New World Fund,® Inc.
Part
B
Statement
of Additional Information
January 1, 2025
This document is not a prospectus but should be read in conjunction with the current prospectus of New World Fund, Inc. (the “fund”) dated January 1, 2025. You may obtain a prospectus from your financial professional, by calling American Funds Service Company® at (800) 421-4225 or by writing to the fund at the following address:
New World
Fund, Inc.
Attention:
Secretary
333 South
Hope Street
Los
Angeles, California 90071
Certain privileges and/or services described below may not be available to all shareholders (including shareholders who purchase shares at net asset value through eligible retirement plans) depending on the shareholder’s investment dealer or retirement plan recordkeeper. Please see your financial professional, investment dealer, plan recordkeeper or employer for more information.
|
Class A |
NEWFX |
Class 529-A |
CNWAX |
Class R-1 |
RNWAX |
|
Class C |
NEWCX |
Class 529-C |
CNWCX |
Class R-2 |
RNWBX |
|
Class T |
TNWFX |
Class 529-E |
CNWEX |
Class R-2E |
RNEBX |
|
Class F-1 |
NWFFX |
Class 529-T |
TWNFX |
Class R-3 |
RNWCX |
|
Class F-2 |
NFFFX |
Class 529-F-1 |
CNWFX |
Class R-4 |
RNWEX |
|
Class F-3 |
FNWFX |
Class 529-F-2 |
FNFWX |
Class R-5E |
RNWHX |
|
Class 529-F-3 |
FWWNX |
Class R-5 |
RNWFX | ||
|
Class R-6 |
RNWGX |
Table of Contents
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Item |
Page no. |
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2 | |
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Description of certain securities, investment techniques and risks |
4 |
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32 | |
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34 | |
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64 | |
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68 | |
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70 | |
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73 | |
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77 | |
|
82 | |
|
85 | |
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90 | |
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91 | |
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94 | |
|
105 |
Investment
portfolio
Financial
statements
New World Fund — Page 1
Certain investment limitations and guidelines
The following limitations and guidelines are considered at the time of purchase, under normal circumstances, and are based on a percentage of the fund’s net assets (excluding, for the avoidance of doubt, collateral held in connection with securities lending activities) unless otherwise noted. This summary is not intended to reflect all of the fund’s investment limitations.
General
· The fund will invest at least 35% of its assets in equity and debt securities of issuers domiciled in qualified developing countries. The prospectus contains information on factors considered in determining whether a country is qualified, as well as information on the qualified developing countries in which the fund may currently invest.
· For purposes of determining whether an investment is made in a particular country or geographic region, the fund’s investment adviser will generally look to the domicile of the issuer in the case of equity securities or to the country to which the security is tied economically in the case of debt securities. In doing so, the fund’s investment adviser will generally look to the determination of MSCI Inc. (MSCI) for equity securities and Bloomberg for debt securities. In certain limited circumstances (including where relevant data is unavailable or the nature of a holding warrants special considerations), the adviser may also take into account additional factors, as applicable, including where the issuer’s securities are listed; where the issuer is legally organized, maintains principal corporate offices, conducts its principal operations, generates revenues and/or has credit risk exposure; and the source of guarantees, if any, of such securities.
Equity securities
· The fund may invest its assets in equity securities of any company, regardless of where it is domiciled, if the fund’s investment adviser determines that a significant portion of its assets or revenues is attributable to developing countries. Although the fund's investment adviser generally considers 20% or more of a company's assets or revenues to be a significant portion of its assets or revenues, in certain limited circumstances (including where relevant data is incomplete or the nature of a holding warrants special considerations), the fund's investment adviser may also take into account additional factors such as the company's industry, expected revenues, and how the company's revenues are earned.
Debt instruments
· The fund may invest in nonconvertible debt securities, including government bonds and securities rated Ba1 or below and BB+ or below by Nationally Recognized Statistical Rating Organizations designated by the fund’s investment adviser or unrated but determined to be of equivalent quality, of issuers domiciled in qualified developing countries, or of issuers that the fund’s investment adviser determines have a significant portion of their assets or revenues (generally 20% or more) attributable to developing countries. The fund will generally purchase debt securities considered consistent with its objective of long-term capital appreciation.
· The fund currently intends to consider the ratings from Moody’s Investors Service, S&P Global Ratings and Fitch Ratings. If agency ratings of a security differ, the security will be considered to have received the highest of these ratings, consistent with the fund's investment policies.
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* * * * * *
The fund may experience difficulty liquidating certain portfolio securities during significant market declines or periods of heavy redemptions.
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Description of certain securities, investment techniques and risks
The descriptions below are intended to supplement the material in the prospectus under “Investment objective, strategies and risks.”
Market conditions – The value of, and the income generated by, the securities in which the fund invests may decline, sometimes rapidly or unpredictably, due to factors affecting certain issuers, particular industries or sectors, or the overall markets. Rapid or unexpected changes in market conditions could cause the fund to liquidate holdings at inopportune times or at a loss or depressed value. The value of a particular holding may decrease due to developments related to that issuer, but also due to general market conditions, including real or perceived economic developments such as changes in interest rates, credit quality, inflation, or currency rates, or generally adverse investor sentiment. The value of a holding may also decline due to factors that negatively affect a particular industry or sector, such as labor shortages, increased production costs, or competitive conditions.
Global economies and financial markets are highly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. Furthermore, local, regional and global events such as war, acts of terrorism, social unrest, natural disasters, the spread of infectious illness or other public health threats, or bank failures could also adversely impact issuers, markets and economies, including in ways that cannot necessarily be foreseen. The fund could be negatively impacted if the value of a portfolio holding were harmed by such conditions or events.
Significant market disruptions, such as those caused by pandemics, natural or environmental disasters, war, acts of terrorism, bank failures or other events, can adversely affect local and global markets and normal market operations. Market disruptions may exacerbate political, social, and economic risks. Additionally, market disruptions may result in increased market volatility; regulatory trading halts; closure of domestic or foreign exchanges, markets, or governments; or market participants operating pursuant to business continuity plans for indeterminate periods of time. Such events can be highly disruptive to economies and markets and significantly impact individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the fund’s investments and operation of the fund. These events could disrupt businesses that are integral to the fund’s operations or impair the ability of employees of fund service providers to perform essential tasks on behalf of the fund.
Governmental and quasi-governmental authorities may take a number of actions designed to support local and global economies and the financial markets in response to economic disruptions. Such actions may include a variety of significant fiscal and monetary policy changes, including, for example, direct capital infusions into companies, new monetary programs and significantly lower interest rates. These actions have resulted in significant expansion of public debt and may result in greater market risk. Additionally, an unexpected or quick reversal of these policies, or the ineffectiveness of these policies, could negatively impact overall investor sentiment and further increase volatility in securities markets.
Equity securities — Equity securities represent an ownership position in a company. Equity securities held by the fund typically consist of common stocks and may also include securities with equity conversion or purchase rights. The prices of equity securities fluctuate based on, among other things, events specific to their issuers and market, economic and other conditions. For example, prices of these securities can be affected by financial contracts held by the issuer or third parties (such as derivatives) relating to the security or other assets or indices. Holders of equity securities are not creditors of the issuer. If an issuer liquidates, holders of equity securities are entitled to their pro rata share of the issuer’s assets, if any, after creditors (including the holders of fixed income securities and senior equity securities) are paid.
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There may be little trading in the secondary market for particular equity securities, which may adversely affect the fund’s ability to value accurately or dispose of such equity securities. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the value and/or liquidity of equity securities.
The growth-oriented, equity-type securities generally purchased by the fund may involve large price swings and potential for loss particularly in the case of smaller capitalization stocks.
Investing in smaller capitalization stocks — The fund may invest in the stocks of smaller capitalization companies. Investing in smaller capitalization stocks can involve greater risk than is customarily associated with investing in stocks of larger, more established companies. For example, smaller companies often have limited product lines, limited operating histories, limited markets or financial resources, may be dependent on one or a few key persons for management and can be more susceptible to losses. Also, their securities may be less liquid or illiquid (and therefore have to be sold at a discount from current prices or sold in small lots over an extended period of time), may be followed by fewer investment research analysts and may be subject to wider price swings, thus creating a greater chance of loss than securities of larger capitalization companies.
Investing outside the United States — Securities of issuers domiciled outside the United States or with significant operations or revenues outside the United States, and securities tied economically to countries outside the United States, may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts, terrorism and war) in the countries or regions in which the issuers are domiciled, operate or generate revenue or to which the securities are tied economically. These issuers may also be more susceptible to actions of foreign governments such as the imposition of price controls, sanctions, or punitive taxes that could adversely impact the value of these securities. To the extent the fund invests in securities that are denominated in currencies other than the U.S. dollar, 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 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, auditing, financial reporting and recordkeeping standards and practices, 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, which could impact the liquidity of the fund’s portfolio. The risks of investing outside the United States may be heightened in connection with investments in developing countries.
Additional costs could be incurred in connection with the fund’s investment activities outside the United States. Brokerage commissions may be higher outside the United States, and the fund will bear certain expenses in connection with its currency transactions. Furthermore, increased custodian costs may be associated with maintaining assets in certain jurisdictions.
Investing in developing countries — Investing in developing countries 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 tend to have less developed political, economic and legal systems than those in developed countries. Accordingly, the governments of these countries may be less stable and more likely to intervene in the market economy, for example, by imposing capital controls, nationalizing a company or industry, placing restrictions on foreign ownership and on withdrawing sale proceeds of securities from the country, and/or imposing punitive taxes that could adversely affect the prices of securities. Information regarding issuers in developing countries may be limited, incomplete or inaccurate, and such issuers may not be subject to regulatory, accounting, auditing, and financial reporting and recordkeeping standards comparable to those to which issuers in developed countries are subject. The fund’s rights with respect to its investments in developing countries, if any, will generally be governed by local law, which may make it difficult or impossible for
New World Fund — Page 5
the fund to pursue legal remedies or to obtain and enforce judgments in local courts. In addition, the economies of these countries may be dependent on relatively few industries, may have limited access to capital and may be more susceptible to changes in local and global trade conditions and downturns in the world economy. 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, more vulnerable to market manipulation, and more difficult to value, than securities issued in countries with more developed economies and/or markets. Less certainty with respect to security valuations may lead to additional challenges and risks in calculating the fund’s net asset value. Additionally, developing countries are more likely to experience problems with the clearing and settling of trades and the holding of securities by banks, agents and depositories that are less established than those in developed countries.
In countries where direct foreign investment is limited or prohibited, the fund may invest in operating companies based in such countries through an offshore intermediary entity that, based on contractual agreements, seeks to replicate the rights and obligations of direct equity ownership in such operating company. Because the contractual arrangements do not in fact bestow the fund with actual equity ownership in the operating company, these investment structures may limit the fund’s rights as an investor and create significant additional risks. For example, local government authorities may determine that such structures do not comply with applicable laws and regulations, including those relating to restrictions on foreign ownership. In such event, the intermediary entity and/or the operating company may be subject to penalties, revocation of business and operating licenses or forfeiture of foreign ownership interests, and the fund’s economic interests in the underlying operating company and its rights as an investor may not be recognized, resulting in a loss to the fund and its shareholders. In addition, exerting control through contractual arrangements may be less effective than direct equity ownership, and a company may incur substantial costs to enforce the terms of such arrangements, including those relating to the distribution of the funds among the entities. These special investment structures may also be disregarded for tax purposes by local tax authorities, resulting in increased tax liabilities, and the fund’s control over – and distributions due from – such structures may be jeopardized if the individuals who hold the equity interest in such structures breach the terms of the agreements. While these structures may be widely used to circumvent limits on foreign ownership in certain jurisdictions, there is no assurance that they will be upheld by local regulatory authorities or that disputes regarding the same will be resolved consistently.
Although there is no universally accepted definition, the investment adviser generally considers a developing country to be a country that is in the earlier stages of its industrialization cycle with a low per capita gross domestic product (“GDP”) and a low market capitalization to GDP ratio relative to those in the United States and the European Union, and would include markets commonly referred to as “frontier markets.”
Certain risk factors related to developing countries
Currency fluctuations — Certain developing countries’ currencies have experienced and in the future may experience significant declines against the U.S. dollar. For example, if the U.S. dollar appreciates against foreign currencies, the value of the fund’s developing countries securities holdings would generally depreciate and vice versa. Further, the fund may lose money due to losses and other expenses incurred in converting various currencies to purchase and sell securities valued in currencies other than the U.S. dollar, as well as from currency restrictions, exchange control regulation, governmental restrictions that limit or otherwise delay the fund's ability to convert or repatriate currencies and currency devaluations.
Government regulation — Certain developing countries lack uniform accounting, auditing and financial reporting and disclosure standards, have less governmental supervision of financial markets than in the United States, and may not honor legal rights or protections enjoyed by investors in the United States. Certain governments may be more unstable and present greater
New World Fund — Page 6
risks of nationalization or restrictions on foreign ownership of local companies. Repatriation of investment income, capital and the proceeds of sales by foreign investors may require governmental registration and/or approval in some developing countries. While the fund will only invest in markets where these restrictions are considered acceptable by the investment adviser, a country could impose new or additional repatriation restrictions after the fund’s investment. If this happened, the fund’s response might include, among other things, applying to the appropriate authorities for a waiver of the restrictions or engaging in transactions in other markets designed to offset the risks of decline in that country. Such restrictions will be considered in relation to the fund’s liquidity needs and other factors. Further, some attractive equity securities may not be available to the fund if foreign shareholders already hold the maximum amount legally permissible.
While government involvement in the private sector varies in degree among developing countries, such involvement may in some cases include government ownership of companies in certain sectors, wage and price controls or imposition of trade barriers and other protectionist measures. With respect to any developing country, there is no guarantee that some future economic or political crisis will not lead to price controls, forced mergers of companies, expropriation, or creation of government monopolies to the possible detriment of the fund’s investments.
Fluctuations in inflation rates — Rapid fluctuations in inflation rates may have negative impacts on the economies and securities markets of certain emerging market countries.
Less developed securities markets — Developing countries may have less well-developed and regulated securities markets and exchanges. These markets have lower trading volumes than the securities markets of more developed countries and may be unable to respond effectively to increases in trading volume. Consequently, these markets may be substantially less liquid than those of more developed countries, and the securities of issuers located in these markets may have limited marketability. These factors may make prompt liquidation of substantial portfolio holdings difficult or impossible at times.
Settlement risks — Settlement systems in developing countries are generally less well organized than those of developed markets. Supervisory authorities may also be unable to apply standards comparable to those in developed markets. Thus, there may be risks that settlement may be delayed and that cash or securities belonging to the fund may be in jeopardy because of failures of or defects in the systems. In particular, market practice may require that payment be made before receipt of the security being purchased or that delivery of a security be made before payment is received. In such cases, default by a broker or bank (the “counterparty”) through which the transaction is effected might cause the fund to suffer a loss. The fund will seek, where possible, to use counterparties whose financial status is such that this risk is reduced. However, there can be no certainty that the fund will be successful in eliminating this risk, particularly as counterparties operating in developing countries frequently lack the standing or financial resources of those in developed countries. There may also be a danger that, because of uncertainties in the operation of settlement systems in individual markets, competing claims may arise with respect to securities held by or to be transferred to the fund.
Limited market information — The fund may encounter problems assessing investment opportunities in certain developing countries in light of limitations on available information and different accounting, auditing and financial reporting standards. For example, due to jurisdictional limitations, the Public Company Accounting Oversight Board (“PCAOB”), which regulates auditors of U.S. reporting companies, may be unable to inspect the audit work and practices of PCAOB-registered auditing firms in certain developing countries. As a result, there is greater risk that financial records and information relating to an issuer’s operations in
New World Fund — Page 7
developing countries will be incomplete or misleading, which may negatively impact the fund’s investments in such company. When faced with limited market information, the fund’s investment adviser will seek alternative sources of information, and to the extent the investment adviser is not satisfied with the sufficiency or accuracy of the information obtained with respect to a particular market or security, the fund will not invest in such market or security.
Taxation — Taxation of dividends, interest and capital gains received by the fund varies among developing countries and, in some cases, is comparatively high. In addition, developing countries typically have less well-defined tax laws and procedures and such laws may permit retroactive taxation so that the fund could become subject in the future to local tax liability that it had not reasonably anticipated in conducting its investment activities or valuing its assets.
Fraudulent securities — Securities purchased by the fund may subsequently be found to be fraudulent or counterfeit, resulting in a loss to the fund.
Remedies — Developing countries may offer less protection to investors than U.S. markets and, in the event of investor harm, there may be substantially less recourse available to the fund and its shareholders. In addition, as a matter of law or practicality, the fund and its shareholders - as well as U.S. regulators - may encounter substantial difficulties in obtaining and enforcing judgments and other actions against non-U.S. individuals and companies.
Investing through Stock Connect — The fund may invest in China A-shares of certain Chinese companies listed and traded on the Shanghai Stock Exchange (“SSE”) and on the Shenzhen Stock Exchange (“SZSE”, and together, the “Exchanges”) through the Shanghai-Hong Kong Stock Connect Program and the Shenzhen-Hong Kong Stock Connect Program, respectively (together, “Stock Connect”). Stock Connect is a securities trading and clearing program developed by the Exchange of Hong Kong, the Exchanges and the China Securities Depository and Clearing Corporation Limited. Stock Connect facilitates foreign investment in the People’s Republic of China (“PRC”) via brokers in Hong Kong. Persons investing through Stock Connect are subject to PRC regulations and Exchange listing rules, among others. These could include limitations on or suspension of trading. These regulations are relatively new and subject to changes which could adversely impact the fund’s rights with respect to the securities. For example, a stock may be recalled from the scope of securities traded on the SSE or SZSE eligible for trading via Stock Connect for various reasons, and in such event the stock can be sold but is restricted from being bought. In such event, the investment adviser’s ability to implement the fund’s investment strategies may be adversely affected. As Stock Connect is still relatively new, investments made through Stock Connect are subject to relatively new trading, clearance and settlement procedures and there are no assurances that the necessary systems to run the program will function properly. In addition, Stock Connect is subject to aggregate and daily quota limitations on purchases and permitted price fluctuations. As a result, the fund may experience delays in transacting via Stock Connect and there can be no assurance that a liquid market on the Exchanges will exist. Since Stock Connect only operates on days when both the Chinese and Hong Kong markets are open for trading, and banking services are available in both markets on the corresponding settlement days, the fund’s ownership interest in securities traded through Stock Connect may not be reflected directly and the fund may be subject to the risk of price fluctuations in China A-shares when Stock Connect is not open to trading. Changes in Chinese tax rules may also adversely affect the fund’s performance. The fund’s shares are held in an omnibus account and registered in nominee name. Please also see the sections on risks relating to investing outside the United States and investing in developing countries.
Investing through Bond Connect — The fund may invest in onshore China bonds via Bond Connect, the opening up of China’s Interbank Bond Market (CIBM) to global investors through the China-Hong Kong mutual access program. The program allows foreign and mainland China investors the ability to trade in each other’s bond market through a connection between the mainland and Hong Kong based
New World Fund — Page 8
financial infrastructure institutions. Bond Connect aims to enhance the efficiency and flexibility of investing in the CIBM. This is accomplished by easing the access requirements to enter the market and using the Hong Kong trading infrastructure to connect to China Foreign Exchange Trading System (CFETS). Market volatility and potential lack of liquidity due to low trading volume of certain debt securities in CIBM may result in prices of certain debt securities traded on such market fluctuating significantly. The bid and offer spreads of the prices of such securities may be large, and the fund may therefore incur significant trading, settlement and realization costs and may face counterparty default, liquidity, and volatility risks, resulting in significant losses for the funds and their investors. Bond Connect is a novel concept and, as such, the current regulations are untested and there is no certainty as to how they will be applied. In addition, the current regulations are subject to change which may have potential retrospective effects and there can be no assurance that Bond Connect will not be abolished. New regulations may be issued from time to time by the regulators in the PRC and Hong Kong in connection with operations, legal enforcement and cross-border trades under Bond Connect. The fund may be adversely affected as a result of such changes.
Synthetic local access instruments — Participation notes, market access warrants and other similar structured investment vehicles (collectively, “synthetic local access instruments”) are instruments used by investors to obtain exposure to equity investments in local markets where direct ownership by foreign investors is not permitted or is otherwise restricted by local law. Synthetic local access instruments, which are generally structured and sold over-the-counter by a local branch of a bank or broker-dealer that is permitted to purchase equity securities in the local market, are designed to replicate exposure to one or more underlying equity securities. The price and performance of a synthetic local access instrument are normally intended to track the price and performance of the underlying equity assets as closely as possible. However, there can be no assurance that the results of synthetic local access instruments will replicate exactly the performance of the underlying securities due to transaction costs, taxes and other fees and expenses. The holder of a synthetic local access instrument may also be entitled to receive any dividends paid in connection with the underlying equity assets, but usually does not receive voting rights as it would if such holder directly owned the underlying assets.
Investments in synthetic local access instruments involve the same risks associated with a direct investment in the shares of the companies the instruments seek to replicate, including, in particular, the risks associated with investing outside the United States. Synthetic local access instruments also involve risks that are in addition to the risks normally associated with a direct investment in the underlying equity securities. For instance, synthetic local access instruments represent unsecured, unsubordinated contractual obligations of the banks or broker-dealers that issue them. Consequently, a purchaser of a synthetic local access instrument relies on the creditworthiness of such a bank or broker-dealer counterparty and has no rights under the instrument against the issuer of the underlying equity securities. Additionally, there is no guarantee that a liquid market for a synthetic local access instrument will exist or that the issuer of the instrument will be willing to repurchase the instrument when an investor wishes to sell it.
Loan assignments and participations — The fund may invest in loans or other forms of indebtedness that represent interests in amounts owed by corporations or other borrowers (collectively "borrowers"). The investment adviser defines debt securities to include investments in loans, such as loan assignments and participations. Most corporate loans are variable or floating rate obligations.
Some loans may represent revolving credit facilities or delayed funding loans, in which a lender agrees to make loans up to a maximum amount upon demand by the borrower during a specified term. These commitments may have the effect of requiring the fund to increase its investment in a company at a time when it might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid).
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Some loans may represent debtor-in-possession financings (commonly known as “DIP financings”). DIP financings are arranged when an entity seeks the protections of the bankruptcy court under Chapter 11 of the U.S. Bankruptcy Code. These financings allow the entity to continue its business operations while reorganizing under Chapter 11. Such financings constitute senior liens on unencumbered collateral (i.e., collateral not subject to other creditors’ claims). There is a risk that the entity will not emerge from Chapter 11 and will be forced to liquidate its assets under Chapter 7 of the U.S. Bankruptcy Code. In the event of liquidation, the fund’s only recourse will be against the collateral securing the DIP financing.
The fund normally acquires loan obligations through an assignment from another lender, but may also acquire loan obligations by purchasing a participation interest from a lender or other holder of the interest. When the fund purchases assignments, it acquires direct contractual rights against the borrower on the loan. The fund acquires the right to receive principal and interest payments directly from the borrower and to enforce its rights as a lender directly against the borrower. However, because assignments are arranged through private negotiations between potential assignees and potential assignors, the rights and obligations acquired by a fund as the purchaser of an assignment may differ from, and be more limited than, those held by the assigning lender. Loan assignments are often administered by a financial institution that acts as agent for the holders of the loan, and the fund may be required to receive approval from the agent and/or borrower prior to the purchase of a loan. Risks may also arise due to the ability of the agent to meet its obligations under the loan agreement.
Loan participations are loans or other direct debt instruments that are interests in amounts owed by the borrower to another party. The fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing participations, the fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement and may not directly benefit from any collateral supporting the loan. As a result, the fund will be subject to the credit risk of both the borrower and the lender that is selling the participation. In the event of the insolvency of the lender selling a participation, a fund may be treated as a general creditor of the lender and may not benefit from any set-off between the lender and the borrower.
Loan assignments and participations are generally subject to legal or contractual restrictions on resale and are not currently listed on any securities exchange or automatic quotation system. Risks may arise due to delayed settlements of loan assignments and participations. If there is no active secondary market for a particular loan, it may be difficult for the investment adviser to sell its interest in such loan at a price that is acceptable to it and to obtain pricing information on such loan.
Investments in loan participations and assignments present the possibility that the fund could be held liable as a co-lender under emerging legal theories of lender liability. In addition, if the loan is foreclosed, the fund could be part owner of any collateral and could bear the costs and liabilities of owning and disposing of the collateral. In addition, some loan participations and assignments may not be rated by major rating agencies and may not be protected by securities laws.
Unfunded commitment agreements — The fund may enter into unfunded commitment agreements to make certain investments, including unsettled bank loan purchase transactions. Under the SEC’s rule applicable to the fund’s use of derivatives, unfunded commitment agreements are not derivatives transactions. The fund will only enter into such unfunded commitment agreements if the fund reasonably believes, at the time it enters into such agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements as they come due.
Real estate investment trusts — Real estate investment trusts ("REITs"), which primarily invest in real estate or real estate-related loans, may issue equity or debt securities. Equity REITs own real estate
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properties, while mortgage REITs hold construction, development and/or long-term mortgage loans. The values of REITs may be affected by changes in the value of the underlying property of the trusts, the creditworthiness of the issuer, property taxes, interest rates, tax laws and regulatory requirements, such as those relating to the environment. Both types of REITs are dependent upon management skill and the cash flows generated by their holdings, the real estate market in general and the possibility of failing to qualify for any applicable pass-through tax treatment or failing to maintain any applicable exemptive status afforded under relevant laws.
Currency transactions — The fund may enter into currency transactions on a spot (i.e., cash) basis at the prevailing rate in the currency exchange market to provide for the purchase or sale of a currency needed to purchase a security denominated in such currency. In addition, the fund may enter into forward currency contracts and may purchase and sell options on currencies to protect against changes in currency exchange rates, to increase exposure to a particular foreign currency, to shift exposure to currency fluctuations from one currency to another or to seek to increase returns. A forward currency contract is an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Some forward currency contracts, called non-deliverable forwards or NDFs, do not call for physical delivery of the currency and are instead settled through cash payments. Forward currency contracts are typically privately negotiated and traded in the interbank market between large commercial banks (or other currency traders) and their customers. Although forward contracts entered into by the fund will typically involve the purchase or sale of a currency against the U.S. dollar, the fund also may purchase or sell a non-U.S. currency against another non-U.S. currency.
The fund may also purchase or write put and call options on foreign currencies on exchanges or in the over-the-counter (“OTC”) market. A put option on a foreign currency gives the purchaser of the option the right to sell a foreign currency at the exercise price until the option expires. A call option on a foreign currency gives the purchaser of the option the right to purchase the currency at the exercise price until the option expires. Currency options, to the extent not exercised, will expire and the fund, as the purchaser, would experience a loss to the extent of the premium paid for the option. Instead of purchasing a call option to hedge against an anticipated increase in the dollar cost of securities to be acquired, the fund could write a put option on the relevant currency, which, if exchange rates move in the manner projected, will expire unexercised and allow the fund to hedge such increased cost up to the amount of the premium. As in the case of other types of options, however, writing a currency option will provide a hedge only up to the amount of the premium, and only if exchange rates move in the expected direction. If this does not occur, the option may be exercised and the fund would be required to purchase or sell the underlying currency at a loss that may not be offset by the amount of the premium. Through the writing of options on foreign currencies, the fund also may be required to forego all or a portion of the benefit that might otherwise have been obtained from favorable movements in exchange rates. OTC options are bilateral contracts that are individually negotiated and they are generally less liquid than exchange-traded options. Although this type of arrangement allows the purchaser or writer greater flexibility to tailor an option to its needs, OTC options generally involve credit risk to the counterparty, whereas for exchange-traded options, credit risk is mutualized through the involvement of the applicable clearing house. Currency options traded on exchanges may be subject to position limits, which may limit the ability of the fund to reduce currency risk using such options. To the extent that the U.S. options markets are closed while the markets for the underlying currencies remain open, substantial price and rate movements may take place in the currency markets that cannot be reflected in the U.S. options markets. See also “Options” for a general description of investment techniques and risks relating to options.
Currency exchange rates generally are determined by forces of supply and demand in the foreign exchange markets and the relative merits of investment in different countries as viewed from an international perspective. Currency exchange rates, as well as foreign currency transactions, can also be affected unpredictably by intervention by U.S. or foreign governments or central banks or by currency controls or political developments in the United States or abroad. Such intervention or other
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events could prevent the fund from entering into foreign currency transactions, force the fund to exit such transactions at an unfavorable time or price or result in penalties to the fund, any of which may result in losses to the fund.
Generally, the fund will not attempt to protect against all potential changes in exchange rates and the use of forward contracts does not eliminate the risk of fluctuations in the prices of the underlying securities. If the value of the underlying securities declines or the amount of the fund’s commitment increases because of changes in exchange rates, the fund may need to provide additional cash or securities to satisfy its commitment under the forward contract. The fund is also subject to the risk that it may be delayed or prevented from obtaining payments owed to it under the forward contract as a result of the insolvency or bankruptcy of the counterparty with which it entered into the forward contract or the failure of the counterparty to comply with the terms of the contract.
The realization of gains or losses on foreign currency transactions will usually be a function of the investment adviser’s ability to accurately estimate currency market movements. Entering into forward currency transactions may change the fund’s exposure to currency exchange rates and could result in losses to the fund if currencies do not perform as expected by the fund’s investment adviser. For example, if the fund’s investment adviser increases the fund’s exposure to a foreign currency using forward contracts and that foreign currency’s value declines, the fund may incur a loss. In addition, while entering into forward currency transactions could minimize the risk of loss due to a decline in the value of the hedged currency, it could also limit any potential gain that may result from an increase in the value of the currency. See also the “Derivatives” section under "Description of certain securities, investment techniques and risks" for a general description of investment techniques and risks relating to derivatives, including certain currency forwards and currency options.
Forward currency contracts may give rise to leverage, or exposure to potential gains and losses in excess of the initial amount invested. Leverage magnifies gains and losses and could cause the fund to be subject to more volatility than if it had not been leveraged, thereby resulting in a heightened risk of loss. Forward currency contracts are considered derivatives. Accordingly, under the SEC’s rule applicable to the fund’s use of derivatives, a fund’s obligations with respect to these instruments will depend on the fund’s aggregate usage of and exposure to derivatives, and the fund’s usage of forward currency contracts is subject to written policies and procedures reasonably designed to manage the fund’s derivatives risk.
Forward currency transactions also may affect the character and timing of income, gain, or loss recognized by the fund for U.S. tax purposes. The use of forward currency contracts could result in the application of the mark-to-market provisions of the Internal Revenue Code of 1986 as amended (the "Code") and may cause an increase (or decrease) in the amount of taxable dividends paid by the fund.
Indirect exposure to cryptocurrencies – Cryptocurrencies are currencies which exist in a digital form and may act as a store of wealth, a medium of exchange or an investment asset. There are thousands of cryptocurrencies, such as bitcoin. Although the fund has no current intention of directly investing in cryptocurrencies, some issuers have begun to accept cryptocurrency for payment of services, use cryptocurrencies as reserve assets or invest in cryptocurrencies, and the fund may invest in securities of such issuers. The fund may also invest in securities of issuers which provide cryptocurrency-related services.
Cryptocurrencies are subject to fluctuations in value. Cryptocurrencies are not backed by any government, corporation or other identified body. Rather, the value of a cryptocurrency is determined by other factors, such as the perceived future prospects or the supply and demand for such cryptocurrency in the global market for the trading of cryptocurrency. Such trading markets are unregulated and may be more exposed to operational or technical issues as well as fraud or manipulation in comparison to established, regulated exchanges for securities, derivatives and
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traditional currencies. The value of a cryptocurrency may decline precipitously (including to zero) for a variety of reasons, including, but not limited to, regulatory changes, a loss of confidence in its network or a change in user preference to other cryptocurrencies. An issuer that owns cryptocurrencies may experience custody issues, and may lose its cryptocurrency holdings through theft, hacking, or technical glitches in the applicable blockchain. The fund may experience losses as a result of the decline in value of its securities of issuers that own cryptocurrencies or which provide cryptocurrency-related services. If an issuer that owns cryptocurrencies intends to pay a dividend using such holdings or to otherwise make a distribution of such holdings to its stockholders, such dividends or distributions may face regulatory, operational and technical issues.
Factors affecting the further development of cryptocurrency include, but are not limited to: continued worldwide growth of, or possible cessation of or reversal in, the adoption and use of cryptocurrencies and other digital assets; the developing regulatory environment relating to cryptocurrencies, including the characterization of cryptocurrencies as currencies, commodities, or securities, the tax treatment of cryptocurrencies, and government and quasi-government regulation or restrictions on, or regulation of access to and operation of, cryptocurrency networks and the exchanges on which cryptocurrencies trade, including anti-money laundering regulations and requirements; perceptions regarding the environmental impact of a cryptocurrency; changes in consumer demographics and public preferences; general economic conditions; maintenance and development of open-source software protocols; the availability and popularity of other forms or methods of buying and selling goods and services; the use of the networks supporting digital assets, such as those for developing smart contracts and distributed applications; and general risks tied to the use of information technologies, including cyber risks. A hack or failure of one cryptocurrency may lead to a loss in confidence in, and thus decreased usage and/or value of, other cryptocurrencies.
Derivatives — In pursuing its investment objective, the fund may invest in derivative instruments. A derivative is a financial instrument, the value of which depends on, or is otherwise derived from, another underlying variable. Most often, the variable underlying a derivative is the price of a traded asset, such as a traditional cash security (e.g., a stock or bond), a currency or a commodity; however, the value of a derivative can be dependent on almost any variable, from the level of an index or a specified rate to the occurrence (or non-occurrence) of a credit event with respect to a specified reference asset. In addition to investing in forward currency contracts and currency options, as described under “Currency transactions,” the fund may take positions in futures contracts and options on futures contracts and swaps, each of which is a derivative instrument described in greater detail below.
Derivative instruments may be distinguished by the manner in which they trade: some are standardized instruments that trade on an organized exchange while others are individually negotiated and traded in the over-the-counter (“OTC”) market. Derivatives also range broadly in complexity, from simple derivatives to more complex instruments. As a general matter, however, all derivatives — regardless of the manner in which they trade or their relative complexities — entail certain risks, some of which are different from, and potentially greater than, the risks associated with investing directly in traditional cash securities.
As is the case with traditional cash securities, derivative instruments are generally subject to counterparty credit risk; however, in some cases, derivatives may pose counterparty risks greater than those posed by cash securities. The use of derivatives involves the risk that a loss may be sustained by the fund as a result of the failure of the fund’s counterparty to make required payments or otherwise to comply with its contractual obligations. For some derivatives, though, the value of — and, in effect, the return on — the instrument may be dependent on both the individual credit of the fund’s counterparty and on the credit of one or more issuers of any underlying assets. If the fund does not correctly evaluate the creditworthiness of its counterparty and, where applicable, of issuers of any underlying reference assets, the fund’s investment in a derivative instrument may result in losses. Further, if a fund’s counterparty were to default on its obligations, the fund’s contractual remedies against such
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counterparty may be subject to applicable bankruptcy and insolvency laws, which could affect the fund’s rights as a creditor and delay or impede the fund’s ability to receive the net amount of payments that it is contractually entitled to receive. Derivative instruments are subject to additional risks, including operational risk (such as documentation issues, settlement issues and systems failures) and legal risk (such as insufficient documentation, insufficient capacity or authority of a counterparty, and issues with the legality or enforceability of a contract).
The value of some derivative instruments in which the fund invests may be particularly sensitive to changes in prevailing interest rates, currency exchange rates or other market conditions. Like the fund’s other investments, the ability of the fund to successfully utilize such derivative instruments may depend in part upon the ability of the fund’s investment adviser to accurately forecast interest rates and other economic factors. The success of the fund’s derivative investment strategy will also depend on the investment adviser’s ability to assess and predict the impact of market or economic developments on the derivative instruments in which the fund invests, in some cases without having had the benefit of observing the performance of a derivative under all possible market conditions. If the investment adviser incorrectly forecasts such factors and has taken positions in derivative instruments contrary to prevailing market trends, or if the investment adviser incorrectly predicts the impact of developments on a derivative instrument, the fund could suffer losses.
Certain derivatives may also be subject to liquidity and valuation risks. The potential lack of a liquid secondary market for a derivative (and, particularly, for an OTC derivative, including swaps and OTC options) may cause difficulty in valuing or selling the instrument. If a derivative transaction is particularly large or if the relevant market is illiquid, as is often the case with many privately-negotiated OTC derivatives, the fund may not be able to initiate a transaction or to liquidate a position at an advantageous time or price. Particularly when there is no liquid secondary market for the fund’s derivative positions, the fund may encounter difficulty in valuing such illiquid positions. The value of a derivative instrument does not always correlate perfectly with its underlying asset, rate or index, and many derivatives, and OTC derivatives in particular, are complex and often valued subjectively. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to the fund.
Because certain derivative instruments may obligate the fund to make one or more potential future payments, which could significantly exceed the value of the fund’s initial investments in such instruments, derivative instruments may also have a leveraging effect on the fund’s portfolio. Certain derivatives have the potential for unlimited loss, irrespective of the size of the fund’s investment in the instrument. When a fund leverages its portfolio, investments in that fund will tend to be more volatile, resulting in larger gains or losses in response to market changes.
The fund’s compliance with the SEC’s rule applicable to the fund’s use of derivatives may limit the ability of the fund to use derivatives as part of its investment strategy. The rule requires that a fund that uses derivatives in more than a limited manner, which is currently the case for the fund, adopt a derivatives risk management program, appoint a derivatives risk manager and comply with an outer limit on leverage based on value at risk, or “VaR”. VaR is an estimate of an instrument’s or portfolio’s potential losses over a given time horizon (i.e., 20 trading days) and at a specified confidence level (i.e., 99%). VaR will not provide, and is not intended to provide, an estimate of an instrument’s or portfolio’s maximum potential loss amount. For example, a VaR of 5% with a specified confidence level of 99% would mean that a VaR model estimates that 99% of the time a fund would not be expected to lose more than 5% of its total assets over the given time period. However, 1% of the time, the fund would be expected to lose more than 5% of its total assets, and in such a scenario the VaR model does not provide an estimate of the extent of this potential loss. The derivatives rule may not be effective in limiting the fund’s risk of loss, as measurements of VaR rely on historical data and may not accurately measure the degree of risk reflected in the fund’s derivatives or other investments. A fund is generally required to satisfy the rule’s outer limit on leverage by limiting the fund’s VaR to 200% of the VaR of a designated reference portfolio that does not utilize derivatives each business day. If a fund does not
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have an appropriate designated reference portfolio in light of the fund’s investments, investment objectives and strategy, a fund must satisfy the rule’s outer limit on leverage by limiting the fund’s VaR to 20% of the value of the fund’s net assets each business day.
Options — The fund may invest in option contracts, including options on futures and options on currencies, as described in more detail under “Futures and Options on Futures” and “Currency Transactions,” respectively. An option contract is a contract that gives the holder of the option, in return for a premium payment, the right to buy from (in the case of a call) or sell to (in the case of a put) the writer of the option the reference instrument underlying the option (or the cash value of the instrument underlying the option) at a specified exercise price. The writer of an option on a security has the obligation, upon exercise of the option, to cash settle or deliver the underlying currency or instrument upon payment of the exercise price (in the case of a call) or to cash settle or take delivery of the underlying currency or instrument and pay the exercise price (in the case of a put).
By purchasing a put option, the fund obtains the right (but not the obligation) to sell the currency or instrument underlying the option (or to deliver the cash value of the instrument underlying the option) at a specified exercise price, which is also referred to as the strike price. In return for this right, the fund pays the current market price, or the option premium, for the option. The fund may terminate its position in a put option by allowing the option to expire or by exercising the option. If the option is allowed to expire, the fund will lose the entire amount of the option premium paid. If the option is exercised, the fund completes the sale of the underlying instrument (or cash settles) at the strike price. The fund may also terminate a put option position by entering into opposing close-out transactions in advance of the option expiration date.
As a buyer of a put option, the fund can expect to realize a gain if the price of the underlying currency or instrument falls substantially. However, if the price of the underlying currency or instrument does not fall enough to offset the cost of purchasing the option, the fund can expect to suffer a loss, albeit a loss limited to the amount of the option premium plus any applicable transaction costs.
The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right (but not the obligation) to purchase, rather than sell, the underlying currency or instrument (or cash settle) at the specified strike price. The buyer of a call option typically attempts to participate in potential price increases of the underlying currency or instrument with risk limited to the cost of the option if the price of the underlying currency or instrument falls. At the same time, the call option buyer can expect to suffer a loss if the price of the underlying currency or instrument does not rise sufficiently to offset the cost of the option.
The writer of a put or call option takes the opposite side of the transaction from the option purchaser. In return for receipt of the option premium, the writer assumes the obligation to pay or receive the strike price for the option’s underlying currency or instrument if the other party to the option chooses to exercise it. The writer may seek to terminate a position in a put option before exercise by entering into opposing close-out transactions in advance of the option expiration date. If the market for the relevant put option is not liquid, however, the writer must be prepared to pay the strike price while the option is outstanding, regardless of price changes.
If the price of the underlying currency or instrument rises, a put writer would generally expect to profit, although its gain would be limited to the amount of the premium it received. If the price of the underlying currency or instrument remains the same over time, it is likely that the
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writer would also profit because it should be able to close out the option at a lower price. This is because an option’s value decreases with time as the currency or instrument approaches its expiration date. If the price of the underlying currency or instrument falls, the put writer would expect to suffer a loss. This loss should be less than the loss from purchasing the underlying currency or instrument directly, however, because the premium received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the writer to, upon exercise of the option, deliver the option’s underlying currency or instrument in return for the strike price or to make a net cash settlement payment, as applicable. The characteristics of writing call options are similar to those of writing put options, except that writing call options is generally a profitable strategy if prices remain the same or fall. The potential gain for the option seller in such a transaction would be capped at the premium received.
Several risks are associated with transactions in options on currencies, securities and other instruments (referred to as the “underlying instruments”). For example, there may be significant differences between the underlying instruments and options markets that could result in an imperfect correlation between these markets, which could cause a given transaction not to achieve its objectives. When a put or call option on a particular underlying instrument is purchased to hedge against price movements in a related underlying instrument, for example, the price to close out the put or call option may move more or less than the price of the related underlying instrument.
Options prices can diverge from the prices of their underlying instruments for a number of reasons. Options prices are affected by such factors as current and anticipated short-term interest rates, changes in the volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect security prices in the same way. Imperfect correlation may also result from differing levels of demand in the options markets and the markets for the underlying instruments, from structural differences in how options and underlying instruments are traded, or from imposition of daily price fluctuation limits or trading halts. The fund may purchase or sell options contracts with a greater or lesser value than the underlying instruments it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the underlying instruments, although this may not be successful. If price changes in the fund’s options positions are less correlated with its other investments, the positions may fail to produce anticipated gains or result in losses that are not offset by gains in other investments.
There is no assurance that a liquid market will exist for any particular options contract at any particular time. Options may have relatively low trading volumes and liquidity if their strike prices are not close to the current prices of the underlying instruments. In addition, exchanges may establish daily price fluctuation limits for exchange-traded options contracts and may halt trading if a contract’s price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached or a trading halt is imposed, it may be impossible to enter into new positions or to close out existing positions. If the market for a contract is not liquid because of price fluctuation limits or otherwise, it could prevent prompt liquidation of unfavorable positions and could potentially require the fund to hold a position until delivery or expiration regardless of changes in its value.
Combined positions involve purchasing and writing options in combination with each other, or in combination with futures or forward contracts, in order to adjust the risk and return profile of the fund’s overall position. For example, purchasing a put option and writing a call option on the same underlying instrument could construct a combined position with risk and return characteristics similar to selling a futures contract (but with leverage embedded). Another possible combined position would involve writing a call option at one strike price and buying a
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call option at a lower strike price to reduce the risk of the written call option in the event of a substantial price increase. Because such combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out.
Futures and options on futures — The fund may enter into futures contracts and options on futures contracts to seek to manage the fund’s interest rate sensitivity by increasing or decreasing the duration of the fund or a portion of the fund’s portfolio. A futures contract is an agreement to buy or sell a security or other financial instrument (the “reference asset”) for a set price on a future date. An option on a futures contract gives the holder of the option the right to buy or sell a position in a futures contract from or to the writer of the option, at a specified price on or before the specified expiration date. Futures contracts and options on futures contracts are standardized, exchange-traded contracts, and, when such contracts are bought or sold, the fund will incur brokerage fees and will be required to maintain margin deposits.
Unlike when the fund purchases or sells a security, such as a stock or bond, no price is paid or received by the fund upon the purchase or sale of a futures contract. When the fund enters into a futures contract, the fund is required to deposit with its futures broker, known as a futures commission merchant (“FCM”), a specified amount of liquid assets in a segregated account in the name of the FCM at the applicable derivatives clearinghouse or exchange. This amount, known as initial margin, is set by the futures exchange on which the contract is traded and may be significantly modified during the term of the contract. The initial margin is in the nature of a performance bond or good faith deposit on the futures contract, which is returned to the fund upon termination of the contract, assuming all contractual obligations have been satisfied. Additionally, on a daily basis, the fund pays or receives cash, or variation margin, equal to the daily change in value of the futures contract. Variation margin does not represent a borrowing or loan by the fund but is instead a settlement between the fund and the FCM of the amount one party would owe the other if the futures contract expired. In computing daily net asset value, the fund will mark-to-market its open futures positions. A fund is also required to deposit and maintain margin with an FCM with respect to put and call options on futures contracts written by the fund. Such margin deposits will vary depending on the nature of the underlying futures contract (and related initial margin requirements), the current market value of the option, and other futures positions held by the fund. In the event of the bankruptcy or insolvency of an FCM that holds margin on behalf of the fund, the fund may be entitled to return of margin owed to it only in proportion to the amount received by the FCM’s other customers, potentially resulting in losses to the fund. An event of bankruptcy or insolvency at a clearinghouse or exchange holding initial margin could also result in losses for the fund.
When the fund invests in futures contracts and options on futures contracts and deposits margin with an FCM, the fund becomes subject to so-called “fellow customer” risk – that is, the risk that one or more customers of the FCM will default on their obligations and that the resulting losses will be so great that the FCM will default on its obligations and margin posted by one customer, such as the fund, will be used to cover a loss caused by a different defaulting customer. Applicable Commodity Futures Trading Commission (“CFTC”) rules generally prohibit the use of one customer’s funds to meet the obligations of another customer and limit the ability of an FCM to use margin posed by non-defaulting customers to satisfy losses caused by defaulting customers. As a general matter, an FCM is required to use its own funds to meet a defaulting customer’s obligations. While a customer’s loss would likely need to be substantial before non-defaulting customers would be exposed to loss on account of fellow customer risk, applicable CFTC rules nevertheless permit the commingling of margin and do not limit the mutualization of customer losses from investment losses, custodial failures, fraud or other causes. If the loss is so great that, notwithstanding the application of an FCM’s own funds, there is a shortfall in the amount of customer funds required to be held in segregation, the FCM could default and be placed into bankruptcy. Under these circumstances, bankruptcy law provides that non-defaulting customers will share pro rata in any shortfall. A shortfall in
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customer segregated funds may also make the transfer of the accounts of non-defaulting customers to another FCM more difficult.
