American Funds® Multi-Sector Income Fund

Part B
Statement of Additional Information

March 1, 2023

This document is not a prospectus but should be read in conjunction with the current prospectus of American Funds Multi-Sector Income Fund (the “fund”) dated March 1, 2023. 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:

American Funds Multi-Sector Income Fund
Attention: Secretary

6455 Irvine Center Drive
Irvine, California 92618

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

MIAQX

Class 529-A

CMBKX

Class R-1

RMDNX

Class C

MIAUX

Class 529-C

CMBLX

Class R-2

RMDOX

Class T

MIAVX

Class 529-E

CMBMX

Class R-2E

RMDPX

Class F-1

MIAWX

Class 529-T

CMBNX

Class R-3

RMDQX

Class F-2

MIAYX

Class 529-F-1

CMBOX

Class R-4

RMDRX

Class F-3

MIAZX

Class 529-F-2

CMBPX

Class R-5E

RMDSX

   

Class 529-F-3

CMBQX

Class R-5

RMDTX

       

Class R-6

RMDUX

 

Table of Contents

   

Item

Page no.

   

Certain investment limitations and guidelines

2

Description of certain securities, investment techniques and risks

3

Fund policies

34

Management of the fund

36

Execution of portfolio transactions

67

Disclosure of portfolio holdings

71

Price of shares

73

Taxes and distributions

76

Purchase and exchange of shares

80

Sales charges

85

Sales charge reductions and waivers

88

Selling shares

92

Shareholder account services and privileges

93

General information

96

Appendix

107

Investment portfolio
Financial statements

American Funds Multi-Sector Income 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 unless otherwise noted. This summary is not intended to reflect all of the fund’s investment limitations.

Debt instruments

· The fund will invest at least 80% of its assets in bonds and other debt instruments, including Eurodollar and Yankee bonds, debentures, notes, securities with equity and fixed income characteristics (such as bonds with warrants attached, convertible bonds, hybrids and certain preferred securities), cash and cash equivalents, securities backed by mortgages and other assets, loans, and other fixed income obligations of banks, corporations and governmental authorities. For purposes of this investment guideline, investments may be represented by derivative instruments, such as futures contracts and swaps. The fund currently intends to look to the ratings from Moody’s Investor Services, Standard & Poor’s Rating Services and Fitch ratings. If rating agencies differ, securities will be considered to have received the highest of these ratings, consistent with the fund’s investment policies.

Investing outside the U.S.

· In determining the domicile of an issuer, the fund’s investment adviser will generally look to the domicile determination of a leading provider of global indexes, such as Morgan Stanley Capital International. However, the adviser in its discretion also may take into account such factors as where the issuer’s securities are listed and where the issuer is legally organized, maintains principal corporate offices, conducts its principal operations, generates revenues and/or has credit risk exposure.

* * * * * *

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 its 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 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, 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 may result 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.

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 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

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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 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.

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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.

Investing outside the U.S. — Securities of issuers domiciled outside the United States, or with significant operations or revenues 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. 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 emerging markets.

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 emerging markets — Investing in emerging markets may involve risks in addition to and greater than those generally associated with investing in the securities markets of developed countries. For instance, emerging market 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 emerging markets 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 more developed markets are subject. The fund’s rights with respect to its investments in emerging markets, if any, will generally be governed by local law, which may make it difficult or impossible for 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, and may be more difficult to value, than securities issued in countries with more developed economies and/or markets. Less certainty with respect to security valuations may lead to additional challenges and risks in calculating the fund’s net asset value. Additionally, emerging markets 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.

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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 an emerging market to be a market 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 emerging markets

Currency fluctuations — Certain emerging markets’ 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 emerging markets 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 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 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.

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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 — Emerging markets may be less well-developed and regulated than other markets. 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 whom 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 emerging markets 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 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.

American Funds Multi-Sector Income Fund — Page 7

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.

Inflation-linked bonds — The fund may invest in inflation-linked bonds issued by governments, their agencies or instrumentalities and corporations.

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

American Funds Multi-Sector Income Fund — Page 8

available for the fund to purchase, making the market less liquid and more volatile than the U.S. Treasury and agency markets.

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 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.

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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:

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. Such securities are subject to variations in market value due to fluctuations in interest rates and in government policies, but, if held to maturity, are expected to be paid in full (either at maturity or thereafter).

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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”).

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 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.

Pass-through securities — The fund may invest in various debt obligations backed by pools of mortgages, corporate loans or other assets including, but not limited to, residential mortgage loans, home equity loans, mortgages on commercial buildings, consumer loans and equipment leases.

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Principal and interest payments made on the underlying asset pools backing these obligations are typically passed through to investors, net of any fees paid to any insurer or any guarantor of the securities. Pass-through securities may have either fixed or adjustable coupons. The risks of an investment in these obligations depend in part on the type of the collateral securing the obligations and the class of the instrument in which the fund invests. These securities include:

Mortgage-backed securities — These securities may be issued by U.S. government agencies and government-sponsored entities, such as Ginnie Mae, Fannie Mae and Freddie Mac, and by private entities. The payment of interest and principal on mortgage-backed obligations issued by U.S. government agencies may be guaranteed by the full faith and credit of the U.S. government (in the case of Ginnie Mae), or may be guaranteed by the issuer (in the case of Fannie Mae and Freddie Mac). However, these guarantees do not apply to the market prices and yields of these securities, which vary with changes in interest rates.

Mortgage-backed securities issued by private entities are structured similarly to those issued by U.S. government agencies. However, these securities and the underlying mortgages are not guaranteed by any government agencies and the underlying mortgages are not subject to the same underwriting requirements. These securities generally are structured with one or more types of credit enhancements such as insurance or letters of credit issued by private companies. Borrowers on the underlying mortgages are usually permitted to prepay their underlying mortgages. Prepayments can alter the effective maturity of these instruments. In addition, delinquencies, losses or defaults by borrowers can adversely affect the prices and volatility of these securities. Such delinquencies and losses can be exacerbated by declining or flattening housing and property values. This, along with other outside pressures, such as bankruptcies and financial difficulties experienced by mortgage loan originators, decreased investor demand for mortgage loans and mortgage-related securities and increased investor demand for yield, can adversely affect the value and liquidity of mortgage-backed securities.

Collateralized mortgage obligations (CMOs) — CMOs are also backed by a pool of mortgages or mortgage loans, which are divided into two or more separate bond issues. CMOs issued by U.S. government agencies are backed by agency mortgages, while privately issued CMOs may be backed by either government agency mortgages or private mortgages. Payments of principal and interest are passed through to each bond issue at varying schedules resulting in bonds with different coupons, effective maturities and sensitivities to interest rates. Some CMOs may be structured in a way that when interest rates change, the impact of changing prepayment rates on the effective maturities of certain issues of these securities is magnified. CMOs may be less liquid or may exhibit greater price volatility than other types of mortgage or asset-backed securities.

Commercial mortgage-backed securities — These securities are backed by mortgages on commercial property, such as hotels, office buildings, retail stores, hospitals and other commercial buildings. These securities may have a lower prepayment uncertainty than other mortgage-related securities because commercial mortgage loans generally prohibit or impose penalties on prepayments of principal. In addition, commercial mortgage-related securities often are structured with some form of credit enhancement to protect against potential losses on the underlying mortgage loans. Many of the risks of investing in commercial mortgage-backed securities reflect the risks of investing in the real estate securing the underlying mortgage loans, including the effects of local and other economic conditions on real estate markets, the ability of tenants to make rental payments and the ability of a property to attract and retain tenants. Commercial mortgage-backed securities may be less liquid or exhibit greater price volatility than other types of mortgage or asset-backed securities and may be more difficult to value.

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Asset-backed securities — These securities are backed by other assets such as credit card, automobile or consumer loan receivables, retail installment loans or participations in pools of leases. Credit support for these securities may be based on the underlying assets and/or provided through credit enhancements by a third party. The values of these securities are sensitive to changes in the credit quality of the underlying collateral, the credit strength of the credit enhancement, changes in interest rates and at times the financial condition of the issuer. Obligors of the underlying assets also may make prepayments that can change effective maturities of the asset-backed securities. These securities may be less liquid and more difficult to value than other securities.

