American Funds Amer Balanced A - IUE

American Funds Amer Balanced A
BALANCED
as of 09/30/2014
Investment Objective
Fund Overview
The investment objectives of the fund are: (1) conservation of capital, (2) current income and (3) longterm growth of capital and income.
Performance Overview
Cumulative %
Annualized %
Quarter Year
to Date to Date 1 Year 3 Year 5 Year 10 Year
American Funds Amer Balanced A
S&P 500 Daily Reinv IX
Lipper Mix Tgt All Gro Average
Lipper Rank / Count
0.61
1.13
-1.31
-
5.53
8.34
4.05
-
13.33
19.73
10.58
63 / 568
16.54
22.99
14.45
67 / 508
12.52
15.70
10.12
24 / 473
Calendar Year Performance
American Funds Amer Balanced A
S&P 500 Daily Reinv IX
Lipper M-A Tgt All G IX
7.27
8.11
6.45
71 / 318
Since
Incep
10.93
-
12/31/2013
40%
20%
0%
-20%
-40%
Time Period (Cumulative %)
American Funds Amer Balanced A
S&P 500 Daily Reinv IX
Lipper M-A Tgt All G IX
2006
11.81
15.79
13.55
2007
6.60
5.49
6.53
2008
-25.73
-37.00
-29.06
2009
21.08
26.46
26.23
2010
13.02
15.06
12.55
2011
3.82
2.11
-0.54
2012
14.19
16.00
13.67
2013
21.73
32.39
20.33
Data is historical. Past performance is not indicative of future results. Investment return and principal
value of shares will fluctuate. Upon redemption, shares may be worth more or less than their original
cost. The current performance may be higher or lower than the quoted performance. Performance
information as of the most recent month-end is available by calling 800-685-6474 or logging on to your
plan’s website. You may also call the Fund Management Company at 800-421-4225.
Lipper Classification
Mix Tgt All Gro
NASDAQ Ticker
ABALX
Inception Date
09/19/1932
Total Fund Assets ($M)
76,454.20
Gross Expense Ratio (%)
0.61
Gross Expense Ratio Per $1000
6.10
Net Expense Ratio (%)
0.61
Net Expense Ratio Per $1000
6.10
Expense Waiver Type
None
Expense Waiver Time Limit
None
Prospectus Benchmark
S&P 500 Daily Reinv IX
Portfolio Turnover (%)
55
Index Fund
No
Management Company
American Funds
333 South Hope Street 52nd Floor
Los Angeles CA 90071-1406
www.americanfunds.com
Fund Manager(s)
John H. Smet
Hilda L. Applbaum
Gregory D. Johnson
Alan N. Berro
Dina N. Perry
James R. Mulally
Eugene P. Stein
Jeffrey T. Lager
Asset Allocation (%)
Fund Tenure
1997
1999
2003
2006
2006
2006
2011
2011
06/30/2014
Equity 69.09
Fixed Income 32.02
Other 0.02
Cash -1.13
The numerical rank is the numerical position achieved by the Fund within its Lipper classification universe of
funds that existed for that time period. Lipper ranks mutual funds based on total return performance. Total return
performance includes the reinvestment of all income dividends and capital gains distributions. The rankings are
subject to change every month. Lipper rankings are not intended to predict future results, and Lipper does not “Other” assets may contain a combination of derivatives, commodities,
and/or collective investments.
guarantee the accuracy of the information.
Lipper Leaders - Overall
Total Return
Consistent
Return
Preservation
Expense
09/30/2014
Rating
Out of
Description
5
5
4
5
508
funds
Lipper Leader ratings for Total Return reflect funds’ historical total return performance relative to peers. Ratings for Total Return are computed for all
Lipper classifications with five or more distinct portfolios and span both equity and fixed-income funds.
505
funds
Lipper Leader ratings for Consistent Return reflect funds’ historic returns, adjusted for volatility, relative to peers. Ratings for Consistent Return are
computed for all Lipper classifications with five or more distinct portfolios and span both equity and fixed-income funds.
3,685
funds
Lipper Leader ratings for Preservation reflect funds’ historical loss avoidance relative to other funds within the same asset class. Scores for
Preservation are computed from three broad asset classes; equity funds, mixed-equity funds, and fixed-income (bond) funds.
