024 | 30,353 |
| O’Key Group SA (GDR)3 | 3,325,000 | 29,982 |
| COSMOS Pharmaceutical Corp.3 | 242,200 | 28,277 |
| Sprouts Farmers Market, Inc.1 | 780,600 | 28,125 |
| VST Industries Ltd.2,3 | 1,003,400 | 27,664 |
| Eurocash SA3 | 2,068,000 | 27,298 |
| Bizim Toptan Satis Magazalari AS, non-registered shares2,3 | 2,466,000 | 23,619 |
| Herbalife Ltd. | 380,000 | 21,763 |
| Fresh Del Monte Produce Inc. | 750,000 | 20,678 |
| Petra Foods Ltd.3 | 6,683,000 | 19,630 |
| PriceSmart, Inc. | 167,700 | 16,926 |
| Cosco Capital, Inc.1,3 | 78,351,300 | 16,578 |
| Kernel Holding SA1,3 | 1,642,578 | 15,816 |
| Coca-Cola Icecek AS, Class C3 | 567,512 | 13,646 |
| Wumart Stores, Inc., Class H3 | 11,980,000 | 11,746 |
| Common stocks | | |
| | | Value |
| Consumer staples (continued) | Shares | (000) |
| | | |
| PT Sumber Alfaria Trijaya Tbk3 | 222,505,000 | $ 10,196 |
| Sundrug Co., Ltd.3 | 194,900 | 8,891 |
| Real Nutriceutical Group Ltd.3 | 39,400,000 | 8,839 |
| Radico Khaitan Ltd.3 | 3,600,000 | 8,792 |
| Tilaknager Industries Ltd.2,3 | 8,890,000 | 8,295 |
| R.E.A. Holdings PLC3 | 800,000 | 6,133 |
| HITEJINRO CO., LTD.3 | 200,679 | 4,428 |
| | | 1,246,407 |
| Energy 4.45% | | |
| | | |
| InterOil Corp.1 | 2,344,500 | 151,830 |
| Ophir Energy PLC1,2,3 | 33,820,898 | 135,290 |
| Peyto Exploration & Development Corp. | 2,020,400 | 68,937 |
| Diamondback Energy, Inc.1 | 982,000 | 66,098 |
| Africa Oil Corp.1 | 5,371,067 | 36,001 |
| Africa Oil Corp. (SEK denominated)1,3 | 3,923,713 | 26,368 |
| Bonanza Creek Energy, Inc.1 | 1,254,300 | 55,691 |
| Keyera Corp. | 871,800 | 55,273 |
| C&J Energy Services, Inc.1 | 1,849,000 | 53,917 |
| Nostrum Oil & Gas LP (GDR)3,4 | 4,669,500 | 49,102 |
| Nostrum Oil & Gas LP (GDR)3 | 353,650 | 3,719 |
| Concho Resources Inc.1 | 403,000 | 49,368 |
| Paramount Resources Ltd.1 | 1,105,000 | 47,669 |
| Ultra Petroleum Corp.1 | 1,580,000 | 42,486 |
| Heritage Oil Ltd.1,3 | 10,628,000 | 42,162 |
| SBM Offshore NV1,3 | 1,387,670 | 25,255 |
| Oasis Petroleum Inc.1 | 600,000 | 25,038 |
| BNK Petroleum Inc.1,2 | 12,804,914 | 23,629 |
| Gulf Keystone Petroleum Ltd.1,3,4 | 15,715,000 | 22,634 |
| Tourmaline Oil Corp.1 | 410,000 | 19,382 |
| KrisEnergy Ltd.1,3 | 32,474,000 | 19,216 |
| Core Laboratories NV | 90,000 | 17,860 |
| Genel Energy PLC1,3 | 1,067,800 | 17,501 |
| Prosafe SE3 | 2,029,000 | 16,257 |
| Exillon Energy PLC1,3 | 7,684,660 | 16,048 |
| Lekoil Ltd. (CDI)1,2,3 | 17,002,425 | 14,939 |
| Amerisur Resources PLC1,3 | 16,000,000 | 14,744 |
| Aker Solutions ASA3 | 762,000 | 11,866 |
| Falkland Oil and Gas Ltd.1,3 | 24,225,000 | 10,297 |
| San Leon Energy PLC1,2,3 | 155,300,000 | 9,274 |
| Tethys Petroleum Ltd.1 | 12,161,000 | 5,940 |
| Tethys Petroleum Ltd. (GBP denominated)1,3 | 1,147,487 | 582 |
| African Petroleum Corp. Ltd.1,3 | 21,954,576 | 5,701 |
| Hunting PLC3 | 350,000 | 5,035 |
| Borders & Southern Petroleum PLC1,3 | 20,265,000 | 4,018 |
| Coal of Africa Ltd.1,3 | 32,410,123 | 2,337 |
| Termbray Petro-king Oilfield Services Ltd.1,3 | 3,119,000 | 1,206 |
| Range Resources Ltd.1,3 | 100,000,000 | 1,191 |
| Esrey Energy Ltd.1 | 650,000 | 147 |
| | | 1,174,008 |
| | | |
| Common stocks | | |
| | | Value |
| Utilities 1.90% | Shares | (000) |