Collateralized bond obligations (CBOs) and collateralized loan obligations (CLOs) — A CBO is a trust typically backed by a diversified pool of fixed-income securities, which may include high risk, lower rated securities. A CLO is a trust typically collateralized by a pool of loans, which may include, among others, senior secured loans, senior unsecured loans, and subordinate corporate loans, including lower rated loans. CBOs and CLOs may charge management fees and administrative expenses.

For both CBOs and CLOs, the cash flows from the trust are split into two or more portions, called tranches, varying in risk and yield. The riskiest and highest yielding portion is the “equity” tranche which bears the bulk of any default by the bonds or loans in the trust and is constructed to protect the other, more senior tranches from default. Since they are partially protected from defaults, the more senior tranches typically have higher ratings and lower yields than the underlying securities in the trust and can be rated investment grade. Despite the protection from the equity tranche, the more senior tranches can still experience substantial losses due to actual defaults of the underlying assets, increased sensitivity to defaults due to impairment of the collateral or the more junior tranches, market anticipation of defaults, as well as potential general aversions to CBO or CLO securities as a class. Normally, these securities are privately offered and sold, and thus, are not registered under the securities laws. CBOs and CLOs may be less liquid, may exhibit greater price volatility and may be more difficult to value than other securities.

“IOs” and “POs” are issued in portions or tranches with varying maturities and characteristics. Some tranches may only receive the interest paid on the underlying mortgages (IOs) and others may only receive the principal payments (POs). The values of IOs and POs are extremely sensitive to interest rate fluctuations and prepayment rates, and IOs are also subject to the risk of early repayment of the underlying mortgages that will substantially reduce or eliminate interest payments.

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

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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 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 deems a fund that uses derivatives only in a limited manner as a limited derivatives user and requires that such fund adopt and

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implement written policies and procedures reasonably designed to manage the fund’s derivatives risks. The rule also requires that a fund that uses derivatives in more than a limited manner 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 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

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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 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.

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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 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.

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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 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 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 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

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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 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 transaction, 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 over-the-counter (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 swap transactions, 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 transaction 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

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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.

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) contract 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

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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 transaction.

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 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.

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 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

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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 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

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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 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.

Municipal bonds — Municipal bonds are debt obligations that are exempt from federal, state and/or local income taxes. Opinions relating to the validity of municipal bonds, exclusion of municipal bond interest from an investor’s gross income for federal income tax purposes and, where applicable, state and local income tax, are rendered by bond counsel to the issuing authorities at the time of issuance.

The two principal classifications of municipal bonds are general obligation bonds and limited obligation or revenue bonds. General obligation bonds are secured by the issuer’s pledge of its full faith and credit including, if available, its taxing power for the payment of principal and interest. Issuers of general obligation bonds include states, counties, cities, towns and various regional or special districts. The proceeds of these obligations are used to fund a wide range of public facilities, such as the construction or improvement of schools, highways and roads, water and sewer systems and facilities for a variety of other public purposes. Lease revenue bonds or certificates of participation in

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leases are payable from annual lease rental payments from a state or locality. Annual rental payments are payable to the extent such rental payments are appropriated annually.

Typically, the only security for a limited obligation or revenue bond is the net revenue derived from a particular facility or class of facilities financed thereby or, in some cases, from the proceeds of a special tax or other special revenues. Revenue bonds have been issued to fund a wide variety of revenue-producing public capital projects including: electric, gas, water and sewer systems; highways, bridges and tunnels; port and airport facilities; colleges and universities; hospitals; and convention, recreational, tribal gaming and housing facilities. Although the security behind these bonds varies widely, many provide additional security in the form of a debt service reserve fund which may also be used to make principal and interest payments on the issuer's obligations. In addition, some revenue obligations (as well as general obligations) are insured by a bond insurance company or backed by a letter of credit issued by a banking institution.

Revenue bonds also include, for example, pollution control, health care and housing bonds, which, although nominally issued by municipal authorities, are generally not secured by the taxing power of the municipality but by the revenues of the authority derived from payments by the private entity which owns or operates the facility financed with the proceeds of the bonds. Obligations of housing finance authorities have a wide range of security features, including reserve funds and insured or subsidized mortgages, as well as the net revenues from housing or other public projects. Many of these bonds do not generally constitute the pledge of the credit of the issuer of such bonds. The credit quality of such revenue bonds is usually directly related to the credit standing of the user of the facility being financed or of an institution which provides a guarantee, letter of credit or other credit enhancement for the bond issue.

Municipal inflation-indexed bonds — The fund may invest in inflation-indexed bonds issued by municipalities. Interest payments are made to bondholders semi-annually and are made up of two components: a fixed “real coupon” or spread, and a variable coupon linked to an inflation index. Accordingly, payments will increase or decrease each period as a result of changes in the inflation index. In a period of deflation payments may decrease to zero, but in any event will not be less than zero.

Insured municipal bonds — The fund may invest in municipal bonds that are insured generally as to the timely payment of interest and repayment of principal. The insurance for such bonds may be purchased by the bond issuer, the fund or any other party, and is usually purchased from private, non-governmental insurance companies. Insurance that covers a municipal bond is expected to protect the fund against losses caused by a bond issuer’s failure to make interest or principal payments. However, insurance does not guarantee the market value of the bond or the prices of the fund‘s shares. Also, the investment adviser cannot be certain that the insurance company will make payments it guarantees. The market value of the bond could drop if a bond's insurer fails to fulfill its obligations. Market conditions or changes to ratings criteria could adversely impact the ratings of municipal bond insurers. When rating agencies lower or withdraw the credit rating of the insurer, the insurance may be providing little or no enhancement of credit or resale value to the municipal bond.

U.S. Territories and Commonwealth obligations — The fund may invest in obligations of the territories and Commonwealths of the United States, such as Puerto Rico, the U.S. Virgin Islands, Guam and their agencies and authorities (“territories and Commonwealth”), to the extent such obligations are exempt from federal income taxes. Adverse political and economic conditions and developments affecting any territory or Commonwealth may, in turn, negatively affect the value of the fund’s holdings in such obligations. Territories and Commonwealths face significant fiscal challenges, including persistent government deficits, underfunded retirement systems, sizable debt service obligations and a high unemployment rate. A restructuring of some or all of the debt or a decline in market prices of the territories’ and Commonwealths’ debt obligations, may affect the fund’s investment in these securities.

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If the economic situation in the territories and Commonwealths persists or worsens, the volatility, credit quality and performance of the fund could be adversely affected.

Zero coupon bonds — Municipalities may issue zero coupon securities which are debt obligations that do not entitle the holder to any periodic payments of interest prior to maturity or a specified date when the securities begin paying current interest. They are issued and traded at a discount from their face amount or par value, which discount varies depending on the time remaining until cash payments begin, prevailing interest rates, liquidity of the security, and the perceived credit quality of the issuer.

Pre-refunded/Escrowed to maturity bonds — From time to time, a municipality may refund a bond that it has already issued prior to, or in the case of escrowed to maturity bonds on, the original bond’s call or maturity date by issuing a second bond, the proceeds of which are typically used to purchase securities of the U.S. government (including its agencies and instrumentalities). The U.S. government securities are placed in an escrow account. The original bonds then become "pre-refunded" or "escrowed to maturity" and while the security is still tax-exempt, the proceeds of the escrow account act as collateral and the original bonds are considered high-quality in nature as a result. The principal and interest payments on the escrowed securities are then used to pay off the original bondholders on the call or maturity date. The escrow account securities do not guarantee the price movement of the bond before maturity. Investment in pre-refunded and escrowed to maturity bonds held by the fund may subject the fund to interest rate risk, market risk and credit risk. For purposes of diversification, pre-refunded and escrowed to maturity bonds will be treated as U.S. governmental issues.

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 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.

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.