160
funds
Lipper Leader ratings for Expense reflect funds’ expense minimization relative to peers with similar load structures. Ratings for Expense are
computed for all Lipper classifications with five or more distinct portfolios and span both equity and fixed-income funds.
Highest = 5 • 4 • 3 • 2 • 1 = Lowest
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Please see Additional Disclosure Information page for more information on Lipper Leaders.
American Funds Amer Balanced A
Top Holdings
Top Sector Allocation
06/30/2014
Holding Name
% TNA
Fixed Income
06/30/2014
% TNA
Microsoft Corp ORD
3.54
Govt. Agency Notes/Bonds
13.54
Wells Fargo & Co ORD
3.00
Corporate Notes/Bonds
11.26
Amazon.com Inc ORD
2.62
Mortgage Backed Securities
6.38
Home Depot Inc ORD
2.44
Asset Backed Securities
0.70
Boeing Co ORD
2.33
Municipal Bonds
0.13
American Express Co ORD
2.15
Merck & Co Inc ORD
2.08
Comcast Corp ORD
1.82
Berkshire Hathaway Inc ORD
1.74
Philip Morris International Inc ORD
1.68
Total
23.40
Top Sector Allocation1
Equity
06/30/2014
% TNA
Financials
15.11
Industrials
11.19
Consumer Services
9.67
Technology
8.57
Health Care
7.30
1
Top Country Allocation
06/30/2014
Country
United States
Switzerland
Netherlands
Canada
Taiwan
Fund Characteristics
Number of Equity Holdings
Avg Weighted Market Cap ($M)
Price to Earnings Ratio
Price to Book Ratio
Return on Equity (%)
% TNA
90.55
3.51
2.33
1.66
0.51
06/30/2014
112
130233.4
22.07
4.40
27.44
Number of Fixed Income Holdings
Average Duration (Years)
Effective Average Maturity (Years)
Nominal Average Maturity (Years)
1,021
4.98
9.56
9.62
Sector weightings are based on ICB Industries.
Risk Statistics - 3 Year
Fund
Benchmark
Definition
Standard Deviation
7.57
10.42
Standard deviation is a measure of risk that gauges the variability of actual returns from the expected values and the
dispersion of these variations over time.
Sharpe Ratio
2.04
2.02
Sharpe ratio is a measure that uses standard deviation and excess return to determine reward per unit of risk. The greater a
portfolio’s Sharpe ratio, the better its risk-adjusted performance has been.
Alpha*
0.04
0.00
Alpha measures a manager’s contribution to performance due to security selection or market timing relative to the index. A
positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%. Correspondingly, a similar negative alpha
would indicate an underperformance of 1%.
Beta*
0.72
1.00
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A
beta of 1 indicates that the security’s price will move with the market. A beta of less than 1 means that the security will be less
volatile than the market. A beta of greater than 1 indicates that the security’s price will be more volatile than the market.
R-Squared*
0.97
1.00
R-squared values range from 0 to 1. An R-squared of 1 means that all movements of a security are completely explained by
movements in the index. A low R-squared means you should ignore the beta.
*Statistics are measured against the Fund’s prospectus benchmark.
Before investing, consider the investment options’ or funds’ investment objectives, risks, charges, and expenses. Call 1-800-685-6474 or log on to your
plan’s website for an offering statement or prospectus and, if available, a summary prospectus containing this and other information. Read it carefully.
024071102
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American Funds Amer Balanced A
Additional Disclosure Information
Lipper Leaders Overall
This fund (in Lipper’s Mixed-Asset Target Alloc Growth Funds classification) received the following ratings for the 3-, 5-, and 10-year periods, respectively (number of
funds rated follows the rating in parentheses). Total Return: 5 (508 funds), 5 (473 funds), and 4 (318 funds). Consistent Return: 5 (505 funds), 5 (470 funds), and 5 (315
funds). Preservation (in Mixed Equity Funds asset class): 4 (3,685 funds), 4 (2,997 funds), and 4 (1,194 funds). Expense: 5 (160 funds), 5 (150 funds), and 5 (115
funds). Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. See Disclaimer Page for additional
information. Lipper Leaders ratings DO NOT take into account the effects of sales charges. The Lipper ratings are subject to change every month and are based on
an equal-weighted average of percentile ranks for the Total Return, Consistent Return, Preservation, and Expense metrics over three-, five-, and ten-year periods (if
applicable). The highest 20% of funds in each peer group are named Lipper Leaders or a 5, the next 20% receive a rating of 4, the middle 20% receive a rating of 3,
the next 20% receive a rating of 2, and the lowest 20% receive a rating of 1. For more information on Lipper Leaders, go to www.lipperweb.com.