| | | |
| ENN Energy Holdings Ltd.3 | 30,574,296 | $ 213,749 |
| Infraestructura Energética Nova, SAB de CV | 14,857,600 | 76,886 |
| APR Energy PLC3 | 4,181,600 | 56,312 |
| Manila Water Co., Inc.3 | 95,875,300 | 51,124 |
| Greenko Group PLC1,2,3 | 9,748,155 | 28,301 |
| Ratchaburi Electricity Generating Holding PCL3 | 8,350,000 | 13,317 |
| Ratchaburi Electricity Generating Holding PCL, nonvoting depository receipts3 | 7,945,000 | 12,671 |
| CESC Ltd.3 | 2,250,000 | 18,957 |
| Mytrah Energy Ltd.1,2,3 | 10,418,000 | 15,410 |
| Energy World Corp. Ltd.1,3 | 47,700,000 | 14,407 |
| | | 501,134 |
| | | |
| Telecommunication services 1.39% | | |
| | | |
| Telephone and Data Systems, Inc. | 3,021,600 | 79,196 |
| Cogent Communications Group, Inc. | 1,765,000 | 62,710 |
| Reliance Communications Ltd.3 | 18,551,252 | 40,116 |
| Total Access Communication PCL3 | 9,964,000 | 35,863 |
| United States Cellular Corp. | 470,000 | 19,275 |
| T-Mobile US, Inc. | 576,650 | 19,047 |
| tw telecom inc.1 | 500,000 | 15,630 |
| Iridium Communications Inc.1 | 2,047,288 | 15,375 |
| Visto Corp.1,3,5 | 3,636,364 | 14,945 |
| PT Sarana Menara Nusantara Tbk1,3 | 39,965,000 | 13,970 |
| Globe Telecom, Inc.3 | 365,000 | 13,544 |
| NII Holdings, Inc., Class B1,2 | 11,042,000 | 13,140 |
| NewSat Ltd.1,3 | 26,555,563 | 10,101 |
| Hutchison Telecommunications Hong Kong Holdings Ltd.3 | 28,662,000 | 9,543 |
| Hellenic Telecommunications Organization SA1,3 | 275,000 | 4,545 |
| | | 367,000 |
| | | |
| Miscellaneous 4.95% | | |
| | | |
| Other common stocks in initial period of acquisition | | 1,305,335 |
| Total common stocks (cost: $16,236,771,000) | | 23,628,074 |
| Preferred securities 0.01% | | |
| | | |
| Miscellaneous 0.01% | | |
| | | |
| Other preferred securities in initial period of acquisition | | 2,375 |
| Total preferred securities (cost: $1,425,000) | | 2,375 |
| Rights & warrants 0.06% | | |
| | | |
| Information technology 0.05% | | |
| | | |
| Foursquare Labs, Inc., warrants, expire 20331,3,5 | 1,163,990 | 11,812 |
| | | |
| Miscellaneous 0.01% | | |
| | | |
| Other rights & warrants in initial period of acquisition | | 3,371 |
| Total rights & warrants (cost: $926,000) | | 15,183 |
| Convertible securities 0.26% | | |
| | Shares or | Value |
| Information technology 0.14% | principal amount | (000) |
| | | |
| Foursquare Labs, Inc., Series D, convertible preferred3,5 | 1,551,988 | $ 20,000 |
| DocuSign, Inc., Series E, convertible preferred3,5 | 1,236,304 | 16,236 |
| DocuSign, Inc., Series B, convertible preferred3,5 | 66,593 | 874 |
| DocuSign, Inc., Series D, convertible preferred3,5 | 47,810 | 628 |
| DocuSign, Inc., Series B1, convertible preferred3,5 | 19,947 | 262 |
| | | 38,000 |
| | | |
| Financials 0.06% | | |
| | | |
| OFG Bancorp, Series C, 8.75% noncumulative convertible preferred5 | 6,000 | 9,540 |
| First Southern Bancorp, Inc., Series C, convertible preferred1,2,3,5 | 2,299 | 5,383 |
| | | 14,923 |
| | | |
| Energy 0.04% | | |
| | | |
| Clean Energy Fuels Corp. 5.25% convertible notes 20184 | $10,833,000 | 9,885 |
| | | |
| Telecommunication services 0.02% | | |
| | | |
| Iridium Communications Inc., Series A, convertible preferred4 | 60,000 | 6,049 |
| | | |