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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. The fund will not borrow money to settle these transactions and, therefore, will liquidate other portfolio securities in advance of settlement if necessary to generate additional cash to meet its obligations. 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.

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. Loans may be originated by the borrower in order to address its working capital needs, as a result of a reorganization of the borrower’s assets and liabilities (recapitalizations), to merge with or acquire another company (mergers and acquisitions), to take control of another company (leveraged buy-outs), to provide temporary financing (bridge loans), or for other corporate purposes. Most corporate loans are variable or floating rate obligations.

Some loans may be secured in whole or in part by assets or other collateral. In other cases, loans may be unsecured or may become undersecured by declines in the value of assets or other collateral securing such loan. The greater the value of the assets securing the loan the more the lender is protected against loss in the case of nonpayment of principal or interest. Loans made to highly leveraged borrowers may be especially vulnerable to adverse changes in economic or market conditions and may involve a greater risk of default.

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).

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 investment adviser generally makes investment decisions based on publicly available information, but may rely on non-public information if necessary. Borrowers may offer to provide lenders with

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material, non-public information regarding a specific loan or the borrower in general. The investment adviser generally chooses not to receive this information. As a result, the investment adviser may be at a disadvantage compared to other investors that may receive such information. The investment adviser’s decision not to receive material, non-public information may impact the investment adviser’s ability to assess a borrower’s requests for amendments or waivers of provisions in the loan agreement. However, the investment adviser may on a case-by-case basis decide to receive such information when it deems prudent. In these situations the investment adviser may be restricted from trading the loan or buying or selling other debt and equity securities of the borrower while it is in possession of such material, non-public information, even if such loan or other security is declining in value.

The fund normally acquires loan obligations through an assignment from another lender, but also may acquire loan obligations by purchasing participation interests from lenders or other holders of the interests. 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 inability 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. They may represent amounts owed to lenders or lending syndicates, to suppliers of goods or services, or to other parties. 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 relating to the loan, nor any rights of set-off against the borrower. In addition, the fund may not directly benefit from any collateral supporting the loan in which it has purchased the participation and the fund will have to rely on the agent bank or other financial intermediary to apply appropriate credit remedies. 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. The investment adviser expects that most loan assignments and participations purchased for the fund will trade on a secondary market. However, although secondary markets for investments in loans are growing among institutional investors, a limited number of investors may be interested in a specific loan. It is possible that loan participations, in particular, could be sold only to a limited number of institutional investors. If there is no active secondary market for a particular loan, it may be difficult for the investment adviser to sell the fund’s 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.

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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.

Variable and floating rate obligations — The interest rates payable on certain securities and other instruments in which the fund may invest may not be fixed but may fluctuate based upon changes in market interest rates or credit ratings. Variable and floating rate obligations bear coupon rates that are adjusted at designated intervals, based on the then current market interest rates or credit ratings. The rate adjustment features tend to limit the extent to which the market value of the obligations will fluctuate. When the fund holds variable or floating rate securities, a decrease in market interest rates will adversely affect the income received from such securities and the net asset value of the fund’s shares.

The London Interbank Offered Rate (“LIBOR”) is one of the most widely used interest rate benchmarks and is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. On July 27, 2017, the U.K. Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. Subsequently, the FCA and ICE Benchmark Administration, Limited (IBA), the administrator of LIBOR, announced that the publication of the one-week and two-month USD LIBOR maturities and non-USD LIBOR maturities will cease immediately after December 31, 2021, with the remaining USD LIBOR maturities ceasing immediately after June 30, 2023. The one, three, and six-month US dollar LIBOR settings will continue to be published under a synthetic methodology for a temporary period until September 30, 2024 for certain legacy contracts. As a result, LIBOR may no longer be available or may no longer be deemed an appropriate reference rate upon which to determine the interest rate on certain loans, bonds, derivatives and other instruments in the fund’s portfolio.

Public and private sector industry initiatives have been underway to identify new or alternative reference rates to be used in place of LIBOR. In the US, the Alternative Reference Rates Committee (ARCC), a group of market participants convened to help ensure a successful transition away from USD LIBOR, has identified the Secured Overnight Financing Rate (“SOFR”), which is intended to be a broad measure of secured overnight U.S. Treasury repo rates, as its preferred alternative rate. Working groups and regulators in other countries have suggested other alternative rates for their markets. There is no assurance that the composition or characteristics of any such alternative reference rate will be similar to or produce the same value or economic equivalence as LIBOR or that instruments using an alternative rate will have the same volume or liquidity. This, in turn, may affect the value or return on certain of the fund’s investments, result in costs incurred in connection with closing out positions and entering into new trades and reduce the effectiveness of related fund transactions such as hedges. Relatedly, there are outstanding contracts governing bonds and other instruments which reference LIBOR that are due to mature beyond the LIBOR cessation date. These “legacy contracts” will need to be transitioned to an alternative reference rate, and a failure to do so may adversely impact the security (for example, under existing contract language the instrument could fall back to a fixed rate or have no fallback rate) and create contractual uncertainty, as well as market and litigation risk. Although there are ongoing efforts among certain government entities and other organizations to address these uncertainties, the ultimate effectiveness of such efforts is not yet known. These risks may also apply with respect to potential changes in connection with other interbank offering rates (e.g., Euribor) and other indices, rates and values that may be used as “benchmarks” and are the subject of recent regulatory reform.

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Inverse floating rate notes — The fund may invest in inverse floating rate notes (a type of derivative instrument). These notes have rates that move in the opposite direction of prevailing interest rates. A change in prevailing interest rates will often result in a greater change in these instruments’ interest rates. As a result, these instruments may have a greater degree of volatility than other types of interest-bearing securities.

Equity securities — Equity securities represent an ownership position in a company. Equity securities held by the fund typically consist of common stocks. 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.

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.

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.

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.

Reinsurance related notes and bonds — The fund may invest in reinsurance related notes and bonds. These instruments, which are typically issued by special purpose reinsurance companies, transfer an element of insurance risk to the note or bond holders. For example, such a note or bond could provide that the reinsurance company would not be required to repay all or a portion of the principal value of the note or bond if losses due to a catastrophic event under the policy (such as a major hurricane) exceed certain dollar thresholds. Consequently, the fund may lose the entire amount of its investment in such bonds or notes if such an event occurs and losses exceed certain dollar thresholds. In this

American Funds Multi-Sector Income Fund — Page 29

instance, investors would have no recourse against the insurance company. These instruments may be issued with fixed or variable interest rates and rated in a variety of credit quality categories by the rating agencies.

Repurchase agreements — The fund may enter into repurchase agreements, or “repos”, under which the fund buys a security and obtains a simultaneous commitment from the seller to repurchase the security at a specified time and price. Because the security purchased constitutes collateral for the repurchase obligation, a repo may be considered a loan by the fund that is collateralized by the security purchased. Repos permit the fund to maintain liquidity and earn income over periods of time as short as overnight.

The seller must maintain with a custodian collateral equal to at least the repurchase price, including accrued interest. In tri-party repos, a third party custodian, called a clearing bank, facilitates repo clearing and settlement, including by providing collateral management services. However, as an alternative to tri-party repos, the fund could enter into bilateral repos, where the parties themselves are responsible for settling transactions.

The fund will only enter into repos involving securities of the type in which it could otherwise invest. If the seller under the repo defaults, the fund may incur a loss if the value of the collateral securing the repo has declined and may incur disposition costs and delays in connection with liquidating the collateral. If bankruptcy proceedings are commenced with respect to the seller, realization of the collateral by the fund may be delayed or limited.

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.

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 1933 Act. Section 4(a)(2) commercial paper has substantially the same price and liquidity characteristics as commercial paper generally,

American Funds Multi-Sector Income Fund — Page 30

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 trustees.

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. Restricted securities held by the fund are often eligible for resale under Rule 144A, an exemption under the 1933 Act allowing for resales to “Qualified Institutional Buyers.” 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.

Maturity — There are no restrictions on the maturity composition of the portfolio. The fund invests in debt securities with a wide range of maturities. Under normal market conditions, longer term securities yield more than shorter term securities, but are subject to greater price fluctuations.