Expense Information
The Gross Expense Ratio is the fund’s total operating expenses taken from the most recent prospectus. This ratio excludes waivers and/or expense reimbursements
the Fund Manager might apply. The Net Expense Ratio, also taken from the most recent prospectus, represents the expenses paid with inclusion of waivers and/or
expense reimbursements. When waivers and/or expense reimbursements are included, the Fund’s expenses will be lowered and performance will be higher for the
disclosed expense waiver period. Waiver and/or expense reimbursements can be voluntary or mandated by contract, and can expire either at a specific date, at will, or
indefinitely. Funds Closed to New Investors are not required to file a prospectus, thus the prospectus gross and net expense ratios may not be available. In the event
that the prospectus expense information is not available the expense ratio reported on the latest audited annual report will be provided.
Fees and expenses are only one of many factors to consider when you decide to invest in an option. You may also want to think about whether an investment in a
particular option, along with your other investments, will help you achieve your financial goals.
Fees and expenses for each investment option include the total annual operating expense (annual gross expense ratio), which reduces the investment’s rate of return,
along with any associated shareholder-type fees. The cumulative effect of fees and expenses can substantially reduce the growth of your retirement savings. Visit the
Department of Labor’s website at www.dol.gov/ebsa/publications/401k_employee .html for an example showing the long-term effect of fees and expenses.
Portfolio Turnover
A fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher
transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These transaction costs, which are not reflected in annual Fund
operating expenses or in the example, affect the fund’s performance.
Top Holdings, Asset Allocation, and Sector Weightings
Data is based on information collected from the investment company, is updated as of the date shown in the section’s title, and will vary over time. Asset Allocation may
equal less than or greater than 100% due to hedged funds or leveraged cash positions by the fund.
Lipper Index
Measures the unweighted average total return performance of either the ten or thirty largest share classes (as available) of funds for a Lipper Classification. The full list
of Lipper Index components is available directly from Lipper. Lipper Indices are unmanaged. It is not possible to invest in a Lipper Index.
Lipper Average
Measures the simple arithmetic average across all funds within the fund’s Lipper classificatoin. Lipper averages are unmanaged. It is not possible to invest in a Lipper
Average.
Prospectus Benchmark
An index assigned to the Fund by the portfolio’s manager to show how the Fund’s total return compares with those of an index measure of market performance. It is
not possible to invest in an index.
The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market, this world-renowned index includes a representative sample of 500 leading
companies in leading industries of the U.S. economy. Although the S&P 500 focuses on the Large-Cap segment of the market, with over 80% coverage of U.S. equities,
it is also an ideal proxy for the total market. The value of the index includes reinvestment of all dividends. An investor cannot invest directly in an index.
Lipper, a Thomson Reuters Company. Copyright 2014 Thomson Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content is expressly
prohibited without the prior written consent of Lipper. Lipper Fund Fact Sheets Service.
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American Funds Amer Balanced A
Supplemental Information
Principal Investment Strategies
The fund uses a balanced approach to invest in a broad range of securities, including common stocks and investment-grade bonds (rated Baa3 or better or BBBor better by Nationally Recognized Statistical Rating Organizations designated by the fund’s investment adviser or unrated but determined to be of equivalent
quality). The fund also invests in securities issued and guaranteed by the U.S. government and by federal agencies and instrumentalities. In addition, the fund
may invest a portion of its assets in common stocks, most of which have a history of paying dividends, bonds and other securities of issuers domiciled outside
the United States.
Normally the fund will maintain at least 50% of the value of its assets in common stocks and at least 25% of the value of its assets in debt securities, including
money market securities. Although the fund focuses on investments in medium to larger capitalization companies, the fund’s investments are not limited to a
particular capitalization size.
The investment adviser uses a system of multiple portfolio managers in managing the fund’s assets. Under this approach, the portfolio of the fund is divided into
segments managed by individual managers who decide how their respective segments will be invested.