Although certain futures contracts, by their terms, require actual future delivery of and payment for the reference asset, in practice, most futures contracts are usually closed out before the delivery date by offsetting purchases or sales of matching futures contracts. Closing out an open futures contract purchase or sale is effected by entering into an offsetting futures contract sale or purchase, respectively, for the same aggregate amount of the identical reference asset and the same delivery date. If the offsetting purchase price is less than the original sale price (in each case taking into account transaction costs, including brokerage fees), the fund realizes a gain; if it is more, the fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price (in each case taking into account transaction costs, including brokerage fees), the fund realizes a gain; if it is less, the fund realizes a loss.
The fund may purchase and write call and put options on futures. A futures option gives the holder the right, in return for the premium paid, to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of the option. Upon exercise of a call option, the holder acquires a long position in the futures contract, and the writer is assigned the opposite short position. The opposite is true in the case of a put option. A call option is “in the money” if the value of the futures contract that is the subject of the option exceeds the exercise price. A put option is “in the money” if the exercise price exceeds the value of the futures contract that is the subject of the option. See also “Options” above for a general description of investment techniques and risks relating to options.
The value of a futures contract tends to increase and decrease in tandem with the value of its underlying reference asset. Purchasing futures contracts will, therefore, tend to increase the fund’s exposure to positive and negative price fluctuations in the reference asset, much as if the fund had purchased the reference asset directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market for the reference asset. Accordingly, selling futures contracts will tend to offset both positive and negative market price changes, much as if the reference asset had been sold.
There is no assurance that a liquid market will exist for any particular futures or futures options contract at any particular time. Futures exchanges may establish daily price fluctuation limits for futures contracts and may halt trading if a contract’s price moves upward or downward more than the limit in a given day. On volatile trading days, when the price fluctuation limit is reached and a trading halt is imposed, it may be impossible to enter into new positions or close out existing positions. If the market for a futures contract is not liquid because of price fluctuation limits or other market conditions, the fund may be prevented from promptly liquidating unfavorable futures positions and the fund could be required to continue to hold a position until delivery or expiration regardless of changes in its value, potentially subjecting the fund to substantial losses. Additionally, the fund may not be able to take other actions or enter into other transactions to limit or reduce its exposure to the position. Under such circumstances, the fund would remain obligated to meet margin requirements until the position is cleared. As a result, the fund’s access to other assets posted as margin for its futures positions could also be impaired.
Although futures exchanges generally operate similarly in the United States and abroad, foreign futures exchanges may follow trading, settlement and margin procedures that are different than those followed by futures exchanges in the United States. Futures and futures options contracts traded outside the United States may not involve a clearing mechanism or related guarantees and may involve greater risk of loss than U.S.-traded contracts, including potentially greater risk of losses due to insolvency of a futures broker, exchange member, or
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other party that may owe initial or variation margin to the fund. Margin requirements on foreign futures exchanges may be different than those of futures exchanges in the United States, and, because initial and variation margin payments may be measured in foreign currency, a futures or futures options contract traded outside the United States may also involve the risk of foreign currency fluctuations.
Swaps — The fund may enter into swaps, which are two-party contracts entered into primarily by institutional investors for a specified time period. In a typical swap, two parties agree to exchange the returns earned or realized from one or more underlying assets or rates of return.
Swaps can be traded on a swap execution facility (“SEF”) and cleared through a central clearinghouse (cleared), traded OTC and cleared, or traded bilaterally and not cleared. For example, standardized interest rate swaps and credit default swap indices are traded on SEFs and cleared. Other forms of swaps, such as total return swaps, are entered into on a bilateral basis. Because clearing interposes a central clearinghouse as the ultimate counterparty to each participant’s swap, and margin is required to be exchanged under the rules of the clearinghouse, central clearing is intended to decrease (but not eliminate) counterparty risk relative to uncleared bilateral swaps. To the extent the fund enters into bilaterally negotiated swaps, the fund will enter into swaps only with counterparties that meet certain credit standards and have agreed to specific collateralization procedures; however, if the counterparty’s creditworthiness deteriorates rapidly and the counterparty defaults on its obligations under the swap or declares bankruptcy, the fund may lose any amount it expected to receive from the counterparty. In addition, bilateral swaps are subject to certain regulatory margin requirements that mandate the posting and collection of minimum margin amounts, which may result in the fund and its counterparties posting higher margin amounts for bilateral swaps than would otherwise be the case.
The term of a swap can be days, months or years and certain swaps may be less liquid than others. If a swap is particularly large or if the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous time or price, which may result in significant losses.
Swaps can take different forms. The fund may enter into the following types of swaps:
Interest rate swaps — The fund may enter into interest rate swaps to seek to manage the interest rate sensitivity of the fund by increasing or decreasing the duration of the fund or a portion of the fund’s portfolio. An interest rate swap is an agreement between two parties to exchange or swap payments based on changes in an interest rate or rates. Typically, one interest rate is fixed and the other is variable based on a designated short-term interest rate such as the Secured Overnight Financing Rate (“SOFR”), prime rate or other benchmark, or on an inflation index such as the U.S. Consumer Price Index (which is a measure that examines the weighted average of prices of a basket of consumer goods and services and measures changes in the purchasing power of the U.S. dollar and the rate of inflation). In other types of interest rate swaps, known as basis swaps, the parties agree to swap variable interest rates based on different designated short-term interest rates. Interest rate swaps generally do not involve the delivery of securities or other principal amounts. Rather, cash payments are exchanged by the parties based on the application of the designated interest rates to a notional amount, which is the predetermined dollar principal of the trade upon which payment obligations are computed. Accordingly, the fund’s current obligation or right under the swap is generally equal to the net amount to be paid or received under the swap based on the relative value of the position held by each party.
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In addition to the risks of entering into swaps discussed above, the use of interest rate swaps involves the risk of losses if interest rates change.
Total return swaps — The fund may enter into total return swaps in order to gain exposure to a market or security without owning or taking physical custody of such security or investing directly in such market. A total return swap is an agreement in which one party agrees to make periodic payments to the other party based on the change in market value of the assets underlying the contract during the specified term in exchange for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. The asset underlying the contract may be a single security, a basket of securities or a securities index. Like other swaps, the use of total return swaps involves certain risks, including potential losses if a counterparty defaults on its payment obligations to the fund or the underlying assets do not perform as anticipated. There is no guarantee that entering into a total return swap will deliver returns in excess of the interest costs involved and, accordingly, the fund’s performance may be lower than would have been achieved by investing directly in the underlying assets.
Credit default swap indices — In order to assume exposure to a diversified portfolio of credits or to hedge against existing credit risks, the fund may invest in credit default swap indices, including CDX and iTraxx indices (collectively referred to as “CDSIs”). A CDSI is based on a portfolio of credit default swaps with similar characteristics, such as credit default swaps on high-yield bonds. In a typical CDSI transaction, one party — the protection buyer — is obligated to pay the other party — the protection seller — a stream of periodic payments over the term of the contract. If a credit event, such as a default or restructuring, occurs with respect to any of the underlying reference obligations, the protection seller must pay the protection buyer the loss on those credits. Also, if a restructuring credit event occurs in an iTraxx index, the fund as protection buyer may receive a single name credit default swap (“CDS”) representing the relevant constituent.
The fund may enter into a CDSI transaction as either protection buyer or protection seller. If the fund is a protection buyer, it would pay the counterparty a periodic stream of payments over the term of the contract and would not recover any of those payments if no credit events were to occur with respect to any of the underlying reference obligations. However, if a credit event did occur, the fund, as a protection buyer, would have the right to deliver the referenced debt obligations or a specified amount of cash, depending on the terms of the applicable agreement, and to receive the par value of such debt obligations from the counterparty protection seller. As a protection seller, the fund would receive fixed payments throughout the term of the contract if no credit events were to occur with respect to any of the underlying reference obligations. If a credit event were to occur, however, the value of any deliverable obligation received by the fund, coupled with the periodic payments previously received by the fund, may be less than the full notional value that the fund, as a protection seller, pays to the counterparty protection buyer, effectively resulting in a loss of value to the fund. Furthermore, as a protection seller, the fund would effectively add leverage to its portfolio because it would have investment exposure to the notional amount of the swap.
The use of CDSI, like all other swaps, is subject to certain risks, including the risk that the fund’s counterparty will default on its obligations. If such a default were to occur, any contractual remedies that the fund might have may be subject to applicable bankruptcy laws, which could delay or limit the fund’s recovery. Thus, if the fund’s counterparty to a CDSI transaction defaults on its obligation to make payments
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thereunder, the fund may lose such payments altogether or collect only a portion thereof, which collection could involve substantial costs or delays.
Additionally, when the fund invests in a CDSI as a protection seller, the fund will be indirectly exposed to the creditworthiness of issuers of the underlying reference obligations in the index. If the investment adviser to the fund does not correctly evaluate the creditworthiness of issuers of the underlying instruments on which the CDSI is based, the investment could result in losses to the fund.
Warrants and rights — Warrants and rights may be acquired by the fund in connection with other securities or separately. Warrants generally entitle, but do not obligate, their holder to purchase other equity or fixed income securities at a specified price at a later date. Rights are similar to warrants but typically have a shorter duration and are issued by a company to existing holders of its stock to provide those holders the right to purchase additional shares of stock at a later date. Warrants and rights do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holder to purchase, and they do not represent any rights in the assets of the issuing company. Additionally, a warrant or right ceases to have value if it is not exercised prior to its expiration date. As a result, warrants and rights may be considered more speculative than certain other types of investments. Changes in the value of a warrant or right do not necessarily correspond to changes in the value of its underlying security. The price of a warrant or right may be more volatile than the price of its underlying security, and they therefore present greater potential for capital appreciation and capital loss. The effective price paid for warrants or rights added to the subscription price of the related security may exceed the value of the subscribed security’s market price, such as when there is no movement in the price of the underlying security. The market for warrants or rights may be very limited and it may be difficult to sell them promptly at an acceptable price.
Depositary receipts — Depositary receipts are securities that evidence ownership interests in, and represent the right to receive, a security or a pool of securities that have been deposited with a bank or trust depository. The fund may invest in American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global Depositary Receipts (“GDRs”), and other similar securities. For ADRs, the depository is typically a U.S. financial institution and the underlying securities are issued by a non-U.S. entity. For other depositary receipts, the depository may be a non-U.S. or a U.S. entity, and the underlying securities may be issued by a non-U.S. or a U.S. entity. Depositary receipts will not necessarily be denominated in the same currency as their underlying securities. Generally, ADRs are issued in registered form, denominated in U.S. dollars, and designed for use in the U.S. securities markets. Other depositary receipts, such as EDRs and GDRs, may be issued in bearer form, may be denominated in either U.S. dollars or in non-U.S. currencies, and are primarily designed for use in securities markets outside the United States. ADRs, EDRs and GDRs can be sponsored by the issuing bank or trust company or the issuer of the underlying securities. Although the issuing bank or trust company may impose charges for the collection of dividends and the conversion of such securities into the underlying securities, generally no fees are imposed on the purchase or sale of these securities other than transaction fees ordinarily involved with trading stock. Such securities may be less liquid or may trade at a lower price than the underlying securities of the issuer. Additionally, the issuers of securities underlying depositary receipts may not be obligated to timely disclose information that is considered material under the securities laws of the United States. Therefore, less information may be available regarding these issuers than about the issuers of other securities and there may not be a correlation between such information and the market value of the depositary receipts.
Debt instruments — Debt securities, also known as “fixed income securities,” are used by issuers to borrow money. Bonds, notes, debentures, asset-backed securities (including those backed by mortgages), and loan participations and assignments are common types of debt securities. Generally, issuers pay investors periodic interest and repay the amount borrowed either periodically during the life of the security and/or at maturity. Some debt securities, such as zero coupon bonds, do not pay current interest, but are purchased at a discount from their face values and their values accrete over
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time to face value at maturity. Some debt securities bear interest at rates that are not fixed, but that vary with changes in specified market rates or indices. The market prices of debt securities fluctuate depending on such factors as interest rates, credit quality and maturity. In general, market prices of debt securities decline when interest rates rise and increase when interest rates fall. These fluctuations will generally be greater for longer-term debt securities than for shorter-term debt securities. Prices of these securities can also be affected by financial contracts held by the issuer or third parties (such as derivatives) relating to the security or other assets or indices. Borrowers that are in bankruptcy or restructuring may never pay off their indebtedness, or they may pay only a small fraction of the amount owed. Direct indebtedness of countries, particularly developing countries, also involves a risk that the governmental entities responsible for the repayment of the debt may be unable, or unwilling, to pay interest and repay principal when due.
Lower rated debt securities, rated Ba1/BB+ or below by Nationally Recognized Statistical Rating Organizations, are described by the rating agencies as speculative and involve greater risk of default or price changes due to changes in the issuer’s creditworthiness than higher rated debt securities, or they may already be in default. Such securities are sometimes referred to as “junk bonds” or high yield bonds. The market prices of these securities may fluctuate more than higher quality securities and may decline significantly in periods of general economic difficulty. It may be more difficult to dispose of, and to determine the value of, lower rated debt securities. Investment grade bonds in the ratings categories A or Baa/BBB also may be more susceptible to changes in market or economic conditions than bonds rated in the highest rating categories.
Certain additional risk factors relating to debt securities are discussed below:
Sensitivity to interest rate and economic changes — Debt securities may be sensitive to economic changes, political and corporate developments, and interest rate changes. In addition, during an economic downturn or a period of rising interest rates, issuers that are highly leveraged may experience increased financial stress that could adversely affect their ability to meet projected business goals, to obtain additional financing and to service their principal and interest payment obligations. Periods of economic change and uncertainty also can be expected to result in increased volatility of market prices and yields of certain debt securities and derivative instruments. As discussed under “Market conditions” above in this statement of additional information, governments and quasi-governmental authorities may take actions to support local and global economies and financial markets during periods of economic crisis, including direct capital infusions into companies, new monetary programs and significantly lower interest rates. Such actions may expose fixed income markets to heightened volatility and may reduce liquidity for certain investments, which could cause the value of the fund’s portfolio to decline.
Payment expectations — Debt securities may contain redemption or call provisions. If an issuer exercises these provisions in a lower interest rate market, the fund may have to replace the security with a lower yielding security, resulting in decreased income to investors. If the issuer of a debt security defaults on its obligations to pay interest or principal or is the subject of bankruptcy proceedings, the fund may incur losses or expenses in seeking recovery of amounts owed to it.
Liquidity and valuation — There may be little trading in the secondary market for particular debt securities, which may affect adversely the fund’s ability to value accurately or dispose of such debt securities. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the value and/or liquidity of debt securities.
Credit ratings for debt securities provided by rating agencies reflect an evaluation of the safety of principal and interest payments, not market value risk. The rating of an issuer is a rating agency’s view
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of past and future potential developments related to the issuer and may not necessarily reflect actual outcomes. There can be a lag between the time of developments relating to an issuer and the time a rating is assigned and updated. The investment adviser considers these ratings of securities as one of many criteria in making its investment decisions.
Bond rating agencies may assign modifiers (such as +/–) to ratings categories to signify the relative position of a credit within the rating category. Investment policies that are based on ratings categories should be read to include any security within that category, without giving consideration to the modifier except where otherwise provided. See the appendix to this statement of additional information for more information about credit ratings.
Securities with equity and debt characteristics — Certain securities have a combination of equity and debt characteristics. Such securities may at times behave more like equity than debt or vice versa.
Preferred stock — Preferred stock represents an equity interest in an issuer that generally entitles the holder to receive, in preference to common stockholders and the holders of certain other stocks, dividends and a fixed share of the proceeds resulting from a liquidation of the issuer. Preferred stocks may pay fixed or adjustable rates of return, and preferred stock dividends may be cumulative or non-cumulative and participating or non-participating. Cumulative dividend provisions require all or a portion of prior unpaid dividends to be paid before dividends can be paid to the issuer’s common stockholders, while prior unpaid dividends on non-cumulative preferred stock are forfeited. Participating preferred stock may be entitled to a dividend exceeding the issuer’s declared dividend in certain cases, while non-participating preferred stock is entitled only to the stipulated dividend. Preferred stock is subject to issuer-specific and market risks applicable generally to equity securities. As with debt securities, the prices and yields of preferred stocks often move with changes in interest rates and the issuer’s credit quality. Additionally, a company’s preferred stock typically pays dividends only after the company makes required payments to holders of its bonds and other debt. Accordingly, the price of preferred stock will usually react more strongly than bonds and other debt to actual or perceived changes in the issuing company’s financial condition or prospects. Preferred stock of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies.
Convertible securities — A convertible security is a debt obligation, preferred stock or other security that may be converted, within a specified period of time and at a stated conversion rate, into common stock or other equity securities of the same or a different issuer. The conversion may occur automatically upon the occurrence of a predetermined event or at the option of either the issuer or the security holder. Under certain circumstances, a convertible security may also be called for redemption or conversion by the issuer after a particular date and at predetermined price specified upon issue. If a convertible security held by the fund is called for redemption or conversion, the fund could be required to tender the security for redemption, convert it into the underlying common stock, or sell it to a third party.
The holder of a convertible security is generally entitled to participate in the capital appreciation resulting from a market price increase in the issuer’s common stock and to receive interest paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible debt or preferred securities, as applicable. Convertible securities rank senior to common stock in an issuer’s capital structure and, therefore, normally entail less risk than the issuer’s common stock. However, convertible securities may also be subordinate to any senior debt obligations of the issuer, and, therefore, an issuer’s convertible securities may entail more risk than such senior debt obligations. Convertible securities usually offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because
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of the potential for capital appreciation. In addition, convertible securities are often lower-rated securities.
Because of the conversion feature, the price of a convertible security will normally fluctuate in some proportion to changes in the price of the underlying asset, and, accordingly, convertible securities are subject to risks relating to the activities of the issuer and/or general market and economic conditions. The income component of a convertible security may cushion the security against declines in the price of the underlying asset but may also cause the price of the security to fluctuate based upon changes in interest rates and the credit quality of the issuer. As with a straight fixed income security, the price of a convertible security tends to increase when interest rates decline and decrease when interest rates rise. Like the price of a common stock, the price of a convertible security also tends to increase as the price of the underlying stock rises and to decrease as the price of the underlying stock declines.
Hybrid securities — A hybrid security is a type of security that also has equity and debt characteristics. Like equities, which have no final maturity, a hybrid security may be perpetual. On the other hand, like debt securities, a hybrid security may be callable at the option of the issuer on a date specified at issue. Additionally, like common equities, which may stop paying dividends at virtually any time without violating any contractual terms or conditions, hybrids typically allow for issuers to withhold payment of interest until a later date or to suspend coupon payments entirely without triggering an event of default. Hybrid securities are normally at the bottom of an issuer’s debt capital structure because holders of an issuer’s hybrid securities are structurally subordinated to the issuer’s senior creditors. In bankruptcy, hybrid security holders should only get paid after all senior creditors of the issuer have been paid but before any disbursements are made to the issuer’s equity holders. Accordingly, hybrid securities may be more sensitive to economic changes than more senior debt securities. Such securities may also be viewed as more equity-like by the market when the issuer or its parent company experiences financial difficulties.
Contingent convertible securities, which are also known as contingent capital securities, are a form of hybrid security that are intended to either convert into equity or have their principal written down upon the occurrence of certain trigger events. One type of contingent convertible security has characteristics designed to absorb losses, by providing that the liquidation value of the security may be adjusted downward to below the original par value or written off entirely under certain circumstances. For instance, if losses have eroded the issuer’s capital level below a specified threshold, the liquidation value of the security may be reduced in whole or in part. The write-down of the security’s par value may occur automatically and would not entitle holders to institute bankruptcy proceedings against the issuer. In addition, an automatic write-down could result in a reduced income rate if the dividend or interest payment associated with the security is based on the security’s par value. Such securities may, but are not required to, provide for circumstances under which the liquidation value of the security may be adjusted back up to par, such as an improvement in capitalization or earnings. Another type of contingent convertible security provides for mandatory conversion of the security into common shares of the issuer under certain circumstances. The mandatory conversion might relate, for example, to the issuer’s failure to maintain a capital minimum. Since the common stock of the issuer may not pay a dividend, investors in such instruments could experience reduced yields (or no yields at all) and conversion would deepen the subordination of the investor, effectively worsening the investor’s standing in the case of the issuer’s insolvency. An automatic write-down or conversion event with respect to a contingent convertible security will typically be triggered by a reduction in the issuer’s capital level, but may also be triggered by regulatory actions, such as a change in regulatory capital requirements, or by other factors.
Obligations backed by the “full faith and credit” of the U.S. government — U.S. government obligations include the following types of securities:
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U.S. Treasury securities — U.S. Treasury securities include direct obligations of the U.S. Treasury, such as Treasury bills, notes and bonds. For these securities, the payment of principal and interest is unconditionally guaranteed by the U.S. government, and thus they are of high credit quality.
Federal agency securities — The securities of certain U.S. government agencies and government-sponsored entities are guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government. Such agencies and entities include, but are not limited to, the Federal Financing Bank (“FFB”), the Government National Mortgage Association (“Ginnie Mae”), the U.S. Department of Veterans Affairs (“VA”), the Federal Housing Administration (“FHA”), the Export-Import Bank of the United States (“Exim Bank”), the U.S. International Development Finance Corporation (“DFC”), the Commodity Credit Corporation (“CCC”) and the U.S. Small Business Administration (“SBA”).
Such securities are subject to variations in market value due to fluctuations in interest rates and in government policies, among other things, but, if held to maturity, are expected to be paid in full (either at maturity or thereafter). However, from time to time, a high national debt level, and uncertainty regarding negotiations to increase the U.S. government’s debt ceiling and periodic legislation to fund the government, could increase the risk that the U.S. government may default on its obligations and/or lead to a downgrade of the credit rating of the U.S. government. Such an event could adversely affect the value of investments in securities backed by the full faith and credit of the U.S. government, cause the fund to suffer losses and lead to significant disruptions in U.S. and global markets. Regulatory or market changes or conditions could increase demand for U.S. government securities and affect the availability of such instruments for investment and the fund's ability to pursue its investment strategies.
Other federal agency obligations — Additional federal agency securities are neither direct obligations of, nor guaranteed by, the U.S. government. These obligations include securities issued by certain U.S. government agencies and government-sponsored entities. However, they generally involve some form of federal sponsorship: some operate under a congressional charter; some are backed by collateral consisting of “full faith and credit” obligations as described above; some are supported by the issuer’s right to borrow from the Treasury; and others are supported only by the credit of the issuing government agency or entity. These agencies and entities include, but are not limited to: the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National Mortgage Association (“Fannie Mae”), the Tennessee Valley Authority and the Federal Farm Credit Bank System.
In 2008, Freddie Mac and Fannie Mae were placed into conservatorship by their new regulator, the Federal Housing Finance Agency (“FHFA”). Simultaneously, the U.S. Treasury made a commitment of indefinite duration to maintain the positive net worth of both firms. As conservator, the FHFA has the authority to repudiate any contract either firm has entered into prior to the FHFA’s appointment as conservator (or receiver should either firm go into default) if the FHFA, in its sole discretion determines that performance of the contract is burdensome and repudiation would promote the orderly administration of Fannie Mae’s or Freddie Mac’s affairs. While the FHFA has indicated that it does not intend to repudiate the guaranty obligations of either entity, doing so could adversely affect holders of their mortgage-backed securities. For example, if a contract were repudiated, the liability for any direct compensatory damages would accrue to the entity’s conservatorship estate and could only be satisfied to the extent the estate had available assets. As a result, if interest payments on Fannie Mae or Freddie Mac mortgage-backed securities held by the fund were reduced because underlying borrowers failed to make payments or such payments were not advanced by a loan servicer, the fund’s only recourse might be against the conservatorship estate, which might not have sufficient assets to offset any shortfalls.
The FHFA, in its capacity as conservator, has the power to transfer or sell any asset or liability of Fannie Mae or Freddie Mac. The FHFA has indicated it has no current intention to do this; however, should it
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do so a holder of a Fannie Mae or Freddie Mac mortgage-backed security would have to rely on another party for satisfaction of the guaranty obligations and would be exposed to the credit risk of that party.
Certain rights provided to holders of mortgage-backed securities issued by Fannie Mae or Freddie Mac under their operative documents may not be enforceable against the FHFA, or enforcement may be delayed during the course of the conservatorship or any future receivership. For example, the operative documents may provide that upon the occurrence of an event of default by Fannie Mae or Freddie Mac, holders of a requisite percentage of the mortgage-backed security may replace the entity as trustee. However, under the Federal Housing Finance Regulatory Reform Act of 2008, holders may not enforce this right if the event of default arises solely because a conservator or receiver has been appointed.
Forward commitment, when issued and delayed delivery transactions — The fund may enter into commitments to purchase or sell securities at a future date. When the fund agrees to purchase such securities, it assumes the risk of any decline in value of the security from the date of the agreement. If the other party to such a transaction fails to deliver or pay for the securities, the fund could miss a favorable price or yield opportunity, or could experience a loss.
The fund may enter into roll transactions, such as a mortgage dollar roll where the fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date, at a pre-determined price. During the period between the sale and repurchase (the “roll period”), the fund forgoes principal and interest paid on the mortgage-backed securities. The fund is compensated by the difference between the current sales price and the lower forward price for the future purchase (often referred to as the “drop”), if any, as well as by the interest earned on the cash proceeds of the initial sale. The fund could suffer a loss if the contracting party fails to perform the future transaction and the fund is therefore unable to buy back the mortgage-backed securities it initially sold. The fund also takes the risk that the mortgage-backed securities that it repurchases at a later date will have less favorable market characteristics than the securities originally sold (e.g., greater prepayment risk). These transactions are accounted for as purchase and sale transactions, which contribute to the fund’s portfolio turnover rate.
With to be announced (“TBA”) transactions, the particular securities (i.e., specified mortgage pools) to be delivered or received are not identified at the trade date, but are “to be announced” at a later settlement date. However, securities to be delivered must meet specified criteria, including face value, coupon rate and maturity, and be within industry-accepted “good delivery” standards.
The fund will not use these transactions for the purpose of leveraging. Although these transactions will not be entered into for leveraging purposes, the fund temporarily could be in a leveraged position (because it may have an amount greater than its net assets subject to market risk). Should market values of the fund’s portfolio securities decline while the fund is in a leveraged position, greater depreciation of its net assets would likely occur than if it were not in such a position. After a transaction is entered into, the fund may still dispose of or renegotiate the transaction. Additionally, prior to receiving delivery of securities as part of a transaction, the fund may sell such securities.
Under the SEC’s rule applicable to the fund’s use of derivatives, when issued, forward-settling and nonstandard settlement cycle securities, as well as TBAs and roll transactions, will be treated as derivatives unless the fund intends to physically settle these transactions and the transactions will settle within 35 days of their respective trade dates.
Inflation-linked bonds — The fund may invest in inflation-linked bonds issued by governments, their agencies or instrumentalities and corporations.
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The principal amount of an inflation-linked bond is adjusted in response to changes in the level of an inflation index, such as the Consumer Price Index for Urban Consumers (“CPURNSA”). If the index measuring inflation falls, the principal value or coupon of these securities will be adjusted downward. Consequently, the interest payable on these securities will be reduced. Also, if the principal value of these securities is adjusted according to the rate of inflation, the adjusted principal value repaid at maturity may be less than the original principal. In the case of U.S. Treasury Inflation-Protected Securities (“TIPS”), currently the only inflation-linked security that is issued by the U.S. Treasury, the principal amounts are adjusted daily based upon changes in the rate of inflation (as currently represented by the non-seasonally adjusted CPURNSA, calculated with a three-month lag). TIPS may pay interest semi-annually, equal to a fixed percentage of the inflation-adjusted principal amount. The interest rate on these bonds is fixed at issuance, but over the life of the bond this interest may be paid on an increasing or decreasing principal amount that has been adjusted for inflation. The current market value of TIPS is not guaranteed and will fluctuate. However, the U.S. government guarantees that, at maturity, principal will be repaid at the higher of the original face value of the security (in the event of deflation) or the inflation adjusted value.
Other non-U.S. sovereign governments also issue inflation-linked securities that are tied to their own local consumer price indexes and that offer similar deflationary protection. In certain of these non-U.S. jurisdictions, the repayment of the original bond principal upon the maturity of an inflation-linked bond is not guaranteed, allowing for the amount of the bond repaid at maturity to be less than par. Corporations also periodically issue inflation-linked securities tied to CPURNSA or similar inflationary indexes. While TIPS and non-U.S. sovereign inflation-linked securities are currently the largest part of the inflation-linked market, the fund may invest in corporate inflation-linked securities.
The value of inflation-linked securities is expected to change in response to the changes in real interest rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates and the rate of inflation. If inflation were to rise at a faster rate than nominal interest rates, real interest rates would decline, leading to an increase in value of the inflation-linked securities. In contrast, if nominal interest rates were to increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-linked securities. There can be no assurance, however, that the value of inflation-linked securities will be directly correlated to the changes in interest rates. If interest rates rise due to reasons other than inflation, investors in these securities may not be protected to the extent that the increase is not reflected in the security’s inflation measure.
The interest rate for inflation-linked bonds is fixed at issuance as a percentage of this adjustable principal. Accordingly, the actual interest income may both rise and fall as the principal amount of the bonds adjusts in response to movements of the consumer price index. For example, typically interest income would rise during a period of inflation and fall during a period of deflation.
The market for inflation-linked securities may be less developed or liquid, and more volatile, than certain other securities markets. There is a limited number of inflation-linked securities currently available for the fund to purchase, making the market less liquid and more volatile than the U.S. Treasury and agency markets.
Cash and cash equivalents — The fund may hold cash or invest in cash equivalents. Cash equivalents include, but are not limited to: (a) shares of money market or similar funds managed by the investment adviser or its affiliates; (b) shares of other money market funds; (c) commercial paper; (d) short-term bank obligations (for example, certificates of deposit, bankers’ acceptances (time drafts on a commercial bank where the bank accepts an irrevocable obligation to pay at maturity)) or bank notes; (e) savings association and savings bank obligations (for example, bank notes and certificates of deposit issued by savings banks or savings associations); (f) securities of the U.S. government, its agencies or instrumentalities that mature, or that may be redeemed, in one year or less; and (g) higher quality corporate bonds and notes that mature, or that may be redeemed, in one year or less.
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Commercial paper — The fund may purchase commercial paper. Commercial paper refers to short-term promissory notes issued by a corporation to finance its current operations. Such securities normally have maturities of thirteen months or less and, though commercial paper is often unsecured, commercial paper may be supported by letters of credit, surety bonds or other forms of collateral. Maturing commercial paper issuances are usually repaid by the issuer from the proceeds of new commercial paper issuances. As a result, investment in commercial paper is subject to rollover risk, or the risk that the issuer cannot issue enough new commercial paper to satisfy its outstanding commercial paper. Like all fixed income securities, commercial paper prices are susceptible to fluctuations in interest rates. If interest rates rise, commercial paper prices will decline and vice versa. However, the short-term nature of a commercial paper investment makes it less susceptible to volatility than many other fixed income securities because interest rate risk typically increases as maturity lengths increase. Commercial paper tends to yield smaller returns than longer-term corporate debt because securities with shorter maturities typically have lower effective yields than those with longer maturities. As with all fixed income securities, there is a chance that the issuer will default on its commercial paper obligations and commercial paper may become illiquid or suffer from reduced liquidity in these or other situations.
Commercial paper in which the fund may invest includes commercial paper issued in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”). Section 4(a)(2) commercial paper has substantially the same price and liquidity characteristics as commercial paper generally, except that the resale of Section 4(a)(2) commercial paper is limited to institutional investors who agree that they are purchasing the paper for investment purposes and not with a view to public distribution. Technically, such a restriction on resale renders Section 4(a)(2) commercial paper a restricted security under the 1933 Act. In practice, however, Section 4(a)(2) commercial paper typically can be resold as easily as any other unrestricted security held by the fund. Accordingly, Section 4(a)(2) commercial paper has been generally determined to be liquid under procedures adopted by the fund’s board of directors.
Restricted or illiquid securities — The fund may purchase securities subject to restrictions on resale. Restricted securities may only be sold pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “1933 Act”), or in a registered public offering. Where registration is required, the holder of a registered security may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time it may be permitted to sell a security under an effective registration statement. Difficulty in selling such securities may result in a loss to the fund or cause it to incur additional administrative costs.
Some fund holdings (including some restricted securities) may be deemed illiquid if the fund expects that a reasonable portion of the holding cannot be sold in seven calendar days or less without the sale significantly changing the market value of the investment. The determination of whether a holding is considered illiquid is made by the fund’s adviser under a liquidity risk management program adopted by the fund’s board and administered by the fund’s adviser. The fund may incur significant additional costs in disposing of illiquid securities.
Cybersecurity risks — With the increased use of technologies such as the Internet to conduct business, the fund has become potentially more susceptible to operational and information security risks through breaches in cybersecurity. In general, a breach in cybersecurity can result from either a deliberate attack or an unintentional event. Cybersecurity breaches may involve, among other things, “ransomware” attacks, injection of computer viruses or malicious software code, or the use of vulnerabilities in code to gain unauthorized access to digital information systems, networks or devices that are used directly or indirectly by the fund or its service providers through “hacking” or other means. Cybersecurity risks also include the risk of losses of service resulting from external attacks that do not require unauthorized access to the fund’s systems, networks or devices. For example, denial-of-service attacks on the investment adviser’s or an affiliate’s website could effectively render the fund’s
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network services unavailable to fund shareholders and other intended end-users. Any such cybersecurity breaches or losses of service may, among other things, cause the fund to lose proprietary information, suffer data corruption or lose operational capacity, or may result in the misappropriation, unauthorized release or other misuse of the fund’s assets or sensitive information (including shareholder personal information or other confidential information), the inability of fund shareholders to transact business, or the destruction of the fund’s physical infrastructure, equipment or operating systems. These, in turn, could cause the fund to violate applicable privacy and other laws and incur or suffer regulatory penalties, reputational damage, additional costs (including compliance costs) associated with corrective measures and/or financial loss. While the fund and its investment adviser have established business continuity plans and risk management systems designed to prevent or reduce the impact of cybersecurity attacks, there are inherent limitations in such plans and systems due in part to the ever-changing nature of technology and cybersecurity attack tactics, and there is a possibility that certain risks have not been adequately identified or prepared for.
In addition, cybersecurity failures by or breaches of the fund’s third-party service providers (including, but not limited to, the fund’s investment adviser, transfer agent, custodian, administrators and other financial intermediaries) may disrupt the business operations of the service providers and of the fund, potentially resulting in financial losses, the inability of fund shareholders to transact business with the fund and of the fund to process transactions, the inability of the fund to calculate its net asset value, violations of applicable privacy and other laws, rules and regulations, regulatory fines, penalties, reputational damage, reimbursement or other compensatory costs and/or additional compliance costs associated with implementation of any corrective measures. The fund and its shareholders could be negatively impacted as a result of any such cybersecurity breaches, and there can be no assurance that the fund will not suffer losses relating to cybersecurity attacks or other informational security breaches affecting the fund’s third-party service providers in the future, particularly as the fund cannot control any cybersecurity plans or systems implemented by such service providers.
Cybersecurity risks may also impact issuers of securities in which the fund invests, which may cause the fund’s investments in such issuers to lose value.
Inflation/Deflation risk — The fund may be subject to inflation and deflation risk. Inflation risk is the risk that the present value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the present value of the fund‘s assets can decline. Deflation risk is the risk that prices throughout the economy decline over time. Deflation or inflation may have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of the fund‘s assets.
Interfund borrowing and lending — Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission, the fund may lend money to, and borrow money from, other funds advised by Capital Research and Management Company or its affiliates. The fund will borrow through the program only when the costs are equal to or lower than the costs of bank loans. The fund will lend through the program only when the returns are higher than those available from an investment in repurchase agreements. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one day's notice. The fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs.
Affiliated investment companies — The fund may purchase shares of certain other investment companies managed by the investment adviser or its affiliates (“Central Funds”). The risks of owning another investment company are similar to the risks of investing directly in the securities in which that investment company invests. Investments in other investment companies could allow the fund to obtain the benefits of a more diversified portfolio than might otherwise be available through direct investments in a particular asset class, and will subject the fund to the risks associated with the
New World Fund — Page 29
particular asset class or asset classes in which an underlying fund invests. However, an investment company may not achieve its investment objective or execute its investment strategy effectively, which may adversely affect the fund’s performance. Any investment in another investment company will be consistent with the fund’s objective(s) and applicable regulatory limitations. Central Funds do not charge management fees. As a result, the fund does not bear additional management fees when investing in Central Funds, but the fund does bear its proportionate share of Central Fund expenses.
Securities lending activities – The fund may lend portfolio securities to brokers, dealers or other institutions that provide cash or U.S. Treasury securities as collateral in an amount at least equal to the value of the securities loaned. While portfolio securities are on loan, the fund will continue to receive the equivalent of the interest and the dividends or other distributions paid by the issuer on the securities, as well as a portion of the interest on the investment of the collateral. Additionally, although the fund will not have the right to vote on securities while they are on loan, the fund has a right to consent on corporate actions and a right to recall each loan to vote on proposals, including proposals involving material events affecting securities loaned. The fund has delegated the decision to lend portfolio securities to the investment adviser. The adviser also has the discretion to consent on corporate actions and to recall securities on loan to vote. In the event the adviser deems a corporate action or proxy vote material, as determined by the adviser based on factors relevant to the fund, it will use reasonable efforts to recall the securities and consent to or vote on the matter.
Securities lending involves risks, including the risk that the loaned securities may not be returned in a timely manner or at all, which would interfere with the fund’s ability to vote proxies or settle transactions, and/or the risk of a counterparty default. Additionally, the fund may lose money from the reinvestment of collateral received on loaned securities in investments that decline in value, default or do not perform as expected. The fund will make loans only to parties deemed by the fund’s adviser to be in good standing and when, in the adviser’s judgment, the income earned would justify the risks.
JPMorgan Chase Bank, N.A. (“JPMorgan”) serves as securities lending agent for the fund. As the securities lending agent, JPMorgan administers the fund’s securities lending program pursuant to the terms of a securities lending agent agreement entered into between the fund and JPMorgan. Under the terms of the agreement, JPMorgan is responsible for making available to approved borrowers securities from the fund’s portfolio. JPMorgan is also responsible for the administration and management of the fund’s securities lending program, including the preparation and execution of an agreement with each borrower governing the terms and conditions of any securities loan, ensuring that securities loans are properly coordinated and documented, ensuring that loaned securities are valued daily and that the corresponding required collateral is delivered by the borrowers, arranging for the investment of collateral received from borrowers, and arranging for the return of loaned securities to the fund in accordance with the fund’s instructions or at loan termination. As compensation for its services, JPMorgan receives a portion of the amount earned by the fund for lending securities.
New World Fund — Page 30
The following table sets forth, for the fund’s most recently completed fiscal year, the fund’s dollar amount of income and fees and/or other compensation related to its securities lending activities. Net income from securities lending activities may differ from the amount reported in the fund’s N-CSR, which reflects estimated accruals.
|
Gross income from securities lending activities |
$8,945,000 |
|
Fees paid to securities lending agent from a revenue split |
210,000 |
|
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) not included in the revenue split |
0 |
|
Administrative fees not included in the revenue split |
0 |
|
Indemnification fees not included in the revenue split |
0 |
|
Rebates (paid to borrower) |
4,743,000 |
|
Other fees not included in the revenue split |
0 |
|
Aggregate fees/compensation for securities lending activities |
4,953,000 |
|
Net income from securities lending activities |
3,992,000 |
* * * * * *
Portfolio turnover — Portfolio changes will be made without regard to the length of time particular investments may have been held. Short-term trading profits are not the fund’s objective, and changes in its investments are generally accomplished gradually, though short-term transactions may occasionally be made. Higher portfolio turnover may involve correspondingly greater transaction costs in the form of dealer spreads or brokerage commissions. It may also result in the realization of net capital gains, which are taxable when distributed to shareholders, unless the shareholder is exempt from taxation or his or her account is tax-favored.
The fund’s portfolio turnover rates for the fiscal years ended October 31, 2024 and 2023 were 37% and 32%, respectively. Variations in turnover rates are due to changes in trading activity during the period. The portfolio turnover rate would equal 100% if each security in a fund’s portfolio were replaced once per year.
New World Fund — Page 31
Fund policies
All percentage limitations in the following fund policies are considered at the time securities are purchased and are based on the fund’s net assets (excluding, for the avoidance of doubt, collateral held in connection with securities lending activities) unless otherwise indicated. None of the following policies involving a maximum percentage of assets will be considered violated unless the excess occurs immediately after, and is caused by, an acquisition by the fund. In managing the fund, the fund’s investment adviser may apply more restrictive policies than those listed below.
Fundamental policies — The fund has adopted the following policies, which may not be changed without approval by holders of a majority of its outstanding shares. Such majority is currently defined in the Investment Company Act of 1940, as amended (the “1940 Act”), as the vote of the lesser of (a) 67% or more of the voting securities present at a shareholder meeting, if the holders of more than 50% of the outstanding voting securities are present in person or by proxy, or (b) more than 50% of the outstanding voting securities.
1. Except as permitted by (i) the 1940 Act and the rules and regulations thereunder, or other successor law governing the regulation of registered investment companies, or interpretations or modifications thereof by the U.S. Securities and Exchange Commission (“SEC”), SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction, the fund may not:
a. Borrow money;
b. Issue senior securities;
c. Underwrite the securities of other issuers;
d. Purchase or sell real estate or commodities;
e. Make loans; or
f. Purchase the securities of any issuer if, as a result of such purchase, the fund’s investments would be concentrated in any particular industry.
2. The fund may not invest in companies for the purpose of exercising control or management.
Nonfundamental policies — The following policy may be changed without shareholder approval:
The fund may not acquire securities of open-end investment companies or unit investment trusts registered under the 1940 Act in reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
New World Fund — Page 32
Additional information about the fund‘s policies — The information below is not part of the fund’s fundamental or nonfundamental policies. This information is intended to provide a summary of what is currently required or permitted by the 1940 Act and the rules and regulations thereunder, or by the interpretive guidance thereof by the SEC or SEC staff, for particular fundamental policies of the fund. Information is also provided regarding the fund’s current intention with respect to certain investment practices permitted by the 1940 Act.
For purposes of fundamental policy 1a, the fund may borrow money in amounts of up to 33-1/3% of its total assets from banks for any purpose. Additionally, the fund may borrow up to 5% of its total assets from banks or other lenders for temporary purposes (a loan is presumed to be for temporary purposes if it is repaid within 60 days and is not extended or renewed). The percentage limitations in this policy are considered at the time of borrowing and thereafter.
For purposes of fundamental policies 1a and 1e, the fund may borrow money from, or loan money to, other funds managed by Capital Research and Management Company or its affiliates to the extent permitted by applicable law and an exemptive order issued by the SEC.
For purposes of fundamental policy 1b, a senior security does not include any promissory note or evidence of indebtedness if such loan is for temporary purposes only and in an amount not exceeding 5% of the value of the total assets of the fund at the time the loan is made (a loan is presumed to be for temporary purposes if it is repaid within 60 days and is not extended or renewed). Further, the fund is permitted to enter into derivatives and certain other transactions, notwithstanding the prohibitions and restrictions on the issuance of senior securities under the 1940 Act, in accordance with current SEC rules and interpretations.
For purposes of fundamental policy 1c, the policy will not apply to the fund to the extent the fund may be deemed an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of fund portfolio securities in the ordinary course of pursuing its investment objective and strategies.
For purposes of fundamental policy 1e, the fund may not lend more than 33-1/3% of its total assets, provided that this limitation shall not apply to the fund’s purchase of debt obligations.
For purposes of fundamental policy 1f, the fund may not invest more than 25% of its total assets in the securities of issuers in a particular industry. This policy does not apply to investments in securities of the U.S. government, its agencies or government sponsored enterprises or repurchase agreements with respect thereto.
New World Fund — Page 33
Board of directors and officers
Independent directors1
The fund’s nominating and governance committee and board select independent directors with a view toward constituting a board that, as a body, possesses the qualifications, skills, attributes and experience to appropriately oversee the actions of the fund’s service providers, decide upon matters of general policy and represent the long-term interests of fund shareholders. In doing so, they consider the qualifications, skills, attributes and experience of the current board members, with a view toward maintaining a board that is diverse in viewpoint, experience, education and skills.
The fund seeks independent directors who have high ethical standards and the highest levels of integrity and commitment, who have inquiring and independent minds, mature judgment, good communication skills, and other complementary personal qualifications and skills that enable them to function effectively in the context of the fund’s board and committee structure and who have the ability and willingness to dedicate sufficient time to effectively fulfill their duties and responsibilities.
Each independent director has a significant record of accomplishments in governance, business, not-for-profit organizations, government service, academia, law, accounting or other professions. Although no single list could identify all experience upon which the fund’s independent directors draw in connection with their service, the following table summarizes key experience for each independent director. These references to the qualifications, attributes and skills of the directors are pursuant to the disclosure requirements of the SEC, and shall not be deemed to impose any greater responsibility or liability on any director or the board as a whole. Notwithstanding the accomplishments listed below, none of the independent directors is considered an “expert” within the meaning of the federal securities laws with respect to information in the fund’s registration statement.