Regulatory considerations — The investment adviser has registered with the Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator (CPO). As a CPO, the investment adviser has adopted certain policies and procedures and implemented certain operational aspects of the fund in order to be in compliance with CFTC rules and regulations. The investment adviser has claimed the relief necessary to take advantage of the CFTC’s approach of permitting substituted compliance with SEC rule requirements, which allows the investment adviser to satisfy applicable CFTC rule requirements by complying with certain SEC rule requirements. As a registered CPO, the investment adviser is subject to additional requirements that are not addressed by substituted compliance with SEC rules. Compliance with these additional registration and regulatory requirements may increase the fund’s expenses.

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 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

American Funds Multi-Sector Income Fund — Page 31

(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 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 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

American Funds Multi-Sector Income Fund — Page 32

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.

* * * * * *

Portfolio turnover — Portfolio changes will be made without regard to the length of time particular investments may have been held, and the fund may engage in frequent and active trading of its portfolio securities. Higher portfolio turnover may involve correspondingly greater transaction costs in the form of dealer spreads, brokerage commissions and other transaction costs on the sale of securities and on reinvestment in other securities. The higher the rate of portfolio turnover, the higher these transaction costs will generally be. In addition, the sale of portfolio securities may 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. These costs and tax effects may adversely affect the fund’s returns to shareholders.

Fixed income securities are generally traded on a net basis and usually neither brokerage commissions nor transfer taxes are involved. Transaction costs are usually reflected in the spread between the bid and asked price.

The fund’s portfolio turnover rates for the fiscal years ended December 31, 2022 and 2021 were 40% and 36%, respectively. The increase in turnover rate was due to increased 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. See "Financial highlights" in the prospectus for the fund's annual portfolio turnover rate for the last three fiscal years and for the fiscal period ended December 31, 2019.

American Funds Multi-Sector Income Fund — Page 33

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 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.

American Funds Multi-Sector Income Fund — Page 34

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 objectives 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.

American Funds Multi-Sector Income Fund — Page 35

Management of the fund

Board of trustees and officers

Independent trustees1

The fund’s nominating and governance committee and board select independent trustees 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 trustees 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 trustee 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 trustees draw in connection with their service, the following table summarizes key experience for each independent trustee. These references to the qualifications, attributes and skills of the trustees are pursuant to the disclosure requirements of the SEC, and shall not be deemed to impose any greater responsibility or liability on any trustee or the board as a whole. Notwithstanding the accomplishments listed below, none of the independent trustees is considered an “expert” within the meaning of the federal securities laws with respect to information in the fund’s registration statement.

American Funds Multi-Sector Income Fund — Page 36

         

Name, year of birth and position with fund (year first elected as a trustee2)

Principal
occupation(s)
during the
past five years

Number of
portfolios
in fund
complex
overseen
by trustee

Other directorships3 held
by trustee during the past five years

Other relevant experience

Francisco G. Cigarroa, MD 1957
Trustee (2021)

Professor of Surgery, University of Texas Health San Antonio; Trustee, Ford Foundation; Clayton Research Scholar, Clayton Foundation for Biomedical Research

88

None

· Corporate board experience

· Service on boards of community and nonprofit organizations

· MD

Nariman Farvardin, 1956
Trustee (2019)

President, Stevens Institute of Technology

93

None

· Senior management experience, educational institution

· Corporate board experience

· Professor, electrical and computer engineering

· Service on advisory boards and councils for educational, nonprofit and governmental organizations

· MS, PhD, electrical engineering

Jennifer C. Feikin, 1968
Trustee (2022)

Business Advisor; previously held positions at Google, AOL, 20th Century Fox and McKinsey & Company; Trustee, The Nature Conservancy of Utah; former Trustee, The Nature Conservancy of California

97

Hertz Global Holdings, Inc.

· Senior corporate management experience

· Corporate board experience

· Business consulting experience

· Service on advisory and trustee boards for charitable and nonprofit organizations

· JD

American Funds Multi-Sector Income Fund — Page 37

         

Name, year of birth and position with fund (year first elected as a trustee2)

Principal
occupation(s)
during the
past five years

Number of
portfolios
in fund
complex
overseen
by trustee

Other directorships3 held
by trustee during the past five years

Other relevant experience

Leslie Stone Heisz, 1961
Trustee (2022)

Former Managing Director, Lazard (retired, 2010); Director, Kaiser Permanente (California public benefit corporation); former Lecturer, UCLA Anderson School of Management

97

Edwards Lifesciences; Public Storage

· Senior corporate management experience, investment banking

· Business consulting experience

· Corporate board experience

· Service on advisory and trustee boards for charitable and nonprofit organizations

· MBA

Mary Davis Holt, 1950
Trustee (2019)

Principal, Mary Davis Holt Enterprises, LLC (leadership development consulting); former Partner, Flynn Heath Holt Leadership, LLC (leadership consulting); former COO, Time Life Inc. (1993–2003)

89

None

· Service as chief operations officer, global media company

· Senior corporate management experience

· Corporate board experience

· Service on advisory and trustee boards for educational, business and nonprofit organizations

· MBA

Merit E. Janow, 1958
Trustee (2019)

Dean Emerita and Professor of Practice, International Economic Law & International Affairs, Columbia University, School of International and Public Affairs

99

Aptiv (autonomous and green vehicle technology); Mastercard Incorporated

Former director of Trimble Inc. (software, hardware and services technology) (until 2021)

· Service with Office of the U.S. Trade Representative and U.S. Department of Justice

· Corporate board experience

· Service on advisory and trustee boards for charitable, educational and nonprofit organizations

· Experience as corporate lawyer

· JD

American Funds Multi-Sector Income Fund — Page 38

         

Name, year of birth and position with fund (year first elected as a trustee2)

Principal
occupation(s)
during the
past five years

Number of
portfolios
in fund
complex
overseen
by trustee

Other directorships3 held
by trustee during the past five years

Other relevant experience

Margaret Spellings, 1957
Chair of the
Board (Independent
and Non-Executive)
(2019)

President and CEO, Texas 2036; former President, Margaret Spellings & Company (public policy and strategic consulting); former President, The University of North Carolina

93

None

· Former U.S. Secretary of Education, U.S. Department of Education

· Former Assistant to the President for Domestic Policy, The White House

· Former senior advisor to the Governor of Texas

· Service on advisory and trustee boards for charitable and nonprofit organizations

Alexandra Trower, 1964

Trustee (2019)

Former Executive Vice President, Global Communications and Corporate Officer, The Estée Lauder Companies

88

None

· Service on trustee boards for charitable and nonprofit organizations

· Senior corporate management experience

· Branding

Paul S. Williams, 1959

Trustee (2020)

Former Partner/Managing Director, Major, Lindsey & Africa (executive recruiting firm)

88

Air Transport Services Group, Inc. (aircraft leasing and air cargo transportation); Compass Minerals, Inc. (producer of salt and specialty fertilizers); Public Storage, Inc.

Former director of Essendant, Inc. (business products wholesaler) (until 2019); Romeo Power, Inc. (manufacturer of batteries for electric vehicles) (until 2022)

· Senior corporate management experience

· Corporate board experience

· Corporate governance experience

· Service on trustee boards for charitable and educational nonprofit organizations

· Securities law expertise

· JD

American Funds Multi-Sector Income Fund — Page 39

Interested trustee(s)4,5

Interested trustees have similar qualifications, skills and attributes as the independent trustees. Interested trustees 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 trustees to make a significant contribution to the fund’s board.