The fund relies on the professional judgment of its investment adviser to make decisions about the fund’s portfolio investments. The basic investment philosophy
of the investment adviser is to seek to invest in attractively valued securities that, in its opinion, represent good, long-term investment opportunities. The investment
adviser believes that an important way to accomplish this is through fundamental analysis, which may include meeting with company executives and employees,
suppliers, customers and competitors. Securities may be sold when the investment adviser believes that they no longer represent relatively attractive investment
opportunities.
Principal Investment Risk
This section describes the principal risks associated with the fund’s principal investment strategies. You may lose money by investing in the fund.
The likelihood of loss may be greater if you invest for a shorter period of time.
Market conditions — The prices of, and the income generated by, the common stocks, bonds and other securities held by the fund may decline in response to
certain events taking place around the world, including those directly involving the issuers of securities held by the fund; conditions affecting the general economy;
overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions;
and currency, interest rate and commodity price fluctuations.
Investing in growth-oriented stocks — Growth-oriented common stocks and other equity-type securities (such as preferred stocks, convertible preferred stocks
and convertible bonds) may involve larger price swings and greater potential for loss than other types of investments.
Investing in income-oriented stocks — Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available
for dividend payments at, the companies in which the fund invests.
Investing in debt instruments — The prices of, and the income generated by, bonds and other debt securities held by the fund may be affected by changing interest
rates and by changes in the effective maturities and credit ratings of these securities.
Rising interest rates will generally cause the prices of bonds and other debt securities to fall. Falling interest rates may cause an issuer to redeem, call or refinance
a debt security before its stated maturity, which may result in the fund having to reinvest the proceeds in lower yielding securities. Longer maturity debt securities
generally have higher rates of interest and may be subject to greater price fluctuations than shorter maturity debt securities.
Bonds and other debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt
security will fail to make timely payments of principal or interest and the security will go into default. Lower quality debt securities generally have higher rates of
interest and may be subject to greater price fluctuations than higher quality debt securities. Credit risk is gauged, in part, by the credit ratings of the debt securities
in which the fund invests. However, ratings are only the opinions of the rating agencies issuing them and are not guarantees as to credit quality or an evaluation
of market risk. The fund’s investment adviser relies on its own credit analysts to research issuers and issues in seeking to mitigate various credit and default risks.
Investing in securities backed by the U.S. government — Securities backed by the U.S. Treasury or the full faith and credit of the U.S. government are guaranteed
only as to the timely payment of interest and principal when held to maturity. Accordingly, the current market values for these securities will fluctuate with changes
in interest rates. Securities issued by government-sponsored entities and federal agencies and instrumentalities that are not backed by the full faith and credit of
the U.S. government are neither issued nor guaranteed by the U.S. government.
Investing in pass-through securities — Pass-through securities are debt obligations backed by a pool of assets, such as mortgages. In addition to the risks
associated with investing in debt securities generally, pass-through securities are subject to changes in the payment patterns of borrowers of the underlying debt.
When interest rates fall, borrowers are more likely to refinance or prepay their debt before its stated maturity. This may result in the fund having to reinvest the
proceeds in lower yielding securities, effectively reducing the fund’s income. Conversely, if interest rates rise and borrowers repay their debt more slowly than
expected, the time in which pass-through securities are paid off could be extended, reducing the fund’s cash available for reinvestment in higher yielding securities.
Thinly traded securities — There may be little trading in the secondary market for particular bonds or other debt securities, which may make them more difficult
to value, acquire or sell.
Investing outside the United States — Securities of issuers domiciled outside the United States, or with significant operations outside the United States, 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 United States. Investments outside the United States may also be subject to different accounting practices
and different regulatory, legal and reporting standards, and may be more difficult to value, than those in the United States. In addition, the value of investments
outside the United States may be reduced by foreign taxes, including foreign withholding taxes on interest and dividends. Further, there may be increased risks of
delayed settlement of securities purchased or sold by the fund. The risks of investing outside the United States may be heightened in connection with investments
in emerging markets.
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
024071102
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American Funds Amer Balanced A
Supplemental Information
to lag relevant benchmarks or other funds with similar objectives.
Your investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental
agency, entity or person. You should consider how this fund fits into your overall investment program.
024071102
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