New World Fund — Page 34
|
Name,
year of |
Principal |
Number
of |
Other
directorships4 held by director |
Other relevant experience |
|
Vanessa
C. L. Chang, 1952 |
Former Director, EL & EL Investments (real estate) |
29 |
Edison
International/ Former director of Sykes Enterprises (outsourced customer engagement service provider) (until 2021) |
· Service as a chief executive officer, insurance-related (claims/dispute resolution) internet company · Senior management experience, investment banking · Former partner, public accounting firm · Corporate board experience · Service on advisory and trustee boards for charitable, educational and nonprofit organizations · Former member of the Governing Council of the Independent Directors Council · CPA (inactive) |
|
Pablo
R. González Guajardo, 1967 |
CEO, Kimberly-Clark de México, SAB de CV |
32 |
América Móvil, SAB de CV (telecommunications company); Kimberly-Clark de México, SAB de CV (consumer staples) Former director Grupo Lala, SAB de CV (dairy company) (until 2022); Grupo Sanborns, SAB de CV (retail stores and restaurants) (until 2023) |
· Service as a chief executive officer · Senior corporate management experience · Corporate board experience · Service on advisory and trustee boards for nonprofit organizations · MBA |
|
Martin
E. Koehler, 1957 |
Independent management consultant |
6 |
Former director of Deutsche Lufthansa AG (until 2020) |
· Senior management experience · Corporate board experience · Service on advisory and trustee boards for charitable and nonprofit organizations · MBA · MS, industrial engineering |
New World Fund — Page 35
|
Name,
year of |
Principal |
Number
of |
Other
directorships4 held by director |
Other relevant experience |
|
Pascal
Millaire, 1983 |
CEO and Director, CyberCube Analytics, Inc. (cyber risk software for insurers) |
3 |
None |
· Service as chief executive officer · Senior management experience · Corporate board experience · Service on advisory and trustee boards for charitable and nonprofit organizations · Global management consultant · Cybersecurity experience · MBA |
|
William
I. Miller, 1956 |
President, The Wallace Foundation |
3 |
Cummins, Inc. |
· Service as chief executive officer · Corporate board experience · Service on advisory and trustee boards for charitable, educational and nonprofit organizations · MBA |
|
Josette
Sheeran, 1954 |
Founder and CEO, Firefly Global Group (geopolitical and business consulting); former President, Canoo, Inc.; former President and CEO, Asia Society |
8 |
None |
· Service as chief executive officer · Senior management experience · Government service · Service on advisory councils and commissions for international and governmental organizations · Service on advisory and trustee boards for charitable and nonprofit organizations · Service as trustee for public and private entities |
New World Fund — Page 36
|
Name,
year of |
Principal |
Number
of |
Other
directorships4 held by director |
Other relevant experience |
|
Christopher
E. Stone, 1956 |
Professor of Practice of Public Integrity, University of Oxford, Blavatnik School of Government |
12 |
None |
· Service on advisory and trustee boards for charitable, international jurisprudence and nonprofit organizations · Former professor, practice of criminal justice · Former president of a large complex of global philanthropies · JD, MPhil, criminology |
|
Amy
Zegart, PhD, 1967 |
Senior Fellow and Associate Director, Stanford Institute for Human-Centered Artificial Intelligence, Stanford University |
9 |
Kratos Defense & Security Solutions |
· Senior academic leadership positions · Corporate board experience · Author · Consultant · PhD, Political Science |
New World Fund — Page 37
Interested director(s)5,6
Interested directors have similar qualifications, skills and attributes as the independent directors. Interested directors are senior executive officers and/or directors of Capital Research and Management Company or its affiliates. Such management roles with the fund‘s service providers also permit the interested directors to make a significant contribution to the fund’s board.
|
Name,
year of birth |
Principal
occupation(s) |
Number
of |
Other
directorships4 |
|
Carl
M. Kawaja, 1964 |
Partner – Capital World Investors, Capital Research and Management Company; Partner - Capital World Investors, Capital Bank and Trust Company*; Vice Chair and Director, Capital Research and Management Company |
3 |
None |
|
Joanna
F. Jonsson, 1963 |
Partner – Capital World Investors, Capital Research and Management Company; Vice Chair, President and Director, Capital Research and Management Company; Vice Chair and Director, The Capital Group Companies, Inc.* |
3 |
None |
New World Fund — Page 38
Other officers6
|
Name,
year of birth |
Principal
occupation(s) during the past five years |
|
Bradford
F. Freer, 1969 |
Partner – Capital Research Global Investors, Capital Research and Management Company |
|
Dawid
Justus, 1968 |
Partner – Capital World Investors, Capital Research Company*; Director, The Capital Group Companies, Inc.* |
|
Lisa
Thompson, 1965 |
Partner – Capital International Investors, Capital Research and Management Company |
|
Michael
W. Stockton, 1967 |
Senior Vice President – Legal and Compliance Group, Capital Research and Management Company |
|
Matt
Hochstetler, 1979 |
Partner – Capital World Investors, Capital Research and Management Company |
|
Winnie
Kwan, 1972 |
Partner – Capital Research Global Investors, Capital International, Inc.* |
|
Robert
W. Lovelace, 1962 |
Partner – Capital International Investors, Capital Research and Management Company; Partner – Capital International Investors, Capital Bank and Trust Company*; Chief Executive Officer and Director, Capital Research and Management Company |
|
Piyada
Phanaphat, 1978 |
Partner – Capital World Investors, Capital International Inc. |
|
Akira
Shiraishi, 1974 |
Partner – Capital International Investors, Capital Research and Management Company |
|
Kirstie
Spence, 1973 |
Partner – Capital Fixed Income Investors, Capital Bank and Trust Company*; Partner - Capital Fixed Income Investors, Capital International Limited*; Vice President and Director, Capital International Limited*; Director, Capital Research Company*; Director, The Capital Group Companies, Inc.* |
|
Tomonori
Tani, 1977 |
Partner – Capital World Investors, Capital Research and Management Company |
New World Fund — Page 39
|
Name,
year of birth |
Principal
occupation(s) during the past five years |
|
Christopher
Thomsen, 1970 |
Partner – Capital Research Global Investors, Capital Research Company* |
|
Jennifer
L. Butler, 1966 |
Assistant Vice President – Legal and Compliance Group, Capital Research and Management Company |
|
Brian
C. Janssen, 1972 |
Senior Vice President – Investment Operations, Capital Research and Management Company |
|
Michael
R. Tom, 1988 |
Associate – Legal and Compliance Group, Capital Research and Management Company |
|
Sandra
Chuon, 1972 |
Vice President – Investment Operations, Capital Research and Management Company |
|
Gregory
F. Niland, 1971 |
Vice President – Investment Operations, Capital Research and Management Company |
* Company affiliated with Capital Research and Management Company.
1 The term independent director refers to a director who is not an “interested person” of the fund within the meaning of the 1940 Act.
2 Directors and officers of the fund serve until their resignation, removal or retirement.
3 Funds managed by Capital Research and Management Company or its affiliates.
4 This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research and Management Company or its affiliates) that are held by each director as a director/trustee of a public company or a registered investment company. Unless otherwise noted, all directorships/trusteeships are current.
5 The term interested director refers to a director who is an “interested person” of the fund within the meaning of the 1940 Act, on the basis of his or her affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter).
6 All of the directors and/or officers listed are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser.
The address for all directors and officers of the fund is 333 South Hope Street, 55th Floor, Los Angeles, California 90071, Attention: Secretary.
New World Fund — Page 40
Fund shares owned by directors as of December 31, 2023:
|
Name |
Dollar
range1,2 |
Aggregate |
Dollar |
Aggregate |
|
Independent directors | ||||
|
Vanessa C. L. Chang |
Over $100,000 |
Over $100,000 |
N/A |
N/A |
|
Pablo R. González Guajardo |
$50,001 – $100,000 |
Over $100,000 |
Over $100,000 |
Over $100,000 |
|
Martin E. Koehler |
$50,001 – $100,000 |
Over $100,000 |
$50,001 – $100,000 |
Over $100,000 |
|
Pascal Millaire |
Over $100,000 |
Over $100,000 |
N/A |
N/A |
|
William I. Miller |
Over $100,000 |
Over $100,000 |
Over $100,000 |
Over $100,000 |
|
Josette Sheeran |
$10,001 – $50,000 |
Over $100,000 |
$10,001 – $50,000 |
Over $100,000 |
|
Christopher E. Stone |
None |
Over $100,000 |
Over $100,000 |
Over $100,000 |
|
Amy Zegart |
Over $100,000 |
Over $100,000 |
N/A |
N/A |
|
Name |
Dollar
range1,2 |
Aggregate |
|
Interested directors | ||
|
Carl M. Kawaja |
Over $100,000 |
Over $100,000 |
|
Joanna F. Jonsson |
Over $100,000 |
Over $100,000 |
1 Ownership disclosure is made using the following ranges: None; $1 – $10,000; $10,001 – $50,000; $50,001 – $100,000; and Over $100,000. The amounts listed for interested directors include shares owned through The Capital Group Companies, Inc. retirement plan and 401(k) plan.
2 N/A indicates that the listed individual, as of December 31, 2023, was not a director of a particular fund, did not allocate deferred compensation to the fund or did not participate in the deferred compensation plan.
3 Eligible directors may defer their compensation under a nonqualified deferred compensation plan. Amounts deferred by the director accumulate at an earnings rate determined by the total return of one or more American Funds as designated by the director.
New World Fund — Page 41
Director compensation — No compensation is paid by the fund to any officer or director who is a director, officer or employee of the investment adviser or its affiliates. Except for the independent directors listed in the “Board of directors and officers — Independent directors” table under the “Management of the fund” section in this statement of additional information, all other officers and directors of the fund are directors, officers or employees of the investment adviser or its affiliates. The board typically meets either individually or jointly with the boards of one or more other such funds with substantially overlapping board membership (in each case referred to as a “board cluster”). The fund typically pays each independent director an annual retainer fee based primarily on the total number of board clusters which that independent director serves. Board and committee chairs receive additional fees for their services.
The fund and the other funds served by each independent director each pay a portion of these fees.
No pension or retirement benefits are accrued as part of fund expenses. Generally, independent directors may elect, on a voluntary basis, to defer all or a portion of their fees through a deferred compensation plan in effect for the fund. The fund also reimburses certain expenses of the independent directors.
New World Fund — Page 42
Director compensation earned during the fiscal year ended October 31, 2024:
|
Name |
Aggregate
compensation |
Total
compensation (including |
|
Vanessa C. L. Chang |
$26,594 |
$442,250 |
|
Pablo R. González Guajardo2 |
28,265 |
489,750 |
|
Martin E. Koehler2 |
28,265 |
328,000 |
|
Pascal Millaire |
39,974 |
239,000 |
|
William I. Miller2 |
50,004 |
299,000 |
|
Josette Sheeran2 |
21,659 |
393,325 |
|
Christopher E. Stone2 |
21,659 |
456,575 |
|
Amy Zegart |
26,594 |
344,750 |
1 Amounts may be deferred by eligible directors under a nonqualified deferred compensation plan adopted by the fund in 1999. Deferred amounts accumulate at an earnings rate determined by the total return of one or more American Funds as designated by the directors. Compensation shown in this table for the fiscal year ended October 31, 2024 does not include earnings on amounts deferred in previous fiscal years. See footnote 2 to this table for more information.
2 Since the deferred compensation plan’s adoption, the total amount of deferred compensation accrued by the fund (plus earnings thereon) through the end of the 2024 fiscal year for participating directors is as follows: Pablo R. González Guajardo ($647,238), Martin E. Koehler ($81,522), William I. Miller ($367,584), Josette Sheeran ($449,074) and Christopher E. Stone ($30,890). Amounts deferred and accumulated earnings thereon are not funded and are general unsecured liabilities of the fund until paid to the directors.
Fund organization and the board of directors — The fund, an open-end, diversified management investment company, was organized as a Maryland corporation on November 13, 1998. At a meeting of the fund’s shareholders on November 24, 2009, shareholders approved the reorganization of the fund to a Delaware statutory trust. The reorganization may be completed in the next year; however, the fund reserves the right to delay the implementation. A summary comparison of the governing documents and state laws affecting the Delaware statutory trust and the current form of organization of the fund can be found in a joint proxy statement available on the SEC’s website at sec.gov. Although the board of directors has delegated day-to-day oversight to the investment adviser, all fund operations are supervised by the fund’s board, which meets periodically and performs duties required by applicable state and federal laws.
Under Maryland law, the business affairs of a fund are managed under the direction of the board of directors, and all powers of the fund are exercised by or under the authority of the board except as reserved to the shareholders by law or the fund’s charter or by-laws. Maryland law requires each director to perform his/her duties as a director, including his/her duties as a member of any board committee on which he/she serves, in good faith, in a manner he/she reasonably believes to be in the best interest of the fund, and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
Independent board members are paid certain fees for services rendered to the fund as described above. They may elect to defer all or a portion of these fees through a deferred compensation plan in effect for the fund.
The fund has several different classes of shares. Shares of each class represent an interest in the same investment portfolio. Each class has pro rata rights as to voting, redemption, dividends and liquidation, except that each class bears different distribution expenses and may bear different transfer agent fees and other expenses properly attributable to the particular class as approved by the board of directors and set forth in the fund’s rule 18f-3 Plan. Each class’ shareholders have exclusive voting rights with
New World Fund — Page 43
respect to the respective class’ rule 12b-1 plans adopted in connection with the distribution of shares and on other matters in which the interests of one class are different from interests in another class. Shares of all classes of the fund vote together on matters that affect all classes in substantially the same manner. Each class votes as a class on matters that affect that class alone. Note that 529 college savings plan account owners invested in Class 529 shares are not shareholders of the fund and, accordingly, do not have the rights of a shareholder, such as the right to vote proxies relating to fund shares. As the legal owner of the fund’s Class 529 shares, Commonwealth Savers PlanSM (formerly, Virginia529) will vote any proxies relating to the fund’s Class 529 shares.
The fund does not hold annual meetings of shareholders. However, significant matters that require shareholder approval, such as certain elections of board members or a change in a fundamental investment policy, will be presented to shareholders at a meeting called for such purpose. Shareholders have one vote per share owned. At the request of the holders of at least 10% of the shares, the fund will hold a meeting at which any member of the board could be removed by a majority vote.
The fund’s articles of incorporation and by-laws, as well as separate indemnification agreements with independent directors, provide in effect that, subject to certain conditions, the fund will indemnify its officers and directors against liabilities or expenses actually and reasonably incurred by them relating to their service to the fund. However, directors are not protected from liability by reason of their willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of their office.
Leadership structure — The board’s chair is currently an independent director who is not an “interested person” of the fund within the meaning of the 1940 Act. The board has determined that an independent chair facilitates oversight and enhances the effectiveness of the board. The independent chair’s duties include, without limitation, generally presiding at meetings of the board, approving board meeting schedules and agendas, leading meetings of the independent directors in executive session, facilitating communication with committee chairs, and serving as the principal independent director contact for fund management and counsel to the independent directors and the fund.
Risk oversight — Day-to-day management of the fund, including risk management, is the responsibility of the fund’s contractual service providers, including the fund’s investment adviser, principal underwriter/distributor and transfer agent. Each of these entities is responsible for specific portions of the fund’s operations, including the processes and associated risks relating to the fund‘s investments, integrity of cash movements, financial reporting, operations and compliance. The board of directors oversees the service providers’ discharge of their responsibilities, including the processes they use to manage relevant risks. In that regard, the board receives reports regarding the operations of the fund’s service providers, including risks. For example, the board receives reports from investment professionals regarding risks related to the fund‘s investments and trading. The board also receives compliance reports from the fund’s and the investment adviser’s chief compliance officers addressing certain areas of risk.
Committees of the fund’s board, which are comprised of independent board members, none of whom is an “interested person” of the fund within the meaning of the 1940 Act, as well as joint committees of independent board members of funds managed by Capital Research and Management Company, also explore risk management procedures in particular areas and then report back to the full board. For example, the fund’s audit committee oversees the processes and certain attendant risks relating to financial reporting, valuation of fund assets, and related controls. Similarly, a joint review and advisory committee oversees certain risk controls relating to the fund’s transfer agency services.
Not all risks that may affect the fund can be identified or processes and controls developed to eliminate or mitigate their effect. Moreover, it is necessary to bear certain risks (such as
New World Fund — Page 44
investment-related risks) to achieve the fund‘s objectives. As a result of the foregoing and other factors, the ability of the fund’s service providers to eliminate or mitigate risks is subject to limitations.
Committees of the board of directors — The fund has an audit committee comprised of Pablo R. González Guajardo, Pascal Millaire, Josette Sheeran and Amy Zegart. The committee provides oversight regarding the fund’s accounting and financial reporting policies and practices, its internal controls and the internal controls of the fund’s principal service providers. The committee acts as a liaison between the fund’s independent registered public accounting firm and the full board of directors. The audit committee held six meetings during the 2024 fiscal year.
The fund has a contracts committee comprised of all of its independent board members. The committee’s principal function is to request, review and consider the information deemed necessary to evaluate the terms of certain agreements between the fund and its investment adviser or the investment adviser’s affiliates, such as the Investment Advisory and Service Agreement, Principal Underwriting Agreement, Administrative Services Agreement and Plans of Distribution adopted pursuant to rule 12b-1 under the 1940 Act, that the fund may enter into, renew or continue, and to make its recommendations to the full board of directors on these matters. The contracts committee held one meeting during the 2024 fiscal year.
The fund has a nominating and governance committee comprised of Vanessa C. L. Chang, Martin E. Koehler, William I. Miller and Christopher E. Stone. 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. The committee also coordinates annual self-assessments of the board and evaluates, selects and nominates independent director candidates to the full board of directors. While the committee normally is able to identify from its own and other 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 fund, addressed to the fund’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 committee. The nominating and governance committee held three meetings during the 2024 fiscal year.
Proxy voting procedures and principles — The fund’s investment adviser, in consultation with the fund’s board, has adopted Proxy Voting Procedures and Principles (the “Principles”) with respect to voting proxies of securities held by the fund and other funds advised by the investment adviser or its affiliates. The complete text of these principles is available at capitalgroup.com. Proxies are voted by a committee of the appropriate equity investment division of the investment adviser under authority delegated by the funds’ boards. The boards of funds advised by Capital Research and Management Company and its affiliates, including American Funds and Capital Group exchange-traded funds, have established a Joint Proxy Committee (“JPC”) composed of independent board members from each applicable fund board. The JPC’s role is to facilitate appropriate oversight of the proxy voting process and provide valuable input on corporate governance and related matters.
The Principles provide an important framework for analysis and decision-making by all funds. However, they are not exhaustive and do not address all potential issues. The Principles provide a certain amount of flexibility so that all relevant facts and circumstances can be considered in connection with every vote. As a result, each proxy received is voted on a case-by-case basis considering the specific circumstances of each proposal. The voting process reflects the funds’ understanding of the company’s business, its management and its relationship with shareholders over time. In all cases, the investment objectives and policies of the funds managed by the investment adviser remain the focus.
New World Fund — Page 45
The investment adviser seeks to vote all U.S. proxies; however, in certain circumstances it may be impracticable or impossible to do so, including when securities are out on loan as part of a securities lending program. Proxies for companies outside the United States are also voted, subject to local market conditions and provided there is sufficient time and information available. Certain regulators have granted investment limit relief to the investment adviser and its affiliates, conditioned upon limiting its voting power to specific voting ceilings. To comply with these voting ceilings, the investment adviser will scale back its votes across all funds and clients on a pro-rata basis based on assets.
After a proxy statement is received, the investment adviser’s stewardship and engagement team prepares a summary of the proposals contained in the proxy statement.
For proxies of securities managed by a particular equity investment division of the investment adviser, the initial voting recommendation is made either by one or more of the division’s investment analysts familiar with the company and industry or, for routine matters, by a member of the investment adviser’s stewardship and engagement team and reviewed by the applicable analyst(s). Depending on the vote, a second recommendation may be made by a proxy coordinator (an investment analyst or other individual with experience in corporate governance and proxy voting matters) within the appropriate investment division, based on knowledge of these Principles and familiarity with proxy-related issues. The proxy summary and voting recommendations are made available to the proxy voting committee of the applicable investment division for a final voting decision. In cases where a fund is co-managed and a security is held by more than one of the investment adviser’s equity investment divisions, the divisions may develop different voting recommendations for individual ballot proposals. If this occurs, and if permitted by local market conventions, the fund’s position will generally be voted proportionally by divisional holding, according to their respective decisions. Otherwise, the outcome will be determined by the equity investment division or divisions with the larger position in the security as of the record date for the shareholder meeting.
In addition to its proprietary proxy voting, governance and executive compensation research, Capital Research and Management Company may utilize research provided by Institutional Shareholder Services, Glass-Lewis & Co. or other third-party advisory firms on a case-by-case basis. It does not, as a policy, follow the voting recommendations provided by these firms. It periodically assesses the information provided by the advisory firms and reports to the JPC, as appropriate.
From time to time, the investment adviser may vote proxies issued by, or on proposals sponsored or publicly supported by, (a) a client with substantial assets managed by the investment adviser or its affiliates, (b) an entity with a significant business relationship with The Capital Group Companies, Inc. or its affiliates, or (c) a company with a director of an American Fund on its board (each referred to as an “Interested Party”). Other persons or entities may also be deemed an Interested Party if facts or circumstances appear to give rise to a potential conflict.
The investment adviser has developed procedures to identify and address instances when a vote could appear to be influenced by such a relationship. Each equity investment division of the investment adviser has established a Special Review Committee (“SRC”) of senior investment professionals and legal and compliance professionals with oversight of potentially conflicted matters.
If a potential conflict is identified according to the procedure above, the SRC will take appropriate steps to address the conflict of interest, which may include engaging an independent third party to review the proxy, using Capital Group’s Principles, and provide an independent voting recommendation to the investment adviser for vote execution. The investment adviser will generally follow the third party’s recommendation, except when it believes the recommendation is inconsistent with the investment adviser’s fiduciary duty to its clients. Occasionally, it may not be feasible to engage the third party to review the matter due to compressed timeframes or other operational issues. In this
New World Fund — Page 46
case, the SRC will take appropriate steps to address the conflict of interest, including reviewing the proxy after being provided with a summary of any relevant communications with the Interested Party, the rationale for the voting decision, information on the organization’s relationship with the Interested Party and any other pertinent information.
Information regarding how the fund voted proxies relating to portfolio securities during the 12-month period ended June 30 of each year will be available on or about September 1 of such year (a) without charge, upon request by calling American Funds Service Company at (800) 421-4225, (b) on the Capital Group website and (c) on the SEC’s website at sec.gov.
The following summary sets forth the general positions of the investment adviser on various proposals. A copy of the full Principles is available upon request, free of charge, by calling American Funds Service Company or visiting the Capital Group website.
Director matters — The election of a company’s slate of nominees for director generally is supported. Votes may be withheld for some or all of the nominees if this is determined to be in the best interest of shareholders or if, in the opinion of the investment adviser, such nominee has not fulfilled his or her fiduciary duty. In making this determination, the investment adviser considers, among other things, a nominee’s potential conflicts of interest, track record in shareholder protection and value creation as well as their capacity for full engagement on board matters. The investment adviser generally supports diversity of experience among board members, and the separation of the chairman and CEO positions.
Governance provisions — Proposals to declassify a board (elect all directors annually) are supported based on the belief that this increases the directors’ sense of accountability to shareholders. Proposals for cumulative voting generally are supported in order to promote management and board accountability and an opportunity for leadership change. Proposals designed to make director elections more meaningful, either by requiring a majority vote or by requiring any director receiving more withhold votes than affirmative votes to tender his or her resignation, generally are supported.
Shareholder rights — Proposals to repeal an existing poison pill generally are supported. (There may be certain circumstances, however, when a proxy voting committee of a fund or an investment division of the investment adviser believes that a company needs to maintain anti-takeover protection.) Proposals to eliminate the right of shareholders to act by written consent or to take away a shareholder’s right to call a special meeting typically are not supported.
Compensation and benefit plans — Option plans are complicated, and many factors are considered in evaluating a plan. Each plan is evaluated based on protecting shareholder interests and a knowledge of the company and its management. Considerations include the pricing (or repricing) of options awarded under the plan and the impact of dilution on existing shareholders from past and future equity awards. Compensation packages should be structured to attract, motivate and retain existing employees and qualified directors; in addition, they should be aligned with the long-term success of the company and the enhancement of shareholder value.
Routine matters — The ratification of auditors, procedural matters relating to the annual meeting and changes to company name are examples of items considered routine. Such items generally are voted in favor of management’s recommendations unless circumstances indicate otherwise.
“ESG” shareholder proposals — The investment adviser believes environmental and social issues present investment risks and opportunities that can shape a company’s long-term
New World Fund — Page 47
financial sustainability. Shareholder proposals, including those relating to social and environmental issues, are evaluated in terms of their materiality to the company and its ability to generate long-term value in light of the company’s specific operating context. The investment adviser generally supports transparency and standardized disclosure, particularly that which leverages existing regulatory reporting or industry standard practices. With respect to environmental matters, this includes disclosures aligned with industry standards and sustainability reports more generally. With respect to social matters, the investment adviser expects companies to be able to articulate a strategy or plan to advance diversity and equity within the workforce, including the company’s management and board, subject to local norms and expectations. To that end, disclosure of data relating to workforce diversity and equity that is consistent with broadly applicable standards is generally supported.
New World Fund — Page 48
Principal fund shareholders — The following table identifies those investors who own of record, or are known by the fund to own beneficially, 5% or more of any class of its shares as of the opening of business on December 1, 2024. Unless otherwise indicated, the ownership percentages below represent ownership of record rather than beneficial ownership.
|
Name and Address |
Ownership |
Ownership Percentage | |
|
Edward D. Jones & Co. |
Record |
Class A |
30.38% |
|
For the benefit of its customers |
|
Class F-3 |
41.39% |
|
St. Louis, MO |
|
Class 529-A |
10.56% |
|
|
|
|
|
|
Pershing, LLC |
Record |
Class A |
6.83% |
|
Jersey City, NJ |
|
Class C |
10.17% |
|
|
|
Class F-2 |
31.60% |
|
|
|
Class F-3 |
11.37% |
|
|
|
|
|
|
Wells Fargo Clearing Services, LLC |
Record |
Class A |
6.59% |
|
Special custody account for the exclusive benefit of customers |
|
Class C |
15.97% |
|
St. Louis, MO |
|
Class F-2 |
13.42% |
|
|
|
|
|
|
National Financial Services, LLC |
Record |
Class A |
5.17% |
|
For the exclusive benefit of our customers |
|
Class C |
5.23% |
|
Omnibus account |
|
Class F-1 |
16.48% |
|
Jersey City, NJ |
|
Class F-2 |
11.80% |
|
|
|
Class F-3 |
12.94% |
|
|
|
|
|
|
Morgan Stanley Smith Barney LLC |
Record |
Class C |
9.07% |
|
For the exclusive benefit of its customers |
|
Class F-2 |
8.71% |
|
New York, NY |
|
Class 529-A |
10.36% |
|
|
|
Class 529-C |
18.67% |
|
|
|
Class 529-E |
7.76% |
|
|
|
|
|
|
LPL Financial |
Record |
Class C |
7.50% |
|
Omnibus customer account |
|
Class F-1 |
5.29% |
|
San Diego, CA |
|
Class F-2 |
8.23% |
|
|
|
|
|
|
Raymond James |
Record |
Class C |
6.33% |
|
Omnibus for mutual funds house account |
|
Class F-2 |
5.66% |
|
St. Petersburg, FL |
|
Class 529-C |
5.93% |
|
|
|
Class 529-F-2 |
5.30% |
|
|
|
|
|
|
Charles Schwab & Co., Inc. |
Record |
Class F-1 |
41.08% |
|
Special custody account for exclusive benefit of customers |
|
|
|
|
Account 1 |
|
|
|
|
San Francisco, CA |
|
|
|
|
|
|
|
|
New World Fund — Page 49
|
Name and Address |
Ownership |
Ownership Percentage | |
|
UBS Wm USA |
Record |
Class F-2 |
5.81% |
|
Weehawken, NJ |
|
|
|
|
|
|
|
|
|
Charles Schwab & Co., Inc. |
Record |
Class F-3 |
19.03% |
|
Special custody account for exclusive benefit of customers |
|
|
|
|
Account 2 |
|
|
|
|
San Francisco, CA |
|
|
|
|
|
|
|
|
|
Charles Schwab & Co., Inc. |
Record |
Class F-3 |
8.13% |
|
Special custody account for exclusive benefit of customers |
|
|
|
|
Account 3 |
|
|
|
|
San Francisco, CA |
|
|
|
|
|
|
|
|
|
Capital Research & Management Co |
Record |
Class 529-F-1 |
100.00% |
|
Corporate Account |
|
Class 529-F-3 |
100.00% |
|
Irvine, CA |
|
|
|
|
|
|
|
|
|
Matrix Trust Company as agent for |
Record |
Class R-1 |
20.14% |
|
Advisor Trust, Inc. |
Beneficial |
Class R-3 |
|
|
Aspire-Investlink |
|
|
|
|
Denver, CO |
|
|
|
|
|
|
|
|
|
DCGT Trustee & or Custodian |
Record |
Class R-1 |
8.76% |
|
FBO PLIC Various Retirement Plans |
|
|
|
|
Omnibus |
|
|
|
|
Des Moines, IA |
|
|
|
|
|
|
|
|
|
AXA Equitable FBO |
Record |
Class R-2 |
6.44% |
|
401k Retirement Plans |
Beneficial |
|
|
|
Jersey City, NJ |
|
|
|
|
|
|
|
|
|
State Street Bank and Trust as Trustee and/or Custodian FBO |
Record |
Class R-2-E |
13.13% |
|
ADP Access Product 401K |
Beneficial |
|
|
|
Boston, MA |
|
|
|
|
|
|
|
|
|
Hartford |
Record |
Class R-2-E |
12.56% |
|
Hartford, CT |
|
|
|
|
|
|
|
|
New World Fund — Page 50
|
Name and Address |
Ownership |
Ownership Percentage | |
|
Massachusetts Mutual Life |
Record |
Class R-2-E |
8.02% |
|
Insurance Company 401K |
Beneficial |
|
|
|
Springfield, MA |
|
|
|
|
|
|
|
|
|
National Financial Services, LLC |
Record |
Class R-2-E |
7.88% |
|
Account 1 |
|
|
|
|
Jersey City, NJ |
|
|
|
|
|
|
|
|
|
DCGT Trustee & or Custodian |
Record |
Class R-3 |
8.08% |
|
FBO PLIC Various Retirement Plans |
|
|
|
|
Omnibus |
|
|
|
|
Des Moines, IA |
|
|
|
|
|
|
|
|
|
Empower Trust Company, LLC |
Record |
Class R-3 |
6.76% |
|
Employee Benefits Clients 401K |
Beneficial |
|
|
|
Greenwood Village, CO |
|
|
|
|
|
|
|
|
|
Nationwide Life Insurance Co DCVA |
Record |
Class R-4 |
11.68% |
|
C/O IPO Portfolio Accounting |
|
|
|
|
Columbus, OH |
|
|
|
|
|
|
|
|
|
MLPF&S |
Record |
Class R-4 |
11.00% |
|
For the sole benefit of its customers |
|
Class R-5 |
26.22% |
|
Jacksonville, FL |
|
|
|
|
|
|
|
|
|
Nationwide Life Insurance Co NACO |
Record |
Class R-4 |
8.63% |
|
C/O IPO Portfolio Accounting |
|
|
|
|
Columbus, OH |
|
|
|
|
|
|
|
|
|
Nationwide Life Insurance Co GPVA |
Record |
Class R-5-E |
7.07% |
|
C/O IPO Portfolio Accounting |
|
|
|
|
Columbus, OH |
|
|
|
|
|
|
|
|
|
American Funds 2045 Target Date |
Record |
Class R-6 |
11.50% |
|
Retirement Fund |
|
|
|
|
Norfolk, VA |
|
|
|
|
|
|
|
|
|
American Funds 2050 Target Date |
Record |
Class R-6 |
10.32% |
|
Retirement Fund |
|
|
|
|
Norfolk, VA |
|
|
|
|
|
|
|
|
|
American Funds 2055 Target Date |
Record |
Class R-6 |
9.73% |
|
Retirement Fund |
|
|
|
|
Norfolk, VA |
|
|
|
|
|
|
|
|
New World Fund — Page 51
|
Name and Address |
Ownership |
Ownership Percentage | |
|
American Funds 2040 Target Date |
Record |
Class R-6 |
9.05% |
|
Retirement Fund |
|
|
|
|
Norfolk, VA |
|
|
|
|
|
|
|
|
|
American Funds 2060 Target Date |
Record |
Class R-6 |
5.92% |
|
Retirement Fund |
|
|
|
|
Norfolk, VA |
|
|
|
|
|
|
|
|
|
National Financial Services, LLC |
Record |
Class R-6 |
5.58% |
|
Account 2 |
|
|
|
|
Jersey City, NJ |
|
|
|
Because Class T and Class 529-T shares are not currently offered to the public, Capital Research and Management Company, the fund’s investment adviser, owns 100% of the fund‘s outstanding Class T and Class 529-T shares.
As of December 1, 2024, the officers and directors of the fund, as a group, owned beneficially or of record less than 1% of the outstanding shares of the fund.
Unless otherwise noted, references in this statement of additional information to Class F shares, Class R shares or Class 529 shares refer to all F share classes, all R share classes or all 529 share classes, respectively.
Investment adviser — Capital Research and Management Company, the fund’s investment adviser, founded in 1931, maintains research facilities in the United States and abroad (Geneva, Hong Kong, London, Los Angeles, Mumbai, New York, San Francisco, Singapore, Tokyo, Toronto and Washington, D.C.). These facilities are staffed with experienced investment professionals. The investment adviser is located at 333 South Hope Street, Los Angeles, CA 90071. It is a wholly owned subsidiary of The Capital Group Companies, Inc., a holding company for several investment management subsidiaries. Capital Research and Management Company manages equity assets through three equity investment divisions and fixed income assets through its fixed income investment division, Capital Fixed Income Investors. The three equity investment divisions — Capital World Investors, Capital Research Global Investors and Capital International Investors — make investment decisions independently of one another. Portfolio managers in Capital International Investors rely on a research team that also provides investment services to institutional clients and other accounts advised by affiliates of Capital Research and Management Company. The investment adviser, which is deemed under the Commodity Exchange Act (the “CEA”) to be the operator of the fund, has claimed an exclusion from the definition of the term commodity pool operator under the CEA with respect to the fund and, therefore, is not subject to registration or regulation as such under the CEA with respect to the fund.
The investment adviser has adopted policies and procedures that address issues that may arise as a result of an investment professional’s management of the fund and other funds and accounts. Potential issues could involve allocation of investment opportunities and trades among funds and accounts, use of information regarding the timing of fund trades, investment professional compensation and voting relating to portfolio securities. The investment adviser believes that its policies and procedures are reasonably designed to address these issues.
Compensation of investment professionals — As described in the prospectus, the investment adviser uses a system of multiple portfolio managers in managing fund assets. In addition, Capital Research and Management Company’s investment analysts may make investment decisions with respect to a portion of a fund’s portfolio within their research coverage.
New World Fund — Page 52
Portfolio managers and investment analysts are paid competitive salaries by Capital Research and Management Company. In addition, they may receive bonuses based on their individual portfolio results. Investment professionals also may participate in profit-sharing plans. The relative mix of compensation represented by bonuses, salary and profit-sharing plans will vary depending on the individual’s portfolio results, contributions to the organization and other factors.
To encourage a long-term focus, bonuses based on investment results are calculated by comparing pretax total investment returns to relevant benchmarks over the most recent one-, three-, five- and eight-year periods, with increasing weight placed on each succeeding measurement period. For portfolio managers, benchmarks may include measures of the marketplaces in which the fund invests and measures of the results of comparable mutual funds. For investment analysts, benchmarks may include relevant market measures and appropriate industry or sector indexes reflecting their areas of expertise. Capital Research and Management Company makes periodic subjective assessments of analysts’ contributions to the investment process and this is an element of their overall compensation. The investment results of each of the fund’s portfolio managers may be measured against one or more benchmarks, depending on his or her investment focus, such as MSCI All Country World Index Net to US, JP Morgan Emerging Markets Bond Index Global Diversified, Qualified Developing Countries (MSCI Emerging Markets ex Korea & Taiwan) Net to US; and a custom average consisting of funds that disclose investment objectives and strategies comparable to those of the fund. From time to time, Capital Research and Management Company may adjust or customize these benchmarks to better reflect the investment objective of the fund and/or the universe of comparably managed funds of competitive investment management firms.
Portfolio manager fund holdings and other managed accounts — As described below, portfolio managers may personally own shares of the fund. In addition, portfolio managers may manage portions of other mutual funds or accounts advised by Capital Research and Management Company or its affiliates.
New World Fund — Page 53
The following table reflects information as of October 31, 2024:
|
Portfolio |
Dollar
range |
Number |
Number |
Number | ||||
|
Bradford F. Freer |
Over $1,000,000 |
6 |
$108.3 |
1 |
$0.54 |
None | ||
|
Matt Hochstetler |
Over $1,000,000 |
5 |
$16.2 |
1 |
$0.54 |
None | ||
|
Dawid Justus |
$100,001 - $500,000 |
2 |
$3.6 |
2 |
$10.18 |
None | ||
|
Carl M. Kawaja |
Over $1,000,000 |
4 |
$425.9 |
4 |
$28.38 |
None | ||
|
Winnie Kwan |
$100,001 - $500,000 |
6 |
$140.2 |
3 |
$1.30 |
None | ||
|
Robert W. Lovelace |
Over $1,000,000 |
3 |
$145.3 |
4 |
$20.05 |
None | ||
|
Piyada Phanaphat |
$100,001 - $500,000 |
5 |
$90.8 |
1 |
$0.54 |
None | ||
|
Akira Shiraishi |
Over $1,000,000 |
2 |
$3.6 |
3 |
$1.61 |
84 |
$2.71 | |
|
Kirstie Spence |
Over $1,000,000 |
3 |
$22.5 |
7 |
$6.68 |
5 |
$1.67 | |
|
Tomonori Tani |
$100,001 - $500,000 |
3 |
$136.9 |
2 |
$14.07 |
None | ||
|
Lisa Thompson |
Over $1,000,000 |
6 |
$21.0 |
4 |
$0.76 |
3 |
$0.26 | |
|
Christopher Thomsen |
Over $1,000,000 |
5 |
$147.1 |
2 |
$14.07 |
None | ||
1 Ownership disclosure is made using the following ranges: None; $1 – $10,000; $10,001 – $50,000; $50,001 – $100,000; $100,001 – $500,000; $500,001 – $1,000,000; and Over $1,000,000.
2 Indicates other RIC(s), PIV(s) or other accounts managed by Capital Research and Management Company or its affiliates for which the portfolio manager also has significant day to day management responsibilities. Assets noted are the total net assets of the RIC(s), PIV(s) or other accounts and are not the total assets managed by the individual, which is a substantially lower amount. No RIC, PIV or other account has an advisory fee that is based on the performance of the RIC, PIV or other account, unless otherwise noted.
3 Personal brokerage accounts of portfolio managers and their families are not reflected.
4 The advisory fee of one of these accounts (representing $0.87 billion in total assets) is based partially on its investment results.
The fund’s investment adviser has adopted policies and procedures to mitigate material conflicts of interest that may arise in connection with a portfolio manager’s management of the fund, on the one hand, and investments in the other pooled investment vehicles and other accounts, on the other hand, such as material conflicts relating to the allocation of investment opportunities that may be suitable for both the fund and such other accounts.
New World Fund — Page 54
Investment Advisory and Service Agreement — The Investment Advisory and Service Agreement (the “Agreement”) between the fund and the investment adviser will continue in effect until November 30, 2025, unless sooner terminated, and may be renewed from year to year thereafter, provided that any such renewal has been specifically approved at least annually by (a) the board of directors, or by the vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the fund, and (b) the vote of a majority of directors who are not parties to the Agreement or interested persons (as defined in the 1940 Act) of any such party, in accordance with applicable laws and regulations. The Agreement provides that the investment adviser has no liability to the fund for its acts or omissions in the performance of its obligations to the fund not involving willful misconduct, bad faith, gross negligence or reckless disregard of its obligations under the Agreement. The Agreement also provides that either party has the right to terminate it, without penalty, upon 60 days’ written notice to the other party, and that the Agreement automatically terminates in the event of its assignment (as defined in the 1940 Act). In addition, the Agreement provides that the investment adviser may delegate all, or a portion of, its investment management responsibilities to one or more subsidiary advisers approved by the fund’s board, pursuant to an agreement between the investment adviser and such subsidiary. Any such subsidiary adviser will be paid solely by the investment adviser out of its fees.
In addition to providing investment advisory services, the investment adviser furnishes the services and pays the compensation and travel expenses of persons to perform the fund’s executive, administrative, clerical and bookkeeping functions, and provides suitable office space, necessary small office equipment and utilities, general purpose accounting forms, supplies and postage used at the fund’s offices. The fund pays all expenses not assumed by the investment adviser, including, but not limited to: custodian, stock transfer and dividend disbursing fees and expenses; shareholder recordkeeping and administrative expenses; costs of the designing, printing and mailing of reports, prospectuses, proxy statements and notices to its shareholders; taxes; expenses of the issuance and redemption of fund shares (including stock certificates, registration and qualification fees and expenses); expenses pursuant to the fund’s plans of distribution (described below); legal and auditing expenses; compensation, fees and expenses paid to independent directors; association dues; costs of stationery and forms prepared exclusively for the fund; and costs of assembling and storing shareholder account data.
New World Fund — Page 55
Under the Agreement, the investment adviser receives a management fee based on the following annualized rates and daily net asset levels:
|
Rate |
Net asset level | |
|
In excess of |
Up to | |
|
0.850% |
$ 0 |
$ 500,000,000 |
|
0.770 |
500,000,000 |
1,000,000,000 |
|
0.710 |
1,000,000,000 |
1,500,000,000 |
|
0.660 |
1,500,000,000 |
2,500,000,000 |
|
0.620 |
2,500,000,000 |
4,000,000,000 |
|
0.580 |
4,000,000,000 |
6,500,000,000 |
|
0.540 |
6,500,000,000 |
10,500,000,000 |
|
0.510 |
10,500,000,000 |
17,000,000,000 |
|
0.500 |
17,000,000,000 |
21,000,000,000 |
|
0.490 |
21,000,000,000 |
27,000,000,000 |
|
0.485 |
27,000,000,000 |
34,000,000,000 |
|
0.480 |
34,000,000,000 |
44,000,000,000 |
|
0.477 |
44,000,000,000 |
55,000,000,000 |
|
0.474 |
55,000,000,000 |
|
Management fees are paid monthly and accrued daily.
For the fiscal years ended October 31, 2024, 2023 and 2022, the investment adviser earned from the fund management fees of $292,843,000, $253,729,000 and $264,033,000, respectively. The fund's board of directors approved an amended Investment Advisory and Service Agreement in September 2021, pursuant to which the annualized rate payable to the investment adviser on daily net assets in excess of certain levels would be decreased. The investment adviser voluntarily waived management fees to give effect to the approved rates in advance of the February 2022 effective date of the amended Agreement. Accordingly, after giving effect to the fee waiver described above, the fund paid the investment adviser management fees of $264,001,000 (a reduction of $32,000) for the fiscal year ended October 31, 2022.
New World Fund — Page 56
Administrative services — The investment adviser and its affiliates provide certain administrative services for shareholders of the fund’s Class A, C, T, F, R and 529 shares. Administrative services are provided by the investment adviser and its affiliates to help assist third parties providing non-distribution services to fund shareholders. These services include providing in-depth information on the fund and market developments that impact fund investments. Administrative services also include, but are not limited to, coordinating, monitoring and overseeing third parties that provide services to fund shareholders.
These services are provided pursuant to an Administrative Services Agreement (the “Administrative Agreement”) between the fund and the investment adviser relating to the fund’s Class A, C, T, F, R and 529 shares. The Administrative Agreement will continue in effect until November 30, 2025, unless sooner renewed or terminated, and may be renewed from year to year thereafter, provided that any such renewal has been specifically approved by the vote of a majority of the members of the fund’s board who are not parties to the Administrative Agreement or interested persons (as defined in the 1940 Act) of any such party. The fund may terminate the Administrative Agreement at any time by vote of a majority of independent board members. The investment adviser has the right to terminate the Administrative Agreement upon 60 days’ written notice to the fund. The Administrative Agreement automatically terminates in the event of its assignment (as defined in the 1940 Act).
The Administrative Services Agreement between the fund and the investment adviser provides the fund the ability to charge an administrative services fee of .05% for all share classes. The fund’s investment adviser receives an administrative services fee at the annual rate of .03% of the average daily net assets of the fund attributable to each of the share classes (which could be increased as noted above) for its provision of administrative services. Administrative services fees are paid monthly and accrued daily.
During the 2024 fiscal year, administrative services fees were:
|
Administrative services fee | |
|
Class A |
$3,890,000 |
|
Class C |
90,000 |
|
Class T |
—* |
|
Class F-1 |
263,000 |
|
Class F-2 |
5,135,000 |
|
Class F-3 |
2,387,000 |
|
Class 529-A |
276,000 |
|
Class 529-C |
6,000 |
|
Class 529-E |
9,000 |
|
Class 529-T |
—* |
|
Class 529-F-1 |
—* |
|
Class 529-F-2 |
40,000 |
|
Class 529-F-3 |
—* |
|
Class R-1 |
7,000 |
|
Class R-2 |
76,000 |
|
Class R-2E |
12,000 |
|
Class R-3 |
149,000 |
|
Class R-4 |
234,000 |
|
Class R-5E |
32,000 |
|
Class R-5 |
92,000 |
|
Class R-6 |
4,577,000 |
* Amount less than $1,000.
New World Fund — Page 57
Principal Underwriter and plans of distribution — Capital Client Group, Inc. (the “Principal Underwriter”) is the principal underwriter of the fund’s shares. The Principal Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071; 6455 Irvine Center Drive, Irvine, CA 92618; 3500 Wiseman Boulevard, San Antonio, TX 78251; and 12811 North Meridian Street, Carmel, IN 46032.
The Principal Underwriter receives revenues relating to sales of the fund’s shares, as follows:
· For Class A and 529-A shares, the Principal Underwriter receives commission revenue consisting of the balance of the Class A and 529-A sales charge remaining after the allowances by the Principal Underwriter to investment dealers.
· For Class C and 529-C shares, the Principal Underwriter receives any contingent deferred sales charges that apply during the first year after purchase.
In addition, the fund reimburses the Principal Underwriter for advancing immediate service fees to qualified dealers and financial professionals upon the sale of Class C and 529-C shares. The fund also reimburses the Principal Underwriter for service fees (and, in the case of Class 529-E shares, commissions) paid on a quarterly basis to intermediaries, such as qualified dealers or financial professionals, in connection with investments in Class T, F-1, 529-E, 529-T, 529-F-1, R-1, R-2, R-2E, R-3 and R-4 shares.
Commissions, revenue or service fees retained by the Principal Underwriter after allowances or compensation to dealers were:
|
Fiscal year |
Commissions, |
Allowance
or | |
|
Class A |
2024 |
$793,000 |
$3,404,000 |
|
2023 |
964,000 |
4,135,000 | |
|
2022 |
1,376,000 |
5,914,000 | |
|
Class C |
2024 |
65,000 |
205,000 |
|
2023 |
17,000 |
271,000 | |
|
2022 |
176,000 |
333,000 | |
|
Class 529-A |
2024 |
131,000 |
508,000 |
|
2023 |
147,000 |
538,000 | |
|
2022 |
173,000 |
650,000 | |
|
Class 529-C |
2024 |
4,000 |
32,000 |
|
2023 |
—* |
36,000 | |
|
2022 |
2,000 |
41,000 |
* Amount less than $1,000.
New World Fund — Page 58
Plans of distribution — The fund has adopted plans of distribution (the “Plans”) pursuant to rule 12b-1 under the 1940 Act. The Plans permit the fund to expend amounts to finance any activity primarily intended to result in the sale of fund shares, provided the fund’s board of directors has approved the category of expenses for which payment is being made.
Each Plan is specific to a particular share class of the fund. As the fund has not adopted a Plan for Class F-2, F-3, 529-F-2, 529-F-3, R-5E, R-5 or R-6, no 12b-1 fees are paid from Class F-2, F-3, 529-F-2, 529-F-3, R-5E, R-5 or R-6 share assets and the following disclosure is not applicable to these share classes.
Payments under the Plans may be made for service-related and/or distribution-related expenses. Service-related expenses include paying service fees to qualified dealers. Distribution-related expenses include commissions paid to qualified dealers. The amounts actually paid under the Plans for the past fiscal year, expressed as a percentage of the fund’s average daily net assets attributable to the applicable share class, are disclosed in the prospectus under “Fees and expenses of the fund.” Further information regarding the amounts available under each Plan is in the “Plans of Distribution” section of the prospectus.
Following is a brief description of the Plans:
Class A and 529-A — For Class A and 529-A shares, up to .25% of the fund’s average daily net assets attributable to such shares is reimbursed to the Principal Underwriter for paying service-related expenses, and the balance available under the applicable Plan may be paid to the Principal Underwriter for distribution-related expenses. The fund may annually expend up to .30% for Class A shares and up to .50% for Class 529-A shares under the applicable Plan; however, for Class 529-A shares, the board of trustees has approved payments to the Principal Underwriter of up to .30% of the fund’s average daily net assets, in the aggregate, for paying service- and distribution-related expenses.