       

Name, year of birth
and position with fund
(year first elected
as a trustee/officer2)

Principal occupation(s)
during the
past five years
and positions
held with affiliated
entities or the
Principal Underwriter
of the fund

Number of
portfolios
in fund
complex
overseen
by trustee

Other directorships3
held by trustee
during the
past five years

Michael C. Gitlin, 1970
Trustee

(2019)

Partner – Capital Fixed Income Investors, Capital Research and Management Company; Vice Chairman and Director, Capital Research and Management Company; Director, The Capital Group Companies, Inc.*

88

None

Karl J. Zeile, 1966
Trustee

(2019)

Partner – Capital Fixed Income Investors, Capital Research and Management Company

23

None

American Funds Multi-Sector Income Fund — Page 40

Other officers5

   

Name, year of birth
and position with fund
(year first elected
as an officer2)

Principal occupation(s) during the past five years
and positions held with affiliated entities
or the Principal Underwriter of the fund

Damien J. McCann, 1977
President (2019)

Partner – Capital Fixed Income Investors, Capital Research and Management Company

Kristine M. Nishiyama, 1970
Principal Executive Officer (2019)

Senior Vice President and Senior Counsel – Fund Business Management Group, Capital Research and Management Company; Chair, Senior Vice President, General Counsel and Director, Capital Bank and Trust Company*

Michael W. Stockton, 1967
Executive Vice President (2021)

Senior Vice President – Fund Business Management Group, Capital Research and Management Company

Kirstie Spence, 1973
Senior Vice President (2019)

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.*

Scott Sykes, 1971
Senior Vice President (2019)

Partner – Capital Fixed Income Investors, Capital Research and Management Company

Shannon Ward, 1964
Senior Vice President (2019)

Partner – Capital Fixed Income Investors, Capital Research and Management Company

Xavier Goss, 1980
Vice President (2022)

Vice President – Capital Fixed Income Investors, Capital Research and Management Company

Steven I. Koszalka, 1964
Secretary (2019)

Vice President – Fund Business Management Group, Capital Research and Management Company

Brian C. Janssen, 1972
Treasurer (2019)

Senior Vice President – Investment Operations, Capital Research and Management Company

Jane Y. Chung, 1974
Assistant Secretary (2019)

Associate – Fund Business Management Group, Capital Research and Management Company

Sandra Chuon, 1972
Assistant Treasurer (2019)

Vice President – Investment Operations, Capital Research and Management Company

Becky L. Park, 1979
Assistant Treasurer (2021)

Vice President – Investment Operations, Capital Research and Management Company

* Company affiliated with Capital Research and Management Company.

1 The term independent trustee refers to a trustee who is not an “interested person” of the fund within the meaning of the 1940 Act.

2 Trustees and officers of the fund serve until their resignation, removal or retirement.

3 This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research and Management Company or its affiliates) that are held by each trustee as a director/trustee of a public company or a registered investment company. Unless otherwise noted, all directorships/trusteeships are current.

4 The term interested trustee refers to a trustee 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).

5 All of the trustees 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 trustees and officers of the fund is 333 South Hope Street, 55th Floor, Los Angeles, California 90071, Attention: Secretary.

American Funds Multi-Sector Income Fund — Page 41

Fund shares owned by trustees as of December 31, 2022:

         

Name

Dollar range1,2
of fund
shares owned

Aggregate
dollar range1
of shares
owned in
all funds
overseen
by trustee
in same family of
investment
companies as the fund

Dollar
range1,2 of
independent
trustees
deferred compensation3 allocated
to fund

Aggregate
dollar
range1,2 of
independent
trustees
deferred
compensation3 allocated to
all funds
overseen
by trustee
in same family of
investment companies as the
fund

Independent trustees

Francisco G. Cigarroa

None

None

N/A

Over $100,000

Nariman Farvardin

None

Over $100,000

N/A

Over $100,000

Jennifer C. Feikin

None

Over $100,000

N/A

N/A

Leslie Stone Heisz

None

Over $100,000

N/A

N/A

Mary Davis Holt

None

Over $100,000

N/A

N/A

Merit E. Janow

None

Over $100,000

N/A

Over $100,000

Margaret Spellings

None

Over $100,000

N/A

Over $100,000

Alexandra Trower

Over $100,000

Over $100,000

N/A

Over $100,000

Paul S. Williams

None

Over $100,000

N/A

Over $100,000

     

Name

Dollar range1,2
of fund
shares owned

Aggregate
dollar range1
of shares
owned in
all funds
overseen
by
trustee
in same family of
investment
companies as the fund

Interested trustees

Michael C. Gitlin

Over $100,000

Over $100,000

Karl J. Zeile

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 trustees 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, 2022, was not a trustee of a particular fund, did not allocate deferred compensation to the fund or did not participate in the deferred compensation plan.

3 Eligible trustees may defer their compensation under a nonqualified deferred compensation plan. Amounts deferred by the trustee accumulate at an earnings rate determined by the total return of one or more American Funds as designated by the trustee.

American Funds Multi-Sector Income Fund — Page 42

Trustee compensation — No compensation is paid by the fund to any officer or trustee who is a director, officer or employee of the investment adviser or its affiliates. Except for the independent trustees listed in the “Board of trustees and officers — Independent trustees” table under the “Management of the fund” section in this statement of additional information, all other officers and trustees 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 trustee an annual retainer fee based primarily on the total number of board clusters which that independent trustee serves. Board and committee chairs receive additional fees for their services.

The fund and the other funds served by each independent trustee each pay a portion of these fees.

No pension or retirement benefits are accrued as part of fund expenses. Generally, independent trustees 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 trustees.

American Funds Multi-Sector Income Fund — Page 43

Trustee compensation earned during the fiscal year ended December 31, 2022:

     

Name

Aggregate compensation
(including voluntarily
deferred compensation1)
from the fund

Total compensation (including
voluntarily deferred
compensation2)
from all funds managed by
Capital Research and
Management
Company or its affiliates

Francisco G. Cigarroa2

$1,373

$327,000

James G. Ellis

(retired December 31, 2022)

1,067

506,500

Nariman Farvardin2

831

499,976

Jennifer C. Feikin

(elected December 5, 2022)

N/A

151,500

Leslie Stone Heisz

(elected December 5, 2022)

N/A

151,500

Mary Davis Holt

1,033

390,000

Merit E. Janow2

650

448,476

Margaret Spellings2

1,016

515,476

Alexandra Trower2

1,420

338,000

Paul S. Williams2

1,376

327,500

1 Amounts may be deferred by eligible trustees under a nonqualified deferred compensation plan adopted by the fund in 2019. Deferred amounts accumulate at an earnings rate determined by the total return of one or more American Funds as designated by the trustees. Compensation shown in this table for the fiscal year ended December 31, 2022 does not include earnings on amounts deferred in previous fiscal years.

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 2022 fiscal year for participating trustees is as follows: Francisco G. Cigarroa ($912), Nariman Farvardin ($1,366), Merit E. Janow ($260), Margaret Spellings ($418), Alexandra Trower ($2,127) and Paul S. Williams ($615). Amounts deferred and accumulated earnings thereon are not funded and are general unsecured liabilities of the fund until paid to the trustees.

American Funds Multi-Sector Income Fund — Page 44

Fund organization and the board of trustees — The fund, an open-end, diversified management investment company, was organized as a Delaware statutory trust on November 8, 2018. All fund operations are supervised by the fund’s board of trustees which meets periodically and performs duties required by applicable state and federal laws.

Delaware law charges trustees with the duty of managing the business affairs of the trust. Trustees are considered to be fiduciaries of the trust and owe duties of care and loyalty to the trust and its shareholders.

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 trustees and set forth in the fund’s rule 18f-3 Plan. Each class’ shareholders have exclusive voting rights with 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, Virginia College Savings PlanSM (Virginia529SM) will vote any proxies relating to the fund’s Class 529 shares. In addition, the trustees have the authority to establish new series and classes of shares, and to split or combine outstanding shares into a greater or lesser number, without shareholder approval.

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.

The fund’s declaration of trust and by-laws, as well as separate indemnification agreements with independent trustees, provide in effect that, subject to certain conditions, the fund will indemnify its officers and trustees against liabilities or expenses actually and reasonably incurred by them relating to their service to the fund. However, trustees 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.