| Consumer discretionary 0.00% | | |
| | | |
| Spot Runner, Inc., Series C, convertible preferred1,3,5 | 1,626,016 | — |
| Total convertible securities (cost: $66,833,000) | | 68,857 |
| Bonds, notes & other debt instruments 0.26% | | |
| | Principal amount | |
| U.S. Treasury bonds & notes 0.25% | (000) | |
| | | |
| U.S. Treasury 0.25% 2015 | $ 19,700 | 19,722 |
| U.S. Treasury 4.00% 2015 | 45,500 | 47,044 |
| | | 66,766 |
| | | |
| Telecommunication services 0.01% | | |
| | | |
| NII Capital Corp. 10.00% 20162 | 5,000 | 2,062 |
| NII Capital Corp. 7.625% 20212 | 4,000 | 1,140 |
| | | 3,202 |
| | | |
| Total bonds, notes & other debt instruments (cost: $70,783,000) | | 69,968 |
| | | |
| Short-term securities 9.84% | | |
| | | |
| Federal Home Loan Bank 0.06%–0.165% due 4/11–11/26/2014 | 321,518 | 321,474 |
| Freddie Mac 0.095%–0.14% due 4/1–11/3/2014 | 320,800 | 320,716 |
| Fannie Mae 0.05%–0.135% due 5/14–11/24/2014 | 302,800 | 302,717 |
| International Bank for Reconstruction and Development 0.10%–0.14% due 5/12–8/22/2014 | 272,500 | 272,462 |
| Gotham Funding Corp. 0.145% due 4/8/20144 | 57,195 | 57,193 |
| Victory Receivables Corp. 0.16% due 4/11/20144 | 57,100 | 57,097 |
| Mitsubishi UFJ Trust and Banking Corp. 0.18% due 4/29/20144 | 50,000 | 49,992 |
| Thunder Bay Funding, LLC 0.18% due 5/20–5/27/20144 | 72,000 | 71,979 |
| Old Line Funding, LLC 0.17%–0.18% due 5/27–6/11/20144 | 41,926 | 41,921 |
| Svenska Handelsbanken Inc. 0.17% due 6/11–6/19/20144 | 105,400 | 105,362 |
| National Australia Funding (Delaware) Inc. 0.14%–0.16% due 4/7–4/23/20144 | 105,000 | 104,992 |
| U.S. Treasury Bills 0.058%–0.101% due 4/17–6/5/2014 | 93,000 | 92,998 |
| | | |
| | Principal amount | Value |
| Short-term securities | (000) | (000) |
| | | |
| KfW 0.11%–0.13% due 5/27–6/13/20144 | $82,000 | $ 81,981 |
| ANZ National (International) Ltd. 0.20% due 8/14/20144 | 77,300 | 77,237 |
| Sumitomo Mitsui Banking Corp. 0.15%–0.25% due 4/30–8/7/20144 | 72,450 | 72,409 |
| Electricité de France 0.13%–0.15% due 4/8–4/14/20144 | 62,100 | 62,097 |
| Province of Ontario 0.09%–0.10% due 4/1–4/24/2014 | 60,700 | 60,698 |
| Total Capital Canada Ltd. 0.07%–0.11% due 4/17–6/19/20144 | 55,000 | 54,987 |
| Nordea Bank AB 0.19% due 4/10/20144 | 53,300 | 53,298 |
| Mizuho Funding LLC 0.195% due 5/7/20144 | 52,400 | 52,390 |
| American Honda Finance Corp. 0.11% due 4/24/2014 | 50,000 | 49,997 |
| Federal Farm Credit Banks 0.14% due 9/5/2014 | 46,500 | 46,486 |
| Toyota Credit Canada Inc. 0.15% due 4/28/2014 | 41,700 | 41,697 |
| Toronto-Dominion Holdings USA Inc. 0.13% due 5/16/20144 | 35,000 | 34,995 |
| Bank of Nova Scotia 0.18% due 4/16/2014 | 30,700 | 30,699 |
| Kells Funding, LLC 0.20% due 8/18/20144 | 25,000 | 24,981 |
| Jupiter Securitization Co., LLC 0.28% due 11/13/20144 | 24,000 | 23,958 |
| BNP Paribas Finance Inc. 0.20% due 5/8/2014 | 20,000 | 19,996 |
| Roche Holdings, Inc. 0.075% due 4/10/20144 | 9,100 | 9,100 |
| Total short-term securities (cost: $2,595,745,000) | | 2,595,909 |
| Total investment securities (cost: $18,972,483,000) | | 26,380,366 |
| Other assets less liabilities | | 1,512 |
| Net assets | | $26,381,878 |
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.