Distribution-related expenses for Class A and 529-A shares include dealer commissions and wholesaler compensation paid on sales of shares of $1 million or more purchased without a sales charge. Commissions on these “no load” purchases (which are described in further detail under the “Sales Charges” section of this statement of additional information) in excess of the Class A and 529-A Plan limitations and not reimbursed to the Principal Underwriter during the most recent fiscal quarter are recoverable for 15 months, provided that the reimbursement of such commissions does not cause the fund to exceed the annual expense limit. After 15 months, these commissions are not recoverable.
Class T and 529-T — For Class T and 529-T shares, the fund may annually expend up to .50% under the applicable Plan; however, the fund’s board of trustees has approved payments to the Principal Underwriter of up to .25% of the fund’s average daily net assets attributable to Class T and 529-T shares for paying service-related expenses.
New World Fund — Page 59
Other share classes — The Plans for each of the other share classes that have adopted Plans provide for payments to the Principal Underwriter for paying service-related and distribution-related expenses of up to the following amounts of the fund’s average daily net assets attributable to such shares:
|
Share class |
Service |
Distribution |
Total |
|
Class C |
0.25% |
0.75% |
1.00% |
|
Class F-1 |
0.25 |
— |
0.50 |
|
Class 529-C |
0.25 |
0.75 |
1.00 |
|
Class 529-E |
0.25 |
0.25 |
0.75 |
|
Class 529-F-1 |
0.25 |
— |
0.50 |
|
Class R-1 |
0.25 |
0.75 |
1.00 |
|
Class R-2 |
0.25 |
0.50 |
1.00 |
|
Class R-2E |
0.25 |
0.35 |
0.85 |
|
Class R-3 |
0.25 |
0.25 |
0.75 |
|
Class R-4 |
0.25 |
— |
0.50 |
1 Amounts in these columns represent the amounts approved by the board of directors under the applicable Plan.
2 The fund may annually expend the amounts set forth in this column under the current Plans with the approval of the board of directors.
Payment of service fees — For purchases of less than $1 million, payment of service fees to investment dealers generally begins accruing immediately after establishment of an account in Class A, C, 529-A or 529-C shares. For purchases of $1 million or more, payment of service fees to investment dealers generally begins accruing 12 months after establishment of an account in Class A or 529-A shares. Service fees are not paid on certain investments made at net asset value including accounts established by registered representatives and their family members as described in the “Sales charges” section of the prospectus.
During the 2024 fiscal year, 12b-1 expenses accrued and paid, and if applicable, unpaid, were:
|
12b-1 expenses |
12b-1
unpaid liability | |
|
Class A |
31,426,000 |
2,588,000 |
|
Class C |
2,959,000 |
277,000 |
|
Class T |
— |
— |
|
Class F-1 |
2,173,000 |
219,000 |
|
Class 529-A |
2,052,000 |
178,000 |
|
Class 529-C |
191,000 |
18,000 |
|
Class 529-E |
155,000 |
15,000 |
|
Class 529-T |
— |
— |
|
Class 529-F-1 |
— |
— |
|
Class R-1 |
225,000 |
23,000 |
|
Class R-2 |
1,908,000 |
262,000 |
|
Class R-2E |
239,000 |
33,000 |
|
Class R-3 |
2,466,000 |
344,000 |
|
Class R-4 |
1,953,000 |
207,000 |
New World Fund — Page 60
Approval of the Plans — As required by rule 12b-1 and the 1940 Act, the Plans (together with the Principal Underwriting Agreement) have been approved by the full board of directors and separately by a majority of the independent directors of the fund who have no direct or indirect financial interest in the operation of the Plans or the Principal Underwriting Agreement. In addition, the selection and nomination of independent directors of the fund are committed to the discretion of the independent directors during the existence of the Plans.
Potential benefits of the Plans to the fund and its shareholders include enabling shareholders to obtain advice and other services from a financial professional at a reasonable cost, the likelihood that the Plans will stimulate sales of the fund benefiting the investment process through growth or stability of assets and the ability of shareholders to choose among various alternatives in paying for sales and service. The Plans may not be amended to materially increase the amount spent for distribution without shareholder approval. Plan expenses are reviewed quarterly by the board of directors and the Plans must be renewed annually by the board of directors.
A portion of the fund’s 12b-1 expense is paid to financial professionals to compensate them for providing ongoing services. If you have questions regarding your investment in the fund or need assistance with your account, please contact your financial professional. If you need a financial professional, please call Capital Client Group, Inc. at (800) 421-4120 for assistance.
Fee to Commonwealth Savers Plan — Class 529 shares are offered to certain American Funds by Commonwealth Savers Plan through CollegeAmerica and Class ABLE shares are offered to certain American Funds by Commonwealth Savers Plan through ABLEAmerica, a tax-advantaged savings program for individuals with disabilities. As compensation for its oversight and administration of the CollegeAmerica and ABLEAmerica savings plans, Commonwealth Savers Plan is entitled to receive a quarterly fee based on the combined net assets invested in Class 529 shares and Class ABLE shares across all American Funds. The quarterly fee is accrued daily and calculated at the annual rate of .09% on the first $20 billion of net assets invested in American Funds Class 529 shares and Class ABLE shares, .05% on net assets between $20 billion and $75 billion and .03% on net assets over $75 billion. The fee for any given calendar quarter is accrued and calculated on the basis of average net assets of American Funds Class 529 and Class ABLE shares for the last month of the prior calendar quarter. Commonwealth Savers Plan is currently waiving that portion of its fee attributable to Class ABLE shares. Such waiver is expected to remain in effect until the earlier of (a) the date on which total net assets invested in Class ABLE shares reach $300 million and (b) June 30, 2028.
New World Fund — Page 61
Other compensation to dealers — As of March 31, 2024, the top dealers (or their affiliates) that Capital Client Group, Inc. anticipates will receive additional compensation (as described in the prospectus) include:
|
Osaic |
|
|
American Portfolios Advisors, Inc. |
|
|
American Portfolios Financial Services, Inc. |
|
|
Ladenburg Thalmann & Co Inc. |
|
|
Osaic Institutions, Inc. |
|
|
Osaic Wealth, Inc. |
|
|
Securities America, Inc. |
|
|
Triad Advisors LLC |
|
|
Woodbury Financial Services, Inc. |
|
|
Ameriprise |
|
|
Ameriprise Financial Services LLC |
|
|
Ameriprise Financial Services, Inc. |
|
|
Atria Wealth Solutions |
|
|
Cadaret, Grant & Co., Inc. |
|
|
CUSO Financial Services, L.P. |
|
|
Grove Point Investments LLC |
|
|
NEXT Financial Group, Inc. |
|
|
SCF Securities, Inc. |
|
|
Sorrento Pacific Financial, LLC |
|
|
Western International Securities, Inc. |
|
|
Avantax Investment Services, Inc. |
|
|
Cambridge |
|
|
Cambridge Investment Research Advisors, Inc. |
|
|
Cambridge Investment Research, Inc. |
|
|
Cetera Financial Group |
|
|
Cetera Advisor Networks LLC |
|
|
Cetera Advisors LLC |
|
|
Cetera Financial Specialists LLC |
|
|
Cetera Investment Services LLC |
|
|
Charles Schwab Network |
|
|
Charles Schwab & Co., Inc. |
|
|
Charles Schwab Trust Bank |
|
|
Commonwealth |
|
|
Commonwealth Financial Network |
|
|
Edward Jones |
|
|
Equitable Advisors |
|
|
Equitable Advisors LLC |
|
|
Fidelity |
|
|
Fidelity Investments |
|
|
Fidelity Retirement Network |
|
|
National Financial Services LLC |
|
|
J.P. Morgan Chase Banc One |
|
|
J.P. Morgan Securities LLC |
|
|
JP Morgan Chase Bank, N.A. |
|
|
Janney Montgomery Scott |
|
|
Janney Montgomery Scott LLC |
|
|
Kestra |
|
|
Kestra Investment Services LLC |
New World Fund — Page 62
|
Lincoln Network |
|
|
Lincoln Financial Advisors Corporation |
|
|
Lincoln Financial Securities Corporation |
|
|
LPL Group |
|
|
LPL Financial LLC |
|
|
Private Advisor Group, LLC |
|
|
Merrill |
|
|
Bank of America Private Bank |
|
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
|
|
MML Investors Services |
|
|
MML Distributors LLC |
|
|
MML Investors Services, LLC |
|
|
Morgan Stanley Wealth Management |
|
|
Northwestern Mutual |
|
|
Northwestern Mutual Investment Services, LLC |
|
|
Raymond James Group |
|
|
Raymond James & Associates, Inc. |
|
|
Raymond James Financial Services Inc. |
|
|
RBC |
|
|
RBC Capital Markets LLC |
|
|
Robert W. Baird |
|
|
Robert W. Baird & Co, Incorporated |
|
|
Stifel, Nicolaus & Co |
|
|
Stifel, Nicolaus & Company, Incorporated |
|
|
UBS |
|
|
UBS Financial Services, Inc. |
|
|
Wells Fargo Network |
|
|
Wells Fargo Advisors Financial Network, LLC |
|
|
Wells Fargo Advisors LLC |
|
|
Wells Fargo Bank, N.A. |
|
|
Wells Fargo Clearing Services LLC |
|
|
Wells Fargo Community Bank Advisors |
|
|
Wells Fargo Securities, LLC |
New World Fund — Page 63
Execution of portfolio transactions
The investment adviser places orders with broker-dealers for the fund’s portfolio transactions. Purchases and sales of equity securities on a securities exchange or an over-the-counter market are effected through broker-dealers who receive commissions for their services. Generally, commissions relating to securities traded on foreign exchanges will be higher than commissions relating to securities traded on U.S. exchanges and may not be subject to negotiation. Equity securities may also be purchased from underwriters at prices that include underwriting fees. Purchases and sales of fixed income securities are generally made with an issuer or a primary market maker acting as principal with no stated brokerage commission. The price paid to an underwriter for fixed income securities includes underwriting fees. Prices for fixed income securities in secondary trades usually include undisclosed compensation to the market maker reflecting the spread between the bid and ask prices for the securities.
In selecting broker-dealers, the investment adviser strives to obtain “best execution” (the most favorable total price reasonably attainable under the circumstances) for the fund’s portfolio transactions, taking into account a variety of factors. These factors include the size and type of transaction, the nature and character of the markets for the security to be purchased or sold, the cost, quality, likely speed and reliability of execution and settlement, the broker-dealer’s or execution venue’s ability to offer liquidity and anonymity and the trade-off between market impact and opportunity costs. The investment adviser considers these factors, which involve qualitative judgments, when selecting broker-dealers and execution venues for fund portfolio transactions. The investment adviser views best execution as a process that should be evaluated over time as part of an overall relationship with particular broker-dealer firms. The investment adviser and its affiliates negotiate commission rates with broker-dealers based on what they believe is reasonably necessary to obtain best execution. They seek, on an ongoing basis, to determine what the reasonable levels of commission rates for execution services are in the marketplace, taking various considerations into account, including the extent to which a broker-dealer has put its own capital at risk, historical commission rates and commission rates that other institutional investors are paying. The fund does not consider the investment adviser as having an obligation to obtain the lowest commission rate available for a portfolio transaction to the exclusion of price, service and qualitative considerations. Brokerage commissions are only a small part of total execution costs and other factors, such as market impact and speed of execution, contribute significantly to overall transaction costs.
The investment adviser may execute portfolio transactions with broker-dealers who provide certain brokerage and/or investment research services to it but only when in the investment adviser’s judgment the broker-dealer is capable of providing best execution for that transaction. The investment adviser makes decisions for procurement of research separately and distinctly from decisions on the choice of brokerage and execution services. The receipt of these research services permits the investment adviser to supplement its own research and analysis and makes available the views of, and information from, individuals and the research staffs of other firms. Such views and information may be provided in the form of written reports, telephone contacts and meetings with securities analysts. These services may include, among other things, reports and other communications with respect to individual companies, industries, countries and regions, economic, political and legal developments, as well as scheduling meetings with corporate executives and seminars and conferences related to relevant subject matters. Research services that the investment adviser receives from broker-dealers may be used by the investment adviser in servicing the fund and other funds and accounts that it advises; however, not all such services will necessarily benefit the fund.
The investment adviser bears the cost of all third-party investment research services for all client accounts it advises. However, in order to compensate certain U.S. broker-dealers for research consumed, and valued, by the investment adviser’s investment professionals, the investment adviser continues to operate a limited commission sharing arrangement with commissions on equity trades for certain registered investment companies it advises. The investment adviser voluntarily reimburses such
New World Fund — Page 64
registered investment companies for all amounts collected into the commission sharing arrangement. In order to operate the commission sharing arrangement, the investment adviser may cause such registered investment companies to pay commissions in excess of what other broker-dealers might have charged for certain portfolio transactions in recognition of brokerage and/or investment research services. In this regard, the investment adviser has adopted a brokerage allocation procedure consistent with the requirements of Section 28(e) of the Securities Exchange Act of 1934. Section 28(e) permits the investment adviser and its affiliates to cause an account to pay a higher commission to a broker-dealer to compensate the broker-dealer or another service provider for certain brokerage and/or investment research services provided to the investment adviser and its affiliates, if the investment adviser and each affiliate makes a good faith determination that such commissions are reasonable in relation to the value of the services provided by such broker-dealer to the investment adviser and its affiliates in terms of that particular transaction or the investment adviser’s overall responsibility to the fund and other accounts that it advises. Certain brokerage and/or investment research services may not necessarily benefit all accounts paying commissions to each such broker-dealer; therefore, the investment adviser and its affiliates assess the reasonableness of commissions in light of the total brokerage and investment research services provided to the investment adviser and its affiliates. Further, investment research services may be used by all investment associates of the investment adviser and its affiliates, regardless of whether they advise accounts with trading activity that generates eligible commissions.
In accordance with their internal brokerage allocation procedure, the investment adviser and its affiliates periodically assess the brokerage and investment research services provided by each broker-dealer and each other service provider from which they receive such services. As part of its ongoing relationships, the investment adviser and its affiliates routinely meet with firms to discuss the level and quality of the brokerage and research services provided, as well as the value and cost of such services. In valuing the brokerage and investment research services the investment adviser and its affiliates receive from broker-dealers and other research providers in connection with its good faith determination of reasonableness, the investment adviser and its affiliates take various factors into consideration, including the quantity, quality and usefulness of the services to the investment adviser and its affiliates. Based on this information and applying their judgment, the investment adviser and its affiliates set an annual research budget.
Research analysts and portfolio managers periodically participate in a research poll to determine the usefulness and value of the research provided by individual broker-dealers and research providers. Based on the results of this research poll, the investment adviser and its affiliates may, through commission sharing arrangements with certain broker-dealers, direct a portion of commissions paid to a broker-dealer by the fund and other registered investment companies managed by the investment adviser or its affiliates to be used to compensate the broker-dealer and/or other research providers for research services they provide. While the investment adviser and its affiliates may negotiate commission rates and enter into commission sharing arrangements with certain broker-dealers with the expectation that such broker-dealers will be providing brokerage and research services, none of the investment adviser, any of its affiliates or any of their clients incurs any obligation to any broker-dealer to pay for research by generating trading commissions. The investment adviser and its affiliates negotiate prices for certain research that may be paid through commission sharing arrangements or by themselves with cash.
When executing portfolio transactions in the same equity security for the funds and accounts, or portions of funds and accounts, over which the investment adviser, through its equity investment divisions, has investment discretion, each investment division within the adviser and its affiliates normally aggregates its respective purchases or sales and executes them as part of the same transaction or series of transactions. When executing portfolio transactions in the same fixed income security for the fund and the other funds or accounts over which it or one of its affiliated companies has investment discretion, the investment adviser normally aggregates such purchases or sales and executes them as part of the same transaction or series of transactions. The objective of aggregating
New World Fund — Page 65
purchases and sales of a security is to allocate executions in an equitable manner among the funds and other accounts that have concurrently authorized a transaction in such security. The investment adviser and its affiliates serve as investment adviser for certain accounts that are designed to be substantially similar to another account. This type of account will often generate a large number of relatively small trades when it is rebalanced to its reference fund due to differing cash flows or when the account is initially started up. The investment adviser may not aggregate program trades or electronic list trades executed as part of this process. Non-aggregated trades performed for these accounts will be allocated entirely to that account. This is done only when the investment adviser believes doing so will not have a material impact on the price or quality of other transactions.
The investment adviser currently owns a minority interest in IEX Group and alternative trading systems, Luminex ATS and LeveL ATS (through a minority interest in their common parent holding company). The investment adviser, or brokers with which the investment adviser places orders, may place orders on these or other exchanges or alternative trading systems in which it, or one of its affiliates, has an ownership interest, provided such ownership interest is less than five percent of the total ownership interests in the entity. The investment adviser is subject to the same best execution obligations when trading on any such exchange or alternative trading systems.
Purchase and sale transactions may be effected directly among and between certain funds or accounts advised by the investment adviser or its affiliates, including the fund. The investment adviser maintains cross-trade policies and procedures and places a cross-trade only when such a trade is in the best interest of all participating clients and is not prohibited by the participating funds’ or accounts’ investment management agreement or applicable law.
The investment adviser may place orders for the fund’s portfolio transactions with broker-dealers who have sold shares of the funds managed by the investment adviser or its affiliated companies; however, it does not consider whether a broker-dealer has sold shares of the funds managed by the investment adviser or its affiliated companies when placing any such orders for the fund’s portfolio transactions.
Purchases and sales of futures contracts for the fund will be effected through executing brokers and FCMs that specialize in the types of futures contracts that the fund expects to hold. The investment adviser will use reasonable efforts to choose executing brokers and FCMs capable of providing the services necessary to obtain the most favorable price and execution available. The full range and quality of services available will be considered in making these determinations. The investment adviser will monitor the executing brokers and FCMs used for purchases and sales of futures contracts for their ability to execute trades based on many factors, such as the sizes of the orders, the difficulty of executions, the operational facilities of the firm involved and other factors.
Forward currency contracts are traded directly between currency traders (usually large commercial banks) and their customers. The cost to the fund of engaging in such contracts varies with factors such as the currency involved, the length of the contract period and the market conditions then prevailing. Because such contracts are entered into on a principal basis, their prices usually include undisclosed compensation to the market maker reflecting the spread between the bid and ask prices for the contracts. The fund may incur additional fees in connection with the purchase or sale of certain contracts.
Brokerage commissions (net of any reimbursements described below) paid by the fund for the fiscal years ended October 31, 2024, 2023 and 2022 amounted to $30,298,000, $19,585,000 and $21,473,000, respectively. The investment adviser is reimbursing the fund for all amounts collected into the commission sharing arrangement. For the fiscal years ended October 31, 2024, 2023 and 2022, the investment adviser reimbursed the fund $556,000, $470,000 and $540,000, respectively, for commissions paid to broker-dealers through a commission sharing arrangement to compensate such
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broker-dealers for research services. Changes in the dollar amount of brokerage commissions paid by the fund over the last three fiscal years resulted from changes in the volume of trading activity.
The fund is required to disclose information regarding investments in the securities of its “regular” broker-dealers (or parent companies of its regular broker-dealers) that derive more than 15% of their revenue from broker-dealer, underwriter or investment adviser activities. A regular broker-dealer is (a) one of the 10 broker-dealers that received from the fund the largest amount of brokerage commissions by participating, directly or indirectly, in the fund’s portfolio transactions during the fund’s most recently completed fiscal year; (b) one of the 10 broker-dealers that engaged as principal in the largest dollar amount of portfolio transactions of the fund during the fund’s most recently completed fiscal year; or (c) one of the 10 broker-dealers that sold the largest amount of securities of the fund during the fund’s most recently completed fiscal year.
At the end of the fund’s most recently completed fiscal year, the fund did not have investments in securities of any of its regular broker-dealers.
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Disclosure of portfolio holdings
The fund’s investment adviser, on behalf of the fund, has adopted policies and procedures with respect to the disclosure of information about fund portfolio securities. These policies and procedures have been reviewed by the fund’s board of directors, and compliance will be periodically assessed by the board in connection with reporting from the fund’s Chief Compliance Officer.
Under these policies and procedures, the fund’s complete list of portfolio holdings available for public disclosure, dated as of the end of each calendar quarter, is permitted to be posted on the Capital Group website no earlier than the 10th day after such calendar quarter. In practice, the publicly disclosed portfolio is typically posted on the Capital Group website within 30 days after the end of the calendar quarter. The publicly disclosed portfolio may exclude certain securities when deemed to be in the best interest of the fund as permitted by applicable regulations. In addition, the fund’s list of top 10 portfolio holdings measured by percentage of net assets, dated as of the end of each calendar month, is permitted to be posted on the Capital Group website no earlier than the 10th day after such month for equity securities, and no earlier than the 30th day after such month for fixed income securities. The fund’s list of top 10 portfolio holdings for equity and fixed income securities is permitted to be posted no earlier than the 10th day after the final month of each calendar quarter. For multi-asset funds, the fund’s list of top 10 portfolio holdings for equity and fixed income securities is permitted to be posted each month, based on the same timeframes described above. Such portfolio holdings information may be disclosed to any person pursuant to an ongoing arrangement to disclose portfolio holdings information to such person no earlier than one day after the day on which the information is posted on the Capital Group website. The investment adviser may disclose individual holdings more frequently on the Capital Group website if it determines it is in the best interest of the fund.
Certain intermediaries are provided additional information about the fund’s management team, including information on the fund’s portfolio securities they have selected. This information is provided to larger intermediaries that require the information to make the fund available for investment on the firm’s platform. Intermediaries receiving the information are required to keep it confidential and use it only to analyze the fund.
The fund’s custodian, outside counsel, auditor, financial printers, proxy voting and class action claims processing service providers, pricing information vendors, consultants or agents operating under a contract with the investment adviser or its affiliates, co-litigants (such as in connection with a bankruptcy proceeding related to a fund holding) and certain other third parties described below, each of which requires portfolio holdings information for legitimate business and fund oversight purposes, may receive fund portfolio holdings information earlier. See the “General information” section in this statement of additional information for further information about the fund’s custodian, outside counsel and auditor.
The fund‘s portfolio holdings, dated as of the end of each calendar month, are made available to up to 20 key broker-dealer relationships and up to 10 key global consulting firms with research departments to help them evaluate the fund for eligibility on approved lists or in model portfolios. These firms include certain of those listed under the “Other compensation to dealers” section of this statement of additional information and certain broker-dealer firms that offer trading platforms for registered investment advisers. Monthly holdings may be provided to these intermediaries no earlier than the 10th day after the end of the calendar month. In practice, monthly holdings are provided within 30 days after the end of the calendar month. Holdings may also be disclosed more frequently to certain statistical and data collection agencies including Morningstar, Lipper, Inc., Value Line, Vickers Stock Research, Bloomberg and Thomson Financial Research. Intermediaries receiving the information are required to keep it confidential and use it only to analyze the fund.
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Affiliated persons of the fund, including officers of the fund and employees of the investment adviser and its affiliates, who receive portfolio holdings information are subject to restrictions and limitations on the use and handling of such information pursuant to applicable codes of ethics, including requirements not to trade in securities based on confidential and proprietary investment information, to maintain the confidentiality of such information, and to pre-clear securities trades and report securities transactions activity, as applicable. For more information on these restrictions and limitations, please see the “Code of ethics” section in this statement of additional information and the Code of Ethics. Third-party service providers of the fund and other entities, as described in this statement of additional information, receiving such information are subject to confidentiality obligations and obligations that would prohibit them from trading in securities based on such information. When portfolio holdings information is disclosed other than through the Capital Group website to persons not affiliated with the fund, such persons will be bound by agreements (including confidentiality agreements) or fiduciary or other obligations that restrict and limit their use of the information to legitimate business uses only. None of the fund, its investment adviser or any of their affiliates receives compensation or other consideration in connection with the disclosure of information about portfolio securities.
Subject to board policies, the authority to disclose a fund’s portfolio holdings, and to establish policies with respect to such disclosure, resides with the appropriate investment-related committees of the fund’s investment adviser. In exercising their authority, the committees determine whether disclosure of information about the fund’s portfolio securities is appropriate and in the best interest of fund shareholders. The investment adviser has implemented policies and procedures to address conflicts of interest that may arise from the disclosure of fund holdings. For example, the investment adviser’s code of ethics specifically requires, among other things, the safeguarding of information about fund holdings and contains prohibitions designed to prevent the personal use of confidential, proprietary investment information in a way that would conflict with fund transactions. In addition, the investment adviser believes that its current policy of not selling portfolio holdings information and not disclosing such information to unaffiliated third parties until such holdings have been made public on the Capital Group website (other than to certain fund service providers and other third parties for legitimate business and fund oversight purposes) helps reduce potential conflicts of interest between fund shareholders and the investment adviser and its affiliates.
The fund’s investment adviser and its affiliates provide investment advice to individuals and financial intermediaries that have investment objectives that may be substantially similar to those of the fund. These clients also may have portfolios consisting of holdings substantially similar to those of the fund and generally have access to current portfolio holdings information for their accounts. These clients do not owe the fund’s investment adviser or the fund a duty of confidentiality with respect to disclosure of their portfolio holdings.
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Shares are purchased at the offering price or sold at the net asset value price next determined after the purchase or sell order is received by the fund or the Transfer Agent provided that your request contains all information and legal documentation necessary to process the transaction. The Transfer Agent may accept written orders for the sale of fund shares on a future date. These orders are subject to the Transfer Agent’s policies, which generally allow shareholders to provide a written request to sell shares at the net asset value on a specified date no more than five business days after receipt of the order by the Transfer Agent. Any request to sell shares on a future date will be rejected if the request is not in writing, if the requested transaction date is more than five business days after the Transfer Agent receives the request or if the request does not contain all information and legal documentation necessary to process the transaction.
The offering or net asset value price is effective for orders received prior to the time of determination of the net asset value and, in the case of orders placed with dealers or their authorized designees, accepted by the Principal Underwriter, the Transfer Agent, a dealer or any of their designees. In the case of orders sent directly to the fund or the Transfer Agent, an investment dealer should be indicated. The dealer is responsible for promptly transmitting purchase and sell orders to the Principal Underwriter.
Prices that appear in newspapers and websites do not always indicate prices at which you will be purchasing and redeeming shares of the fund, since such prices generally reflect the previous day’s closing price, while purchases and redemptions are made at the next calculated price. The price you pay for shares, the offering price, is based on the net asset value per share, which is calculated once daily as of the close of regular trading on the New York Stock Exchange, normally 4 p.m. New York time, each day the New York Stock Exchange is open. If the New York Stock Exchange makes a scheduled (e.g., the day after Thanksgiving) or an unscheduled close prior to 4 p.m. New York time, the net asset value of the fund will be determined at approximately the time the New York Stock Exchange closes on that day. If on such a day market quotations and prices from third-party pricing services are not based as of the time of the early close of the New York Stock Exchange but are as of a later time (up to approximately 4 p.m. New York time), for example because the market remains open after the close of the New York Stock Exchange, those later market quotations and prices will be used in determining the fund’s net asset value.
Orders in good order received after the New York Stock Exchange closes (scheduled or unscheduled) will be processed at the net asset value (plus any applicable sales charge) calculated on the following business day. The New York Stock Exchange is currently closed on weekends and on the following holidays: New Year’s Day; Martin Luther King Jr. Day; Presidents’ Day; Good Friday; Memorial Day; Juneteenth National Independence Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day. Each share class of the fund has a separately calculated net asset value (and share price).
Orders received by the investment dealer or authorized designee, the Transfer Agent or the fund after the time of the determination of the net asset value will be entered at the next calculated offering price. Note that investment dealers or other intermediaries may have their own rules about share transactions and may have earlier cut-off times than those of the fund. For more information about how to purchase through your intermediary, contact your intermediary directly.
All portfolio securities of funds managed by Capital Research and Management Company (other than American Funds U.S. Government Money Market Fund) are valued, and the net asset values per share for each share class are determined, as indicated below. The fund follows standard industry practice by typically reflecting changes in its holdings of portfolio securities on the first business day following a portfolio trade.
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Equity securities, including depositary receipts, exchange-traded funds, and certain convertible preferred stocks that trade on an exchange or market, 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.
Exchange-traded options and futures are generally valued at the official closing price for options and official settlement price for futures on the exchange or market on which such instruments are traded, as of the close of business on the day such instruments are being valued.
Fixed income securities, including short-term securities, are generally valued at evaluated prices obtained from third-party pricing vendors. Vendors value such securities based on one or more inputs that may include, among other things, benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, underlying equity of the issuer, interest rate volatilities, 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, prepayment information, default rates, delinquency and loss assumptions, financial or collateral characteristics or performance, credit enhancements, liquidation value calculations, specific deal information and other reference data.
Forward currency contracts are valued based on the spot and forward exchange rates obtained from a third-party pricing vendor.
Futures contracts are generally valued at the official settlement price of, or the last reported sale price on, the principal exchange or market on which such instruments are traded, as of the close of business on the day the contracts are being valued or, lacking any sales, at the last available bid price.
Swaps, including interest rate swaps, total return swaps and positions in credit default swap indices, are generally valued using evaluated prices obtained from third-party pricing vendors who calculate these values based on market inputs that may include yields of the indices referenced in the instrument and the relevant curve, dealer quotes, default probabilities and recovery rates, other reference data, and terms of the contract.
Options are valued using market quotations or valuations provided by one or more pricing vendors. Similar to futures, options may also be valued at the official settlement price if listed on an exchange.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are valued at fair value as determined in good faith under fair value guidelines adopted by the investment adviser and approved by the fund’s board. Subject to board oversight, the fund’s board has designated the fund’s investment adviser to make fair valuation determinations, which are directed by a valuation committee established by the fund’s investment adviser. The board receives regular reports describing fair valued securities and the valuation methods used.
As a general principle, these guidelines consider relevant company, market and other data and considerations to determine the price that the fund might reasonably expect to receive if such fair valued securities were sold in an orderly transaction. Fair valuations may differ materially from valuations that would have been used had greater market activity occurred. The investment adviser’s valuation committee 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, restrictions on resale of the security, relevant financial or business developments of the issuer, actively traded similar or related securities and transactions, dealer or broker quotes, conversion or
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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. The valuation committee employs additional fair value procedures to address issues related to equity securities that trade principally in markets outside the United States. Such securities may trade in markets that open and close at different times, reflecting time zone differences. If significant events occur after the close of a market (and before the fund’s net asset values are next determined) which affect the value of equity securities held in the fund’s portfolio, appropriate adjustments from closing market prices may be made to reflect these events. Events of this type could include, for example, earthquakes and other natural disasters or significant price changes in other markets (e.g., U.S. stock markets).
Certain short-term securities, such as variable rate demand notes or repurchase agreements involving securities fully collateralized by cash or U.S. government securities, are valued at par.
Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars, prior to the next determination of the net asset value of the fund’s shares, at the exchange rates obtained from a third-party pricing vendor.
Each class of shares represents interests in the same portfolio of investments and is identical in all respects to each other class, except for differences relating to distribution, service and other charges and expenses, certain voting rights, differences relating to eligible investors, the designation of each class of shares, conversion features and exchange privileges. Expenses attributable to the fund, but not to a particular class of shares, are borne by each class pro rata based on the relative aggregate net assets of the classes. Expenses directly attributable to a class of shares are borne by that class of shares. Liabilities attributable to particular share classes, such as liabilities for repurchase of fund shares, are deducted from total assets attributable to such share classes.
Net assets so obtained for each share class are then divided by the total number of shares outstanding of that share class, and the result, rounded to the nearest cent, is the net asset value per share for that class.
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Disclaimer: Some of the following information may not apply to certain shareholders, including those holding fund shares in a tax-favored account, such as a retirement plan or education savings account. Shareholders should consult their tax advisors about the application of federal, state and local tax law in light of their particular situation.
Taxation as a regulated investment company — The fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), so that it will not be liable for federal tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company, and avoid being subject to federal income taxes, the fund intends to distribute substantially all of its net investment income and realized net capital gains on a fiscal year basis, and intends to comply with other tests applicable to regulated investment companies under Subchapter M.
The Code includes savings provisions allowing the fund to cure inadvertent failures of certain qualification tests required under Subchapter M. However, should the fund fail to qualify under Subchapter M, the fund would be subject to federal, and possibly state, corporate taxes on its taxable income and gains.
Amounts not distributed by the fund on a timely basis in accordance with a calendar year distribution requirement may be subject to a nondeductible 4% excise tax. Unless an applicable exception applies, to avoid the tax, the fund must distribute during each calendar year an amount equal to the sum of (a) at least 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year, (b) at least 98.2% of its capital gains in excess of its capital losses for the twelve month period ending on October 31, and (c) all ordinary income and capital gains for previous years that were not distributed during such years and on which the fund paid no U.S. federal income tax.
Dividends paid by the fund from ordinary income or from an excess of net short-term capital gain over net long-term capital loss are taxable to shareholders as ordinary income dividends. Shareholders of the fund that are individuals and meet certain holding period requirements with respect to their fund shares may be eligible for reduced tax rates on “qualified dividend income,” if any, distributed by the fund to such shareholders.
The fund may declare a capital gain distribution consisting of the excess of net realized long-term capital gains over net realized short-term capital losses. Net capital gains for a fiscal year are computed by taking into account any capital loss carryforward of the fund.
The fund may retain a portion of net capital gain for reinvestment and may elect to treat such capital gain as having been distributed to shareholders of the fund. Shareholders may receive a credit for the tax that the fund paid on such undistributed net capital gain and would increase the basis in their shares of the fund by the difference between the amount of includible gains and the tax deemed paid by the shareholder.
Distributions of net capital gain that the fund properly reports as a capital gain distribution generally will be taxable as long-term capital gain, regardless of the length of time the shares of the fund have been held by a shareholder. Any loss realized upon the redemption of shares held at the time of redemption for six months or less from the date of their purchase will be treated as a long-term capital loss to the extent of any capital gain distributions (including any undistributed amounts treated as distributed capital gains, as described above) during such six-month period.
Capital gain distributions by the fund result in a reduction in the net asset value of the fund’s shares. Investors should consider the tax implications of buying shares just prior to a capital gain distribution.
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The price of shares purchased at that time includes the amount of the forthcoming distribution. Those purchasing just prior to a distribution will subsequently receive a partial return of their investment capital upon payment of the distribution, which will be taxable to them.
Individuals (and certain other non-corporate entities) are generally eligible for a 20% deduction with respect to taxable ordinary REIT dividends through 2025. Applicable Treasury regulations allow the fund to pass through to its shareholders such taxable ordinary REIT dividends. Accordingly, individual (and certain other non-corporate) shareholders of the fund that have received such taxable ordinary REIT dividends may be able to take advantage of this 20% deduction with respect to any such amounts passed through.
Redemptions and exchanges of fund shares — Redemptions of shares, including exchanges for shares of other American Funds, may result in federal, state and local tax consequences (gain or loss) to the shareholder.
Any loss realized on a redemption or exchange of shares of the fund will be disallowed to the extent substantially identical shares are reacquired within the 61-day period beginning 30 days before and ending 30 days after the shares are disposed of. Any loss disallowed under this rule will be added to the shareholder’s tax basis in the new shares purchased.
If a shareholder exchanges or otherwise disposes of shares of the fund within 90 days of having acquired such shares, and if, as a result of having acquired those shares, the shareholder subsequently pays a reduced or no sales charge for shares of the fund, or of a different fund acquired before January 31st of the year following the year the shareholder exchanged or otherwise disposed of the original fund shares, the sales charge previously incurred in acquiring the fund’s shares will not be taken into account (to the extent such previous sales charges do not exceed the reduction in sales charges) for the purposes of determining the amount of gain or loss on the exchange, but will be treated as having been incurred in the acquisition of such other fund(s).
Tax consequences of investing in non-U.S. securities — Dividend and interest income received by the fund from sources outside the United States may be subject to withholding and other taxes imposed by such foreign jurisdictions. Tax conventions between certain countries and the United States, however, may reduce or eliminate these foreign taxes. Some foreign countries impose taxes on capital gains with respect to investments by foreign investors.
If more than 50% of the value of the total assets of the fund at the close of the taxable year consists of securities of foreign corporations, the fund may elect to pass through to shareholders the foreign taxes paid by the fund. If such an election is made, shareholders may claim a credit or deduction on their federal income tax returns for, and will be required to treat as part of the amounts distributed to them, their pro rata portion of qualified taxes paid by the fund to foreign countries. The application of the foreign tax credit depends upon the particular circumstances of each shareholder.
Foreign currency gains and losses, including the portion of gain or loss on the sale of debt securities attributable to fluctuations in foreign exchange rates, are generally taxable as ordinary income or loss. These gains or losses may increase or decrease the amount of dividends payable by the fund to shareholders. A fund may elect to treat gain and loss on certain foreign currency contracts as capital gain and loss instead of ordinary income or loss.
If the fund invests in stock of certain passive foreign investment companies (PFICs), the fund intends to mark-to-market these securities and recognize any gains at the end of its fiscal and excise tax years. Deductions for losses are allowable only to the extent of any previously recognized gains. Both gains and losses will be treated as ordinary income or loss, and the fund is required to distribute any
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resulting income. If the fund is unable to identify an investment as a PFIC security and thus does not make a timely mark-to-market election, the fund may be subject to adverse tax consequences.
Tax consequences of investing in derivatives — The fund may enter into transactions involving derivatives, such as futures, swaps, options and forward contracts. Special tax rules may apply to these types of transactions that could defer losses to the fund, accelerate the fund’s income, alter the holding period of certain securities or change the classification of capital gains. These tax rules may therefore impact the amount, timing and character of fund distributions.
Discount — Certain bonds acquired by the fund, such as zero coupon bonds, may be treated as bonds that were originally issued at a discount. Original issue discount represents interest for federal income tax purposes and is generally defined as the difference between the price at which a bond was issued (or the price at which it was deemed issued for federal income tax purposes) and its stated redemption price at maturity. Original issue discount is treated for federal income tax purposes as tax exempt income earned by a fund over the term of the bond, and therefore is subject to the distribution requirements of the Code. The annual amount of income earned on such a bond by a fund generally is determined on the basis of a constant yield to maturity which takes into account the semiannual compounding of accrued interest (including original issue discount). Certain bonds acquired by the fund may also provide for contingent interest and/or principal. In such a case, rules similar to those for original issue discount bonds would require the accrual of income based on an assumed yield that may exceed the actual interest payments on the bond.
Some of the bonds may be acquired by a fund on the secondary market at a discount which exceeds the original issue discount, if any, on such bonds. This additional discount constitutes market discount for federal income tax purposes. Any gain recognized on the disposition of any bond having market discount generally will be treated as taxable ordinary income to the extent it does not exceed the accrued market discount on such bond (unless a fund elects to include market discount in income in the taxable years to which it is attributable). Realized accrued market discount on obligations that pay tax-exempt interest is nonetheless taxable. Generally, market discount accrues on a daily basis for each day the bond is held by a fund at a constant rate over the time remaining to the bond’s maturity. In the case of any debt instrument having a fixed maturity date of not more than one year from date of issue, the gain realized on disposition will be treated as short-term capital gain. Some of the bonds acquired by a fund with a fixed maturity date of one year or less from the date of their issuance may be treated as having original issue discount or, in certain cases, “acquisition discount” (generally, the excess of a bond’s stated redemption price at maturity over its acquisition price). A fund will be required to include any such original issue discount or acquisition discount in taxable ordinary income. The rate at which such acquisition discount and market discount accrues, and is thus included in a fund’s investment company taxable income, will depend upon which of the permitted accrual methods the fund elects.
Other tax considerations — After the end of each calendar year, individual shareholders holding fund shares in taxable accounts will receive a statement of the federal income tax status of all distributions. Shareholders of the fund also may be subject to state and local taxes on distributions received from the fund.
For fund shares acquired on or after January 1, 2012, the fund is required to report cost basis information for redemptions, including exchanges, to both shareholders and the IRS.
Shareholders may obtain more information about cost basis online at capitalgroup.com/costbasis.
Under the backup withholding provisions of the Code, the fund generally will be required to withhold federal income tax on all payments made to a shareholder if the shareholder either does not furnish the fund with the shareholder’s correct taxpayer identification number or fails to certify that the
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shareholder is not subject to backup withholding. Backup withholding also applies if the IRS notifies the shareholder or the fund that the taxpayer identification number provided by the shareholder is incorrect or that the shareholder has previously failed to properly report interest or dividend income.
The foregoing discussion of U.S. federal income tax law relates solely to the application of that law to U.S. persons (i.e., U.S. citizens and legal residents and U.S. corporations, partnerships, trusts and estates). Each shareholder who is not a U.S. person should consider the U.S. and foreign tax consequences of ownership of shares of the fund, including the possibility that such a shareholder may be subject to U.S. withholding taxes.
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Unless otherwise noted, all references in the following pages to Class A, C, T or F shares also refer to the corresponding Class 529-A, 529-C, 529-T or 529-F shares. Class 529 shareholders should also refer to the applicable program description for information on policies and services specifically relating to these accounts. Shareholders holding shares through an eligible retirement plan should contact their plan’s administrator or recordkeeper for information regarding purchases, sales and exchanges.
Purchase and exchange of shares
Purchases by individuals — As described in the prospectus, you may generally open an account and purchase fund shares by contacting a financial professional or investment dealer authorized to sell the fund’s shares. You may make investments by any of the following means:
Contacting your financial professional — Deliver or mail a check to your financial professional.
By mail — For initial investments, you may mail a check, made payable to the fund, directly to the address indicated on the account application. Please indicate an investment dealer on the account application. You may make additional investments by filling out the “Account Additions” form at the bottom of a recent transaction confirmation and mailing the form, along with a check made payable to the fund, using the envelope provided with your confirmation.
The amount of time it takes for us to receive regular U.S. postal mail may vary and there is no assurance that we will receive such mail on the day you expect. Mailing addresses for regular U.S. postal mail can be found in the prospectus. To send investments or correspondence to us via overnight mail or courier service, use either of the following addresses:
American Funds
12711 North Meridian Street
Carmel, IN 46032-9181
American Funds
5300 Robin Hood Road
Norfolk, VA 23513-2407
By telephone — Calling American Funds Service Company. Please see the “Shareholder account services and privileges” section of this statement of additional information for more information regarding this service.
By Internet — Using capitalgroup.com. Please see the “Shareholder account services and privileges” section of this statement of additional information for more information regarding this service.
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By wire — If you are making a wire transfer, instruct your bank to wire funds to:
Wells Fargo Bank
ABA Routing No. 121000248
Account No. 4600-076178
Your bank should include the following information when wiring funds:
For credit to the account of:
American Funds Service Company
(fund’s name)
For further credit to:
(shareholder’s fund account number)
(shareholder’s name)
You may contact American Funds Service Company at (800) 421-4225 if you have questions about making wire transfers.
Other purchase information — Class 529 shares may be purchased only through CollegeAmerica by investors establishing qualified higher education savings accounts. Class 529-E shares may be purchased only by investors participating in CollegeAmerica through an eligible employer plan. American Funds state tax-exempt funds are qualified for sale only in certain jurisdictions, and tax-exempt funds in general should not serve as retirement plan investments. In addition, the fund and the Principal Underwriter reserve the right to reject any purchase order.
Class R-5 and R-6 shares may be made available to certain charitable foundations organized and maintained by The Capital Group Companies, Inc. or its affiliates. Class R-6 shares are also available to corporate investment accounts established by The Capital Group Companies, Inc. and its affiliates.
Class R-5 and R-6 shares may also be made available to Commonwealth Savers Plan for use in the Virginia Education Savings Trust and the Virginia Prepaid Education Program and other registered investment companies approved by the fund’s investment adviser or distributor. Class R-6 shares are also available to other post employment benefits plans.
Purchase minimums and maximums — All investments are subject to the purchase minimums and maximums described in the prospectus. As noted in the prospectus, purchase minimums may be waived or reduced in certain cases.
In the case of American Funds non-tax-exempt funds, the initial purchase minimum of $25 may be waived for the following account types:
· Payroll deduction retirement plan accounts (such as, but not limited to, 403(b), 401(k), SIMPLE IRA, SARSEP and deferred compensation plan accounts); and
· Employer-sponsored CollegeAmerica accounts.
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The following account types may be established without meeting the initial purchase minimum:
· Retirement accounts that are funded with employer contributions; and
· Accounts that are funded with monies set by court decree.
The following account types may be established without meeting the initial purchase minimum, but shareholders wishing to invest in two or more funds must meet the normal initial purchase minimum of each fund:
· Accounts that are funded with (a) transfers of assets, (b) rollovers from retirement plans, (c) rollovers from 529 college savings plans or (d) required minimum distribution automatic exchanges; and
· American Funds U.S. Government Money Market Fund accounts registered in the name of clients of Capital Group Private Client Services.
Certain accounts held on the fund’s books, known as omnibus accounts, contain multiple underlying accounts that are invested in shares of the fund. These underlying accounts are maintained by entities such as financial intermediaries and are subject to the applicable initial purchase minimums as described in the prospectus and this statement of additional information. However, in the case where the entity maintaining these accounts aggregates the accounts’ purchase orders for fund shares, such accounts are not required to meet the fund’s minimum amount for subsequent purchases.
Exchanges — With the exception of Class T shares, for which rights of exchange are not generally available, you may only exchange shares without a sales charge into other American Funds within the same share class; however, Class A, C, T or F shares may also generally be exchanged without a sales charge for the corresponding 529 share class. Clients of Capital Group Private Client Services may exchange the shares of the fund for those of any other fund(s) managed by Capital Research and Management Company or its affiliates.
Notwithstanding the above, exchanges from Class A shares of American Funds U.S. Government Money Market Fund may be made to Class C shares of other American Funds for dollar cost averaging purposes.
Exchange purchases are subject to the minimum investment requirements of the fund purchased and no sales charge generally applies. However, exchanges of shares from American Funds U.S. Government Money Market Fund are subject to applicable sales charges, unless the American Funds U.S. Government Money Market Fund shares were acquired by an exchange from a fund having a sales charge, or by reinvestment or cross-reinvestment of dividends or capital gain distributions.
Exchanges of Class F shares generally may only be made through fee-based programs of investment firms that have special agreements with the fund’s distributor and certain registered investment advisors.
You may exchange shares of other classes by contacting your financial professional by calling American Funds Service Company at (800) 421-4225 or using capitalgroup.com, or faxing (see “American Funds Service Company service areas” in the prospectus for the appropriate fax numbers) the Transfer Agent. For more information, see “Shareholder account services and privileges” in this statement of additional information. These transactions have the same tax consequences as ordinary sales and purchases.
Shares held in employer-sponsored retirement plans may be exchanged into other American Funds by contacting your plan administrator or recordkeeper. Exchange redemptions and purchases are
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processed simultaneously at the share prices next determined after the exchange order is received (see “Price of shares” in this statement of additional information).
Conversion — Class C shares of the fund automatically convert to Class A shares in the month of the 8-year anniversary of the purchase date. Class 529-C shares of the fund automatically convert to Class 529-A shares in the month of the 5-year anniversary of the purchase date.
Frequent trading of fund shares — As noted in the prospectus, certain redemptions may trigger a restriction under the fund’s “frequent trading policy.” Under this policy, systematic redemptions will not trigger a restriction and systematic purchases will not be prevented if the entity maintaining the shareholder account is able to identify the transaction as a systematic redemption or purchase. For purposes of this policy, systematic redemptions include, for example, regular periodic automatic redemptions and statement of intention escrow share redemptions. Systematic purchases include, for example, regular periodic automatic purchases and automatic reinvestments of dividends and capital gain distributions. Generally, purchases and redemptions will not be considered “systematic” unless the transaction is prescheduled for a specific date.