Removal of trustees by shareholders — At any meeting of shareholders, duly called and at which a quorum is present, shareholders may, by the affirmative vote of the holders of two-thirds of the votes entitled to be cast, remove any trustee from office and may elect a successor or successors to fill any resulting vacancies for the unexpired terms of removed trustees. In addition, the trustees of the fund will promptly call a meeting of shareholders for the purpose of voting upon the removal of any trustees when requested in writing to do so by the record holders of at least 10% of the outstanding shares.

Leadership structure — The board’s chair is currently an independent trustee 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 trustees in executive

American Funds Multi-Sector Income Fund — Page 45

session, facilitating communication with committee chairs, and serving as the principal independent trustee contact for fund management and counsel to the independent trustees 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 trustees 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 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 trustees — The fund has an audit committee comprised of Francisco G. Cigarroa, Leslie Stone Heisz, Mary Davis Holt and Paul S. Williams. 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 trustees. The audit committee held five meetings during the 2022 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 trustees on these matters. The contracts committee held one meeting during the 2022 fiscal year.

The fund has a nominating and governance committee comprised of Nariman Farvardin, Jennifer C. Feikin, Merit E. Janow, Margaret Spellings and Alexandra Trower. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. The committee also coordinates annual self-assessments of the board and evaluates, selects and nominates independent trustee candidates to the full board of trustees. 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,

American Funds Multi-Sector Income Fund — Page 46

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 two meetings during the 2022 fiscal year.

The independent board members of the fund have oversight responsibility for the fund and certain other funds managed by the investment adviser. As part of their oversight responsibility for these funds, each independent board member sits on one of three fund review committees comprised solely of independent board members. The three committees are divided by portfolio type. Each committee functions independently and is not a decision making body. The purpose of the committees is to assist the board of each fund in the oversight of the investment management services provided by the investment adviser. In addition to regularly monitoring and reviewing investment results, investment activities and strategies used to manage the fund’s assets, the committees also receive reports from the investment adviser’s Principal Investment Officers for the funds, portfolio managers and other investment personnel concerning efforts to achieve the fund’s investment objectives. Each committee reports to the full board of the fund.

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 American Funds have established a Joint Proxy Committee (“JPC”) composed of independent board members from each American Funds 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.

The investment adviser seeks to vote all U.S. proxies; however, in certain circumstances it may be impracticable or impossible to do so. Proxies for companies outside the U.S. also are voted, 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. A notation of any potential conflicts of interest also is included in the summary (see below for a description of the investment adviser’s special review procedures).

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

American Funds Multi-Sector Income Fund — Page 47

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 analyzes these proxies and proposals on their merits and does not consider these relationships when casting its vote.

The investment adviser has developed procedures to identify and address instances where a vote could appear to be influenced by such a relationship. Under the procedures, prior to a final vote being cast by the investment adviser, the relevant proxy committees’ voting results for proxies issued by Interested Parties are reviewed by a Special Review Committee (“SRC”) of the investment division voting the proxy if the vote was in favor of the Interested Party.

If a potential conflict is identified according to the procedure above, the SRC will be 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. If the SRC determines, based on the information provided, that a conflict of interest could affect the investment adviser’s best judgment as a fiduciary, the SRC will take appropriate steps to address the conflict of interest including, if appropriate, engaging an independent, third-party fiduciary to vote the proxy. The SRC includes senior investment professionals and legal and compliance professionals.

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 American Funds, American Funds Insurance Series and 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

American Funds Multi-Sector Income Fund — Page 48

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 — Typically, 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; however, they should not be excessive.

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 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 best practices. With respect to environmental matters, this includes disclosures aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the standards set forth by the Sustainability Accounting Standards Board (SASB), 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.

American Funds Multi-Sector Income Fund — Page 49

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 February 1, 2023. 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
FOR THE BENEFIT OF CUSTOMERS
OMNIBUS ACCOUNT
SAINT LOUIS MO

RECORD

CLASS A

32.97%

 

CLASS F-3

9.02

 

CLASS 529-A

26.71

 

CLASS 529-C

23.45

       

CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS #1
SAN FRANCISCO CA

RECORD

CLASS A

29.24

 

CLASS F-2

5.68

     
       

MORGAN STANLEY SMITH BARNEY LLC
FOR THE BENEFIT OF ITS CUSTOMERS
OMNIBUS ACCOUNT
NEW YORK NY

RECORD

CLASS C

17.13

 

CLASS F-2

9.12

 

CLASS 529-C

15.34

 

CLASS 529-E

5.74

       

LPL FINANCIAL
--OMNIBUS CUSTOMER ACCOUNT--
SAN DIEGO CA

RECORD

CLASS C

6.44

 

CLASS F-2

11.71

 

CLASS R-2

8.91

       

PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ

RECORD

CLASS C

5.91

 

CLASS F-1

10.97

 

CLASS F-2

11.27

 

CLASS F-3

12.99

 

CLASS R-3

6.88

       

RAYMOND JAMES
OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCOUNT
ST PETERSBURG FL

RECORD

CLASS C

5.44

 

CLASS F-2

33.38

 

CLASS 529-A

8.19

 

CLASS 529-C

14.81

   

CLASS 529-F-2

8.13

       

CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT #2
SAN FRANCISCO CA

RECORD

CLASS F-1

29.02

 

CLASS F-3

6.58

     
       

NATIONAL FINANCIAL SERVICES LLC
FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ

RECORD

CLASS F-1

28.54

 

CLASS F-2

16.00

 

CLASS F-3

44.49

     
       

American Funds Multi-Sector Income Fund — Page 50

       

NAME AND ADDRESS

OWNERSHIP

OWNERSHIP PERCENTAGE

TD AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
OMNIBUS ACCOUNT
OMAHA NE

RECORD

CLASS F-1

21.41

     
     
     
       

BNY MELLON N A
OMNIBUS ACCOUNT
PITTSBURGH PA

RECORD

CLASS F-3

9.96

     
     
       

WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO

RECORD

CLASS 529-C

8.64

     
     
     
       

AMERICAN ENTERPRISE INVESTMENT SVC
OMNIBUS ACCOUNT
MINNEAPOLIS MN

RECORD

CLASS 529-C

5.18

     
     
     

CAPITAL RESEARCH & MANAGEMENT COMPANY
CORPORATE ACCOUNT
LOS ANGELES CA

RECORD

CLASS 529-E

12.28

 

CLASS 529-F-1

100.00

 

CLASS 529-F-3

100.00

 

CLASS R-1

29.63

 

CLASS R-2E

100.00

 

CLASS R-5

11.61

 

CLASS R-5E

7.87

       

VCSP/COLLEGEAMERICA
INDIVIDUAL INVESTOR #1
PORTLAND ME

RECORD
BENEFICIAL

CLASS 529-E

9.29

   
     

VCSP/COLLEGEAMERICA
INDIVIDUAL INVESTOR #2
AVENTURA FL

RECORD
BENEFICIAL

CLASS 529-E

8.18

   
     

VCSP/COLLEGEAMERICA
INDIVIDUAL INVESTOR #3
AUSTIN TX

RECORD
BENEFICIAL

CLASS 529-E

6.81

   
     

VCSP/COLLEGEAMERICA
INDIVIDUAL INVESTOR #4
KING GEORGE VA

RECORD
BENEFICIAL

CLASS 529-E

6.16

   
     

VCSP/COLLEGEAMERICA
INDIVIDUAL INVESTOR #5
SUFFOLK VA

RECORD
BENEFICIAL

CLASS 529-E

5.98

   
     

VCSP/COLLEGEAMERICA
INDIVIDUAL INVESTOR #6
AUSTIN TX

RECORD
BENEFICIAL

CLASS 529-E

5.57

   
     

VCSP/COLLEGEAMERICA
INDIVIDUAL INVESTOR #7
KINGS PARK NY

RECORD
BENEFICIAL

CLASS 529-E

5.29

   
     

American Funds Multi-Sector Income Fund — Page 51

       

NAME AND ADDRESS

OWNERSHIP

OWNERSHIP PERCENTAGE

DUMONT BOARD OF EDUCATION
403B PLAN
DENVER CO

RECORD
BENEFICIAL

CLASS R-1

51.05

   
     