1Security did not produce income during the last 12 months.
2Represents an affiliated company as defined under the Investment Company Act of 1940.
3Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in “Miscellaneous,” was $10,905,263,000, which represented 41.34% of the net assets of the fund. This amount includes $10,616,129,000 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.
4Acquired in a transaction exempt from registration under Rule 144A or 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 $1,215,331,000, which represented 4.61% of the net assets of the fund.
5Acquired 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 these holdings appear below.
| | | | | Percent |
| | Acquisition | Cost | Value | of net |
| | date(s) | (000) | (000) | assets |
| | | | | |
| Foursquare Labs, Inc., Series D, convertible preferred | 12/3/2013 | $ 20,000 | $20,000 | .08% |
| Foursquare Labs, Inc., warrants, expire 2033 | 12/3/2013 | — | 11,812 | .04 |
| DocuSign Inc., Series E, convertible preferred | 2/28/2014 | 16,236 | 16,236 | .06 |
| DocuSign Inc., Series B, convertible preferred | 2/28/2014 | 874 | 874 | .00 |
| DocuSign Inc., Series D, convertible preferred | 2/28/2014 | 628 | 628 | .00 |
| DocuSign Inc., Series B1, convertible preferred | 2/28/2014 | 262 | 262 | .00 |
| Visto Corp. | 8/27/2012 | 20,000 | 14,945 | .06 |
| OFG Bancorp, Series C, 8.75% noncumulative | | | | |
| convertible preferred | 6/28/2012 | 6,000 | 9,540 | .04 |
| First Southern Bancorp, Inc. | 12/17/2009 | 22,070 | 8,137 | .03 |
| First Southern Bancorp, Inc., Series C, convertible preferred | 12/17/2009 | — | 5,383 | .02 |
| Spot Runner, Inc. | 10/26/2006–3/20/2008 | 15,071 | — | .00 |
| Spot Runner, Inc., Series C, convertible preferred | 10/25/2006 | 6,000 | — | .00 |
| Fontainebleau Resorts LLC, Class A, nonvoting units | 10/5/2005–6/1/2007 | 21,500 | — | .00 |
| Total restricted securities | | $128,641 | $87,817 | .33% |
Key to abbreviations
ADR = American Depositary Receipts
CDI = CREST Depository Interest
GDR = Global Depositary Receipts
SDR = Swedish Depositary Receipts
CAD = Canadian dollars
GBP = British pounds
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 American Funds website at americanfunds.com.
MFGEFPX-035-0514O-S37668
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 directors 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 directors. 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) | Not applicable for filing of semi-annual reports to shareholders. |
| | |
| (a)(2) | The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | SMALLCAP WORLD FUND, INC. |
| | |
| | By /s/ Paul F. Roye |
| | Paul F. Roye, Executive Vice President and Principal Executive Officer |
| | |
| | Date: May 30, 2014 |
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/ Paul F. Roye |
Paul F. Roye, Executive Vice President and Principal Executive Officer |
| |
| Date: May 30, 2014 |
| By /s/ Jeffrey P. Regal |
Jeffrey P. Regal, Treasurer and Principal Financial Officer |
| |
| Date: May 30, 2014 |