Potentially abusive activity — American Funds Service Company will monitor for the types of activity that could potentially be harmful to the American Funds — for example, short-term trading activity in multiple funds. When identified, American Funds Service Company will request that the shareholder discontinue the activity. If the activity continues, American Funds Service Company will freeze the shareholder account to prevent all activity other than redemptions of fund shares.
Moving between share classes
If you wish to “move” your investment between share classes (within the same fund or between different funds), we generally will process your request as an exchange of the shares you currently hold for shares in the new class or fund. Below is more information about how sales charges are handled for various scenarios.
Exchanging Class C shares for Class A or Class T shares — If you exchange Class C shares for Class A or Class T shares, you are still responsible for paying any Class C contingent deferred sales charges and applicable Class A or Class T sales charges.
Exchanging Class C shares for Class F shares — If you are part of a qualified fee-based program or approved self-directed platform and you wish to exchange your Class C shares for Class F shares to be held in the program, you are still responsible for paying any applicable Class C contingent deferred sales charges.
Exchanging Class F shares for Class A shares — You can exchange Class F shares held in a qualified fee-based program for Class A shares without paying an initial Class A sales charge if you are leaving or have left the fee-based program. Your financial intermediary can also convert Class F-1 shares to Class A shares without a sales charge if they are held in a brokerage account and they were initially transferred to the account or converted from Class C shares. You can exchange Class F shares received in a conversion from Class C shares for Class A shares at any time without paying an initial Class A sales charge if you notify American Funds Service Company of the conversion when you make your request. If you have already redeemed your Class F shares, the foregoing requirements apply and you must purchase Class A shares within 90 days after redeeming your Class F shares to receive the Class A shares without paying an initial Class A sales charge.
Exchanging Class A or Class T shares for Class F shares — If you are part of a qualified fee-based program or approved self-directed platform and you wish to exchange your Class A or
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Class T shares for Class F shares to be held in the program, any Class A or Class T sales charges (including contingent deferred sales charges) that you paid or are payable will not be credited back to your account.
Exchanging Class A shares for Class R shares — Provided it is eligible to invest in Class R shares, a retirement plan currently invested in Class A shares may exchange its shares for Class R shares. Any Class A sales charges that the retirement plan previously paid will not be credited back to the plan’s account. No contingent deferred sales charge will be assessed as part of the share class conversion.
Moving between Class F shares — If you are part of a qualified fee-based program that offers Class F shares, you may exchange your Class F shares for any other Class F shares to be held in the program. For example, if you hold Class F-2 shares, you may exchange your shares for Class F-1 or Class F-3 shares to be held in the program.
Moving between other share classes — If you desire to move your investment between share classes and the particular scenario is not described in this statement of additional information, please contact American Funds Service Company at (800) 421-4225 for more information.
Non-reportable transactions — Automatic conversions described in the prospectus will be non-reportable for tax purposes. In addition, an exchange of shares from one share class of a fund to another share class of the same fund will be treated as a non-reportable exchange for tax purposes, provided that the exchange request is received in writing by American Funds Service Company and processed as a single transaction. However, a movement between a 529 share class and a non-529 share class of the same fund will be reportable.
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Class A purchases
Purchases by certain 403(b) plans
A 403(b) plan may not invest in American Funds Class A or C shares unless such plan was invested in Class A or C shares before January 1, 2009.
Participant accounts of a 403(b) plan that invested in American Funds Class A or C shares and were treated as an individual-type plan for sales charge purposes before January 1, 2009, may continue to be treated as accounts of an individual-type plan for sales charge purposes. Participant accounts of a 403(b) plan that invested in American Funds Class A or C shares and were treated as an employer-sponsored plan for sales charge purposes before January 1, 2009, may continue to be treated as accounts of an employer-sponsored plan for sales charge purposes. Participant accounts of a 403(b) plan that was established on or after January 1, 2009, are treated as accounts of an employer-sponsored plan for sales charge purposes.
Purchases by SEP plans and SIMPLE IRA plans
Participant accounts in a Simplified Employee Pension (SEP) plan or a Savings Incentive Match Plan for Employees of Small Employers IRA (SIMPLE IRA) will be aggregated at the plan level for Class A sales charge purposes if an employer adopts a prototype plan produced by Capital Client Group, Inc. or (a) the employer or plan sponsor submits all contributions for all participating employees in a single contribution transmittal or the contributions are identified as related to the same plan; (b) each transmittal is accompanied by checks or wire transfers and generally must be submitted through the transfer agent’s automated contribution system if held on the fund’s books; and (c) if the fund is expected to carry separate accounts in the name of each plan participant and (i) the employer or plan sponsor notifies the funds’ transfer agent or the intermediary holding the account that the separate accounts of all plan participants should be linked and (ii) all new participant accounts are established by submitting the appropriate documentation on behalf of each new participant. Participant accounts in a SEP or SIMPLE plan that are eligible to aggregate their assets at the plan level may not also aggregate the assets with their individual accounts.
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Other purchases
In addition, American Funds Class A and Class 529-A shares may be offered at net asset value to companies exchanging securities with the fund through a merger, acquisition or exchange offer and to certain individuals meeting the criteria described above who invested in Class A and Class 529-A shares before Class F-2 and Class 529-F-2 shares were made available under this privilege.
Transfers to CollegeAmerica — A transfer from the Virginia Prepaid Education ProgramSM or the Virginia Education Savings TrustSM to a CollegeAmerica account will be made with no sales charge. No commission will be paid to the dealer on such a transfer. Investment dealers will be compensated solely with an annual service fee that begins to accrue immediately.
Class F-2 and Class 529-F-2 purchases
If requested, American Funds Class F-2 and Class 529-F-2 shares will be sold to:
|
(1) |
current or retired directors, trustees, officers and advisory board members of, and certain lawyers who provide services to the funds managed by Capital Research and Management Company, current or retired employees of The Capital Group Companies, Inc. and its affiliated companies, certain family members of the above persons, and trusts or plans primarily for such persons; and | |
|
(2) |
The Capital Group Companies, Inc. and its affiliated companies. |
Once an account in Class F-2 or Class 529-F-2 is established under this privilege, additional investments can be made in Class F-2 or Class 529-F-2 for the life of the account. Depending on the financial intermediary holding your account, these privileges may be unavailable. Investors should consult their financial intermediary for further information.
Moving between accounts — American Funds investments by certain account types may be moved to other account types without incurring additional Class A sales charges. These transactions include:
· redemption proceeds from a non-retirement account (for example, a joint tenant account) used to purchase fund shares in an IRA or other individual-type retirement account;
· required minimum distributions from an IRA or other individual-type retirement account used to purchase fund shares in a non-retirement account; and
· death distributions paid to a beneficiary’s account that are used by the beneficiary to purchase fund shares in a different account.
Investors may not move investments from a Capital Bank & Trust Company SIMPLE IRA Plus to a Capital Bank & Trust Company SIMPLE IRA unless it is part of a plan transfer or to a current employer’s Capital Bank & Trust Company SIMPLE IRA plan.
These privileges are generally available only if your account is held directly with the fund’s transfer agent or if the financial intermediary holding your account has the systems, policies and procedures to support providing the privileges on its systems. Investors should consult their financial intermediary for further information.
Loan repayments — Repayments on loans taken from a retirement plan are not subject to sales charges if American Funds Service Company is notified of the repayment.
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Dealer commissions and compensation — Commissions (up to 1.00%) are paid to dealers who initiate and are responsible for certain Class A share purchases not subject to initial sales charges. These purchases consist of a) purchases of $1 million or more, and b) purchases by employer-sponsored defined contribution-type retirement plans investing $1 million or more or with 100 or more eligible employees. Commissions on such investments (other than IRA rollover assets that roll over at no sales charge under the fund’s IRA rollover policy as described in the prospectus) are paid to dealers at the following rates: 1.00% on amounts of less than $10 million, .50% on amounts of at least $10 million but less than $25 million and .25% on amounts of at least $25 million. Commissions are based on cumulative investments over the life of the account with no adjustment for redemptions, transfers, or market declines. For example, if a shareholder has accumulated investments in excess of $10 million (but less than $25 million) and subsequently redeems all or a portion of the account(s), purchases following the redemption will generate a dealer commission of .50%.
A dealer concession of up to 1% may be paid by the fund under its Class A plan of distribution to reimburse the Principal Underwriter in connection with dealer and wholesaler compensation paid by it with respect to investments made with no initial sales charge.
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Sales charge reductions and waivers
Reducing your Class A sales charge — As described in the prospectus, there are various ways to reduce your sales charge when purchasing Class A shares. Additional information about Class A sales charge reductions is provided below.
Statement of intention — By establishing a statement of intention (the "Statement"), you enter into a nonbinding commitment to purchase shares of American Funds (excluding American Funds U.S. Government Money Market Fund) over a 13-month period and receive the same sales charge (expressed as a percentage of your purchases) as if all shares had been purchased at once, unless the Statement is upgraded as described below.
The Statement period starts on the date on which your first purchase made toward satisfying the Statement is processed. Your accumulated holdings (as described in the paragraph below titled “Rights of accumulation”) eligible to be aggregated as of the day immediately before the start of the Statement period may be credited toward satisfying the Statement.
You may revise the commitment you have made in your Statement upward at any time during the Statement period. If your prior commitment has not been met by the time of the revision, the Statement period during which purchases must be made will remain unchanged. Purchases made from the date of the revision will receive the reduced sales charge, if any, resulting from the revised Statement. If your prior commitment has been met by the time of the revision, your original Statement will be considered met and a new Statement will be established.
The Statement will be considered completed if the shareholder dies within the 13-month Statement period. Commissions to dealers will not be adjusted or paid on the difference between the Statement amount and the amount actually invested before the shareholder’s death.
When a shareholder elects to use a Statement, shares equal to 5% of the dollar amount specified in the Statement may be held in escrow in the shareholder’s account out of the initial purchase (or subsequent purchases, if necessary) by the Transfer Agent. All dividends and any capital gain distributions on shares held in escrow will be credited to the shareholder’s account in shares (or paid in cash, if requested). If the intended investment is not completed within the specified Statement period the investments made during the statement period will be adjusted to reflect the difference between the sales charge actually paid and the sales charge which would have been paid if the total of such purchases had been made at a single time. Any dealers assigned to the shareholder’s account at the time a purchase was made during the Statement period will receive a corresponding commission adjustment if appropriate.
In addition, if you currently have individual holdings in American Legacy variable annuity contracts or variable life insurance policies that were established on or before March 31, 2007, you may continue to apply purchases under such contracts and policies to a Statement.
Shareholders purchasing shares at a reduced sales charge under a Statement indicate their acceptance of these terms and those in the prospectus with their first purchase.
The Statement period may be extended in cases where the fund’s distributor determines it is appropriate to do so; for example in periods when there are extenuating circumstances such as a natural disaster that may limit an individual’s ability to meet the investment required under the Statement.
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Aggregation — Qualifying investments for aggregation include those made by you and your “immediate family” as defined in the prospectus, if all parties are purchasing shares for their own accounts and/or:
· individual-type employee benefit plans, such as an IRA, single-participant Keogh-type plan, or a participant account of a 403(b) plan that is treated as an individual-type plan for sales charge purposes (see “Purchases by certain 403(b) plans” under “Sales charges” in this statement of additional information);
· SEP plans and SIMPLE IRA plans established after November 15, 2004, by an employer adopting any plan document other than a prototype plan produced by Capital Client Group, Inc.;
· business accounts solely controlled by you or your immediate family (for example, you own the entire business);
· trust accounts established by you or your immediate family (for trusts with only one primary beneficiary, upon the trustor’s death the trust account may be aggregated with such beneficiary’s own accounts; for trusts with multiple primary beneficiaries, upon the trustor’s death the trustees of the trust may instruct American Funds Service Company to establish separate trust accounts for each primary beneficiary; each primary beneficiary’s separate trust account may then be aggregated with such beneficiary’s own accounts);
· endowments or foundations established and controlled by you or your immediate family; or
· 529 accounts, which will be aggregated at the account owner level (Class 529-E accounts may only be aggregated with an eligible employer plan).
Individual purchases by a trustee(s) or other fiduciary(ies) may also be aggregated if the investments are:
· for a single trust estate or fiduciary account, including employee benefit plans other than the individual-type employee benefit plans described above;
· made for two or more employee benefit plans of a single employer or of affiliated employers as defined in the 1940 Act, excluding the individual-type employee benefit plans described above;
· for a diversified common trust fund or other diversified pooled account not specifically formed for the purpose of accumulating fund shares;
· for nonprofit, charitable or educational organizations, or any endowments or foundations established and controlled by such organizations, or any employer-sponsored retirement plans established for the benefit of the employees of such organizations, their endowments, or their foundations;
· for participant accounts of a 403(b) plan that is treated as an employer-sponsored plan for sales charge purposes (see “Purchases by certain 403(b) plans” under “Sales charges” in this statement of additional information), or made for participant accounts of two or more such plans, in each case of a single employer or affiliated employers as defined in the 1940 Act; or
· for a SEP or SIMPLE IRA plan established after November 15, 2004, by an employer adopting a prototype plan produced by Capital Client Group, Inc.
Purchases made for nominee or street name accounts (securities held in the name of an investment dealer or another nominee such as a bank trust department instead of the
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customer) may not be aggregated with those made for other accounts and may not be aggregated with other nominee or street name accounts unless otherwise qualified as described above.
Joint accounts may be aggregated with other accounts belonging to the primary owner and/or his or her immediate family. The primary owner of a joint account is the individual responsible for taxes on the account.
Concurrent purchases — As described in the prospectus, you may reduce your Class A sales charge by combining purchases of all classes of shares in American Funds. Shares of American Funds U.S. Government Money Market Fund purchased through an exchange, reinvestment or cross-reinvestment from a fund having a sales charge also qualify. However, direct purchases of American Funds U.S. Government Money Market Fund Class A shares are excluded. If you currently have individual holdings in American Legacy variable annuity contracts or variable life insurance policies that were established on or before March 31, 2007, you may continue to combine purchases made under such contracts and policies to reduce your Class A sales charge.
Rights of accumulation — Subject to the limitations described in the aggregation policy, you may take into account your accumulated holdings in all share classes of American Funds to determine your sales charge on investments in accounts eligible to be aggregated. Direct purchases of American Funds U.S. Government Money Market Fund Class A shares are excluded. Subject to your investment dealer’s or recordkeeper’s capabilities, your accumulated holdings will be calculated as the higher of (a) the current value of your existing holdings (the “market value”) as of the day prior to your American Funds investment or (b) the amount you invested (including reinvested dividends and capital gains, but excluding capital appreciation) less any withdrawals (the “cost value”). Depending on the entity on whose books your account is held, the value of your holdings in that account may not be eligible for calculation at cost value. For example, accounts held in nominee or street name may not be eligible for calculation at cost value and instead may be calculated at market value for purposes of rights of accumulation.
The value of all of your holdings in accounts established in calendar year 2005 or earlier will be assigned an initial cost value equal to the market value of those holdings as of the last business day of 2005. Thereafter, the cost value of such accounts will increase or decrease according to actual investments or withdrawals. You must contact your financial professional or American Funds Service Company if you have additional information that is relevant to the calculation of the value of your holdings.
When determining your American Funds Class A sales charge, if your investment is not in an employer-sponsored retirement plan, you may also continue to take into account the market value (as of the day prior to your American Funds investment) of your individual holdings in various American Legacy variable annuity contracts and variable life insurance policies that were established on or before March 31, 2007. An employer-sponsored retirement plan may also continue to take into account the market value of its investments in American Legacy Retirement Investment Plans that were established on or before March 31, 2007.
You may not purchase Class C or 529-C shares if such combined holdings cause you to be eligible to purchase Class A or 529-A shares at the $1 million or more sales charge discount rate (i.e., at net asset value).
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If you make a gift of American Funds Class A shares, upon your request, you may purchase the shares at the sales charge discount allowed under rights of accumulation of all of your American Funds and applicable American Legacy accounts.
Reducing your Class T sales charge — As described in the prospectus, the initial sales charge you pay each time you buy Class T shares may differ depending upon the amount you invest and may be reduced for larger purchases. Additionally, Class T shares acquired through reinvestment of dividends or capital gain distributions are not subject to an initial sales charge. Sales charges on Class T shares are applied on a transaction-by-transaction basis, and, accordingly, Class T shares are not eligible for any other sales charge waivers or reductions, including through the aggregation of Class T shares concurrently purchased by other related accounts or in other American Funds. The sales charge applicable to Class T shares may not be reduced by establishing a statement of intention, and rights of accumulation are not available for Class T shares.
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CDSC waivers for Class A and C shares — As noted in the prospectus, a contingent deferred sales charge (“CDSC”) will be waived for redemptions due to death or post-purchase disability of a shareholder (this generally excludes accounts registered in the names of trusts and other entities). In the case of joint tenant accounts, if one joint tenant dies, a surviving joint tenant, at the time he or she notifies the Transfer Agent of the other joint tenant’s death and removes the decedent’s name from the account, may redeem shares from the account without incurring a CDSC. Redemptions made after the Transfer Agent is notified of the death of a joint tenant will be subject to a CDSC.
In addition, a CDSC will be waived for the following types of transactions, if they do not exceed 12% of the value of an “account” (defined below) annually (the “12% limit”):
· Required minimum distributions taken from retirement accounts in accordance with IRS regulations.
· Redemptions through an automatic withdrawal plan (“AWP”) (see “Automatic withdrawals” under “Shareholder account services and privileges” in this statement of additional information). For each AWP payment, assets that are not subject to a CDSC, such as shares acquired through reinvestment of dividends and/or capital gain distributions, will be redeemed first and will count toward the 12% limit. If there is an insufficient amount of assets not subject to a CDSC to cover a particular AWP payment, shares subject to the lowest CDSC will be redeemed next until the 12% limit is reached. Any dividends and/or capital gain distributions taken in cash by a shareholder who receives payments through an AWP will also count toward the 12% limit. In the case of an AWP, the 12% limit is calculated at the time an automatic redemption is first made, and is recalculated at the time each additional automatic redemption is made. Shareholders who establish an AWP should be aware that the amount of a payment not subject to a CDSC may vary over time depending on fluctuations in the value of their accounts. This privilege may be revised or terminated at any time.
For purposes of this paragraph, “account” means your investment in the applicable class of shares of the particular fund from which you are making the redemption.
The CDSC on American Funds Class A shares may be waived in cases where the fund’s transfer agent determines the benefit to the fund of collecting the CDSC would be outweighed by the cost of applying it.
CDSC waivers are allowed only in the cases listed here and in the prospectus. For example, CDSC waivers will not be allowed on redemptions of Class 529-C shares due to termination of CollegeAmerica; a determination by the Internal Revenue Service that CollegeAmerica does not qualify as a qualified tuition program under the Code; proposal or enactment of law that eliminates or limits the tax-favored status of CollegeAmerica; or elimination of the fund by Commonwealth Savers Plan as an option for additional investment within CollegeAmerica.
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The methods for selling (redeeming) shares are described more fully in the prospectus. If you wish to sell your shares by contacting American Funds Service Company directly, any such request must be signed by the registered shareholders. To contact American Funds Service Company via overnight mail or courier service, see “Purchase and exchange of shares.”
A signature guarantee may be required for certain redemptions. In such an event, your signature may be guaranteed by a domestic stock exchange or the Financial Industry Regulatory Authority, bank, savings association or credit union that is an eligible guarantor institution. The Transfer Agent reserves the right to require a signature guarantee on any redemptions.
Additional documentation may be required for sales of shares held in corporate, partnership or fiduciary accounts. You must include with your written request any shares you wish to sell that are in certificate form.
If you sell Class A or C shares and request a specific dollar amount to be sold, we will sell sufficient shares so that the sale proceeds, after deducting any applicable CDSC, equals the dollar amount requested.
If you hold multiple American Funds and a CDSC applies to the shares you are redeeming, the CDSC will be calculated based on the applicable class of shares of the particular fund from which you are making the redemption.
Redemption proceeds will not be mailed until sufficient time has passed to provide reasonable assurance that checks or drafts (including certified or cashier’s checks) for shares purchased have cleared (normally seven business days from the purchase date). Except for delays relating to clearance of checks for share purchases or in extraordinary circumstances (and as permissible under the 1940 Act), the fund typically expects to pay redemption proceeds one business day following receipt and acceptance of a redemption order. Interest will not accrue or be paid on amounts that represent uncashed distribution or redemption checks.
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Shareholder account services and privileges
The following services and privileges are generally available to all shareholders. However, certain services and privileges described in the prospectus and this statement of additional information may not be available for Class 529 shareholders or if your account is held with an investment dealer or through an employer-sponsored retirement plan.
Automatic investment plan — An automatic investment plan enables you to make monthly or quarterly investments in American Funds through automatic debits from your bank account. To set up a plan, you must fill out an account application and specify the amount that you would like to invest and the date on which you would like your investments to occur. The plan will begin within 30 days after your account application is received. Your bank account will be debited on the day or a few days before your investment is made, depending on the bank’s capabilities. The Transfer Agent will then invest your money into the fund you specified on or around the date you specified. If the date you specified falls on a weekend or holiday, your money will be invested on the following business day. However, if the following business day falls in the next month, your money will be invested on the business day immediately preceding the weekend or holiday. If your bank account cannot be debited due to insufficient funds, a stop-payment or the closing of the account, the plan may be terminated and the related investment reversed. You may change the amount of the investment or discontinue the plan at any time by contacting the Transfer Agent.
Automatic reinvestment — Dividends and capital gain distributions are reinvested in additional shares of the same class and fund at net asset value unless you indicate otherwise on the account application. You also may elect to have dividends and/or capital gain distributions paid in cash by informing the fund, the Transfer Agent or your investment dealer. Dividends and capital gain distributions paid to retirement plan shareholders or shareholders of the 529 share classes will be automatically reinvested.
If you have elected to receive dividends and/or capital gain distributions in cash, and the postal or other delivery service is unable to deliver checks to your address of record, or you do not respond to mailings from American Funds Service Company with regard to uncashed distribution checks, your distribution option may be automatically converted to having all dividends and other distributions reinvested in additional shares.
Cross-reinvestment of dividends and distributions — For all share classes, except Class T shares and the 529 classes of shares, you may cross-reinvest dividends and capital gains (distributions) into other American Funds in the same share class at net asset value, subject to the following conditions:
(1) the aggregate value of your account(s) in the fund(s) paying distributions equals or exceeds $5,000 (this is waived if the value of the account in the fund receiving the distributions equals or exceeds that fund’s minimum initial investment requirement);
(2) if the value of the account of the fund receiving distributions is below the minimum initial investment requirement, distributions must be automatically reinvested; and
(3) if you discontinue the cross-reinvestment of distributions, the value of the account of the fund receiving distributions must equal or exceed the minimum initial investment requirement. If you do not meet this requirement within 90 days of notification, the fund has the right to automatically redeem the account.
Depending on the financial intermediary holding your account, your reinvestment privileges may be unavailable or differ from those described in this statement of additional information. Investors should consult their financial intermediary for further information.
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Automatic exchanges — For all share classes other than Class T shares, you may automatically exchange shares of the same class in amounts of $50 or more among any American Funds on any day (or preceding business day if the day falls on a nonbusiness day) of each month you designate.
Automatic withdrawals — Depending on the type of account, for all share classes except R shares, you may automatically withdraw shares from any of the American Funds. You can make automatic withdrawals of $50 or more. You can designate the day of each period for withdrawals and request that checks be sent to you or someone else. Withdrawals may also be electronically deposited to your bank account. The Transfer Agent will withdraw your money from the fund you specify on or around the date you specify. If the date you specified falls on a weekend or holiday, the redemption will take place on the previous business day. However, if the previous business day falls in the preceding month, the redemption will take place on the following business day after the weekend or holiday. You should consult with your financial professional or intermediary to determine if your account is eligible for automatic withdrawals.
Withdrawal payments are not to be considered as dividends, yield or income. Generally, automatic investments may not be made into a shareholder account from which there are automatic withdrawals. Withdrawals of amounts exceeding reinvested dividends and distributions and increases in share value would reduce the aggregate value of the shareholder’s account. The Transfer Agent arranges for the redemption by the fund of sufficient shares, deposited by the shareholder with the Transfer Agent, to provide the withdrawal payment specified.
Redemption proceeds from an automatic withdrawal plan are not eligible for reinvestment without a sales charge.
Account statements — Your account is opened in accordance with your registration instructions. Transactions in the account, such as additional investments, will be reflected on regular confirmation statements from the Transfer Agent. Dividend and capital gain reinvestments, purchases through automatic investment plans and certain retirement plans, as well as automatic exchanges and withdrawals, will be confirmed at least quarterly.
American Funds Service Company and capitalgroup.com — You may check your share balance, the price of your shares or your most recent account transaction or redeem or exchange shares by calling American Funds Service Company at (800) 421-4225 or using capitalgroup.com. Redemptions and exchanges through American Funds Service Company and capitalgroup.com are subject to the conditions noted above and in “Telephone and Internet purchases, redemptions and exchanges” below. You will need your fund number (see the list of American Funds under the “General information — fund numbers” section in this statement of additional information), personal identification number (generally the last four digits of your Social Security number or other tax identification number associated with your account) and account number.
Generally, all shareholders are automatically eligible to use these services. However, if you are not currently authorized to do so, please contact American Funds Service Company for assistance. Once you establish this privilege, you, your financial professional or any person with your account information may use these services.
Telephone and Internet purchases, redemptions and exchanges — By using the telephone or the Internet (including capitalgroup.com), or fax purchase, redemption and/or exchange options, you agree to hold the fund, the Transfer Agent, any of its affiliates or mutual funds managed by such affiliates, and each of their respective directors, trustees, officers, employees and agents harmless from any losses, expenses, costs or liabilities (including attorney fees) that may be incurred in connection with the exercise of these privileges. Generally, all shareholders are automatically eligible to use these services. However, you may elect to opt out of these services by writing the Transfer Agent (you may
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also reinstate them at any time by writing the Transfer Agent). If the Transfer Agent does not employ reasonable procedures to confirm that the instructions received from any person with appropriate account information are genuine, it and/or the fund may be liable for losses due to unauthorized or fraudulent instructions. In the event that shareholders are unable to reach the fund by telephone because of technical difficulties, market conditions or a natural disaster, redemption and exchange requests may be made in writing only.
Redemption of shares — The fund’s articles of incorporation permit the fund to direct the Transfer Agent to redeem the shares of any shareholder for their then current net asset value per share if at such time the shareholder of record owns shares having an aggregate net asset value of less than the minimum initial investment amount required of new shareholders as set forth in the fund’s current registration statement under the 1940 Act, and subject to such further terms and conditions as the board of directors of the fund may from time to time adopt.
While payment of redemptions normally will be in cash, the fund’s articles of incorporation permit payment of the redemption price wholly or partly with portfolio securities or other fund assets under conditions and circumstances determined by the fund’s board of directors. For example, redemptions could be made in this manner if the board determined that making payments wholly in cash over a particular period would be unfair and/or harmful to other fund shareholders.
Share certificates — Shares are credited to your account. The fund does not issue share certificates.
New World Fund — Page 93
Custodian of assets — Securities and cash owned by the fund, including proceeds from the sale of shares of the fund and of securities in the fund’s portfolio, are held by JP Morgan Chase Bank N.A., 270 Park Avenue, New York, NY 10017-2070, as custodian. If the fund holds securities of issuers outside the United States, the custodian may hold these securities pursuant to subcustodial arrangements in banks outside the United States or branches of U.S. banks outside the United States.
Transfer agent services — American Funds Service Company, a wholly owned subsidiary of the investment adviser, maintains the records of shareholder accounts, processes purchases and redemptions of the fund’s shares, acts as dividend and capital gain distribution disbursing agent, and performs other related shareholder service functions. The principal office of American Funds Service Company is located at 6455 Irvine Center Drive, Irvine, CA 92618. Transfer agent fees are paid according to a fee schedule, based on the number of accounts serviced or a percentage of fund assets, contained in a Shareholder Services Agreement between the fund and American Funds Service Company.
In the case of certain shareholder accounts, third parties who may be unaffiliated with the investment adviser provide transfer agency and shareholder services in place of American Funds Service Company. These services are rendered under agreements with American Funds Service Company or its affiliates and the third parties receive compensation according to such agreements. Compensation for transfer agency and shareholder services, whether paid to American Funds Service Company or such third parties, is ultimately paid from fund assets and is reflected in the expenses of the fund as disclosed in the prospectus.
During the 2024 fiscal year, transfer agent fees, gross of any payments made by American Funds Service Company to third parties, were:
|
Transfer agent fee | |
|
Class A |
$21,721,000 |
|
Class C |
501,000 |
|
Class T |
—* |
|
Class F-1 |
1,320,000 |
|
Class F-2 |
18,601,000 |
|
Class F-3 |
144,000 |
|
Class 529-A |
1,450,000 |
|
Class 529-C |
31,000 |
|
Class 529-E |
24,000 |
|
Class 529-T |
—* |
|
Class 529-F-1 |
—* |
|
Class 529-F-2 |
89,000 |
|
Class 529-F-3 |
—* |
|
Class R-1 |
23,000 |
|
Class R-2 |
880,000 |
|
Class R-2E |
81,000 |
|
Class R-3 |
738,000 |
|
Class R-4 |
782,000 |
|
Class R-5E |
162,000 |
|
Class R-5 |
162,000 |
|
Class R-6 |
269,000 |
* Amount less than $1,000.
New World Fund — Page 94
Independent registered public accounting firm — Deloitte & Touche LLP, 695 Town Center Drive, Costa Mesa, CA 92626, serves as the fund’s independent registered public accounting firm, providing audit services and review of certain documents to be filed with the SEC. Deloitte Tax LLP prepares tax returns for the fund. The financial statements and financial highlights of the fund included in this statement of additional information that are from the fund's Form N-CSR for the most recent fiscal year have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial highlights are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The selection of the fund’s independent registered public accounting firm is reviewed and determined annually by the board of directors.
Independent legal counsel — Dechert LLP, 45 Fremont Street, 26th Floor, San Francisco, CA 94104-2223, serves as independent legal counsel (“counsel”) for the fund and for independent directors in their capacities as such. A determination with respect to the independence of the fund’s counsel will be made at least annually by the independent directors of the fund, as prescribed by applicable 1940 Act rules.
Prospectuses, reports to shareholders and proxy statements — The fund’s fiscal year ends on October 31. Shareholders are provided updated summary prospectuses annually and at least semi-annually with reports showing the fund’s expenses, key statistics, holdings information and investment results (annual report only). Shareholders may request a copy of the fund’s current prospectus at no cost by calling (800) 421-4225 or by sending an email request to [email protected]. Shareholders may also access the fund’s current summary prospectus, prospectus, statement of additional information and shareholder reports at capitalgroup.com/prospectus. The fund’s annual financial statements are audited by the fund’s independent registered public accounting firm, Deloitte & Touche LLP. In addition, shareholders may also receive proxy statements for the fund. In an effort to reduce the volume of mail shareholders receive from the fund when a household owns more than one account, the Transfer Agent has taken steps to eliminate duplicate mailings of summary prospectuses, shareholder reports and proxy statements. To receive additional copies of a summary prospectus, report or proxy statement, shareholders should contact the Transfer Agent.
Shareholders may also elect to receive updated summary prospectuses, annual reports and semi-annual reports electronically by signing up for electronic delivery on our website, capitalgroup.com. Shareholders who elect to receive documents electronically will receive such documents in electronic form and will not receive documents in paper form by mail. A shareholder who elects electronic delivery is able to cancel this service at any time and return to receiving updated summary prospectuses and other reports in paper form by mail.
Summary prospectuses, prospectuses, annual reports and semi-annual reports that are mailed to shareholders by the Capital Group organization are printed with ink containing soy and/or vegetable oil on paper containing recycled fibers.
New World Fund — Page 95
Codes of ethics — The fund and Capital Research and Management Company and its affiliated companies, including the fund’s Principal Underwriter, have adopted codes of ethics that allow for personal investments, including securities in which the fund may invest from time to time. These codes include a ban on acquisitions of securities pursuant to an initial public offering; restrictions on acquisitions of private placement securities; preclearance and reporting requirements; review of duplicate confirmation statements; annual recertification of compliance with codes of ethics; blackout periods on personal investing for certain investment personnel; ban on short-term trading profits for investment personnel; limitations on service as a director of publicly traded companies; disclosure of personal securities transactions; and policies regarding political contributions.
Credit facility — The fund, together with other U.S. registered investment funds managed by Capital Research and Management Company, has entered into a committed line of credit facility pursuant to which the funds may borrow up to $1.5 billion as a source of temporary liquidity on a first-come, first-served basis. Under the credit facility, loans are generally unsecured; however, a borrowing fund must collateralize any borrowings under the facility on an equivalent basis if it has certain other collateralized borrowings.
Determination of net asset value, redemption price and maximum offering price per share for Class A shares — October 31, 2024
|
Net
asset value and redemption price per share |
$82.05 |
|
Maximum
offering price per share |
$87.06 |
Other information — The fund reserves the right to modify the privileges described in this statement of additional information at any time.
The fund’s financial statements, including the investment portfolio and the report of the fund’s independent registered public accounting firm contained in the fund’s Form N-CSR, are included in this statement of additional information.
New World Fund — Page 96
Fund numbers — Here are the fund numbers for use when making share transactions:
|
Fund numbers | ||||||
|
Fund |
Class A |
Class C |
Class T |
Class F-1 |
Class F-2 |
Class F-3 |
|
Stock and stock/fixed income funds |
||||||
|
AMCAP Fund® |
002 |
302 |
43002 |
402 |
602 |
702 |
|
American Balanced Fund® |
011 |
311 |
43011 |
411 |
611 |
711 |
|
American Funds® Developing World Growth and Income Fund |
30100 |
33100 |
43100 |
34100 |
36100 |
37100 |
|
American Funds® Global Balanced Fund |
037 |
337 |
43037 |
437 |
637 |
737 |
|
American Funds® Global Insight Fund |
30122 |
33122 |
43122 |
34122 |
36122 |
37122 |
|
American Funds® International Vantage Fund |
30123 |
33123 |
43123 |
34123 |
36123 |
37123 |
|
American Mutual Fund® |
003 |
303 |
43003 |
403 |
603 |
703 |
|
Capital Income Builder® |
012 |
312 |
43012 |
412 |
612 |
712 |
|
Capital World Growth and Income Fund® |
033 |
333 |
43033 |
433 |
633 |
733 |
|
EuroPacific Growth Fund® |
016 |
316 |
43016 |
416 |
616 |
716 |
|
Fundamental Investors® |
010 |
310 |
43010 |
410 |
610 |
710 |
|
The Growth Fund of America® |
005 |
305 |
43005 |
405 |
605 |
705 |
|
The Income Fund of America® |
006 |
306 |
43006 |
406 |
606 |
706 |
|
International Growth and Income Fund |
034 |
334 |
43034 |
434 |
634 |
734 |
|
The Investment Company of America® |
004 |
304 |
43004 |
404 |
604 |
704 |
|
The New Economy Fund® |
014 |
314 |
43014 |
414 |
614 |
714 |
|
New Perspective Fund® |
007 |
307 |
43007 |
407 |
607 |
707 |
|
New World Fund® |
036 |
336 |
43036 |
436 |
636 |
736 |
|
SMALLCAP World Fund® |
035 |
335 |
43035 |
435 |
635 |
735 |
|
Washington Mutual Investors Fund |
001 |
301 |
43001 |
401 |
601 |
701 |
|
Fixed income funds |
||||||
|
American Funds Emerging Markets Bond Fund ® |
30114 |
33114 |
43114 |
34114 |
36114 |
37114 |
|
American Funds Corporate Bond Fund ® |
032 |
332 |
43032 |
432 |
632 |
732 |
|
American Funds Inflation Linked Bond Fund® |
060 |
360 |
43060 |
460 |
660 |
760 |
|
American Funds Mortgage Fund® |
042 |
342 |
43042 |
442 |
642 |
742 |
|
American Funds® Multi-Sector Income Fund |
30126 |
33126 |
43126 |
34126 |
36126 |
37126 |
|
American
Funds Short-Term Tax-Exempt |
039 |
N/A |
43039 |
439 |
639 |
739 |
|
American Funds® Strategic Bond Fund |
30112 |
33112 |
43112 |
34112 |
36112 |
37112 |
|
American
Funds Tax-Exempt Fund of |
041 |
341 |
43041 |
441 |
641 |
741 |
|
American High-Income Municipal Bond Fund® |
040 |
340 |
43040 |
440 |
640 |
740 |
|
American High-Income Trust® |
021 |
321 |
43021 |
421 |
621 |
721 |
|
The Bond Fund of America® |
008 |
308 |
43008 |
408 |
608 |
708 |
|
Capital World Bond Fund® |
031 |
331 |
43031 |
431 |
631 |
731 |
|
Intermediate Bond Fund of America® |
023 |
323 |
43023 |
423 |
623 |
723 |
|
Limited
Term Tax-Exempt Bond Fund |
043 |
343 |
43043 |
443 |
643 |
743 |
|
Short-Term Bond Fund of America® |
048 |
348 |
43048 |
448 |
648 |
748 |
|
The Tax-Exempt Bond Fund of America® |
019 |
319 |
43019 |
419 |
619 |
719 |
|
The Tax-Exempt Fund of California® |
020 |
320 |
43020 |
420 |
620 |
720 |
|
U.S. Government Securities Fund® |
022 |
322 |
43022 |
422 |
622 |
722 |
|
Money market fund |
||||||
|
American
Funds® U.S. Government |
059 |
359 |
43059 |
459 |
659 |
759 |
New World Fund — Page 97
|
Fund numbers | |||||||||
|
Fund |
Class
|
Class |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
|
Stock and stock/fixed income funds |
|||||||||
|
AMCAP Fund |
1002 |
1302 |
1502 |
46002 |
1402 |
1602 |
1702 |
N/A |
N/A |
|
American Balanced Fund |
1011 |
1311 |
1511 |
46011 |
1411 |
1611 |
1711 |
N/A |
N/A |
|
American Funds Developing World Growth and Income Fund |
10100 |
13100 |
15100 |
46100 |
14100 |
16100 |
17100 |
N/A |
N/A |
|
American Funds Global Balanced Fund |
1037 |
1337 |
1537 |
46037 |
1437 |
1637 |
1737 |
N/A |
N/A |
|
American Funds Global Insight Fund |
10122 |
13122 |
15122 |
46122 |
14122 |
16122 |
17122 |
N/A |
N/A |
|
American Funds International Vantage Fund |
10123 |
13123 |
15123 |
46123 |
14123 |
16123 |
17123 |
N/A |
N/A |
|
American Mutual Fund |
1003 |
1303 |
1503 |
46003 |
1403 |
1603 |
1703 |
N/A |
N/A |
|
Capital Income Builder |
1012 |
1312 |
1512 |
46012 |
1412 |
1612 |
1712 |
N/A |
N/A |
|
Capital World Growth and Income Fund |
1033 |
1333 |
1533 |
46033 |
1433 |
1633 |
1733 |
N/A |
N/A |
|
EuroPacific Growth Fund |
1016 |
1316 |
1516 |
46016 |
1416 |
1616 |
1716 |
N/A |
N/A |
|
Fundamental Investors |
1010 |
1310 |
1510 |
46010 |
1410 |
1610 |
1710 |
N/A |
N/A |
|
The Growth Fund of America |
1005 |
1305 |
1505 |
46005 |
1405 |
1605 |
1705 |
N/A |
N/A |
|
The Income Fund of America |
1006 |
1306 |
1506 |
46006 |
1406 |
1606 |
1706 |
N/A |
N/A |
|
International Growth and Income Fund |
1034 |
1334 |
1534 |
46034 |
1434 |
1634 |
1734 |
N/A |
N/A |
|
The Investment Company of America |
1004 |
1304 |
1504 |
46004 |
1404 |
1604 |
1704 |
N/A |
N/A |
|
The New Economy Fund |
1014 |
1314 |
1514 |
46014 |
1414 |
1614 |
1714 |
N/A |
N/A |
|
New Perspective Fund |
1007 |
1307 |
1507 |
46007 |
1407 |
1607 |
1707 |
N/A |
N/A |
|
New World Fund |
1036 |
1336 |
1536 |
46036 |
1436 |
1636 |
1736 |
N/A |
N/A |
|
SMALLCAP World Fund |
1035 |
1335 |
1535 |
46035 |
1435 |
1635 |
1735 |
N/A |
N/A |
|
Washington Mutual Investors Fund |
1001 |
1301 |
1501 |
46001 |
1401 |
1601 |
1701 |
N/A |
N/A |
|
Fixed income funds |
|||||||||
|
American Funds Emerging Markets Bond Fund |
10114 |
13114 |
15114 |
46114 |
14114 |
16114 |
17114 |
N/A |
N/A |
|
American Funds Corporate Bond Fund |
1032 |
1332 |
1532 |
46032 |
1432 |
1632 |
1732 |
N/A |
N/A |
|
American Funds Inflation Linked Bond Fund |
1060 |
1360 |
1560 |
46060 |
1460 |
1660 |
1760 |
N/A |
N/A |
|
American Funds Mortgage Fund |
1042 |
1342 |
1542 |
46042 |
1442 |
1642 |
1742 |
N/A |
N/A |
|
American Funds Multi-Sector Income Fund |
10126 |
13126 |
15126 |
46126 |
14126 |
16126 |
17126 |
N/A |
N/A |
|
American Funds Strategic Bond Fund |
10112 |
13112 |
15112 |
46112 |
14112 |
16112 |
17112 |
N/A |
N/A |
|
American High-Income Trust |
1021 |
1321 |
1521 |
46021 |
1421 |
1621 |
1721 |
N/A |
N/A |
|
The Bond Fund of America |
1008 |
1308 |
1508 |
46008 |
1408 |
1608 |
1708 |
N/A |
N/A |
|
Capital World Bond Fund |
1031 |
1331 |
1531 |
46031 |
1431 |
1631 |
1731 |
N/A |
N/A |
|
Intermediate Bond Fund of America |
1023 |
1323 |
1523 |
46023 |
1423 |
1623 |
1723 |
N/A |
N/A |
|
Short-Term Bond Fund of America |
1048 |
1348 |
1548 |
46048 |
1448 |
1648 |
1748 |
N/A |
N/A |
|
U.S. Government Securities Fund |
1022 |
1322 |
1522 |
46022 |
1422 |
1622 |
1722 |
N/A |
N/A |
|
Money market fund |
|
||||||||
|
American
Funds U.S. Government |
1059 |
1359 |
1559 |
46059 |
1459 |
1659 |
1759 |
48059 |
60059 |
New World Fund — Page 98
|
Fund numbers | ||||||||
|
Fund |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
|
Stock and stock/fixed income funds |
||||||||
|
AMCAP Fund |
2102 |
2202 |
4102 |
2302 |
2402 |
2702 |
2502 |
2602 |
|
American Balanced Fund |
2111 |
2211 |
4111 |
2311 |
2411 |
2711 |
2511 |
2611 |
|
American Funds Developing World Growth and Income Fund |
21100 |
22100 |
41100 |
23100 |
24100 |
27100 |
25100 |
26100 |
|
American Funds Global Balanced Fund |
2137 |
2237 |
4137 |
2337 |
2437 |
2737 |
2537 |
2637 |
|
American Funds Global Insight Fund |
21122 |
22122 |
41122 |
23122 |
24122 |
27122 |
25122 |
26122 |
|
American Funds International Vantage Fund |
21123 |
22123 |
41123 |
23123 |
24123 |
27123 |
25123 |
26123 |
|
American Mutual Fund |
2103 |
2203 |
4103 |
2303 |
2403 |
2703 |
2503 |
2603 |
|
Capital Income Builder |
2112 |
2212 |
4112 |
2312 |
2412 |
2712 |
2512 |
2612 |
|
Capital World Growth and Income Fund |
2133 |
2233 |
4133 |
2333 |
2433 |
2733 |
2533 |
2633 |
|
EuroPacific Growth Fund |
2116 |
2216 |
4116 |
2316 |
2416 |
2716 |
2516 |
2616 |
|
Fundamental Investors |
2110 |
2210 |
4110 |
2310 |
2410 |
2710 |
2510 |
2610 |
|
The Growth Fund of America |
2105 |
2205 |
4105 |
2305 |
2405 |
2705 |
2505 |
2605 |
|
The Income Fund of America |
2106 |
2206 |
4106 |
2306 |
2406 |
2706 |
2506 |
2606 |
|
International Growth and Income Fund |
2134 |
2234 |
41034 |
2334 |
2434 |
27034 |
2534 |
2634 |
|
The Investment Company of America |
2104 |
2204 |
4104 |
2304 |
2404 |
2704 |
2504 |
2604 |
|
The New Economy Fund |
2114 |
2214 |
4114 |
2314 |
2414 |
2714 |
2514 |
2614 |
|
New Perspective Fund |
2107 |
2207 |
4107 |
2307 |
2407 |
2707 |
2507 |
2607 |
|
New World Fund |
2136 |
2236 |
4136 |
2336 |
2436 |
2736 |
2536 |
2636 |
|
SMALLCAP World Fund |
2135 |
2235 |
4135 |
2335 |
2435 |
2735 |
2535 |
2635 |
|
Washington Mutual Investors Fund |
2101 |
2201 |
4101 |
2301 |
2401 |
2701 |
2501 |
2601 |
|
Fixed income funds |
||||||||
|
American Funds Emerging Markets Bond Fund |
21114 |
22114 |
41114 |
23114 |
24114 |
27114 |
25114 |
26114 |
|
American Funds Corporate Bond Fund |
2132 |
2232 |
4132 |
2332 |
2432 |
2732 |
2532 |
2632 |
|
American Funds Inflation Linked Bond Fund |
2160 |
2260 |
4160 |
2360 |
2460 |
2760 |
2560 |
2660 |
|
American Funds Mortgage Fund |
2142 |
2242 |
4142 |
2342 |
2442 |
2742 |
2542 |
2642 |
|
American Funds Multi-Sector Income Fund |
21126 |
22126 |
41126 |
23126 |
24126 |
27126 |
25126 |
26126 |
|
American Funds Strategic Bond Fund |
21112 |
22112 |
41112 |
23112 |
24112 |
27112 |
25112 |
26112 |
|
American High-Income Trust |
2121 |
2221 |
4121 |
2321 |
2421 |
2721 |
2521 |
2621 |
|
The Bond Fund of America |
2108 |
2208 |
4108 |
2308 |
2408 |
2708 |
2508 |
2608 |
|
Capital World Bond Fund |
2131 |
2231 |
4131 |
2331 |
2431 |
2731 |
2531 |
2631 |
|
Intermediate Bond Fund of America |
2123 |
2223 |
4123 |
2323 |
2423 |
2723 |
2523 |
2623 |
|
Short-Term Bond Fund of America |
2148 |
2248 |
4148 |
2348 |
2448 |
2748 |
2548 |
2648 |
|
U.S. Government Securities Fund |
2122 |
2222 |
4122 |
2322 |
2422 |
2722 |
2522 |
2622 |
|
Money market fund |
||||||||
|
American
Funds U.S. Government |
2159 |
2259 |
4159 |
2359 |
2459 |
2759 |
2559 |
2659 |
New World Fund — Page 99
|
Fund numbers | ||||||
|
Fund |
Class A |
Class C |
Class T |
Class F-1 |
Class F-2 |
Class F-3 |
|
American Funds Target Date Retirement Series® |
||||||
|
American Funds® 2070 Target Date Retirement Fund |
30187 |
33187 |
43187 |
34187 |
36187 |
37187 |
|
American Funds® 2065 Target Date Retirement Fund |
30185 |
33185 |
43185 |
34185 |
36185 |
37185 |
|
American Funds 2060 Target Date Retirement Fund® |
083 |
383 |
43083 |
483 |
683 |
783 |
|
American Funds 2055 Target Date Retirement Fund® |
082 |
382 |
43082 |
482 |
682 |
782 |
|
American Funds 2050 Target Date Retirement Fund® |
069 |
369 |
43069 |
469 |
669 |
769 |
|
American Funds 2045 Target Date Retirement Fund® |
068 |
368 |
43068 |
468 |
668 |
768 |
|
American Funds 2040 Target Date Retirement Fund® |
067 |
367 |
43067 |
467 |
667 |
767 |
|
American Funds 2035 Target Date Retirement Fund® |
066 |
366 |
43066 |
466 |
36066 |
766 |
|
American Funds 2030 Target Date Retirement Fund® |
065 |
365 |
43065 |
465 |
665 |
765 |
|
American Funds 2025 Target Date Retirement Fund® |
064 |
364 |
43064 |
464 |
664 |
764 |
|
American Funds 2020 Target Date Retirement Fund® |
063 |
363 |
43063 |
463 |
663 |
763 |
|
American Funds 2015 Target Date Retirement Fund® |
062 |
362 |
43062 |
462 |
662 |
762 |
|
American Funds 2010 Target Date Retirement Fund® |
061 |
361 |
43061 |
461 |
661 |
761 |
New World Fund — Page 100
|
Fund numbers | ||||||||
|
Fund |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
|
American Funds Target Date Retirement Series® |
||||||||
|
American
Funds® 2070 |
21187 |
22187 |
41187 |
23187 |
24187 |
27187 |
25187 |
26187 |
|
American
Funds® 2065 |
21185 |
22185 |
41185 |
23185 |
24185 |
27185 |
25185 |
26185 |
|
American
Funds 2060 |
2183 |
2283 |
4183 |
2383 |
2483 |
2783 |
2583 |
2683 |
|
American
Funds 2055 |
2182 |
2282 |
4182 |
2382 |
2482 |
2782 |
2582 |
2682 |
|
American
Funds 2050 |
2169 |
2269 |
4169 |
2369 |
2469 |
2769 |
2569 |
2669 |
|
American
Funds 2045 |
2168 |
2268 |
4168 |
2368 |
2468 |
2768 |
2568 |
2668 |
|
American
Funds 2040 |
2167 |
2267 |
4167 |
2367 |
2467 |
2767 |
2567 |
2667 |
|
American
Funds 2035 |
2166 |
2266 |
4166 |
2366 |
2466 |
2766 |
2566 |
2666 |
|
American
Funds 2030 |
2165 |
2265 |
4165 |
2365 |
2465 |
2765 |
2565 |
2665 |
|
American
Funds 2025 |
2164 |
2264 |
4164 |
2364 |
2464 |
2764 |
2564 |
2664 |
|
American
Funds 2020 |
2163 |
2263 |
4163 |
2363 |
2463 |
2763 |
2563 |
2663 |
|
American
Funds 2015 |
2162 |
2262 |
4162 |
2362 |
2462 |
2762 |
2562 |
2662 |
|
American
Funds 2010 |
2161 |
2261 |
4161 |
2361 |
2461 |
2761 |
2561 |
2661 |
New World Fund — Page 101
|
Fund numbers | |||||||
|
Fund |
Class
|
Class
|
Class
|
Class
|
Class
|
Class
|
Class
|
|
American Funds College Target Date Series® |
|||||||
|
American Funds® College 2042 Fund |
10144 |
13144 |
15144 |
46144 |
14144 |
16144 |
17144 |
|
American Funds® College 2039 Fund |
10136 |
13136 |
15136 |
46136 |
14136 |
16136 |
17136 |
|
American Funds® College 2036 Fund |
10125 |
13125 |
15125 |
46125 |
14125 |
16125 |
17125 |
|
American Funds College 2033 Fund® |
10103 |
13103 |
15103 |
46103 |
14103 |
16103 |
17103 |
|
American Funds College 2030 Fund® |
1094 |
1394 |
1594 |
46094 |
1494 |
1694 |
1794 |
|
American Funds College 2027 Fund® |
1093 |
1393 |
1593 |
46093 |
1493 |
1693 |
1793 |
|
American Funds College Enrollment Fund® |
1088 |
1388 |
1588 |
46088 |
1488 |
1688 |
1788 |
New World Fund — Page 102
|
Fund numbers | ||||||
|
Fund |
Class A |
Class C |
Class T |
Class F-1 |
Class F-2 |
Class F-3 |
|
American Funds® Portfolio Series |
||||||
|
American Funds® Global Growth Portfolio |
055 |
355 |
43055 |
455 |
655 |
755 |
|
American Funds® Growth Portfolio |
053 |
353 |
43053 |
453 |
653 |
753 |
|
American Funds® Growth and Income Portfolio |
051 |
351 |
43051 |
451 |
651 |
751 |
|
American Funds® Moderate Growth and Income Portfolio |
050 |
350 |
43050 |
450 |
650 |
750 |
|
American Funds® Conservative Growth and Income Portfolio |
047 |
347 |
43047 |
447 |
647 |
747 |
|
American
Funds® Tax-Aware Conservative |
046 |
346 |
43046 |
446 |
646 |
746 |
|
American Funds® Preservation Portfolio |
045 |
345 |
43045 |
445 |
645 |
745 |
|
American Funds® Tax-Exempt Preservation Portfolio |
044 |
344 |
43044 |
444 |
644 |
744 |
|
Fund numbers | |||||||||
|
Fund |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
|
American Funds Global Growth Portfolio |
1055 |
1355 |
1555 |
46055 |
1455 |
1655 |
1755 |
48055 |
60055 |
|
American Funds Growth Portfolio |
1053 |
1353 |
1553 |
46053 |
1453 |
1653 |
1753 |
48053 |
60053 |
|
American Funds Growth and Income Portfolio |
1051 |
1351 |
1551 |
46051 |
1451 |
1651 |
1751 |
48051 |
60051 |
|
American Funds Moderate Growth and Income Portfolio |
1050 |
1350 |
1550 |
46050 |
1450 |
1650 |
1750 |
48050 |
60050 |
|
American Funds Conservative Growth and Income Portfolio |
1047 |
1347 |
1547 |
46047 |
1447 |
1647 |
1747 |
48047 |
60047 |
|
American Funds Tax-Aware Conservative Growth and Income Portfolio |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
|
American Funds Preservation Portfolio |
1045 |
1345 |
1545 |
46045 |
1445 |
1645 |
1745 |
48045 |
60045 |
|
American Funds Tax-Exempt Preservation Portfolio |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
|
Fund numbers | ||||||||
|
Fund |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
|
American Funds Global Growth Portfolio |
2155 |
2255 |
4155 |
2355 |
2455 |
2755 |
2555 |
2655 |
|
American Funds Growth Portfolio |
2153 |
2253 |
4153 |
2353 |
2453 |
2753 |
2553 |
2653 |
|
American Funds Growth and Income Portfolio |
2151 |
2251 |
4151 |
2351 |
2451 |
2751 |
2551 |
2651 |
|
American Funds Moderate Growth and Income Portfolio |
2150 |
2250 |
4150 |
2350 |
2450 |
2750 |
2550 |
2650 |
|
American Funds Conservative Growth and Income Portfolio |
2147 |
2247 |
4147 |
2347 |
2447 |
2747 |
2547 |
2647 |
|
American
Funds Tax-Aware Conservative |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
|
American Funds Preservation Portfolio |
2145 |
2245 |
4145 |
2345 |
2445 |
2745 |
2545 |
2645 |
|
American Funds Tax-Exempt Preservation Portfolio |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
New World Fund — Page 103
|
Fund numbers | ||||||
|
Fund |
Class A |
Class C |
Class T |
Class F-1 |
Class F-2 |
Class F-3 |
|
American Funds® Retirement Income Portfolio Series |
||||||
|
American Funds® Retirement Income Portfolio – Conservative |
30109 |
33109 |
43109 |
34109 |
36109 |
37109 |
|
American Funds® Retirement Income Portfolio – Moderate |
30110 |
33110 |
43110 |
34110 |
36110 |
37110 |
|
American Funds® Retirement Income Portfolio – Enhanced |
30111 |
33111 |
43111 |
34111 |
36111 |
37111 |
|
Fund numbers | ||||||||
|
Fund |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
Class |
|
American Funds Retirement Income Portfolio – Conservative |
21109 |
22109 |
41109 |
23109 |
24109 |
27109 |
25109 |
26109 |
|
American Funds Retirement Income Portfolio – Moderate |
21110 |
22110 |
41110 |
23110 |
24110 |
27110 |
25110 |
26110 |
|
American Funds Retirement Income Portfolio – Enhanced |
21111 |
22111 |
41111 |
23111 |
24111 |
27111 |
25111 |
26111 |
New World Fund — Page 104
The following descriptions of debt security ratings are based on information provided by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, Inc.