     

HILLSIDE INFECTIOUS DISEASE CONSULTING PLLC
401K PLAN
NEW HYDE PARK NY

RECORD
BENEFICIAL

CLASS R-1

17.94

   
     
     

PEARSON FOOD SALES COMPANY INC
RETIREMENT PLAN
POMONA CA

RECORD
BENEFICIAL

CLASS R-2

23.71

   
     
     

TERRA STAFFING SERVICES
401K PLAN
OCONOMOWOC WI

RECORD
BENEFICIAL

CLASS R-2

7.13

   
     
       

TEKNA INVESTMENTS INC
RETIREMENT PLAN
CHARLESTON SC

RECORD
BENEFICIAL

CLASS R-2

5.67

   
     
     

3406 NORTH ROOSEVELT BLVD CORP
401K PLAN
UMATILLA FL

RECORD
BENEFICIAL

CLASS R-3

17.55

   
     
       

401K PLAN
GREENWOOD CO

BENEFICIAL

CLASS R-3

14.86

   
       

SHOREVIEW INDUSTRIES IV LLC
401K PLAN
GREENWOOD VLG CO

RECORD
BENEFICIAL

CLASS R-3

12.89

   
     
       

CHICO DENTAL ARTS
401K PLAN
CHICO CA

RECORD
BENEFICIAL

CLASS R-3

5.70

   
     
       

VICTORIA PACIFIC TRADING CORP
401K PLAN
BALDWIN PARK CA

RECORD
BENEFICIAL

CLASS R-4

26.07

   
     
       

FMS LAW GROUP LLC
RETIREMENT PLAN
CHICAGO IL

RECORD
BENEFICIAL

CLASS R-4

14.85

   
     
     

A&S MACHINING AND WELDING
401K PLAN #1
PALOS PARK IL

RECORD
BENEFICIAL

CLASS R-4

14.32

   
     
       

American Funds Multi-Sector Income Fund — Page 52

       

NAME AND ADDRESS

OWNERSHIP

OWNERSHIP PERCENTAGE

A&S MACHINING AND WELDING
401K PLAN #2
PALOS PARK IL

RECORD
BENEFICIAL

CLASS R-4

13.61

   
     
       

ASG STAFFING INC
RETIREMENT PLAN
GREENWOOD VLG CO

RECORD
BENEFICIAL

CLASS R-4

10.25

   
     
     

RETIREMENT PLAN #1
WHITTIER CA

BENEFICIAL

CLASS R-4

9.59

   
     

AMERICA AMBULANCE SVC INC
401K PLAN
SPRINGFIELD IL

RECORD
BENEFICIAL

CLASS R-4

5.48

   
     
       

NATIONAL FINANCIAL SERVICES LLC
401K PLAN #1
JERSEY CITY NJ

RECORD
BENEFICIAL

CLASS R-5

20.31

CLASS R-5

68.07

     
       

TEDDER INDUSTRIES
401K PLAN
HAYDEN ID

RECORD
BENEFICIAL

CLASS R-5E

15.78

   
     
       

RETIREMENT PLAN #2
JONES OK

BENEFICIAL

CLASS R-5E

13.42

     
     

MCCARTHY WEALTH MANAGEMENT
401K PLAN
NEWPORT BEACH CA

RECORD
BENEFICIAL

CLASS R-5E

10.86

   
     
       

RETIREMENT PLAN #3
GREENWOOD VLG CO

BENEFICIAL

CLASS R-5E

5.99

   
     

WESTERN STATES CONSTRUCTION MANAGEMENT
401K PLAN
EASTVALE CA

RECORD
BENEFICIAL

CLASS R-5E

5.40

   
     
       

GROW FINANCIAL PLANNING GROUP
401K PLAN
OSWEGO NY

RECORD
BENEFICIAL

CLASS R-5E

5.13

   
     
       

AMERICAN FUNDS INCOME PORTFOLIO
OMNIBUS ACCOUNT
NORFOLK VA

RECORD

CLASS R-6

17.00

     
     

American Funds Multi-Sector Income Fund — Page 53

       

NAME AND ADDRESS

OWNERSHIP

OWNERSHIP PERCENTAGE

AMERICAN FUNDS 2030 TARGET DATE
RETIREMENT FUND
NORFOLK VA

RECORD

CLASS R-6

16.63

     
     

AMERICAN FUNDS 2025 TARGET DATE
RETIREMENT FUND
NORFOLK VA

RECORD

CLASS R-6

16.13

     
     

AMERICAN FUNDS 2035 TARGET DATE
RETIREMENT FUND
NORFOLK VA

RECORD

CLASS R-6

13.11

     
     

AMERICAN FUNDS GROWTH &
INCOME PORTFOLIO
OMNIBUS ACCOUNT
NORFOLK VA

RECORD

CLASS R-6

9.98

     
     
     

AMERICAN FUNDS 2020 TARGET DATE
RETIREMENT FUND
NORFOLK VA

RECORD

CLASS R-6

9.80

     
     

AMERICAN FUNDS 2040 TARGET DATE
RETIREMENT FUND
NORFOLK VA

RECORD

CLASS R-6

5.58

     
     

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 February 1, 2023, the officers and trustees 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 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

American Funds Multi-Sector Income Fund — Page 54

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, the investment analysts may make investment decisions with respect to a portion of the fund's portfolio within their research coverage.

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 Bloomberg U.S. Corporate High Yield Index 2% Issuer Cap, Bloomberg U.S. Corporate Investment Grade Index, JP Morgan Emerging Markets Bond Index Global Diversified, Bloomberg CMBS Ex AAA Index, Bloomberg ABS Ex AAA Index 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 universe of comparably managed funds of competitive investment management firms.

American Funds Multi-Sector Income Fund — Page 55

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.

The following table reflects information as of December 31, 2022:

               

Portfolio
manager

Dollar range
of fund
shares
owned1

Number
of other
registered
investment
companies (RICs)
for which
portfolio
manager
is a manager
(assets of RICs
in billions)2

Number
of other
pooled
investment
vehicles (PIVs)
for which
portfolio
manager
is a manager
(assets of PIVs
in billions)2

Number
of other
accounts
for which
portfolio
manager
is a manager
(assets of
other accounts
in billions)2,3

Damien J. McCann

Over $1,000,000

3

$16.4

3

$0.21

None

Kirstie Spence

$100,001 – $500,000

3

$50.0

7

$4.25

5

$1.95

Scott Sykes

$100,001 – $500,000

4

$14.7

3

$1.22

11

$8.71

Shannon Ward

$500,001 – $1,000,000

7

$366.9

7

$10.19

14

$0.24

Xavier Goss

$100,001 – $500,000

3

$16.4

3

$0.21

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 this account (representing $0.24 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.

American Funds Multi-Sector Income Fund — Page 56

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 April 30, 2023, 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 trustees, 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 trustees 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 trustees; association dues; costs of stationery and forms prepared exclusively for the fund; and costs of assembling and storing shareholder account data.

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

0.332%

$ 0

$15,000,000,000

0.300

15,000,000,000

 

Management fees are paid monthly and accrued daily.

For the fiscal years ended December 31, 2022, 2021 and 2020, the investment adviser earned from the fund management fees of $20,232,000, $8,788,000 and $1,056,000, respectively. The fund’s board of trustees approved an amended Investment Advisory and Service Agreement, 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 effective date of the amended agreement. Accordingly, after giving effect to the fee waivers described above, the fund paid the investment adviser management fees of $20,126,000 (a reduction of $106,000) and $8,713,000 (a reduction of $75,000) for the fiscal years ended December 31, 2022 and 2021, respectively.

American Funds Multi-Sector Income Fund — Page 57

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 April 30, 2023, 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.