Description of bond ratings
Moody’s
Long-term
rating scale
Aaa
Obligations
rated Aaa are judged to be of the highest quality, subject to the lowest level
of credit risk.
Aa
Obligations
rated Aa are judged to be of high quality and are subject to very low credit
risk.
A
Obligations
rated A are considered upper-medium grade and are subject to low credit
risk.
Baa
Obligations
rated Baa are judged to be medium-grade and subject to moderate credit risk and
as such may possess certain speculative characteristics.
Ba
Obligations
rated Ba are judged to be speculative and are subject to substantial credit
risk.
B
Obligations
rated B are considered speculative and are subject to high credit
risk.
Caa
Obligations
rated Caa are judged to be speculative and of poor standing and are subject to
very high credit risk.
Ca
Obligations
rated Ca are highly speculative and are likely in, or very near, default, with
some prospect of recovery of principal and interest.
C
Obligations
rated C are the lowest rated and are typically in default, with little prospect
for recovery of principal or interest.
Note: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies and securities firms.
New World Fund — Page 105
S&P
Global Ratings
Long-term
issue credit ratings
AAA
An
obligation rated AAA has the highest rating assigned by S&P Global Ratings.
The obligor’s capacity to meet its financial commitments on the obligation is
extremely strong.
AA
An
obligation rated AA differs from the highest-rated obligations only to a small
degree. The obligor’s capacity to meet its financial commitments on the
obligation is very strong.
A
An
obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor’s capacity to meet its financial
commitments on the obligation is still strong.
BBB
An
obligation rated BBB exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to weaken the
obligor’s capacity to meet its financial commitments on the
obligation.
BB, B, CCC, CC, and C
Obligations rated BB, B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB
An
obligation rated BB is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor’s
inadequate capacity to meet its financial commitments on the
obligation.
B
An
obligation rated B is more vulnerable to nonpayment than obligations rated BB,
but the obligor currently has the capacity to meet its financial commitments on
the obligation. Adverse business, financial, or economic conditions will likely
impair the obligor’s capacity or willingness to meet its financial commitments
on the obligation.
CCC
An
obligation rated CCC is currently vulnerable to nonpayment and is dependent upon
favorable business, financial, and economic conditions for the obligor to meet
its financial commitments on the obligation. In the event of adverse business,
financial, or economic conditions, the obligor is not likely to have the
capacity to meet its financial commitments on the obligation.
CC
An
obligation rated CC is currently highly vulnerable to nonpayment. The CC rating
is used when a default has not occurred, but S&P Global Ratings expects
default to be a virtual certainty, regardless of the anticipated time to
default.
New World Fund — Page 106
C
An
obligation rated C is currently highly vulnerable to nonpayment, and the
obligation is expected to have lower relative seniority or lower ultimate
recovery compared with obligations that are rated higher.
D
An
obligation rated D is in default or in breach of an imputed promise. For
non-hybrid capital instruments, the D rating category is used when payments on
an obligation are not made on the date due, unless S&P Global Ratings
believes that such payments will be made within the next five business days in
the absence of a stated grace period or within the earlier of the stated grace
period or the next 30 calendar days. The D rating also will be used upon the
filing of a bankruptcy petition or the taking of similar action and where
default on an obligation is a virtual certainty, for example due to automatic
stay provisions. A rating on an obligation is lowered to D if it is subject to a
distressed debt restructuring.
Plus (+) or minus (–)
The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
NR
Indicates that a rating has not been assigned or is no longer assigned.
New World Fund — Page 107
Fitch
Ratings, Inc.
Long-term
credit ratings
AAA
Highest
credit quality. AAA ratings denote the lowest expectation of default risk. They
are assigned only in case of exceptionally strong capacity for payment of
financial commitments. This capacity is highly unlikely to be adversely affected
by foreseeable events.
AA
Very
high credit quality. AA ratings denote expectations of very low default risk.
They indicate very strong capacity for payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable
events.
A
High
credit quality. A ratings denote expectations of low default risk. The capacity
for payment of financial commitments is considered strong. This capacity may,
nevertheless, be more vulnerable to changes in circumstances or in economic
conditions than is the case for higher ratings.
BBB
Good
credit quality. BBB ratings indicate that expectations of default risk are low.
The capacity for payment of financial commitments is considered adequate but
adverse changes in circumstances and economic conditions are more likely to
impair this capacity.
BB
Speculative.
BB ratings indicate an elevated vulnerability to default risk, particularly in
the event of adverse changes in business or economic conditions over time;
however, business or financial flexibility exists which supports the servicing
of financial commitments.
B
Highly
speculative. B ratings indicate that material default risk is present, but a
limited margin of safety remains. Financial commitments are currently being met;
however, capacity for continued payment is vulnerable to deterioration in the
business and economic environment.
CCC
Substantial
credit risk. Default is a real possibility.
CC
Very
high levels of credit risk. Default of some kind appears
probable.
C
Exceptionally
high levels of credit risk. Default is imminent or inevitable, or the issuer is
in standstill. Conditions that are indicative of a C category rating for an
issuer include:
· The issuer has entered into a grace or cure period following nonpayment of a material financial obligation;
· The issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or
· Fitch Ratings otherwise believes a condition of RD or D to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.
New World Fund — Page 108
RD
Restricted
default. RD ratings indicate an issuer that in Fitch Ratings’ opinion has
experienced an uncured payment default on a bond, loan or other material
financial obligation but which has not entered into bankruptcy filings,
administration, receivership, liquidation or other formal winding up procedure,
and which has not otherwise ceased operating. This would
include:
· The selective payment default on a specific class or currency of debt;
· The uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation;
· The extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or
· Execution of a distressed debt exchange on one or more material financial obligations.
D
Default.
D ratings indicate an issuer that in Fitch Ratings’ opinion has entered into
bankruptcy filings, administration, receivership, liquidation or other formal
winding up procedure, or which has otherwise ceased business.
Default ratings are not assigned prospectively to entities or their obligations; within this context, nonpayment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.
Imminent default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but the date of the exchange still lies several days or weeks in the immediate future.
In all cases, the assignment of a default rating reflects the agency’s opinion as to the most appropriate rating category consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer’s financial obligations or local commercial practice.
Note: The modifiers “+” or “–” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the AAA long-term rating category, or to categories below B.
New World Fund — Page 109
Description of commercial paper ratings
Moody’s
Global short-term rating scale
P-1
Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
P-2
Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
P-3
Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
NP
Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
S&P Global Ratings
Commercial paper ratings (highest three ratings)
A-1
A short-term obligation rated A-1 is rated in the highest category by S&P Global Ratings. The obligor’s capacity to meet its financial commitments on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitments on these obligations is extremely strong.
A-2
A short-term obligation rated A-2 is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitments on the obligation is satisfactory.
A-3
A short-term obligation rated A-3 exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken an obligor's capacity to meet its financial commitments on the obligation.
New World Fund — Page 110
|
Common
stocks 91.98% |
|
Shares |
Value
(000) | |
Financials
16.97% | ||||
|
Nu
Holdings, Ltd., Class A1
|
60,586,064 |
$914,244 | ||
|
Banco
Bilbao Vizcaya Argentaria, SA |
62,680,638 |
624,288 | ||
|
|
AIA
Group, Ltd. |
75,480,355 |
600,612 | |
|
|
Bank
Mandiri (Persero) Tbk PT |
1,267,307,211 |
540,432 | |
|
|
PB
Fintech, Ltd.1,2
|
26,265,089 |
523,573 | |
|
|
Capitec
Bank Holdings, Ltd. |
2,638,940 |
474,748 | |
|
|
Bank
Central Asia Tbk PT |
713,958,900 |
465,880 | |
|
|
Mastercard,
Inc., Class A |
902,936 |
451,098 | |
|
|
HDFC
Bank, Ltd. |
17,263,629 |
354,782 | |
|
|
Kotak
Mahindra Bank, Ltd. |
15,573,755 |
320,233 | |
|
|
Ping
An Insurance (Group) Company of China, Ltd., Class H |
50,632,500 |
314,321 | |
|
|
XP,
Inc., Class A |
16,399,888 |
286,342 | |
|
|
Visa,
Inc., Class A |
954,367 |
276,623 | |
|
|
Cholamandalam
Investment and Finance Co., Ltd. |
17,006,001 |
255,765 | |
|
|
Axis
Bank, Ltd. |
16,813,540 |
230,342 | |
|
|
Eurobank
Ergasias Services and Holdings SA |
104,707,515 |
215,215 | |
|
|
Discovery,
Ltd. |
21,069,420 |
215,208 | |
|
|
Shriram
Finance, Ltd. |
5,705,788 |
211,346 | |
|
|
AU
Small Finance Bank, Ltd. |
28,669,552 |
208,605 | |
|
|
UniCredit
SpA |
4,222,674 |
187,077 | |
|
|
B3
SA - Brasil, Bolsa, Balcao |
96,751,519 |
177,741 | |
|
|
ICICI
Bank, Ltd. (ADR) |
2,998,731 |
91,191 | |
|
|
ICICI
Bank, Ltd. |
5,348,760 |
81,774 | |
|
|
Grupo
Financiero Banorte, SAB de CV, Series O |
22,977,018 |
159,993 | |
|
|
National
Bank of Greece SA |
15,341,002 |
119,309 | |
|
|
National
Bank of Greece SA |
4,171,732 |
32,444 | |
|
|
Bank
of the Philippine Islands |
60,674,985 |
148,802 | |
|
|
S&P
Global, Inc. |
308,793 |
148,332 | |
|
|
Hong
Kong Exchanges and Clearing, Ltd. |
3,461,700 |
138,321 | |
|
|
Bajaj
Finserv, Ltd. |
6,158,519 |
127,642 | |
|
|
Bajaj
Finance, Ltd. |
1,480,400 |
120,544 | |
|
|
Aon
PLC, Class A |
292,156 |
107,183 | |
|
|
Canara
Bank |
85,350,880 |
103,932 | |
|
|
China
Merchants Bank Co., Ltd., Class H |
16,581,500 |
80,794 | |
|
|
China
Merchants Bank Co., Ltd., Class A |
3,451,000 |
18,124 | |
|
|
BSE,
Ltd. |
1,740,909 |
92,172 | |
|
|
Erste
Group Bank AG |
1,626,559 |
91,606 | |
|
|
PICC
Property and Casualty Co., Ltd., Class H |
55,044,000 |
83,410 | |
|
|
Commercial
International Bank - Egypt (CIB) SAE (GDR) |
40,760,109 |
63,045 | |
|
|
Commercial
International Bank - Egypt (CIB) SAE |
11,776,605 |
19,247 | |
|
|
HSBC
Holdings PLC (GBP denominated) |
8,667,906 |
79,151 | |
|
|
BDO
Unibank, Inc. |
28,097,320 |
73,477 | |
|
|
Banco
BTG Pactual SA, units |
12,500,614 |
70,321 | |
|
|
Brookfield
Corp., Class A |
1,218,800 |
64,596 | |
|
|
Alpha
Services and Holdings SA |
37,673,000 |
56,622 | |
|
|
Moody’s
Corp. |
118,550 |
53,826 | |
|
|
Max
Financial Services, Ltd.1
|
3,260,000 |
49,693 | |
|
|
Emirates
NBD Bank PJSC |
9,375,090 |
48,466 | |
|
|
Edenred
SA |
1,490,498 |
48,106 | |
|
|
DBS
Group Holdings, Ltd. |
1,516,081 |
43,632 | |
|
|
China
Construction Bank Corp., Class H |
55,813,877 |
43,284 | |
|
|
BNP
Paribas SA |
612,734 |
41,858 | |
|
|
Akbank
TAS |
22,632,931 |
33,457 | |
|
|
Prudential
PLC |
3,585,000 |
29,538 | |
|
|
Bank
of Ningbo Co., Ltd., Class A |
7,434,120 |
26,693 | |
|
|
Standard
Chartered PLC |
1,944,022 |
22,423 | |
|
|
Bank
of Baroda |
7,335,509 |
21,769 | |
|
|
Jio
Financial Services, Ltd.1
|
5,370,604 |
20,407 | |
|
|
Société
Générale |
598,543 |
17,269 | |
|
|
Bajaj
Housing Finance, Ltd.1
|
5,421,065 |
8,646 | |
|
|
Bajaj
Housing Finance, Ltd.1,3
|
5,357,062 |
8,544 | |
|
|
Haci
Ömer Sabanci Holding AS |
6,912,547 |
16,808 | |
|
New
World Fund |
1 |
|
Common
stocks (continued) |
|
Shares |
Value
(000) | |
Financials
(continued) | ||||
|
Asia
Commercial Joint Stock Bank |
10,542,800 |
$11,334 | ||
|
Power
Finance Corp., Ltd. |
1,604,561 |
8,564 | ||
|
|
Sberbank
of Russia PJSC4
|
38,486,552 |
—
5 | |
|
|
|
|
|
10,574,824 |
|
| ||||
Information
technology
14.86% | ||||
|
Taiwan
Semiconductor Manufacturing Co., Ltd. |
79,246,816 |
2,492,020 | ||
|
Taiwan
Semiconductor Manufacturing Co., Ltd. (ADR) |
150,200 |
28,619 | ||
|
Microsoft
Corp. |
3,535,900 |
1,436,813 | ||
|
|
NVIDIA
Corp. |
6,813,094 |
904,506 | |
|
|
Broadcom,
Inc. |
4,849,027 |
823,219 | |
|
|
ASML
Holding NV |
553,459 |
372,150 | |
|
|
SAP
SE |
1,359,685 |
317,801 | |
|
|
SAP
SE (ADR)6
|
83,800 |
19,579 | |
|
|
Keyence
Corp. |
748,200 |
335,509 | |
|
|
Synopsys,
Inc.1
|
566,856 |
291,143 | |
|
|
Apple,
Inc. |
1,222,487 |
276,172 | |
|
|
SK
hynix, Inc. |
1,838,079 |
240,160 | |
|
|
Samsung
Electronics Co., Ltd. |
4,507,094 |
190,494 | |
|
|
E
Ink Holdings, Inc. |
20,210,000 |
187,391 | |
|
|
Capgemini
SE |
1,026,746 |
177,005 | |
|
|
ASM
International NV |
255,167 |
141,478 | |
|
|
MediaTek,
Inc. |
3,172,130 |
124,170 | |
|
|
Tokyo
Electron, Ltd. |
796,200 |
118,382 | |
|
|
eMemory
Technology, Inc. |
1,108,000 |
105,008 | |
|
|
Coforge,
Ltd. |
1,128,108 |
101,978 | |
|
|
Applied
Materials, Inc. |
528,913 |
96,040 | |
|
|
Tata
Consultancy Services, Ltd. |
2,010,838 |
94,385 | |
|
|
Globant
SA1
|
352,506 |
73,987 | |
|
|
TDK
Corp. |
5,334,500 |
63,033 | |
|
|
Atlassian
Corp., Class A1
|
255,290 |
48,132 | |
|
|
Advantech
Co., Ltd. |
4,521,000 |
43,943 | |
|
|
Oracle
Corp. |
165,382 |
27,758 | |
|
|
Micron
Technology, Inc. |
244,341 |
24,349 | |
|
|
Wolfspeed,
Inc.1,6
|
1,725,288 |
22,964 | |
|
|
KLA
Corp. |
31,063 |
20,695 | |
|
|
Accenture
PLC, Class A |
54,543 |
18,808 | |
|
|
Zhongji
Innolight Co., Ltd., Class A |
857,000 |
17,235 | |
|
|
Canva,
Inc.1,4,7
|
10,572 |
13,532 | |
|
|
Disco
Corp. |
23,500 |
6,636 | |
|
|
EPAM
Systems, Inc.1
|
14,700 |
2,773 | |
|
|
|
|
|
9,257,867 |
|
| ||||
Consumer
discretionary
12.23% | ||||
|
MercadoLibre,
Inc.1
|
614,703 |
1,252,261 | ||
|
Trip.com
Group, Ltd. (ADR)1
|
10,824,984 |
697,129 | ||
|
LVMH
Moët Hennessy-Louis Vuitton SE |
875,900 |
581,187 | ||
|
|
Meituan,
Class B1
|
23,974,700 |
566,296 | |
|
|
Midea
Group Co., Ltd., Class A |
32,263,593 |
323,928 | |
|
|
Eicher
Motors, Ltd. |
5,290,346 |
306,973 | |
|
|
H
World Group, Ltd. (ADR) |
7,233,161 |
265,384 | |
|
|
H
World Group, Ltd. |
6,261,200 |
23,095 | |
|
|
Galaxy
Entertainment Group, Ltd. |
61,021,000 |
268,757 | |
|
|
adidas
AG |
999,580 |
238,309 | |
|
|
BYD
Co., Ltd., Class H |
3,282,500 |
119,248 | |
|
|
BYD
Co., Ltd., Class A |
2,758,712 |
113,701 | |
|
|
Compagnie
Financière Richemont SA, Class A |
1,289,616 |
188,130 | |
|
|
Hyundai
Motor India, Ltd.1
|
4,086,398 |
88,572 | |
|
|
Hyundai
Motor India, Ltd.1,3
|
3,942,470 |
85,452 | |
|
|
Jumbo
SA |
6,182,223 |
164,381 | |
|
|
TVS
Motor Co., Ltd. |
4,903,533 |
145,104 | |
|
|
Titan
Co., Ltd. |
3,676,360 |
142,713 | |
|
|
Maruti
Suzuki India, Ltd. |
1,071,899 |
140,914 | |
|
|
Shenzhou
International Group Holdings, Ltd. |
16,594,700 |
127,966 | |
|
|
Ferrari
NV (EUR denominated) |
259,236 |
123,930 | |
|
|
Sands
China, Ltd.1
|
42,047,000 |
106,993 | |
|
|
Alibaba
Group Holding, Ltd. (ADR) |
713,880 |
69,946 | |
|
|
Alibaba
Group Holding, Ltd. |
2,912,000 |
35,644 | |
|
2 |
New
World Fund |
|
Common
stocks (continued) |
|
Shares |
Value
(000) | |
Consumer
discretionary
(continued) | ||||
|
Naspers,
Ltd., Class N |
414,880 |
$97,638 | ||
|
Zomato,
Ltd.1
|
29,488,715 |
84,678 | ||
|
Evolution
AB |
858,547 |
81,081 | ||
|
|
lululemon
athletica, Inc.1
|
266,322 |
79,337 | |
|
|
Booking
Holdings, Inc. |
16,777 |
78,453 | |
|
|
Amadeus
IT Group SA, Class A, non-registered shares |
1,040,241 |
75,506 | |
|
|
Hermès
International |
33,078 |
75,101 | |
|
|
Tesla,
Inc.1
|
293,919 |
73,436 | |
|
|
Mahindra
& Mahindra, Ltd. |
1,868,966 |
60,226 | |
|
|
YUM!
Brands, Inc. |
443,730 |
58,200 | |
|
|
Aptiv
PLC1
|
1,011,749 |
57,498 | |
|
|
Industria
de Diseño Textil, SA |
983,078 |
56,019 | |
|
|
Starbucks
Corp. |
520,232 |
50,827 | |
|
|
Stellantis
NV |
3,589,937 |
49,459 | |
|
|
China
Tourism Group Duty Free Corp., Ltd., Class H6
|
6,712,640 |
45,778 | |
|
|
Hilton
Worldwide Holdings, Inc. |
188,265 |
44,214 | |
|
|
Li
Ning Co., Ltd. |
21,484,000 |
43,822 | |
|
|
Suzuki
Motor Corp. |
3,868,400 |
38,149 | |
|
|
Tube
Investments of India, Ltd. |
702,883 |
37,401 | |
|
|
Marriott
International, Inc., Class A |
141,663 |
36,835 | |
|
|
Airbnb,
Inc., Class A1
|
263,665 |
35,539 | |
|
|
Magazine
Luiza SA1
|
17,578,670 |
28,766 | |
|
|
Melco
Resorts & Entertainment, Ltd. (ADR)1
|
3,994,697 |
26,844 | |
|
|
NIKE,
Inc., Class B |
342,000 |
26,378 | |
|
|
Shangri-La
Asia, Ltd. |
32,362,000 |
23,294 | |
|
|
Renault
SA |
462,500 |
21,190 | |
|
|
Inchcape
PLC |
1,815,116 |
16,856 | |
|
|
Cyrela
Brazil Realty SA, ordinary nominative shares |
3,354,724 |
12,616 | |
|
|
Gree
Electric Appliances, Inc. of Zhuhai, Class A |
2,060,692 |
12,601 | |
|
|
Zhongsheng
Group Holdings, Ltd. |
6,466,550 |
9,901 | |
|
|
Bharat
Forge, Ltd. |
363,625 |
6,081 | |
|
|
|
|
|
7,619,737 |
|
| ||||
Industrials
10.85% | ||||
|
Airbus
SE, non-registered shares |
4,848,901 |
738,919 | ||
|
International
Container Terminal Services, Inc. |
80,395,951 |
547,550 | ||
|
|
Safran
SA |
1,975,099 |
448,116 | |
|
|
Techtronic
Industries Co., Ltd. |
25,701,500 |
368,177 | |
|
|
Shenzhen
Inovance Technology Co., Ltd., Class A |
38,861,093 |
302,740 | |
|
|
Rolls-Royce
Holdings PLC1
|
40,087,296 |
278,249 | |
|
|
Rumo
SA |
78,822,522 |
271,336 | |
|
|
Copa
Holdings, SA, Class A |
2,776,000 |
270,105 | |
|
|
Airports
of Thailand PCL, foreign registered shares |
110,994,700 |
201,089 | |
|
|
Carrier
Global Corp. |
2,510,919 |
182,594 | |
|
|
General
Electric Co. |
1,036,436 |
178,039 | |
|
|
TransDigm
Group, Inc. |
132,060 |
171,982 | |
|
|
Larsen
& Toubro, Ltd. |
3,888,413 |
167,147 | |
|
|
Contemporary
Amperex Technology Co., Ltd., Class A |
4,777,121 |
165,204 | |
|
|
Grupo
Aeroportuario del Pacífico, SAB de CV, Class B |
8,149,599 |
141,312 | |
|
|
Grupo
Aeroportuario del Pacífico, SAB de CV, Class B (ADR) |
122,282 |
21,288 | |
|
|
Daikin
Industries, Ltd. |
1,344,800 |
157,641 | |
|
|
DSV
A/S |
661,087 |
143,875 | |
|
|
BAE
Systems PLC |
8,725,852 |
140,709 | |
|
|
Schneider
Electric SE |
478,683 |
123,838 | |
|
|
Siemens
AG |
590,381 |
114,603 | |
|
|
Caterpillar,
Inc. |
282,000 |
106,088 | |
|
|
IMCD
NV |
614,559 |
97,488 | |
|
|
Wizz
Air Holdings PLC1,2
|
5,170,491 |
91,945 | |
|
|
Mitsui
& Co., Ltd. |
4,347,900 |
88,102 | |
|
|
SMC
Corp. |
198,500 |
84,848 | |
|
|
Jiangsu
Hengli Hydraulic Co., Ltd., Class A |
11,599,763 |
84,222 | |
|
|
ZTO
Express (Cayman), Inc., Class A (ADR) |
3,465,994 |
80,099 | |
|
|
Thales
SA |
492,906 |
79,465 | |
|
|
InPost
SA1
|
4,036,644 |
78,776 | |
|
|
CCR
SA, ordinary nominative shares |
36,743,892 |
77,862 | |
|
|
Ayala
Corp. |
6,281,260 |
74,278 | |
|
|
Interpump
Group SpA |
1,419,037 |
63,313 | |
|
|
GE
Vernova, Inc.1
|
191,957 |
57,906 | |
|
New
World Fund |
3 |
|
Common
stocks (continued) |
|
Shares |
Value
(000) | |
Industrials
(continued) | ||||
|
Bureau
Veritas SA |
1,743,229 |
$55,164 | ||
|
SM
Investments Corp. |
3,403,750 |
54,852 | ||
|
|
Weichai
Power Co., Ltd., Class A |
13,993,248 |
26,261 | |
|
|
Weichai
Power Co., Ltd., Class H |
17,040,000 |
25,726 | |
|
|
MISUMI
Group, Inc. |
2,985,889 |
48,613 | |
|
|
Leonardo
SpA |
1,972,447 |
47,174 | |
|
|
GT
Capital Holdings, Inc. |
3,630,870 |
44,853 | |
|
|
Ingersoll-Rand,
Inc. |
409,595 |
39,321 | |
|
|
Boeing
Co. (The)1
|
221,500 |
33,072 | |
|
|
Shanghai
International Airport Co., Ltd., Class A |
6,503,525 |
31,959 | |
|
|
Hitachi,
Ltd. |
1,209,780 |
30,448 | |
|
|
Grab
Holdings, Ltd., Class A1
|
7,426,377 |
30,300 | |
|
|
Centre
Testing International Group Co., Ltd. |
11,813,222 |
22,905 | |
|
|
Epiroc
AB, Class B |
1,249,425 |
21,463 | |
|
|
Embraer
SA1
|
2,391,200 |
20,053 | |
|
|
Legrand
SA |
142,852 |
16,005 | |
|
|
Haitian
International Holdings, Ltd. |
3,351,000 |
9,266 | |
|
|
|
|
|
6,756,340 |
|
| ||||
Health
care
9.52% | ||||
|
Novo
Nordisk AS, Class B |
9,775,021 |
1,092,981 | ||
|
Eli
Lilly and Co. |
867,885 |
720,119 | ||
|
|
Max
Healthcare Institute, Ltd.2
|
59,793,818 |
719,773 | |
|
|
AstraZeneca
PLC |
3,368,216 |
478,866 | |
|
|
Thermo
Fisher Scientific, Inc. |
824,670 |
450,534 | |
|
|
BeiGene,
Ltd. (ADR)1
|
1,155,057 |
234,061 | |
|
|
BeiGene,
Ltd.1
|
693,600 |
10,876 | |
|
|
Laurus
Labs, Ltd.2
|
35,030,909 |
203,200 | |
|
|
Jiangsu
Hengrui Medicine Co., Ltd., Class A |
28,964,718 |
189,743 | |
|
|
Abbott
Laboratories |
1,532,609 |
173,752 | |
|
|
Rede
D’Or Sao Luiz SA |
32,099,565 |
163,027 | |
|
|
Innovent
Biologics, Inc.1
|
34,310,291 |
149,139 | |
|
|
Danaher
Corp. |
570,233 |
140,083 | |
|
|
EssilorLuxottica
SA |
533,018 |
125,336 | |
|
|
Zai
Lab, Ltd. (ADR)1,6
|
3,873,058 |
117,044 | |
|
|
WuXi
AppTec Co., Ltd., Class H6
|
14,433,283 |
95,515 | |
|
|
WuXi
AppTec Co., Ltd., Class A |
2,907,577 |
21,253 | |
|
|
Revvity,
Inc. |
800,621 |
94,946 | |
|
|
Aspen
Pharmacare Holdings, Ltd. |
9,315,557 |
94,555 | |
|
|
Mankind
Pharma, Ltd.1
|
2,804,820 |
88,881 | |
|
|
Shenzhen
Mindray Bio-Medical Electronics Co., Ltd., Class A |
1,726,481 |
64,705 | |
|
|
Teva
Pharmaceutical Industries, Ltd. (ADR)1
|
2,979,500 |
54,942 | |
|
|
Hypera
SA, ordinary nominative shares |
12,339,084 |
47,171 | |
|
|
OdontoPrev
SA |
24,789,972 |
47,171 | |
|
|
Lupin,
Ltd. |
1,682,129 |
43,699 | |
|
|
Zoetis,
Inc., Class A |
216,700 |
38,742 | |
|
|
Legend
Biotech Corp. (ADR)1
|
800,114 |
36,021 | |
|
|
Alcon,
Inc. |
385,670 |
35,375 | |
|
|
Illumina,
Inc.1
|
240,328 |
34,641 | |
|
|
Siemens
Healthineers AG |
577,100 |
30,115 | |
|
|
Align
Technology, Inc.1
|
127,706 |
26,184 | |
|
|
Medtronic
PLC |
268,000 |
23,919 | |
|
|
Mettler-Toledo
International, Inc.1
|
17,309 |
22,359 | |
|
|
Asahi
Intecc Co., Ltd. |
1,330,200 |
21,348 | |
|
|
Straumann
Holding AG |
101,536 |
13,316 | |
|
|
Angelalign
Technology, Inc. |
1,530,000 |
12,030 | |
|
|
Wuxi
Biologics (Cayman), Inc.1
|
4,410,500 |
9,266 | |
|
|
CanSino
Biologics, Inc., Class H1,6
|
832,000 |
3,013 | |
|
|
|
|
|
5,927,701 |
|
| ||||
Communication
services
9.20% | ||||
|
Tencent
Holdings, Ltd. |
29,082,607 |
1,513,104 | ||
|
Meta
Platforms, Inc., Class A |
1,676,336 |
951,455 | ||
|
Alphabet,
Inc., Class A |
2,757,614 |
471,855 | ||
|
|
Alphabet,
Inc., Class C |
2,472,573 |
426,989 | |
|
|
Bharti
Airtel, Ltd. |
33,157,210 |
634,820 | |
|
|
Bharti
Airtel, Ltd., interim shares |
1,085,032 |
15,544 | |
|
|
NetEase,
Inc. |
19,484,300 |
312,578 | |
|
4 |
New
World Fund |
|
Common
stocks (continued) |
|
Shares |
Value
(000) | |
Communication
services
(continued) | ||||
|
NetEase,
Inc. (ADR) |
402,647 |
$32,417 | ||
|
MTN
Group, Ltd. |
49,649,366 |
246,841 | ||
|
América
Móvil, SAB de CV, Class B (ADR) |
10,111,343 |
159,153 | ||
|
|
Telefónica,
SA, non-registered shares6
|
30,129,668 |
141,319 | |
|
|
Netflix,
Inc.1
|
175,417 |
132,621 | |
|
|
Telkom
Indonesia (Persero) Tbk PT, Class B |
497,250,100 |
88,753 | |
|
|
Indus
Towers, Ltd.1
|
19,414,447 |
78,182 | |
|
|
Singapore
Telecommunications, Ltd. |
27,008,100 |
63,918 | |
|
|
Vodafone
Group PLC |
67,462,979 |
62,676 | |
|
|
Intouch
Holdings PCL, foreign registered |
16,947,513 |
53,614 | |
|
|
Advanced
Info Service PCL, foreign registered shares |
6,147,100 |
49,963 | |
|
|
Tencent
Music Entertainment Group, Class A (ADR) |
4,416,289 |
49,153 | |
|
|
Sea,
Ltd., Class A (ADR)1
|
444,981 |
41,850 | |
|
|
Informa
PLC |
3,210,083 |
33,642 | |
|
|
Baidu,
Inc., Class A (ADR)1
|
354,943 |
32,381 | |
|
|
KANZHUN,
Ltd., Class A (ADR) |
2,207,004 |
32,112 | |
|
|
TIM
SA |
10,489,043 |
30,083 | |
|
|
True
Corp. PCL, nonvoting depository receipts1
|
80,197,000 |
29,197 | |
|
|
JCDecaux
SE1
|
1,239,700 |
23,386 | |
|
|
Vodafone
Idea, Ltd.1
|
223,158,109 |
21,487 | |
|
|
|
|
|
5,729,093 |
|
| ||||
Consumer
staples
6.77% | ||||
|
Kweichow
Moutai Co., Ltd., Class A |
3,348,092 |
719,109 | ||
|
ITC,
Ltd. |
77,325,738 |
446,697 | ||
|
|
Varun
Beverages, Ltd. |
40,296,680 |
285,913 | |
|
|
Ajinomoto
Co., Inc. |
6,634,000 |
255,774 | |
|
|
Nestlé
SA |
2,305,945 |
218,051 | |
|
|
Monster
Beverage Corp.1
|
3,929,126 |
206,986 | |
|
|
Arca
Continental, SAB de CV |
20,870,565 |
178,682 | |
|
|
British
American Tobacco PLC |
4,610,631 |
160,568 | |
|
|
JBS
SA |
25,120,554 |
156,479 | |
|
|
Constellation
Brands, Inc., Class A |
595,668 |
138,397 | |
|
|
Carlsberg
A/S, Class B |
1,186,744 |
130,951 | |
|
|
Dino
Polska SA, non-registered shares1,6
|
1,496,315 |
124,289 | |
|
|
Anheuser-Busch
InBev SA/NV |
2,077,540 |
123,705 | |
|
|
Shoprite
Holdings, Ltd. |
7,008,140 |
120,540 | |
|
|
KT&G
Corp. |
1,424,020 |
112,735 | |
|
|
Avenue
Supermarts, Ltd.1
|
2,157,871 |
100,647 | |
|
|
Tsingtao
Brewery Co., Ltd., Class H |
14,885,813 |
95,876 | |
|
|
Budweiser
Brewing Co., APAC, Ltd. |
70,052,800 |
73,053 | |
|
|
United
Spirits, Ltd. |
3,826,166 |
65,651 | |
|
|
Philip
Morris International, Inc. |
488,890 |
64,876 | |
|
|
Coca-Cola
Co. |
711,222 |
46,450 | |
|
|
Haleon
PLC |
9,619,300 |
46,038 | |
|
|
L’Oréal
SA, non-registered shares |
117,527 |
44,258 | |
|
|
JD
Health International, Inc.1,6
|
11,499,800 |
41,100 | |
|
|
WH
Group, Ltd. |
49,409,500 |
38,275 | |
|
|
Danone
SA |
511,049 |
36,514 | |
|
|
Dabur
India, Ltd. |
5,306,400 |
33,975 | |
|
|
Masan
Group Corp.1
|
10,255,500 |
31,022 | |
|
|
Kimberly-Clark
de México, SAB de CV, Class A, ordinary participation
certificates6
|
21,001,800 |
30,155 | |
|
|
Bunge
Global SA |
349,000 |
29,323 | |
|
|
Barry
Callebaut AG (Switzerland)1
|
11,052 |
19,323 | |
|
|
Uni-Charm
Corp. |
499,100 |
15,990 | |
|
|
BBB
Foods, Inc., Class A1,6
|
475,538 |
15,189 | |
|
|
Mondelez
International, Inc., Class A |
189,227 |
12,958 | |
|
|
|
|
|
4,219,549 |
|
| ||||
Materials
6.00% | ||||
|
Freeport-McMoRan,
Inc. |
11,652,324 |
524,588 | ||
|
First
Quantum Minerals, Ltd.1
|
37,288,345 |
481,788 | ||
|
|
Linde
PLC |
813,244 |
370,961 | |
|
|
Vale
SA, ordinary nominative shares |
12,503,392 |
134,228 | |
|
|
Vale
SA (ADR), ordinary nominative shares |
8,181,117 |
87,538 | |
|
|
Barrick
Gold Corp. |
11,132,349 |
215,077 | |
|
|
APL
Apollo Tubes, Ltd. |
10,507,405 |
189,842 | |
|
|
Glencore
PLC |
34,229,619 |
178,370 | |
|
New
World Fund |
5 |
|
Common
stocks (continued) |
|
Shares |
Value
(000) | |
Materials
(continued) | ||||
|
Amcor
PLC (CDI) |
14,241,464 |
$156,142 | ||
|
Tata
Steel, Ltd. |
87,550,649 |
153,440 | ||
|
|
Grupo
México, SAB de CV, Series B |
27,154,506 |
142,073 | |
|
|
Sika
AG |
490,056 |
136,708 | |
|
|
Albemarle
Corp.6
|
1,166,792 |
110,530 | |
|
|
Zijin
Mining Group Co., Ltd., Class H |
49,978,000 |
106,199 | |
|
|
Givaudan
SA |
21,422 |
101,778 | |
|
|
Southern
Copper Corp. |
822,515 |
90,107 | |
|
|
Shin-Etsu
Chemical Co., Ltd. |
2,418,400 |
89,513 | |
|
|
Loma
Negra Compania Industrial Argentina SA (ADR)1,2
|
6,442,242 |
59,011 | |
|
|
Anhui
Conch Cement Co., Ltd., Class H |
19,980,000 |
57,851 | |
|
|
Nutrien,
Ltd. (CAD denominated) |
1,192,974 |
56,883 | |
|
|
Fresnillo
PLC |
4,590,946 |
43,592 | |
|
|
Asian
Paints, Ltd. |
1,205,674 |
41,887 | |
|
|
Ivanhoe
Mines, Ltd., Class A1
|
2,862,186 |
37,845 | |
|
|
Arkema
SA |
373,575 |
32,842 | |
|
|
SRF,
Ltd. |
1,202,754 |
32,010 | |
|
|
BASF
SE |
534,774 |
25,975 | |
|
|
Akzo
Nobel NV |
392,741 |
25,058 | |
|
|
Gerdau
SA (ADR) |
6,263,005 |
19,541 | |
|
|
Antofagasta
PLC |
780,109 |
17,606 | |
|
|
DSM-Firmenich
AG |
94,358 |
11,211 | |
|
|
CEMEX,
SAB de CV (ADR), ordinary participation certificates,
units |
1,899,858 |
9,917 | |
|
|
Alrosa
PJSC4
|
15,128,747 |
—
5 | |
|
|
|
|
|
3,740,111 |
|
| ||||
Energy
2.47% | ||||
|
TotalEnergies
SE |
7,238,270 |
452,743 | ||
|
Reliance
Industries, Ltd. |
23,884,142 |
377,676 | ||
|
|
Vista
Energy, SAB de CV, Class A (ADR)1
|
2,100,287 |
104,720 | |
|
|
Cheniere
Energy, Inc. |
501,000 |
95,881 | |
|
|
New
Fortress Energy, Inc., Class A6
|
10,894,997 |
91,627 | |
|
|
Exxon
Mobil Corp. |
722,584 |
84,383 | |
|
|
Adnoc
Gas PLC |
90,214,840 |
81,021 | |
|
|
Shell
PLC (GBP denominated) |
2,037,544 |
67,779 | |
|
|
Chevron
Corp. |
369,795 |
55,033 | |
|
|
Schlumberger
NV |
1,155,800 |
46,313 | |
|
|
Galp
Energia, SGPS, SA, Class B |
2,106,148 |
35,914 | |
|
|
Borr
Drilling, Ltd.1
|
6,340,216 |
26,565 | |
|
|
INPEX
Corp. |
711,500 |
9,327 | |
|
|
Saudi
Arabian Oil Co. |
938,685 |
6,748 | |
|
|
Petróleo
Brasileiro SA (Petrobras) (ADR), ordinary nominative
shares |
344,754 |
4,637 | |
|
|
Rosneft
Oil Co. PJSC4
|
8,335,580 |
—
5 | |
|
|
|
|
|
1,540,367 |
|
| ||||
Real
estate
1.65% | ||||
|
Macrotech
Developers, Ltd. |
36,100,631 |
516,615 | ||
|
China
Resources Mixc Lifestyle Services, Ltd. |
29,153,200 |
119,661 | ||
|
|
KE
Holdings, Inc., Class A (ADR) |
4,718,881 |
103,485 | |
|
|
Fibra
Uno Administración REIT, SA de CV |
77,884,325 |
89,680 | |
|
|
Prestige
Estates Projects, Ltd. |
4,307,293 |
83,708 | |
|
|
CK
Asset Holdings, Ltd. |
15,623,500 |
63,992 | |
|
|
American
Tower Corp. REIT |
156,000 |
33,312 | |
|
|
Longfor
Group Holdings, Ltd. |
6,784,936 |
11,102 | |
|
|
ALLOS
SA, ordinary nominative shares |
1,074,770 |
4,113 | |
|
|
|
|
|
1,025,668 |
|
| ||||
Utilities
1.46% | ||||
|
Equatorial
Energia SA, ordinary nominative shares |
33,273,525 |
184,875 | ||
|
Companhia
de Saneamento Basico do Estado de Sao Paulo-SABESP,
ordinary
nominative shares1
|
7,898,093 |
125,804 | ||
|
|
Gulf
Energy Development PCL, foreign registered |
51,550,100 |
101,417 | |
|
|
NTPC,
Ltd. |
18,276,719 |
88,051 | |
|
|
Engie
SA |
5,231,996 |
87,659 | |
|
|
SembCorp
Industries, Ltd. |
22,627,700 |
86,132 | |
|
|
Power
Grid Corporation of India, Ltd. |
19,504,644 |
74,054 | |
|
|
Torrent
Power, Ltd. |
2,606,036 |
56,366 | |
|
6 |
New
World Fund |
|
Common
stocks (continued) |
|
Shares |
Value
(000) | |
Utilities
(continued) | ||||
|
CPFL
Energia SA |
8,218,913 |
$46,590 | ||
|
ENN
Energy Holdings, Ltd. |
5,057,200 |
35,749 | ||
|
|
AES
Corp. |
1,335,919 |
22,029 | |
|
|
|
|
|
908,726 |
|
|
Total
common stocks
(cost: $40,458,561,000) |
|
|
57,299,983 |
|
Preferred
securities 0.61% |
|
|
| |
Financials
0.27% | ||||
|
Itaú
Unibanco Holding SA (ADR), preferred nominative
shares |
23,291,676 |
140,915 | ||
|
Itaú
Unibanco Holding SA, preferred nominative shares |
4,994,844 |
30,258 | ||
|
|
|
|
|
171,173 |
|
| ||||
Real
estate
0.14% | ||||
|
QuintoAndar,
Ltd., Series E, preference shares1,4,7
|
433,164 |
67,535 | ||
|
QuintoAndar,
Ltd., Series E-1, preference shares1,4,7
|
113,966 |
17,768 | ||
|
|
|
|
|
85,303 |
|
| ||||
Information
technology
0.10% | ||||
|
Samsung
Electronics Co., Ltd., nonvoting preferred shares |
1,746,875 |
60,467 | ||
|
Canva,
Inc., Series A, noncumulative preferred shares1,4,7
|
925 |
1,184 | ||
|
Canva,
Inc., Series A-3, noncumulative preferred shares1,4,7
|
38 |
49 | ||
|
|
Canva,
Inc., Series A-4, noncumulative preferred shares1,4,7
|
3 |
4 | |
|
|
Canva,
Inc., Series A-5, noncumulative preferred shares1,4,7
|
2 |
2 | |
|
|
|
|
|
61,706 |
|
| ||||
Consumer
discretionary
0.10% | ||||
|
Dr.
Ing. h.c. F. Porsche AG, nonvoting non-registered preferred
shares |
862,527 |
60,666 | ||
|
Getir
BV, Series D, preferred shares1,4,7
|
103,205 |
—
5 | ||
|
|
|
|
60,666 | |
|
|
Total
preferred securities
(cost: $465,955,000) |
|
|
378,848 |
|
Convertible
stocks 0.00% |
|
|
| |
Materials
0.00% | ||||
|
Albemarle
Corp., Class A, cumulative convertible preferred depositary shares,
7.25%
3/1/2027 |
92,800 |
4,153 | ||
|
Total
convertible stocks
(cost: $4,651,000) |
|
|
4,153 | |
|
Bonds,
notes & other debt instruments 3.38% |
|
Principal amount
(000) |
| |
|
Bonds
& notes of governments & government agencies outside the
U.S. 2.96% | ||||
|
|
Abu
Dhabi (Emirate of) 2.50% 9/30/20298
|
USD7,900 |
7,213 | |
|
|
Angola
(Republic of) 8.00% 11/26/20298
|
13,202 |
12,110 | |
|
|
Angola
(Republic of) 8.75% 4/14/20328
|
6,950 |
6,314 | |
|
|
Argentine
Republic 1.00% 7/9/2029 |
—
5 |
—
5 | |
|
|
Argentine
Republic 4.125% 7/9/2035 (4.75% on 7/9/2027)9
|
15,539 |
8,615 | |
|
|
Argentine
Republic 5.00% 1/9/2038 |
10,333 |
6,173 | |
|
|
Brazil
(Federative Republic of) 10.00% 1/1/2025 |
BRL87,400 |
15,055 | |
|
|
Brazil
(Federative Republic of) 10.00% 1/1/2027 |
147,000 |
24,083 | |
|
|
Brazil
(Federative Republic of) 6.00% 5/15/202710
|
466,987 |
79,050 | |
|
|
Brazil
(Federative Republic of) 10.00% 1/1/2029 |
148,700 |
23,444 | |
|
|
Brazil
(Federative Republic of) 0% 1/1/2030 |
200,000 |
18,495 | |
|
|
Brazil
(Federative Republic of) 10.00% 1/1/2031 |
148,234 |
22,668 | |
|
|
Brazil
(Federative Republic of) 6.00% 8/15/203210
|
83,806 |
13,766 | |
|
|
Brazil
(Federative Republic of) 10.00% 1/1/2033 |
351,590 |
52,733 | |
|
|
Brazil
(Federative Republic of) 10.00% 1/1/2035 |
290,000 |
44,624 | |
|
|
Brazil
(Federative Republic of) 6.00% 8/15/205010
|
146,531 |
23,074 | |
|
|
Chile
(Republic of) 5.30% 11/1/2037 |
CLP7,520,000 |
7,643 | |
|
|
Chile
(Republic of) 3.10% 5/7/2041 |
USD9,265 |
6,896 | |
|
|
China
(People’s Republic of), Series INBK, 2.89%
11/18/2031 |
CNY456,940 |
67,773 | |
|
|
China
(People’s Republic of), Series INBK, 2.27% 5/25/2034 |
98,000 |
13,933 | |
|
|
China
(People’s Republic of), Series INBK, 3.72% 4/12/2051 |
407,410 |
72,557 | |
|
|
China
(People’s Republic of), Series INBK, 3.12%
10/25/2052 |
162,200 |
26,331 | |
|
New
World Fund |
7 |
|
Bonds,
notes & other debt instruments (continued) |
|
Principal amount
(000) |
Value
(000) | |
|
Bonds
& notes of governments & government agencies outside the
U.S. (continued) | ||||
|
|
China
(People’s Republic of), Series INBK, 2.57% 5/20/2054 |
CNY71,400 |
$10,554 | |
|
|
Colombia
(Republic of) 3.00% 1/30/2030 |
USD511 |
426 | |
|
|
Colombia
(Republic of), Series B, 7.00% 3/26/2031 |
COP26,634,000 |
5,105 | |
|
|
Colombia
(Republic of) 3.25% 4/22/2032 |
USD11,800 |
9,140 | |
|
|
Colombia
(Republic of), Series B, 13.25% 2/9/2033 |
COP29,638,300 |
7,560 | |
|
|
Colombia
(Republic of), Series UVR, 3.75% 2/25/203710
|
130,200 |
9,425 | |
|
|
Colombia
(Republic of), Series B, 9.25% 5/28/2042 |
20,182,600 |
3,801 | |
|
|
Colombia
(Republic of) 5.625% 2/26/2044 |
USD2,209 |
1,665 | |
|
|
Colombia
(Republic of) 5.00% 6/15/2045 |
7,251 |
4,986 | |
|
|
Colombia
(Republic of) 5.20% 5/15/2049 |
3,955 |
2,708 | |
|
|
Cote
d’Ivoire (Republic of) 4.875% 1/30/2032 |
EUR1,890 |
1,803 | |
|
|
Czech
Republic 1.95% 7/30/2037 |
CZK300,160 |
10,081 | |
|
|
Dominican
Republic 8.625% 4/20/20278
|
USD4,950 |
5,131 | |
|
|
Dominican
Republic 6.00% 7/19/20288
|
4,360 |
4,388 | |
|
|
Dominican
Republic 4.50% 1/30/20308
|
2,307 |
2,146 | |
|
|
Dominican
Republic 6.00% 2/22/20338
|
3,295 |
3,250 | |
|
|
Dominican
Republic 5.875% 1/30/2060 |
18,230 |
16,176 | |
|
|
Dominican
Republic 5.875% 1/30/20608
|
10,273 |
9,115 | |
|
|
Egypt
(Arab Republic of) 5.625% 4/16/2030 |
EUR1,615 |
1,494 | |
|
|
Egypt
(Arab Republic of) 5.875% 2/16/20318
|
USD2,350 |
1,950 | |
|
|
Egypt
(Arab Republic of) 7.625% 5/29/20328
|
7,060 |
6,208 | |
|
|
Egypt
(Arab Republic of) 7.625% 5/29/2032 |
2,000 |
1,759 | |
|
|
Egypt
(Arab Republic of) 8.50% 1/31/2047 |
5,010 |
3,987 | |
|
|
Egypt
(Arab Republic of) 8.875% 5/29/2050 |
2,720 |
2,223 | |
|
|
Egypt
(Arab Republic of) 8.75% 9/30/2051 |
7,240 |
5,859 | |
|
|
Egypt
(Arab Republic of) 8.15% 11/20/20598
|
7,510 |
5,735 | |
|
|
Gabonese
Republic 7.00% 11/24/2031 |
7,500 |
6,010 | |
|
|
Georgia
(Republic of) 2.75% 4/22/20268
|
4,995 |
4,688 | |
|
|
Honduras
(Republic of) 6.25% 1/19/2027 |
15,473 |
15,154 | |
|
|
Honduras
(Republic of) 5.625% 6/24/20308
|
5,600 |
5,042 | |
|
|
Honduras
(Republic of) 5.625% 6/24/2030 |
2,042 |
1,838 | |
|
|
Hungary
(Republic of) 6.25% 9/22/20328
|
6,200 |
6,453 | |
|
|
India
(Republic of) 7.32% 11/13/2030 |
INR640,000 |
7,824 | |
|
|
India
(Republic of) 6.54% 1/17/2032 |
2,745,460 |
32,198 | |
|
|
India
(Republic of) 7.18% 7/24/2037 |
1,144,400 |
14,008 | |
|
|
Indonesia
(Republic of), Series 95, 6.375% 8/15/2028 |
IDR279,540,000 |
17,666 | |
|
|
Indonesia
(Republic of), Series 82, 7.00% 9/15/2030 |
200,000,000 |
12,892 | |
|
|
Indonesia
(Republic of), Series 91, 6.375% 4/15/2032 |
183,716,000 |
11,434 | |
|
|
Indonesia
(Republic of), Series 96, 7.00% 2/15/2033 |
418,880,000 |
26,977 | |
|
|
Indonesia
(Republic of), Series 100, 6.625% 2/15/2034 |
803,008,000 |
50,506 | |
|
|
Indonesia
(Republic of), Series 80, 7.50% 6/15/2035 |
138,600,000 |
9,212 | |
|
|
Indonesia
(Republic of) 6.625% 2/17/2037 |
USD8,612 |
9,743 | |
|
|
Indonesia
(Republic of), Series 98, 7.125% 6/15/2038 |
IDR365,721,000 |
23,558 | |
|
|
International
Bank for Reconstruction and Development 6.05%
2/9/2029 |
INR153,500 |
1,753 | |
|
|
International
Bank for Reconstruction and Development 6.75%
7/13/2029 |
446,600 |
5,252 | |
|
|
Malaysia
(Federation of), Series 0119, 3.906% 7/15/2026 |
MYR49,000 |
11,280 | |
|
|
Malaysia
(Federation of), Series 0219, 3.885% 8/15/2029 |
32,000 |
7,377 | |
|
|
Malaysia
(Federation of), Series 0419, 3.828% 7/5/2034 |
66,000 |
14,955 | |
|
|
Malaysia
(Federation of), Series 0418, 4.893% 6/8/2038 |
68,100 |
16,982 | |
|
|
Malaysia
(Federation of), Series 0519, 3.757% 5/22/2040 |
33,761 |
7,449 | |
|
|
Malaysia
(Federation of), Series 0519, 4.638% 11/15/2049 |
16,166 |
3,932 | |
|
|
Malaysia
(Federation of), Series 0120, 4.065% 6/15/2050 |
49,200 |
10,983 | |
|
|
Malaysia
(Federation of), Series 022, 5.357% 5/15/2052 |
15,534 |
4,187 | |
|
|
MFB
Magyar Fejlesztesi Bank Zartkoruen Mukodo Reszvenytarsasag 6.50%
6/29/2028 |
USD14,500 |
15,012 | |
|
|
Mongolia
(State of) 7.875% 6/5/2029 |
5,679 |
6,013 | |
|
|
Mongolia
(State of) 4.45% 7/7/2031 |
400 |
356 | |
|
|
Morocco
(Kingdom of) 5.95% 3/8/20288
|
4,231 |
4,300 | |
|
|
Mozambique
(Republic of) 9.00% 9/15/2031 |
9,800 |
8,214 | |
|
|
Nigeria
(Republic of) 7.875% 2/16/2032 |
13,200 |
11,877 | |
|
|
Oman
(Sultanate of) 5.625% 1/17/2028 |
7,200 |
7,256 | |
|
|
Oman
(Sultanate of) 6.00% 8/1/2029 |
12,400 |
12,712 | |
|
|
Oman
(Sultanate of) 6.25% 1/25/20318
|
4,189 |
4,366 | |
|
|
Oman
(Sultanate of) 6.75% 1/17/2048 |
8,100 |
8,399 | |
|
|
Panama
(Republic of) 3.75% 4/17/2026 |
4,590 |
4,482 | |
|
|
Panama
(Republic of) 6.875% 1/31/2036 |
8,200 |
8,095 | |
|
|
Panama
(Republic of) 4.50% 4/16/2050 |
4,525 |
3,017 | |
|
|
Panama
(Republic of) 4.30% 4/29/2053 |
6,400 |
4,069 | |
|
8 |
New
World Fund |
|
Bonds,
notes & other debt instruments (continued) |
|
Principal amount
(000) |
Value
(000) | |
|
Bonds
& notes of governments & government agencies outside the
U.S. (continued) | ||||
|
|
Panama
(Republic of) 6.853% 3/28/2054 |
USD9,000 |
$8,316 | |
|
|
Panama
(Republic of) 4.50% 1/19/2063 |
2,430 |
1,541 | |
|
|
Paraguay
(Republic of) 4.70% 3/27/2027 |
5,500 |
5,428 | |
|
|
Paraguay
(Republic of) 4.95% 4/28/2031 |
3,415 |
3,337 | |
|
|
Peru
(Republic of) 3.00% 1/15/2034 |
5,715 |
4,715 | |
|
|
Peru
(Republic of) 5.625% 11/18/2050 |
1,240 |
1,212 | |
|
|
Peru
(Republic of) 3.55% 3/10/2051 |
4,900 |
3,473 | |
|
|
Peru
(Republic of) 2.78% 12/1/2060 |
10,795 |
6,048 | |
|
|
PETRONAS
Capital, Ltd. 3.50% 4/21/20308
|
3,400 |
3,177 | |
|
|
PETRONAS
Capital, Ltd. 4.55% 4/21/20508
|
3,400 |
3,033 | |
|
|
Philippines
(Republic of) 3.95% 1/20/2040 |
11,700 |
10,126 | |
|
|
Poland
(Republic of), Series 0429, 5.75% 4/25/2029 |
PLN86,250 |
21,707 | |
|
|
Poland
(Republic of) 4.875% 10/4/2033 |
USD8,680 |
8,555 | |
|
|
Poland
(Republic of), Series 1033, 6.00% 10/25/2033 |
PLN148,000 |
37,234 | |
|
|
Poland
(Republic of), Series 1034, 5.00% 10/25/2034 |
58,300 |
13,562 | |
|
|
Qatar
(State of) 3.75% 4/16/20308
|
USD6,200 |
5,986 | |
|
|
Romania
6.625% 9/27/2029 |
EUR6,900 |
8,201 | |
|
|
Romania
2.00% 1/28/2032 |
18,275 |
16,212 | |
|
|
Romania
5.25% 5/30/2032 |
7,600 |
8,261 | |
|
|
Romania
2.00% 4/14/2033 |
7,080 |
5,969 | |
|
|
Romania
6.375% 1/30/20348
|
USD7,448 |
7,468 | |
|
|
Romania
5.625% 5/30/2037 |
EUR6,595 |
6,989 | |
|
|
Romania
2.875% 4/13/2042 |
5,900 |
4,244 | |
|
|
Romania
5.125% 6/15/20488
|
USD9,300 |
7,655 | |
|
|
Saudi
Arabia (Kingdom of) 5.75% 1/16/2054 |
29,200 |
28,326 | |
|
|
Senegal
(Republic of) 4.75% 3/13/2028 |
EUR13,200 |
13,330 | |
|
|
Senegal
(Republic of) 5.375% 6/8/2037 |
715 |
560 | |
|
|
Sharjah
Sukuk Programme, Ltd. 5.433% 4/17/20358
|
USD17,606 |
17,548 | |
|
|
South
Africa (Republic of), Series R-213, 7.00% 2/28/2031 |
ZAR881,900 |
43,831 | |
|
|
South
Africa (Republic of), Series R-2032, 8.25% 3/31/2032 |
188,190 |
9,757 | |
|
|
South
Africa (Republic of) 5.875% 4/20/2032 |
USD8,700 |
8,352 | |
|
|
South
Africa (Republic of), Series R-2035, 8.875%
2/28/2035 |
ZAR859,200 |
43,671 | |
|
|
South
Africa (Republic of), Series R-2040, 9.00% 1/31/2040 |
525,500 |
25,034 | |
|
|
South
Africa (Republic of), Series R-2035, 11.625%
3/31/2053 |
220,900 |
12,909 | |
|
|
Thailand
(Kingdom of) 3.45% 6/17/2043 |
THB672,200 |
21,459 | |
|
|
Turkey
(Republic of) 12.60% 10/1/2025 |
TRY659,300 |
15,272 | |
|
|
Turkey
(Republic of) 17.30% 7/19/2028 |
915,200 |
18,461 | |
|
|
Turkey
(Republic of) 5.875% 6/26/2031 |
USD12,630 |
11,973 | |
|
|
Turkey
(Republic of) 4.875% 4/16/2043 |
11,100 |
8,003 | |
|
|
United
Mexican States, Series M, 7.50% 6/3/2027 |
MXN277,450 |
13,117 | |
|
|
United
Mexican States, Series M20, 8.50% 5/31/2029 |
526,654 |
24,984 | |
|
|
United
Mexican States, Series M, 7.75% 5/29/2031 |
1,945,849 |
87,278 | |
|
|
United
Mexican States, Series M, 7.50% 5/26/2033 |
564,000 |
24,088 | |
|
|
United
Mexican States, Series M, 7.75% 11/23/2034 |
641,152 |
27,453 | |
|
|
United
Mexican States, Series M30, 8.50% 11/18/2038 |
369,000 |
16,157 | |
|
|
United
Mexican States, Series MTN, 4.75% 3/8/2044 |
USD13,300 |
10,598 | |
|
|
United
Mexican States, Series M, 8.00% 7/31/2053 |
MXN213,721 |
8,438 | |
|
|
United
Mexican States, Series S, 4.00% 10/29/205410
|
268,625 |
10,992 | |
|
|
United
Mexican States 3.75% 4/19/2071 |
USD10,285 |
5,998 | |
|
|
Venezuela
(Bolivarian Republic of) 7.00% 12/1/201811
|
870 |
107 | |
|
|
Venezuela
(Bolivarian Republic of) 7.75% 10/13/201911
|
14,640 |
1,898 | |
|
|
Venezuela
(Bolivarian Republic of) 6.00% 12/9/202011
|
12,912 |
1,594 | |
|
|
Venezuela
(Bolivarian Republic of) 9.00% 5/7/202311
|
12,757 |
1,811 | |
|
|
Venezuela
(Bolivarian Republic of) 8.25% 10/13/202411
|
2,827 |
394 | |
|
|
Venezuela
(Bolivarian Republic of) 9.25% 5/7/202811
|
3,175 |
474 | |
|
|
Venezuela
(Bolivarian Republic of) 7.00% 3/31/203811
|
1,448 |
201 | |
|
|
|
|
|
1,843,263 |
|
Corporate
bonds, notes & loans 0.42% | ||||
Energy
0.07% | ||||
|
GreenSaif
Pipelines Bidco SARL 5.853% 2/23/20368
|
6,000 |
6,016 | ||
|
Oleoducto
Central SA 4.00% 7/14/20278
|
3,450 |
3,277 | ||
|
|
Petroleos
Mexicanos 6.49% 1/23/2027 |
6,488 |
6,399 | |
|
|
Petroleos
Mexicanos 5.95% 1/28/2031 |
21,000 |
18,114 | |
|
New
World Fund |
9 |
|
Bonds,
notes & other debt instruments (continued) |
|
Principal amount
(000) |
Value
(000) | |
|
Corporate
bonds, notes & loans (continued) | ||||
Energy
(continued) | ||||
|
PTTEP
Treasury Center Co., Ltd. 2.993% 1/15/2030 |
USD2,068 |
$1,885 | ||
|
Sinopec
Group Overseas Development (2018), Ltd. 3.10% 1/8/20518
|
8,300 |
6,064 | ||
|
|
Transportadora
de Gas del Sur SA 8.50% 7/24/20318
|
4,170 |
4,334 | |
|
|
|
|
|
46,089 |
|
| ||||
Financials
0.07% | ||||
|
Bangkok
Bank Public Co., Ltd. 3.733% 9/25/2034
(5-year
UST Yield Curve Rate T Note Constant Maturity + 1.90% on
9/25/2029)9
|
7,517 |
6,871 | ||
|
BBVA
Bancomer, SA 8.45% 6/29/2038
(5-year
UST Yield Curve Rate T Note Constant Maturity + 4.661% on
6/29/2033)8,9
|
5,200 |
5,472 | ||
|
|
CMB
International Leasing Management, Ltd. 2.75%
8/12/2030 |
7,385 |
6,584 | |
|
|
HDFC
Bank, Ltd. 3.70% junior subordinated perpetual bonds
(5-Year
UST Yield Curve Rate T Note Constant Maturity + 2.925% on
2/25/2027)8,9
|
8,300 |
7,919 | |
|
|
HSBC
Holdings PLC 6.332% 3/9/2044 (USD-SOFR + 2.65% on 3/9/2043)9
|
9,000 |
9,742 | |
|
|
XP,
Inc. 6.75% 7/2/20298
|
4,190 |
4,210 | |
|
|
|
|
|
40,798 |
|
| ||||
Materials
0.06% | ||||
|
Braskem
Idesa SAPI 7.45% 11/15/2029 |
8,100 |
6,431 | ||
|
Braskem
Idesa SAPI 7.45% 11/15/20298
|
3,564 |
2,830 | ||
|
|
Braskem
Idesa SAPI 6.99% 2/20/20328
|
4,000 |
2,974 | |
|
|
Braskem
Netherlands Finance BV 8.50% 1/12/20318
|
6,038 |
6,257 | |
|
|
CSN
Resources SA 8.875% 12/5/20308
|
6,200 |
6,230 | |
|
|
PT
Krakatau Posco 6.375% 6/11/2027 |
2,400 |
2,403 | |
|
|
PT
Krakatau Posco 6.375% 6/11/2029 |
3,600 |
3,594 | |
|
|
Sasol
Financing USA, LLC 5.50% 3/18/2031 |
9,400 |
8,120 | |
|
|
|
|
|
38,839 |
|
| ||||
Communication
services
0.05% | ||||
|
América
Móvil, SAB de CV 10.125% 1/22/2029 |
MXN225,000 |
11,041 | ||
|
América
Móvil, SAB de CV 9.50% 1/27/2031 |
129,800 |
6,176 | ||
|
Axiata
SPV5 (Labuan), Ltd. 3.064% 8/19/2050 |
USD1,217 |
833 | ||
|
|
PLDT,
Inc. 2.50% 1/23/2031 |
2,590 |
2,254 | |
|
|
Tencent
Holdings, Ltd. 3.975% 4/11/2029 |
6,300 |
6,112 | |
|
|
Tencent
Holdings, Ltd. 3.24% 6/3/20508
|
7,100 |
5,010 | |
|
|
|
|
|
31,426 |
|
| ||||
Consumer
discretionary
0.04% | ||||
|
Alibaba
Group Holding, Ltd. 2.125% 2/9/2031 |
5,926 |
5,068 | ||
|
Alibaba
Group Holding, Ltd. 3.15% 2/9/2051 |
7,800 |
5,354 | ||
|
Melco
Resorts Finance, Ltd. 7.625% 4/17/20328
|
5,700 |
5,779 | ||
|
|
MercadoLibre,
Inc. 3.125% 1/14/2031 |
3,331 |
2,902 | |
|
|
Sands
China, Ltd. 4.375% 6/18/2030 |
4,575 |
4,307 | |
|
|
Wynn
Macau, Ltd. 5.625% 8/26/2028 |
4,500 |
4,323 | |
|
|
|
|
|
27,733 |
|
| ||||
Utilities
0.04% | ||||
|
Aegea
Finance SARL 9.00% 1/20/20318
|
5,210 |
5,558 | ||
|
AES
Panama Generation Holdings, SRL 4.375% 5/31/20308
|
3,363 |
2,973 | ||
|
|
Empresas
Publicas de Medellin ESP 4.25% 7/18/20298
|
2,062 |
1,819 | |
|
|
Empresas
Publicas de Medellin ESP 4.25% 7/18/2029 |
445 |
393 | |
|
|
Empresas
Publicas de Medellin ESP 4.375% 2/15/20318
|
3,679 |
3,127 | |
|
|
Greenko
Dutch BV 3.85% 3/29/20268
|
4,606 |
4,440 | |
|
|
SAEL,
Ltd. 7.80% 7/31/20318
|
1,670 |
1,691 | |
|
|
San
Miguel Global Power Holdings Corp. 8.75% perpetual bonds
(5-year
UST Yield Curve Rate T Note Constant Maturity + 7.732% on
9/12/2029)9
|
2,908 |
3,040 | |
|
|
|
|
|
23,041 |
|
| ||||
Industrials
0.04% | ||||
|
Empresa
de Transporte de Pasajeros Metro SA 4.70% 5/7/20508
|
4,520 |
3,832 | ||
|
IRB
Infrastructure Developers, Ltd. 7.11% 3/11/20328
|
5,465 |
5,568 | ||
|
|
LATAM
Airlines Group SA 7.875% 4/15/20308
|
6,200 |
6,216 | |
|
|
Lima
Metro Line 2 Finance, Ltd. 5.875% 7/5/20348
|
1,255 |
1,249 | |
|
|
Mexico
City Airport Trust 4.25% 10/31/2026 |
6,200 |
6,097 | |
|
|
|
|
|
22,962 |
|
10 |
New
World Fund |
|
Bonds,
notes & other debt instruments (continued) |
|
Principal amount
(000) |
Value
(000) | |
|
Corporate
bonds, notes & loans (continued) | ||||
|
| ||||
|
Consumer
staples
0.03% | ||||
|
MARB
BondCo PLC 3.95% 1/29/20318
|
USD7,700 |
$6,664 | ||
|
MARB
BondCo PLC 3.95% 1/29/2031 |
4,300 |
3,721 | ||
|
|
NBM
US Holdings, Inc. 6.625% 8/6/20297
|
6,150 |
6,138 | |
|
|
|
|
|
16,523 |
|
| ||||
Health
care
0.02% | ||||
|
Biocon
Biologics Global PLC 6.67% 10/9/20298
|
7,100 |
7,006 | ||
|
Rede
D’Or Finance SARL 4.95% 1/17/2028 |
702 |
682 | ||
|
|
Rede
D’Or Finance SARL 4.50% 1/22/2030 |
6,323 |
5,849 | |
|
|
|
|
|
13,537 |
|
|
Total
corporate bonds, notes & loans |
|
|
260,948 |
|
|
Total
bonds, notes & other debt instruments
(cost: $2,257,737,000) |
|
|
2,104,211 |
|
Short-term
securities 4.30% |
|
Shares |
| |
|
Money
market investments 4.07% | ||||
|
|
Capital
Group Central Cash Fund 4.87%2,12
|
25,338,084 |
2,533,808 | |
|
|
|
|
| |
|
Money
market investments purchased with collateral from securities on
loan 0.19% | ||||
|
|
Capital
Group Central Cash Fund 4.87%2,12,13
|
451,526 |
45,153 | |
|
|
Invesco
Short-Term Investments Trust – Government & Agency Portfolio,
Institutional
Class 4.77%12,13
|
19,254,520 |
19,255 | |
|
|
BlackRock
Liquidity Funds – FedFund, Institutional Shares 4.76%12,13
|
8,100,000 |
8,100 | |
|
|
Dreyfus
Treasury Obligations Cash Management, Institutional Shares
4.72%12,13
|
8,100,000 |
8,100 | |
|
|
Fidelity Investments
Money Market Government Portfolio, Class I 4.70%12,13
|
8,100,000 |
8,100 | |
|
|
Goldman
Sachs Financial Square Government Fund, Institutional Shares
4.70%12,13
|
8,100,000 |
8,100 | |
|
|
Morgan
Stanley Institutional Liquidity Funds – Government Portfolio,
Institutional
Class 4.78%12,13
|
8,100,000 |
8,100 | |
|
|
State
Street Institutional U.S. Government Money Market Fund,
Premier
Class 4.82%12,13
|
6,201,337 |
6,201 | |
|
|
RBC
Funds Trust – U.S. Government Money Market Fund,
RBC
Institutional Class 1 4.77%12,13
|
6,000,000 |
6,000 | |
|
|
|
|
|
117,109 |
|
|
Weighted
average
yield
at
acquisition |
Principal amount
(000) |
| |
|
Bills
& notes of governments & government agencies outside the
U.S. 0.04% | ||||
|
|
Egypt
(Arab Republic of) 3/18/2025 |
20.180
% |
EGP800,000 |
14,783 |
|
|
Nigeria
(Republic of) 2/11/2025 |
18.000 |
NGN1,403,815 |
777 |
|
|
Nigeria
(Republic of) 2/20/2025 |
17.782 |
1,871,755 |
1,026 |
|
|
Nigeria
(Republic of) 2/25/2025 |
18.036 |
5,700,647 |
3,113 |
|
|
Nigeria
(Republic of) 3/6/2025 |
17.801 |
6,400,320 |
3,471 |
|
|
Nigeria
(Republic of) 3/13/2025 |
17.900 |
2,495,670 |
1,346 |
|
|
Nigeria
(Republic of) 3/27/2025 |
18.586 |
3,638,793 |
1,943 |
|
|
|
|
|
26,459 |
|
|
Total
short-term securities
(cost: $2,680,527,000) |
|
|
2,677,376 |
|
|
Total
investment securities
100.27%
(cost: $45,867,431,000) |
|
|
62,464,571 |
|
|
Other
assets less liabilities (0.27)% |
|
|
(170,395
) |
|
|
Net
assets
100.00% |
|
|
$62,294,176 |
|
New
World Fund |
11 |
|
Contracts |
Type |
Number
of
contracts |
Expiration
date |
Notional
amount
(000) |
Value
and
unrealized
appreciation
(depreciation)
at 10/31/2024
(000) |
|
2
Year U.S. Treasury Note Futures |
Long |
540 |
1/6/2025 |
USD111,210 |
$(954
) |
|
5
Year U.S. Treasury Note Futures |
Long |
480 |
12/31/2024 |
51,473 |
(1,591
) |
|
10
Year Euro-Bund Futures |
Short |
286 |
12/10/2024 |
(41,003
) |
507 |
|
10
Year Ultra U.S. Treasury Note Futures |
Long |
183 |
12/31/2024 |
20,816 |
(846
) |
|
30
Year Ultra U.S. Treasury Bond Futures |
Long |
73 |
12/31/2024 |
9,171 |
(623
) |
|
|
|
|
|
|
$(3,507
) |
|
Contract
amount |
Counterparty |
Settlement
date |
Unrealized
appreciation
(depreciation)
at
10/31/2024
(000) | |||
|
Currency
purchased
(000) |
Currency
sold
(000) | |||||
|
USD |
20,764 |
HUF |
7,800,000 |
Bank
of New York Mellon |
11/7/2024 |
$(14
) |
|
HUF |
7,800,000 |
USD |
21,408 |
UBS
AG |
11/7/2024 |
(630
) |
|
USD |
43,285 |
ZAR |
755,399 |
Citibank |
11/8/2024 |
469 |
|
USD |
3,019 |
ZAR |
53,050 |
Citibank |
11/8/2024 |
12 |
|
CZK |
325,600 |
USD |
14,185 |
BNP
Paribas |
11/8/2024 |
(194
) |
|
PLN |
18,300 |
USD |
4,622 |
Citibank |
11/14/2024 |
(52
) |
|
CNH |
131,600 |
USD |
18,583 |
Standard
Chartered Bank |
11/14/2024 |
(86
) |
|
CZK |
292,740 |
USD |
12,661 |
Barclays
Bank PLC |
11/18/2024 |
(81
) |
|
USD |
65,927 |
EUR |
59,978 |
Citibank |
11/21/2024 |
629 |
|
USD |
24,501 |
MXN |
489,223 |
Morgan
Stanley |
11/25/2024 |
159 |
|
TRY |
334,000 |
USD |
9,414 |
JPMorgan
Chase |
11/25/2024 |
84 |
|
USD |
24,794 |
BRL |
141,404 |
JPMorgan
Chase |
11/26/2024 |
412 |
|
USD |
37,384 |
MYR |
160,510 |
JPMorgan
Chase |
11/27/2024 |
702 |
|
USD |
5,035 |
THB |
170,019 |
JPMorgan
Chase |
11/29/2024 |
—
5 |
|
HUF |
7,800,000 |
USD |
20,731 |
Bank
of New York Mellon |
12/9/2024 |
11 |
|
|
|
|
|
|
|
$1,421 |
|
|
Value at
11/1/2023
(000) |
Additions
(000) |
Reductions
(000) |
Net
realized
gain
(loss)
(000) |
Net
unrealized
appreciation
(depreciation)
(000) |
Value at
10/31/2024
(000) |
Dividend
or
interest
income
(000) |
|
Common
stocks 2.56% |
|
|
|
|
|
|
|
|
Financials
0.84% |
|
|
|
|
|
|
|
|
PB
Fintech, Ltd. 1 |
$14,916 |
$320,642 |
$52,317 |
$24,179 |
$216,153 |
$523,573 |
$— |
|
Industrials
0.15% |
|
|
|
|
|
|
|
|
Wizz
Air Holdings PLC 1 |
47,055 |
59,174 |
— |
— |
(14,284
) |
91,945 |
— |
|
Health
care 1.48% |
|
|
|
|
|
|
|
|
Max
Healthcare Institute, Ltd. |
441,843 |
180,372 |
201,449 |
38,990 |
260,017 |
719,773 |
1,068 |
|
Laurus
Labs, Ltd. |
141,536 |
11,394 |
— |
— |
50,270 |
203,200 |
324 |
|
|
|
|
|
|
|
922,973 |
|
|
Materials
0.09% |
|
|
|
|
|
|
|
|
Loma
Negra Compania Industrial Argentina SA (ADR)1
|
36,721 |
— |
— |
— |
22,290 |
59,011 |
2,584 |
|
First
Quantum Minerals, Ltd.1,14
|
220,855 |
256,294 |
118,582 |
(31,889
) |
155,110 |
— |
— |
|
|
|
|
|
|
|
59,011 |
|
|
Total
common stocks |
|
|
|
|
|
1,597,502 |
|
|
12 |
New
World Fund |
|
|
Value
at
11/1/2023
(000) |
Additions
(000) |
Reductions
(000) |
Net
realized
gain
(loss)
(000) |
Net
unrealized
appreciation
(depreciation)
(000) |
Value
at
10/31/2024
(000) |
Dividend
or
interest
income
(000) |
|
Short-term
securities 4.14% |
|
|
|
|
|
|
|
|
Money
market investments 4.07% |
|
|
|
|
|
|
|
|
Capital
Group Central Cash Fund 4.87% 12 |
$2,598,930 |
$9,447,784 |
$9,513,313 |
$538 |
$(131
) |
$2,533,808 |
$138,582 |
|
Money
market investments purchased with collateral
from
securities on loan 0.07% |
|
|
|
|
|
|
|
|
Capital
Group Central Cash Fund 4.87% 12,13 |
43,724 |
1,429
15 |
|
|
|
45,153 |
—
16 |
|
Total
short-term securities |
|
|
|
|
|
2,578,961 |
|
|
Total
6.70% |
|
|
|
$31,818 |
$689,425 |
$4,176,463 |
$142,558 |
|
|
Acquisition
date(s) |
Cost
(000) |
Value
(000) |
Percent
of net
assets |
|
QuintoAndar,
Ltd., Series E, preference shares1,4
|
5/26/2021 |
$69,742 |
$67,535 |
.11
% |
|
QuintoAndar,
Ltd., Series E-1, preference shares1,4
|
12/20/2021 |
23,284 |
17,768 |
.03 |
|
Canva,
Inc.1,4
|
8/26/2021-11/4/2021 |
18,022 |
13,532 |
.02 |
|
Canva,
Inc., Series A, noncumulative preferred shares1,4
|
11/4/2021 |
1,577 |
1,184 |
.00
17 |
|
Canva,
Inc., Series A-3, noncumulative preferred shares1,4
|
11/4/2021 |
65 |
49 |
.00
17 |
|
Canva,
Inc., Series A-4, noncumulative preferred shares1,4
|
11/4/2021 |
5 |
4 |
.00
17 |
|
Canva,
Inc., Series A-5, noncumulative preferred shares1,4
|
11/4/2021 |
3 |
2 |
.00
17 |
|
NBM
US Holdings, Inc. 6.625% 8/6/2029 |
7/8/2022 |
5,975 |
6,138 |
.01 |
|
Getir
BV, Series D, preferred shares1,4
|
5/27/2021 |
46,500 |
—
5 |
.00
17 |
|
Total |
|
$165,173 |
$106,212 |
.17
% |
|
1 |
Security
did not produce income during the last 12 months. |
|
2 |
Affiliate
of the fund or part of the same “group of investment companies“ as the
fund, as defined under the Investment Company Act of 1940, as
amended. |
|
3 |
Security
is subject to a contractual sale restriction (lockup). The total value of
all such securities was $93,996,000, which represented 0.15% of the net
assets of the
fund.
The remaining lockup period is generally less than one year; and early
lockup release provisions may be applicable based on certain set
milestones or
condition
in accordance with legal documents. |
|
4 |
Value
determined using significant unobservable inputs. |
|
5 |
Amount
less than one thousand. |
|
6 |
All
or a portion of this security was on loan. The total value of all such
securities was $262,369,000, which represented .42% of the net assets of
the fund. Refer to
Note
5 for more information on securities lending.
|
|
7 |
Restricted
security, other than Rule 144A securities or commercial paper issued
pursuant to Section 4(a)(2) of the Securities Act of 1933. The total value
of all such
restricted
securities was $106,212,000, which represented .17% of the net assets of
the fund. |
|
8 |
Acquired
in a transaction exempt from registration under Rule 144A or, for
commercial paper, Section 4(a)(2) of the Securities Act of 1933. May be
resold in the
U.S.
in transactions exempt from registration, normally to qualified
institutional buyers. The total value of all such securities was
$249,791,000, which represented
.40%
of the net assets of the fund. |
|
9 |
Step
bond; coupon rate may change at a later date. |
|
10 |
Index-linked
bond whose principal amount moves with a government price
index.
|
|
11 |
Scheduled
interest and/or principal payment was not
received. |
|
12 |
Rate
represents the seven-day yield at 10/31/2024. |
|
13 |
Security
purchased with cash collateral from securities on loan. Refer to Note 5
for more information on securities lending. |
|
14 |
Affiliated
issuer during the reporting period but no longer an affiliate at
10/31/2024. Refer to the investment portfolio for the security value at
10/31/2024. |
|
15 |
Represents
net activity. Refer to Note 5 for more information on securities
lending. |
|
16 |
Dividend
income is included with securities lending income in the fund’s statement
of operations and is not shown in this table. |
|
17 |
Amount
less than .01%. |
|
New
World Fund |
13 |
|
Key to
abbreviation(s) |
|
ADR
= American Depositary Receipts |
|
BRL
= Brazilian reais |
|
CAD
= Canadian dollars |
|
CDI
= CREST Depository Interest
|
|
CLP
= Chilean pesos |
|
CNH
= Chinese yuan renminbi |
|
CNY
= Chinese yuan |
|
COP
= Colombian pesos |
|
CZK
= Czech korunas |
|
EGP
= Egyptian pounds |
|
EUR
= Euros |
|
GBP
= British pounds |
|
GDR
= Global Depositary
Receipts |
|
|
|
HUF
= Hungarian forints |
|
IDR
= Indonesian rupiah |
|
INR
= Indian rupees |
|
MXN
= Mexican pesos |
|
MYR
= Malaysian ringgits |
|
NGN
= Nigerian naira |
|
PLN
= Polish zloty |
|
REIT
= Real Estate Investment Trust |
|
SOFR
= Secured Overnight Financing Rate |
|
THB
= Thai baht |
|
TRY
= Turkish lira |
|
USD
= U.S. dollars |
|
ZAR
= South African rand |
|
14 |
New
World Fund |
|
Assets: |
|
|
|
Investment
securities, at value (includes $262,369 of
investment
securities on loan): |
|
|
|
Unaffiliated
issuers (cost: $42,220,303) |
$58,288,108 |
|
|
Affiliated
issuers (cost: $3,647,128) |
4,176,463 |
$62,464,571 |
|
Cash |
|
74,442 |
|
Cash
collateral pledged for futures contracts |
|
3,065 |
|
Cash
collateral pledged for forward currency contracts |
|
930 |
|
Cash
denominated in currencies other than U.S. dollars (cost:
$79,339) |
|
79,069 |
|
Unrealized
appreciation on open forward currency contracts |
|
2,478 |
|
Receivables
for: |
|
|
|
Sales
of investments |
89,055 |
|
|
Sales
of fund’s shares |
79,952 |
|
|
Dividends
and interest |
112,481 |
|
|
Securities
lending income |
781 |
|
|
Variation
margin on futures contracts |
225 |
|
|
Other |
2 |
282,496
|
|
|
|
62,907,051 |
|
Liabilities: |
|
|
|
Collateral
for securities on loan |
|
117,109 |
|
Unrealized
depreciation on open forward currency contracts |
|
1,057 |
|
Payables
for: |
|
|
|
Purchases
of investments |
90,913 |
|
|
Repurchases
of fund’s shares |
37,961 |
|
|
Investment
advisory services |
27,447 |
|
|
Services
provided by related parties |
5,894 |
|
|
Directors’
deferred compensation |
3,628 |
|
|
Variation
margin on futures contracts |
140 |
|
|
Non-U.S.
taxes |
325,032 |
|
|
Other |
3,694 |
494,709
|
|
Net
assets at October
31, 2024 |
|
$62,294,176 |
|
Net
assets consist of: |
|
|
|
Capital
paid in on shares of capital stock |
|
$44,062,433 |
|
Total
distributable earnings (accumulated loss) |
|
18,231,743
|
|
Net
assets at
October
31, 2024 |
|
$62,294,176 |
|
New
World Fund |
15 |
|
|
Net
assets |
Shares
outstanding |
Net asset
value
per
share |
|
Class
A |
$13,012,382 |
158,596 |
$82.05 |
|
Class
C |
277,851 |
3,569 |
77.86 |
|
Class
T |
14 |
—
* |
81.96 |
|
Class
F-1 |
854,876 |
10,492 |
81.48 |
|
Class
F-2 |
18,085,564 |
220,703 |
81.95 |
|
Class
F-3 |
8,466,030 |
102,880 |
82.29 |
|
Class
529-A |
917,887 |
11,307 |
81.18 |
|
Class
529-C |
17,627 |
226 |
78.05 |
|
Class
529-E |
30,877 |
384 |
80.38 |
|
Class
529-T |
17 |
—
* |
81.92 |
|
Class
529-F-1 |
12 |
—
* |
80.95 |
|
Class
529-F-2 |
137,016 |
1,670 |
82.06 |
|
Class
529-F-3 |
12 |
—
* |
81.87 |
|
Class
R-1 |
22,316 |
286 |
77.94 |
|
Class
R-2 |
250,497 |
3,213 |
77.97 |
|
Class
R-2E |
41,987 |
523 |
80.28 |
|
Class
R-3 |
501,903 |
6,237 |
80.47 |
|
Class
R-4 |
795,668 |
9,762 |
81.51 |
|
Class
R-5E |
117,822 |
1,451 |
81.18 |
|
Class
R-5 |
298,289 |
3,616 |
82.50 |
|
Class
R-6 |
18,465,529 |
224,528 |
82.24 |
|
16 |
New
World Fund |
|
Investment
income: |
|
|
|
Income: |
|
|
|
Dividends
(net of non-U.S. taxes of $80,455;
also
includes $142,558 from affiliates) |
$1,104,791 |
|
|
Interest
from unaffiliated issuers (net of non-U.S. taxes of
$1,079) |
159,683 |
|
|
Securities
lending income (net of fees) |
3,987 |
$1,268,461 |
|
Fees
and expenses*: |
|
|
|
Investment
advisory services |
292,843 |
|
|
Distribution
services |
45,747 |
|
|
Transfer
agent services |
46,978 |
|
|
Administrative
services |
17,275 |
|
|
529
plan services |
621 |
|
|
Reports
to shareholders |
2,428 |
|
|
Registration
statement and prospectus |
902 |
|
|
Directors’
compensation |
1,034 |
|
|
Auditing
and legal |
337 |
|
|
Custodian |
11,615 |
|
|
State
and local taxes |
1 |
|
|
Other |
1,019 |
420,800
|
|
Net
investment income |
|
847,661
|
|
Net
realized gain (loss) and unrealized appreciation
(depreciation): |
|
|
|
Net
realized gain (loss) on: |
|
|
|
Investments
(net of non-U.S. taxes of $140,081): |
|
|
|
Unaffiliated
issuers |
1,607,069 |
|
|
Affiliated
issuers |
31,818 |
|
|
Futures
contracts |
470 |
|
|
Forward
currency contracts |
(6,233
) |
|
|
Currency
transactions |
(9,163
) |
1,623,961 |
|
Net
unrealized appreciation (depreciation) on: |
|
|
|
Investments
(net of non-U.S. taxes of $322,412): |
|
|
|
Unaffiliated
issuers |
8,096,180 |
|
|
Affiliated
issuers |
689,425 |
|
|
Futures
contracts |
(5,942
) |
|
|
Forward
currency contracts |
(378
) |
|
|
Currency
translations |
(1,509
) |
8,777,776
|
|
Net
realized gain (loss) and unrealized appreciation
(depreciation) |
|
10,401,737
|
|
Net
increase (decrease) in net assets resulting from
operations |
|
$11,249,398 |
|
New
World Fund |
17 |
|
|
Year ended October
31, | |
|
|
2024 |
2023 |
|
|
| |
|
Operations: |
|
|
|
Net
investment income |
$847,661 |
$694,417 |
|
Net
realized gain (loss) |
1,623,961 |
1,260,895 |
|
Net
unrealized appreciation (depreciation) |
8,777,776 |
2,678,806 |
|
Net
increase (decrease) in net assets resulting from
operations |
11,249,398 |
4,634,118 |
|
Distributions
paid to shareholders |
(1,413,453
) |
(516,454
) |
|
Net
capital share transactions |
4,723,441 |
72,023 |
|
Total
increase (decrease) in net assets
|
14,559,386 |
4,189,687 |
|
Net
assets: |
|
|
|
Beginning
of year |
47,734,790 |
43,545,103 |
|
End
of year |
$62,294,176 |
$47,734,790 |
|
18 |
New
World Fund |
|
Share
class |
Initial
sales charge |
Contingent
deferred sales
charge upon
redemption |
Conversion
feature |
|
Classes
A and 529-A |
Up
to 5.75% for
Class
A; up to 3.50% for
Class
529-A |
None
(except 1.00% for certain
redemptions
within 18 months of purchase
without
an initial sales charge) |
None |
|
Classes
C and 529-C |
None |
1.00%
for redemptions within one year of
purchase |
Class
C converts to Class A
after
eight years and Class 529-C
converts
to Class 529-A after five years |
|
Class
529-E |
None |
None |
None |
|
Classes
T and 529-T* |
Up
to 2.50% |
None |
None |
|
Classes
F-1, F-2, F-3, 529-F-1,
529-F-2
and 529-F-3 |
None |
None |
None |
|
Classes
R-1, R-2, R-2E, R-3, R-4,
R-5E,
R-5 and R-6 |
None |
None |
None |
|
New
World Fund |
19 |
|
Fixed-income
class |
Examples of
standard inputs |
|
All |
Benchmark
yields, transactions, bids, offers, quotations from dealers and
trading
systems, new issues, spreads and other relationships observed in
the
markets among comparable securities; and proprietary pricing models
such
as yield measures calculated using factors such as cash flows, financial
or
collateral performance and other reference data (collectively referred to
as
“standard inputs”) |
|
Corporate
bonds, notes & loans; convertible securities |
Standard
inputs and underlying equity of the issuer |
|
Bonds
& notes of governments & government agencies |
Standard
inputs and interest rate volatilities |
|
Mortgage-backed;
asset-backed obligations |
Standard
inputs and cash flows, prepayment information, default rates,
delinquency
and loss assumptions, collateral characteristics, credit
enhancements
and specific deal information
|
|
20 |
New
World Fund |
|
|
Investment
securities | |||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets: |
|
|
|
|
|
Common
stocks: |
|
|
|
|
|
Financials |
$2,801,490 |
$7,773,334 |
—
* |
$10,574,824 |
|
Information
technology |
4,115,557 |
5,128,778 |
13,532 |
9,257,867 |
|
Consumer
discretionary |
2,893,663 |
4,726,074 |
— |
7,619,737 |
|
Industrials |
1,681,357 |
5,074,983 |
— |
6,756,340 |
|
Health
care |
2,424,716 |
3,502,985 |
— |
5,927,701 |
|
Communication
services |
2,360,069 |
3,369,024 |
— |
5,729,093 |
|
Consumer
staples |
879,495 |
3,340,054 |
— |
4,219,549 |
|
Materials |
2,340,087 |
1,400,024 |
—
* |
3,740,111 |
|
Energy |
509,159 |
1,031,208 |
—
* |
1,540,367 |
|
Real
estate |
230,590 |
795,078 |
— |
1,025,668 |
|
Utilities |
379,298 |
529,428 |
— |
908,726 |
|
Preferred
securities
|
171,173 |
121,133 |
86,542 |
378,848 |
|
Convertible
stocks
|
4,153 |
— |
— |
4,153 |
|
Bonds,
notes & other debt instruments
|
— |
2,104,211 |
— |
2,104,211 |
|
Short-term
securities |
2,650,917 |
26,459 |
— |
2,677,376 |
|
Total |
$23,441,724 |
$38,922,773 |
$100,074 |
$62,464,571 |
|
|
Other investments†
| |||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets: |
|
|
|
|
|
Unrealized
appreciation on futures contracts |
$507 |
$— |
$— |
$507 |
|
Unrealized
appreciation on open forward currency contracts |
— |
2,478 |
— |
2,478 |
|
Liabilities: |
|
|
|
|
|
Unrealized
depreciation on futures contracts |
(4,014
) |
— |
— |
(4,014
) |
|
Unrealized
depreciation on open forward currency contracts |
— |
(1,057
) |
— |
(1,057
) |
|
Total
|
$(3,507
) |
$1,421 |
$— |
$(2,086
) |
|
New
World Fund |
21 |
|
22 |
New
World Fund |
|
New
World Fund |
23 |
|
24 |
New
World Fund |
|
|
|
Assets |
Liabilities | ||
|
Contracts |
Risk
type |
Location
on statement of
assets
and liabilities |
Value |
Location
on statement of
assets
and liabilities |
Value |
|
Futures |
Interest |
Unrealized
appreciation* |
$507 |
Unrealized
depreciation* |
$4,014 |
|
Forward
currency |
Currency |
Unrealized
appreciation on open forward
currency
contracts |
2,478 |
Unrealized
depreciation on open forward
currency
contracts |
1,057 |
|
|
|
|
$2,985 |
|
$5,071 |
|
|
|
Net realized gain
(loss) |
Net unrealized
appreciation (depreciation) | ||
|
Contracts |
Risk
type |
Location
on statement of operations |
Value |
Location
on statement of operations |
Value |
|
Futures |
Interest |
Net
realized gain (loss) on futures contracts |
$470 |
Net
unrealized appreciation (depreciation)
on
futures contracts |
$(5,942
) |
|
Forward
currency |
Currency |
Net
realized gain (loss) on forward
currency
contracts |
(6,233
) |
Net
unrealized appreciation (depreciation)
on
forward currency contracts |
(378
) |
|
|
|
|
$(5,763
) |
|
$(6,320
) |
|
Counterparty |
Gross amounts
recognized in the
statement of assets
and
liabilities |
Gross amounts not offset in
the
statement of assets and
liabilities and
subject to a master netting
agreement |
Net
amount | ||
|
Available
to
offset |
Non-cash
collateral* |
Cash
collateral* | |||
|
Assets: |
|
|
|
|
|
|
Bank
of New York Mellon |
$11
|
$
(11
) |
$
—
|
$
—
|
$
—
|
|
Citibank |
1,110 |
(52
) |
—
|
(1,058
) |
—
|
|
JPMorgan
Chase |
1,198
|
—
|
(886
) |
—
|
312 |
|
Morgan
Stanley |
159
|
—
|
—
|
(159
) |
—
|
|
Total |
$2,478 |
$
(63
) |
$
(886
) |
$
(1,217
) |
$312 |
|
New
World Fund |
25 |
|
Counterparty |
Gross amounts
recognized in
the
statement of
assets
and
liabilities |
Gross amounts not offset in
the
statement of assets and
liabilities and
subject to a master netting
agreement |
Net
amount | ||
|
Available
to
offset |
Non-cash
collateral* |
Cash
collateral* | |||
|
Liabilities: |
|
|
|
|
|
|
Bank
of New York Mellon |
$14
|
$
(11
) |
$
—
|
$
—
|
$3
|
|
Barclays
Bank PLC |
81
|
—
|
—
|
—
|
81
|
|
BNP
Paribas |
194 |
—
|
— |
(194
) |
—
|
|
Citibank |
52
|
(52
) |
—
|
—
|
—
|
|
Standard
Chartered Bank |
86
|
—
|
—
|
—
|
86
|
|
UBS
AG |
630
|
—
|
— |
(610
) |
20
|
|
Total |
$1,057 |
$
(63
) |
$ — |
$
(804
) |
$190
|
|
Undistributed
ordinary income |
$601,320 |
|
Undistributed
long-term capital gains |
1,658,196 |
|
Gross
unrealized appreciation on investments |
18,798,865 |
|
Gross
unrealized depreciation on investments |
(2,499,495
) |
|
Net
unrealized appreciation (depreciation) on
investments |
16,299,370 |
|
Cost
of investments |
46,163,115 |
|
26 |
New
World Fund |
|
|
Year ended October 31,
2024 |
Year ended October 31,
2023 | ||||
|
Share
class |
Ordinary
income |
Long-term
capital
gains |
Total
distributions
paid |
Ordinary
income |
Long-term
capital
gains |
Total
distributions
paid |
|
Class
A |
$155,865 |
$153,467 |
$309,332 |
$104,575 |
$— |
$104,575 |
|
Class
C |
1,498 |
3,975 |
5,473 |
52 |
— |
52 |
|
Class
T |
—
* |
—
* |
—
* |
—
* |
— |
—
* |
|
Class
F-1 |
11,113 |
10,844 |
21,957 |
7,789 |
— |
7,789 |
|
Class
F-2 |
249,174 |
195,534 |
444,708 |
175,025 |
— |
175,025 |
|
Class
F-3 |
123,391 |
90,678 |
214,069 |
86,351 |
— |
86,351 |
|
Class
529-A |
11,029 |
11,056 |
22,085 |
7,437 |
— |
7,437 |
|
Class
529-C |
72 |
264 |
336 |
— |
— |
— |
|
Class
529-E |
324 |
387 |
711 |
199 |
— |
199 |
|
Class
529-T |
—
* |
—
* |
—
* |
—
* |
— |
—
* |
|
Class
529-F-1 |
—
* |
—
* |
—
* |
—
* |
— |
—
* |
|
Class
529-F-2 |
1,929 |
1,508 |
3,437 |
1,318 |
— |
1,318 |
|
Class
529-F-3 |
—
* |
—
* |
—
* |
—
* |
— |
—
* |
|
Class
R-1 |
148 |
288 |
436 |
54 |
— |
54 |
|
Class
R-2 |
1,640 |
3,191 |
4,831 |
443 |
— |
443 |
|
Class
R-2E |
349 |
456 |
805 |
145 |
— |
145 |
|
Class
R-3 |
5,087 |
5,911 |
10,998 |
2,737 |
— |
2,737 |
|
Class
R-4 |
9,772 |
9,062 |
18,834 |
6,910 |
— |
6,910 |
|
Class
R-5E |
1,507 |
1,213 |
2,720 |
948 |
— |
948 |
|
Class
R-5 |
4,872 |
3,692 |
8,564 |
3,412 |
— |
3,412 |
|
Class
R-6 |
198,476 |
145,681 |
344,157 |
119,059 |
— |
119,059 |
|
Total |
$776,246 |
$637,207 |
$1,413,453 |
$516,454 |
$— |
$516,454 |
|
New
World Fund |
27 |
|
Share
class |
Currently approved
limits |
Plan
limits |
|
Class
A |
0.30
% |
0.30
% |
|
Class
529-A |
0.30 |
0.50 |
|
Classes
C, 529-C and R-1 |
1.00 |
1.00 |
|
Class
R-2 |
0.75 |
1.00 |
|
Class
R-2E |
0.60 |
0.85 |
|
Classes
529-E and R-3 |
0.50 |
0.75 |
|
Classes
T, F-1, 529-T, 529-F-1 and R-4 |
0.25 |
0.50 |
|
28 |
New
World Fund |
|
Share
class |
Distribution
services |
Transfer agent
services |
Administrative
services |
529 plan
services |
|
Class
A |
$31,426 |
$21,721 |
$3,890 |
Not
applicable |
|
Class
C |
2,959 |
501 |
90 |
Not
applicable |
|
Class
T |
— |
—
* |
—
* |
Not
applicable |
|
Class
F-1 |
2,173 |
1,320 |
263 |
Not
applicable |
|
Class
F-2 |
Not
applicable |
18,601 |
5,135 |
Not
applicable |
|
Class
F-3 |
Not
applicable |
144 |
2,387 |
Not
applicable |
|
Class
529-A |
2,052 |
1,450 |
276 |
$518 |
|
Class
529-C |
191 |
31 |
6 |
11 |
|
Class
529-E |
155 |
24 |
9 |
18 |
|
Class
529-T |
— |
—
* |
—
* |
—
* |
|
Class
529-F-1 |
— |
—
* |
—
* |
—
* |
|
Class
529-F-2 |
Not
applicable |
89 |
40 |
74 |
|
Class
529-F-3 |
Not
applicable |
—
* |
—
* |
—
* |
|
Class
R-1 |
225 |
23 |
7 |
Not
applicable |
|
Class
R-2 |
1,908 |
880 |
76 |
Not
applicable |
|
Class
R-2E |
239 |
81 |
12 |
Not
applicable |
|
Class
R-3 |
2,466 |
738 |
149 |
Not
applicable |
|
Class
R-4 |
1,953 |
782 |
234 |
Not
applicable |
|
Class
R-5E |
Not
applicable |
162 |
32 |
Not
applicable |
|
Class
R-5 |
Not
applicable |
162 |
92 |
Not
applicable |
|
Class
R-6 |
Not
applicable |
269 |
4,577 |
Not
applicable |
|
|
|
|
|
|
|
Total
class-specific expenses |
$45,747 |
$46,978 |
$17,275 |
$621 |
|
New
World Fund |
29 |
|
|
Sales* |
Reinvestments of
distributions |
Repurchases* |
Net increase
(decrease) | ||||
|
Share
class |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
|
Year
ended October 31, 2024 | ||||||||
|
Class
A |
$543,291 |
6,972 |
$304,076 |
4,130 |
$(1,729,780
) |
(22,140
) |
$(882,413
) |
(11,038
) |
|
Class
C |
24,549 |
332 |
5,456 |
78 |
(99,859
) |
(1,347
) |
(69,854
) |
(937
) |
|
Class
T |
— |
— |
— |
— |
— |
— |
— |
— |
|
Class
F-1 |
100,351 |
1,306 |
21,533 |
295 |
(252,981
) |
(3,288
) |
(131,097
) |
(1,687
) |
|
Class
F-2 |
3,534,926 |
45,388 |
432,550 |
5,898 |
(3,452,700
) |
(44,379
) |
514,776 |
6,907 |
|
Class
F-3 |
1,716,110 |
21,899 |
208,841 |
2,838 |
(1,659,877
) |
(21,275
) |
265,074 |
3,462 |
|
Class
529-A |
64,287 |
834 |
22,074 |
303 |
(156,481
) |
(2,027
) |
(70,120
) |
(890
) |
|
Class
529-C |
3,850 |
52 |
335 |
5 |
(10,351
) |
(140
) |
(6,166
) |
(83
) |
|
Class
529-E |
1,752 |
23 |
709 |
10 |
(5,938
) |
(78
) |
(3,477
) |
(45
) |
|
Class
529-T |
— |
— |
—
† |
—
† |
— |
— |
—
† |
—
† |
|
Class
529-F-1 |
— |
— |
—
† |
—
† |
— |
— |
—
† |
—
† |
|
Class
529-F-2 |
23,062 |
296 |
3,437 |
47 |
(25,515
) |
(325
) |
984 |
18 |
|
Class
529-F-3 |
— |
— |
—
† |
—
† |
— |
— |
—
† |
—
† |
|
Class
R-1 |
3,613 |
49 |
434 |
6 |
(6,533
) |
(88
) |
(2,486
) |
(33
) |
|
Class
R-2 |
38,017 |
511 |
4,827 |
69 |
(65,232
) |
(869
) |
(22,388
) |
(289
) |
|
Class
R-2E |
11,066 |
144 |
805 |
11 |
(10,340
) |
(134
) |
1,531 |
21 |
|
Class
R-3 |
94,043 |
1,222 |
10,949 |
151 |
(127,011
) |
(1,651
) |
(22,019
) |
(278
) |
|
Class
R-4 |
150,827 |
1,953 |
18,847 |
258 |
(185,935
) |
(2,383
) |
(16,261
) |
(172
) |
|
Class
R-5E |
30,222 |
390 |
2,719 |
37 |
(24,249
) |
(317
) |
8,692 |
110 |
|
Class
R-5 |
58,235 |
744 |
8,530 |
115 |
(100,623
) |
(1,286
) |
(33,858
) |
(427
) |
|
Class
R-6 |
6,900,469 |
88,443 |
343,204 |
4,667 |
(2,051,150
) |
(25,962
) |
5,192,523 |
67,148 |
|
Total
net increase
(decrease) |
$13,298,670 |
170,558 |
$1,389,326 |
18,918 |
$(9,964,555
) |
(127,689
) |
$4,723,441 |
61,787 |
|
30 |
New
World Fund |
|
|
Sales* |
Reinvestments of
distributions |
Repurchases* |
Net increase
(decrease) | ||||
|
Share
class |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
|
Year
ended October 31, 2023 | ||||||||
|
Class
A |
$631,333 |
8,926 |
$102,574 |
1,538 |
$(1,519,189
) |
(21,687
) |
$(785,282
) |
(11,223
) |
|
Class
C |
31,222 |
465 |
52 |
1 |
(108,462
) |
(1,614
) |
(77,188
) |
(1,148
) |
|
Class
T |
— |
— |
— |
— |
— |
— |
— |
— |
|
Class
F-1 |
152,688 |
2,183 |
7,654 |
116 |
(272,474
) |
(3,873
) |
(112,132
) |
(1,574
) |
|
Class
F-2 |
3,845,710 |
54,513 |
170,371 |
2,565 |
(5,071,724
) |
(73,006
) |
(1,055,643
) |
(15,928
) |
|
Class
F-3 |
2,161,759 |
31,362 |
84,079 |
1,262 |
(1,659,464
) |
(23,575
) |
586,374 |
9,049 |
|
Class
529-A |
64,013 |
914 |
7,435 |
112 |
(131,886
) |
(1,871
) |
(60,438
) |
(845
) |
|
Class
529-C |
4,192 |
62 |
— |
— |
(11,646
) |
(173
) |
(7,454
) |
(111
) |
|
Class
529-E |
2,096 |
30 |
199 |
3 |
(5,083
) |
(72
) |
(2,788
) |
(39
) |
|
Class
529-T |
— |
— |
—
† |
—
† |
— |
— |
—
† |
—
† |
|
Class
529-F-1 |
— |
— |
—
† |
—
† |
— |
— |
—
† |
—
† |
|
Class
529-F-2 |
20,298 |
288 |
1,318 |
20 |
(22,025
) |
(309
) |
(409
) |
(1
) |
|
Class
529-F-3 |
— |
— |
—
† |
—
† |
— |
— |
—
† |
—
† |
|
Class
R-1 |
3,028 |
44 |
53 |
1 |
(4,706
) |
(69
) |
(1,625
) |
(24
) |
|
Class
R-2 |
43,960 |
652 |
443 |
7 |
(62,502
) |
(929
) |
(18,099
) |
(270
) |
|
Class
R-2E |
10,168 |
146 |
145 |
2 |
(7,184
) |
(105
) |
3,129 |
43 |
|
Class
R-3 |
92,088 |
1,320 |
2,720 |
41 |
(113,835
) |
(1,642
) |
(19,027
) |
(281
) |
|
Class
R-4 |
132,199 |
1,876 |
6,909 |
104 |
(203,059
) |
(2,886
) |
(63,951
) |
(906
) |
|
Class
R-5E |
30,437 |
440 |
948 |
15 |
(21,427
) |
(306
) |
9,958 |
149 |
|
Class
R-5 |
77,282 |
1,087 |
3,398 |
51 |
(76,953
) |
(1,076
) |
3,727 |
62 |
|
Class
R-6 |
2,593,043 |
36,396 |
118,331 |
1,776 |
(1,038,503
) |
(14,728
) |
1,672,871 |
23,444 |
|
Total
net increase
(decrease) |
$9,895,516 |
140,704 |
$506,629 |
7,614 |
$(10,330,122
) |
(147,921
) |
$72,023 |
397 |
|
New
World Fund |
31 |
|
|
|
Income (loss) from
investment operations1 |
Dividends and
distributions |
|
|
|
|
|
| ||||
|
Year
ended
|
Net asset
value,
beginning
of
year |
Net
investment
income
(loss) |
Net gains
(losses) on
securities
(both
realized and
unrealized) |
Total from
investment
operations |
Dividends
(from net
investment
income) |
Distributions
(from capital
gains) |
Total
dividends
and
distributions |
Net asset
value,
end
of
year |
Total
return2,3
|
Net assets,
end of
year
(in
millions)
|
Ratio of
expenses to
average net
assets before
reimburse-
ments4
|
Ratio of
expenses to
average net
assets after
reimburse-
ments3,4
|
Ratio of
net income
(loss) to
average
net
assets3
|
|
| |||||||||||||
|
Class
A:
| |||||||||||||
|
10/31/2024 |
$68.46 |
$.96 |
$14.47 |
$15.43 |
$(.93
) |
$(.91
) |
$(1.84
) |
$82.05 |
22.85
% |
$13,012 |
.98
% |
.98
% |
1.23
% |
|
10/31/2023 |
62.50 |
.83 |
5.72 |
6.55 |
(.59
) |
— |
(.59
) |
68.46 |
10.50 |
11,612 |
1.00 |
1.00 |
1.17 |
|
10/31/2022 |
93.89 |
.69 |
(26.15
) |
(25.46
) |
(.37
) |
(5.56
) |
(5.93
) |
62.50 |
(28.73
) |
11,303 |
.96 |
.96 |
.93 |
|
10/31/2021 |
73.88 |
.38 |
19.72 |
20.10 |
(.09
) |
— |
(.09
) |
93.89 |
27.20 |
17,043 |
.96 |
.96 |
.42 |
|
10/31/2020 |
69.13 |
.27 |
7.06 |
7.33 |
(.74
) |
(1.84
) |
(2.58
) |
73.88 |
10.78 |
13,341 |
1.00 |
1.00 |
.40 |
|
Class
C:
| |||||||||||||
|
10/31/2024 |
64.99 |
.36 |
13.76 |
14.12 |
(.34
) |
(.91
) |
(1.25
) |
77.86 |
21.94 |
278 |
1.72 |
1.72 |
.48 |
|
10/31/2023 |
59.27 |
.28 |
5.45 |
5.73 |
(.01
) |
— |
(.01
) |
64.99 |
9.67 |
293 |
1.75 |
1.75 |
.41 |
|
10/31/2022 |
89.61 |
.11 |
(24.89
) |
(24.78
) |
— |
(5.56
) |
(5.56
) |
59.27 |
(29.28
) |
335 |
1.72 |
1.72 |
.15 |
|
10/31/2021 |
70.96 |
(.29
) |
18.94 |
18.65 |
— |
— |
— |
89.61 |
26.26 |
598 |
1.70 |
1.70 |
(.33
) |
|
10/31/2020 |
66.46 |
(.22
) |
6.75 |
6.53 |
(.19
) |
(1.84
) |
(2.03
) |
70.96 |
9.98 |
533 |
1.74 |
1.74 |
(.33
) |
|
Class
T:
| |||||||||||||
|
10/31/2024 |
68.42 |
1.14 |
14.45 |
15.59 |
(1.14
) |
(.91
) |
(2.05
) |
81.96 |
23.15
5 |
—
6 |
.69
5 |
.69
5 |
1.46
5 |
|
10/31/2023 |
62.49 |
1.01 |
5.71 |
6.72 |
(.79
) |
— |
(.79
) |
68.42 |
10.79
5 |
—
6 |
.72
5 |
.72
5 |
1.42
5 |
|
10/31/2022 |
93.87 |
.87 |
(26.11
) |
(25.24
) |
(.58
) |
(5.56
) |
(6.14
) |
62.49 |
(28.56
)5 |
—
6 |
.71
5 |
.71
5 |
1.18
5 |
|
10/31/2021 |
73.86 |
.58 |
19.69 |
20.27 |
(.26
) |
— |
(.26
) |
93.87 |
27.47
5 |
—
6 |
.74
5 |
.74
5 |
.63
5 |
|
10/31/2020 |
69.12 |
.43 |
7.05 |
7.48 |
(.90
) |
(1.84
) |
(2.74
) |
73.86 |
11.05
5 |
—
6 |
.76
5 |
.76
5 |
.62
5 |
|
Class
F-1:
| |||||||||||||
|
10/31/2024 |
67.99 |
.96 |
14.38 |
15.34 |
(.94
) |
(.91
) |
(1.85
) |
81.48 |
22.87 |
855 |
.97 |
.97 |
1.24 |
|
10/31/2023 |
62.05 |
.85 |
5.67 |
6.52 |
(.58
) |
— |
(.58
) |
67.99 |
10.53 |
828 |
.96 |
.96 |
1.21 |
|
10/31/2022 |
93.27 |
.67 |
(25.95
) |
(25.28
) |
(.38
) |
(5.56
) |
(5.94
) |
62.05 |
(28.74
) |
854 |
.96 |
.96 |
.91 |
|
10/31/2021 |
73.39 |
.39 |
19.58 |
19.97 |
(.09
) |
— |
(.09
) |
93.27 |
27.22 |
1,418 |
.95 |
.95 |
.43 |
|
10/31/2020 |
68.68 |
.29 |
7.01 |
7.30 |
(.75
) |
(1.84
) |
(2.59
) |
73.39 |
10.83 |
1,097 |
.98 |
.98 |
.43 |
|
Class
F-2:
| |||||||||||||
|
10/31/2024 |
68.39 |
1.19 |
14.44 |
15.63 |
(1.16
) |
(.91
) |
(2.07
) |
81.95 |
23.20 |
18,086 |
.68 |
.68 |
1.53 |
|
10/31/2023 |
62.44 |
1.05 |
5.70 |
6.75 |
(.80
) |
— |
(.80
) |
68.39 |
10.85 |
14,620 |
.68 |
.68 |
1.48 |
|
10/31/2022 |
93.83 |
.90 |
(26.09
) |
(25.19
) |
(.64
) |
(5.56
) |
(6.20
) |
62.44 |
(28.52
) |
14,343 |
.68 |
.68 |
1.22 |
|
10/31/2021 |
73.81 |
.65 |
19.68 |
20.33 |
(.31
) |
— |
(.31
) |
93.83 |
27.55 |
20,219 |
.67 |
.67 |
.72 |
|
10/31/2020 |
69.06 |
.48 |
7.05 |
7.53 |
(.94
) |
(1.84
) |
(2.78
) |
73.81 |
11.14 |
14,085 |
.70 |
.70 |
.70 |
|
Class
F-3:
| |||||||||||||
|
10/31/2024 |
68.67 |
1.28 |
14.49 |
15.77 |
(1.24
) |
(.91
) |
(2.15
) |
82.29 |
23.34 |
8,466 |
.57 |
.57 |
1.63 |
|
10/31/2023 |
62.70 |
1.13 |
5.73 |
6.86 |
(.89
) |
— |
(.89
) |
68.67 |
10.98 |
6,827 |
.58 |
.58 |
1.59 |
|
10/31/2022 |
94.20 |
.99 |
(26.19
) |
(25.20
) |
(.74
) |
(5.56
) |
(6.30
) |
62.70 |
(28.45
) |
5,666 |
.57 |
.57 |
1.34 |
|
10/31/2021 |
74.08 |
.76 |
19.74 |
20.50 |
(.38
) |
— |
(.38
) |
94.20 |
27.70 |
7,473 |
.57 |
.57 |
.83 |
|
10/31/2020 |
69.30 |
.55 |
7.08 |
7.63 |
(1.01
) |
(1.84
) |
(2.85
) |
74.08 |
11.25 |
4,850 |
.60 |
.60 |
.81 |
|
Class
529-A:
| |||||||||||||
|
10/31/2024 |
67.75 |
.93 |
14.32 |
15.25 |
(.91
) |
(.91
) |
(1.82
) |
81.18 |
22.81 |
918 |
1.00 |
1.00 |
1.20 |
|
10/31/2023 |
61.86 |
.80 |
5.66 |
6.46 |
(.57
) |
— |
(.57
) |
67.75 |
10.48 |
826 |
1.02 |
1.02 |
1.14 |
|
10/31/2022 |
93.01 |
.66 |
(25.89
) |
(25.23
) |
(.36
) |
(5.56
) |
(5.92
) |
61.86 |
(28.76
) |
807 |
.99 |
.99 |
.90 |
|
10/31/2021 |
73.19 |
.36 |
19.54 |
19.90 |
(.08
) |
— |
(.08
) |
93.01 |
27.17 |
1,205 |
.97 |
.97 |
.40 |
|
10/31/2020 |
68.50 |
.25 |
6.99 |
7.24 |
(.71
) |
(1.84
) |
(2.55
) |
73.19 |
10.77 |
971 |
1.02 |
1.02 |
.37 |
|
32 |
New
World Fund |
|
|
|
Income (loss) from
investment operations1 |
Dividends and
distributions |
|
|
|
|
|
| ||||
|
Year
ended |
Net
asset
value,
beginning
of
year |
Net
investment
income
(loss) |
Net
gains
(losses)
on
securities
(both
realized
and
unrealized) |
Total
from
investment
operations |
Dividends
(from
net
investment
income) |
Distributions
(from
capital
gains) |
Total
dividends
and
distributions |
Net
asset
value,
end
of
year |
Total
return2,3 |
Net
assets,
end of
year
(in millions)
|
Ratio
of
expenses
to
average
net
assets
before
reimburse-
ments4 |
Ratio
of
expenses
to
average
net
assets
after
reimburse-
ments3,4 |
Ratio
of
net
income
(loss)
to
average
net
assets3 |
|
Class
529-C:
| |||||||||||||
|
10/31/2024 |
$65.08 |
$.34 |
$13.79 |
$14.13 |
$(.25
) |
$(.91
) |
$(1.16
) |
$78.05 |
21.91
% |
$18 |
1.75
% |
1.75
% |
.45
% |
|
10/31/2023 |
59.37 |
.24 |
5.47 |
5.71 |
— |
— |
— |
65.08 |
9.62 |
20 |
1.80 |
1.80 |
.36 |
|
10/31/2022 |
89.80 |
.07 |
(24.94
) |
(24.87
) |
— |
(5.56
) |
(5.56
) |
59.37 |
(29.31
) |
25 |
1.77 |
1.77 |
.09 |
|
10/31/2021 |
71.13 |
(.33
) |
19.00 |
18.67 |
— |
— |
— |
89.80 |
26.23 |
46 |
1.73 |
1.73 |
(.38
) |
|
10/31/2020 |
66.62 |
(.21
) |
6.73 |
6.52 |
(.17
) |
(1.84
) |
(2.01
) |
71.13 |
9.93 |
47 |
1.78 |
1.78 |
(.32
) |
|
Class
529-E:
| |||||||||||||
|
10/31/2024 |
67.09 |
.78 |
14.19 |
14.97 |
(.77
) |
(.91
) |
(1.68
) |
80.38 |
22.57 |
31 |
1.19 |
1.19 |
1.01 |
|
10/31/2023 |
61.25 |
.66 |
5.61 |
6.27 |
(.43
) |
— |
(.43
) |
67.09 |
10.27 |
29 |
1.21 |
1.21 |
.95 |
|
10/31/2022 |
92.11 |
.51 |
(25.66
) |
(25.15
) |
(.15
) |
(5.56
) |
(5.71
) |
61.25 |
(28.90
) |
29 |
1.19 |
1.19 |
.70 |
|
10/31/2021 |
72.57 |
.17 |
19.37 |
19.54 |
— |
— |
— |
92.11 |
26.93 |
45 |
1.18 |
1.18 |
.19 |
|
10/31/2020 |
67.94 |
.13 |
6.92 |
7.05 |
(.58
) |
(1.84
) |
(2.42
) |
72.57 |
10.55 |
38 |
1.22 |
1.22 |
.19 |
|
Class
529-T:
| |||||||||||||
|
10/31/2024 |
68.40 |
1.10 |
14.45 |
15.55 |
(1.12
) |
(.91
) |
(2.03
) |
81.92 |
23.08
5 |
—
6 |
.78
5 |
.78
5 |
1.41
5 |
|
10/31/2023 |
62.47 |
.98 |
5.70 |
6.68 |
(.75
) |
— |
(.75
) |
68.40 |
10.74
5 |
—
6 |
.75
5 |
.75
5 |
1.39
5 |
|
10/31/2022 |
93.83 |
.84 |
(26.10
) |
(25.26
) |
(.54
) |
(5.56
) |
(6.10
) |
62.47 |
(28.58
)5 |
—
6 |
.75
5 |
.75
5 |
1.14
5 |
|
10/31/2021 |
73.84 |
.53 |
19.69 |
20.22 |
(.23
) |
— |
(.23
) |
93.83 |
27.43
5 |
—
6 |
.78
5 |
.78
5 |
.59
5 |
|
10/31/2020 |
69.10 |
.40 |
7.06 |
7.46 |
(.88
) |
(1.84
) |
(2.72
) |
73.84 |
11.00
5 |
—
6 |
.79
5 |
.79
5 |
.59
5 |
|
Class
529-F-1:
| |||||||||||||
|
10/31/2024 |
67.61 |
1.06 |
14.28 |
15.34 |
(1.09
) |
(.91
) |
(2.00
) |
80.95 |
23.04
5 |
—
6 |
.78
5 |
.78
5 |
1.37
5 |
|
10/31/2023 |
61.77 |
.93 |
5.65 |
6.58 |
(.74
) |
— |
(.74
) |
67.61 |
10.68
5 |
—
6 |
.79
5 |
.79
5 |
1.33
5 |
|
10/31/2022 |
92.91 |
.81 |
(25.82
) |
(25.01
) |
(.57
) |
(5.56
) |
(6.13
) |
61.77 |
(28.60
)5 |
—
6 |
.78
5 |
.78
5 |
1.11
5 |
|
10/31/2021 |
73.20 |
.55 |
19.53 |
20.08 |
(.37
) |
— |
(.37
) |
92.91 |
27.44
5 |
—
6 |
.75
5 |
.75
5 |
.60
5 |
|
10/31/2020 |
68.51 |
.41 |
6.98 |
7.39 |
(.86
) |
(1.84
) |
(2.70
) |
73.20 |
11.01
5 |
—
6 |
.80
5 |
.80
5 |
.60
5 |
|
Class
529-F-2:
| |||||||||||||
|
10/31/2024 |
68.49 |
1.19 |
14.46 |
15.65 |
(1.17
) |
(.91
) |
(2.08
) |
82.06 |
23.21 |
137 |
.69 |
.69 |
1.52 |
|
10/31/2023 |
62.53 |
1.05 |
5.71 |
6.76 |
(.80
) |
— |
(.80
) |
68.49 |
10.85 |
113 |
.68 |
.68 |
1.49 |
|
10/31/2022 |
93.92 |
.90 |
(26.14
) |
(25.24
) |
(.59
) |
(5.56
) |
(6.15
) |
62.53 |
(28.54
) |
103 |
.69 |
.69 |
1.21 |
|
10/31/2021 |
73.88 |
.59 |
19.69 |
20.28 |
(.24
) |
— |
(.24
) |
93.92 |
27.48 |
138 |
.74 |
.74 |
.65 |
|
10/31/20207,8
|
73.88 |
— |
— |
— |
— |
— |
— |
73.88 |
— |
97 |
— |
— |
— |
|
Class
529-F-3:
| |||||||||||||
|
10/31/2024 |
68.35 |
1.19 |
14.43 |
15.62 |
(1.19
) |
(.91
) |
(2.10
) |
81.87 |
23.22 |
—
6 |
.63 |
.63 |
1.52 |
|
10/31/2023 |
62.44 |
1.04 |
5.71 |
6.75 |
(.84
) |
— |
(.84
) |
68.35 |
10.84 |
—
6 |
.65 |
.65 |
1.48 |
|
10/31/2022 |
93.84 |
.92 |
(26.08
) |
(25.16
) |
(.68
) |
(5.56
) |
(6.24
) |
62.44 |
(28.50
) |
—
6 |
.64 |
.64 |
1.25 |
|
10/31/2021 |
73.88 |
.67 |
19.68 |
20.35 |
(.39
) |
— |
(.39
) |
93.84 |
27.58 |
—
6 |
.67 |
.62 |
.73 |
|
10/31/20207,8
|
73.88 |
— |
— |
— |
— |
— |
— |
73.88 |
— |
—
6 |
— |
— |
— |
|
Class
R-1:
| |||||||||||||
|
10/31/2024 |
65.13 |
.41 |
13.78 |
14.19 |
(.47
) |
(.91
) |
(1.38
) |
77.94 |
22.02 |
22 |
1.66 |
1.66 |
.55 |
|
10/31/2023 |
59.48 |
.33 |
5.48 |
5.81 |
(.16
) |
— |
(.16
) |
65.13 |
9.77 |
21 |
1.67 |
1.67 |
.49 |
|
10/31/2022 |
89.83 |
.19 |
(24.98
) |
(24.79
) |
— |
(5.56
) |
(5.56
) |
59.48 |
(29.21
) |
21 |
1.63 |
1.63 |
.26 |
|
10/31/2021 |
71.14 |
(.28
) |
18.97 |
18.69 |
— |
— |
— |
89.83 |
26.26 |
29 |
1.70 |
1.70 |
(.32
) |
|
10/31/2020 |
66.65 |
(.24
) |
6.78 |
6.54 |
(.21
) |
(1.84
) |
(2.05
) |
71.14 |
9.96 |
24 |
1.77 |
1.77 |
(.37
) |
|
New
World Fund |
33 |
|
|
|
Income (loss) from
investment operations1 |
Dividends and
distributions |
|
|
|
|
|
| ||||
|
Year
ended |
Net
asset
value,
beginning
of
year |
Net
investment
income
(loss) |
Net
gains
(losses)
on
securities
(both
realized
and
unrealized) |
Total
from
investment
operations |
Dividends
(from
net
investment
income) |
Distributions
(from
capital
gains) |
Total
dividends
and
distributions |
Net
asset
value,
end
of
year |
Total
return2,3 |
Net
assets,
end of
year
(in millions)
|
Ratio
of
expenses
to
average
net
assets
before
reimburse-
ments4 |
Ratio
of
expenses
to
average
net
assets
after
reimburse-
ments3,4 |
Ratio
of
net
income
(loss)
to
average
net
assets3 |
|
Class
R-2:
| |||||||||||||
|
10/31/2024 |
$65.16 |
$.41 |
$13.78 |
$14.19 |
$(.47
) |
$(.91
) |
$(1.38
) |
$77.97 |
22.01
% |
$250 |
1.66
% |
1.66
% |
.54
% |
|
10/31/2023 |
59.47 |
.33 |
5.48 |
5.81 |
(.12
) |
— |
(.12
) |
65.16 |
9.77 |
228 |
1.67 |
1.67 |
.49 |
|
10/31/2022 |
89.85 |
.15 |
(24.97
) |
(24.82
) |
— |
(5.56
) |
(5.56
) |
59.47 |
(29.24
) |
224 |
1.67 |
1.67 |
.21 |
|
10/31/2021 |
71.13 |
(.26
) |
18.98 |
18.72 |
— |
— |
— |
89.85 |
26.30 |
341 |
1.66 |
1.66 |
(.29
) |
|
10/31/2020 |
66.67 |
(.20
) |
6.78 |
6.58 |
(.28
) |
(1.84
) |
(2.12
) |
71.13 |
10.03 |
293 |
1.70 |
1.70 |
(.30
) |
|
Class
R-2E:
| |||||||||||||
|
10/31/2024 |
67.07 |
.64 |
14.18 |
14.82 |
(.70
) |
(.91
) |
(1.61
) |
80.28 |
22.37 |
42 |
1.37 |
1.37 |
.83 |
|
10/31/2023 |
61.22 |
.55 |
5.61 |
6.16 |
(.31
) |
— |
(.31
) |
67.07 |
10.08 |
34 |
1.38 |
1.38 |
.79 |
|
10/31/2022 |
92.06 |
.37 |
(25.65
) |
(25.28
) |
— |
(5.56
) |
(5.56
) |
61.22 |
(29.03
) |
28 |
1.38 |
1.38 |
.51 |
|
10/31/2021 |
72.67 |
—
9 |
19.39 |
19.39 |
— |
— |
— |
92.06 |
26.67 |
42 |
1.37 |
1.37 |
—
10 |
|
10/31/2020 |
68.10 |
—
9 |
6.92 |
6.92 |
(.51
) |
(1.84
) |
(2.35
) |
72.67 |
10.34 |
35 |
1.41 |
1.41 |
(.01
) |
|
Class
R-3:
| |||||||||||||
|
10/31/2024 |
67.20 |
.76 |
14.21 |
14.97 |
(.79
) |
(.91
) |
(1.70
) |
80.47 |
22.56 |
502 |
1.21 |
1.21 |
.99 |
|
10/31/2023 |
61.34 |
.65 |
5.62 |
6.27 |
(.41
) |
— |
(.41
) |
67.20 |
10.26 |
438 |
1.22 |
1.22 |
.94 |
|
10/31/2022 |
92.20 |
.48 |
(25.67
) |
(25.19
) |
(.11
) |
(5.56
) |
(5.67
) |
61.34 |
(28.92
) |
417 |
1.22 |
1.22 |
.66 |
|
10/31/2021 |
72.67 |
.13 |
19.40 |
19.53 |
— |
— |
— |
92.20 |
26.86 |
644 |
1.22 |
1.22 |
.15 |
|
10/31/2020 |
68.03 |
.10 |
6.93 |
7.03 |
(.55
) |
(1.84
) |
(2.39
) |
72.67 |
10.51 |
563 |
1.26 |
1.26 |
.14 |
|
Class
R-4:
| |||||||||||||
|
10/31/2024 |
68.03 |
1.00 |
14.38 |
15.38 |
(.99
) |
(.91
) |
(1.90
) |
81.51 |
22.93 |
796 |
.92 |
.92 |
1.29 |
|
10/31/2023 |
62.11 |
.87 |
5.69 |
6.56 |
(.64
) |
— |
(.64
) |
68.03 |
10.58 |
676 |
.93 |
.93 |
1.23 |
|
10/31/2022 |
93.33 |
.72 |
(25.99
) |
(25.27
) |
(.39
) |
(5.56
) |
(5.95
) |
62.11 |
(28.70
) |
673 |
.92 |
.92 |
.98 |
|
10/31/2021 |
73.44 |
.42 |
19.59 |
20.01 |
(.12
) |
— |
(.12
) |
93.33 |
27.26 |
989 |
.92 |
.92 |
.46 |
|
10/31/2020 |
68.72 |
.31 |
7.01 |
7.32 |
(.76
) |
(1.84
) |
(2.60
) |
73.44 |
10.87 |
759 |
.94 |
.94 |
.46 |
|
Class
R-5E:
| |||||||||||||
|
10/31/2024 |
67.77 |
1.15 |
14.31 |
15.46 |
(1.14
) |
(.91
) |
(2.05
) |
81.18 |
23.17 |
118 |
.72 |
.72 |
1.48 |
|
10/31/2023 |
61.88 |
1.02 |
5.65 |
6.67 |
(.78
) |
— |
(.78
) |
67.77 |
10.80 |
91 |
.73 |
.73 |
1.45 |
|
10/31/2022 |
93.07 |
.85 |
(25.86
) |
(25.01
) |
(.62
) |
(5.56
) |
(6.18
) |
61.88 |
(28.57
) |
74 |
.72 |
.72 |
1.16 |
|
10/31/2021 |
73.23 |
.63 |
19.50 |
20.13 |
(.29
) |
— |
(.29
) |
93.07 |
27.52 |
102 |
.71 |
.71 |
.70 |
|
10/31/2020 |
68.56 |
.44 |
7.01 |
7.45 |
(.94
) |
(1.84
) |
(2.78
) |
73.23 |
11.08 |
57 |
.74 |
.74 |
.66 |
|
Class
R-5:
| |||||||||||||
|
10/31/2024 |
68.83 |
1.24 |
14.55 |
15.79 |
(1.21
) |
(.91
) |
(2.12
) |
82.50 |
23.29 |
298 |
.62 |
.62 |
1.58 |
|
10/31/2023 |
62.85 |
1.10 |
5.73 |
6.83 |
(.85
) |
— |
(.85
) |
68.83 |
10.90 |
278 |
.63 |
.63 |
1.54 |
|
10/31/2022 |
94.40 |
.95 |
(26.25
) |
(25.30
) |
(.69
) |
(5.56
) |
(6.25
) |
62.85 |
(28.48
) |
250 |
.62 |
.62 |
1.28 |
|
10/31/2021 |
74.24 |
.70 |
19.81 |
20.51 |
(.35
) |
— |
(.35
) |
94.40 |
27.64 |
378 |
.62 |
.62 |
.76 |
|
10/31/2020 |
69.43 |
.52 |
7.09 |
7.61 |
(.96
) |
(1.84
) |
(2.80
) |
74.24 |
11.20 |
304 |
.64 |
.64 |
.76 |
|
Class
R-6:
| |||||||||||||
|
10/31/2024 |
68.63 |
1.28 |
14.49 |
15.77 |
(1.25
) |
(.91
) |
(2.16
) |
82.24 |
23.35 |
18,465 |
.57 |
.57 |
1.63 |
|
10/31/2023 |
62.67 |
1.13 |
5.72 |
6.85 |
(.89
) |
— |
(.89
) |
68.63 |
10.97 |
10,801 |
.58 |
.58 |
1.59 |
|
10/31/2022 |
94.15 |
.99 |
(26.17
) |
(25.18
) |
(.74
) |
(5.56
) |
(6.30
) |
62.67 |
(28.45
) |
8,393 |
.57 |
.57 |
1.34 |
|
10/31/2021 |
74.05 |
.73 |
19.75 |
20.48 |
(.38
) |
— |
(.38
) |
94.15 |
27.70 |
10,326 |
.57 |
.57 |
.80 |
|
10/31/2020 |
69.27 |
.56 |
7.07 |
7.63 |
(1.01
) |
(1.84
) |
(2.85
) |
74.05 |
11.26 |
8,255 |
.59 |
.59 |
.82 |
|
34 |
New
World Fund |
|
|
Year ended October
31, | ||||
|
2024 |
2023 |
2022 |
2021 |
2020 | |
|
Portfolio
turnover rate for all share classes11 |
37
% |
32
% |
39
% |
32
% |
40
% |
|
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 reimbursements from CRMC.
During one of the years shown, CRMC reimbursed a portion of transfer agent
services
fees for Class 529-F-3 shares. |
|
4 |
Ratios
do not include expenses of any Central Funds. The fund indirectly bears
its proportionate share of the expenses of any Central
Funds. |
|
5 |
All
or a significant portion of assets in this class consisted of seed capital
invested by CRMC and/or its affiliates. Fees for distribution services are
not charged or
accrued
on these seed capital assets. If such fees were paid by the fund on seed
capital assets, fund expenses would have been higher and net income and
total
return
would have been lower.
|
|
6 |
Amount
less than $1 million. |
|
7 |
Based
on operations for a period that is less than a full
year. |
|
8 |
Class
529-F-2 and 529-F-3 shares began investment operations on October 30,
2020. |
|
9 |
Amount
less than $.01. |
|
10 |
Amount
less than .01%. |
|
11 |
Rates do not include the fund’s portfolio activity with respect to any Central Funds. |
|
New
World Fund |
35 |
|
36 |
New
World Fund |