American Funds Multi-Sector Income Fund — Page 58

During the 2022 fiscal year, administrative services fees were:

   
 

Administrative services fee

Class A

$191,000

Class C

6,000

Class T

—*

Class F-1

4,000

Class F-2

316,000

Class F-3

112,000

Class 529-A

3,000

Class 529-C

—*

Class 529-E

—*

Class 529-T

—*

Class 529-F-1

—*

Class 529-F-2

1,000

Class 529-F-3

—*

Class R-1

—*

Class R-2

—*

Class R-2E

—*

Class R-3

—*

Class R-4

1,000

Class R-5E

—*

Class R-5

—*

Class R-6

1,115,000

* Amount less than $1,000.

American Funds Multi-Sector Income Fund — Page 59

Principal Underwriter and plans of distribution — American Funds Distributors, 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.

American Funds Multi-Sector Income Fund — Page 60

Commissions, revenue or service fees retained by the Principal Underwriter after allowances or compensation to dealers were:

       
 

Fiscal year

Commissions,
revenue
or fees retained

Allowance or
compensation
to dealers

Class A

2022

$143,000

$494,000

 

2021

336,000

1,290,000

 

2020

182,000

728,000

Class C

2022

60,000

 

2021

109,000

 

2020

71,000

Class 529-A

2022

2,000

8,000

 

2021

3,000

13,000

 

2020

1,000

4,000

Class 529-C

2022

1,000

2,000

 

2021

3,000

 

2020

1,000

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 trustees 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.

American Funds Multi-Sector Income Fund — Page 61

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.As of the fund’s most recent fiscal year, unreimbursed expenses that remained subject to reimbursement under the Plan for Class A shares totaled $574,000 or less than 1% of Class A net assets.

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.

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
related
payments1

Distribution
related
payments1

Total
allowable
under
the Plans2

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 trustees 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 trustees.

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.

American Funds Multi-Sector Income Fund — Page 62

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 2022 fiscal year, 12b-1 expenses accrued and paid, and if applicable, unpaid, were:

     
 

12b-1 expenses

12b-1 unpaid liability
outstanding

Class A

$1,909 ,000

$121,000

Class C

179,000

15,000

Class T

Class F-1

36,000

3,000

Class 529-A

22,000

2,000

Class 529-C

6,000

—*

Class 529-E

1,000

—*

Class 529-T

Class 529-F-1

Class 529-F-2

Class 529-F-3

Class R-1

1,000

—*

Class R-2

8,000

1,000

Class R-2E

—*

Class R-3

6,000

1,000

Class R-4

4,000

1,000

* Amount less than $1,000.

American Funds Multi-Sector Income Fund — Page 63

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 trustees and separately by a majority of the independent trustees 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 trustees of the fund are committed to the discretion of the independent trustees 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 trustees and the Plans must be renewed annually by the board of trustees.

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 American Funds Distributors at (800) 421-4120 for assistance.

Fee to Virginia529 — Class 529 shares are offered to certain American Funds by Virginia529 through CollegeAmerica and Class ABLE shares are offered to certain American Funds by Virginia529 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, Virginia529 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. Virginia529 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.

American Funds Multi-Sector Income Fund — Page 64

Other compensation to dealers — As of March 31, 2023, the top dealers (or their affiliates) that American Funds Distributors anticipates will receive additional compensation (as described in the prospectus) include:

   

Advisor Group

 

American Portfolios Financial Services, Inc.

 

Arbor Point Advisors

 

Bluechip Wealth Advisors LLC

 

Capital Wealth Management Inc

 

Continuum Advisory LLC

 

Financial Directions LLC

 

Frazier Financial Advisors LLC

 

FSC Securities Corporation

 

Future Finances Inc

 

Grace Capital Management Llc

 

Infinex Investments, Inc.

 

Ladenburg Thalmann & Co Inc

 

Ladenburg Thalmann Asset Management Inc

 

Overridge Wealth Advisors

 

Premier Trust Inc

 

Royal Alliance Associates, Inc.

 

SagePoint Financial, Inc.

 

Securities America, Inc.

 

Triad Advisors LLC

 

Triad Hybrid Solutions LLC

 

Wealth Management Associates Inc

 

Wealthplan Partners

 

Wmbc

 

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.

 

NEXT Financial Group, Inc.

 

SCF Securities, Inc.

 

Sorrento Pacific Financial, LLC

 

Western International Securities, Inc.

 

Avantax Investment Services, Inc.

 

Cambridge

 

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

 

American Funds Multi-Sector Income Fund — Page 65

   

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 Securities

 

Grove Point Investments LLC

 

Kestra Investment Services LLC

 

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

 

The MassMutual Trust Company FSB

 

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

 

SA Stone Investment Advisors Inc

 

Stifel, Nicolaus & Company, Incorporated

 

UBS

 

UBS Financial Services, Inc.

 

UBS Securities, LLC

 

Wells Fargo Network

 

Wells Fargo Advisors Financial Network, LLC

 

Wells Fargo Advisors LLC (WBS)

 

Wells Fargo Advisors Private Client Group

 

Wells Fargo Bank, N.A.

 

Wells Fargo Clearing Services LLC

 

Wells Fargo Securities, LLC

 

American Funds Multi-Sector Income Fund — Page 66

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

American Funds Multi-Sector Income Fund — Page 67

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

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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 whom 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.

No brokerage commissions were paid by the fund on portfolio transactions for the fiscal year ended December 31, 2022, 2021 and 2020.

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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’s regular broker-dealers included Citigroup Inc., Deutsche Bank A.G., Goldman Sachs Group, Inc., J.P. Morgan Securities LLC, LPL Holdings, Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC. At the end of the fund’s most recently completed fiscal year, the fund held debt securities of Citigroup Inc. in the amount of $39,941,000, Deutsche Bank A.G. in the amount of $16,702,000, Goldman Sachs Group, Inc. in the amount of $47,947,000, J.P. Morgan Securities LLC in the amount of $66,351,000, LPL Holdings, Inc. in the amount of 18,776,000, Morgan Stanley & Co. LLC in the amount of $47,586,000 and Wells Fargo Securities, LLC in the amount of $50,430,000.

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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 trustees, 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 equity 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. 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.

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 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 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.

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

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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 clients other than the fund 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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Price of shares

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 the newspaper 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, contractual or legal restrictions on resale of the security, relevant financial or business developments of the issuer, actively traded similar or related securities and transactions, dealer or

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broker quotes, conversion or exchange rights on the security, related corporate actions, significant events occurring after the close of trading in the security and changes in overall market conditions. 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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Taxes and distributions

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, including the asset diversification test. The asset diversification test requires that at the close of each quarter of the fund’s taxable year that (i) at least 50% of the fund’s assets be invested in cash and cash items, government securities, securities of other funds and other securities which, with respect to any one issuer, represent neither more than 5% of the assets of the fund nor more than 10% of the voting securities of the issuer, and (ii) no more than 25% of the fund’s assets be invested in the securities of any one issuer (other than government securities or the securities of other funds), the securities (other than the securities of other funds) of two or more issuers that the fund controls and are engaged in similar trades or businesses, or the securities of one or more qualified publicly traded partnerships.

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. In the event the fund's distribution of net investment income exceeds its earnings and profits for tax purposes, a portion of such distribution may be classified as return of capital. Returns of capital distributions decrease your cost basis and are not taxable until your cost basis has been reduced to zero. If your cost basis is zero, returns of capital distributions are treated as capital gains.

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

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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. 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.

Certain distributions reported by the fund as Section 163(j) interest dividends may be treated as interest income by shareholders for purposes of the tax rules applicable to interest expense limitations under Section 163(j) of the Code. Such treatment by the shareholder is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that the fund is eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of the fund’s business interest income over the sum of the fund’s (i) business interest expense and (ii) other deductions properly allocable to the fund’s business interest income.

Individuals (and certain other non-corporate entities) are generally eligible for a 20% deduction with respect to taxable ordinary REIT dividends. 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

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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 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

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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 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 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.

American Funds Multi-Sector Income Fund — Page 79

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.

American Funds Multi-Sector Income Fund — Page 80

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 Virginia529 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

American Funds Multi-Sector Income Fund — Page 82

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. The board of trustees of the fund reserves the right at any time, without shareholder approval, to amend the conversion features of the Class C and Class 529-C shares, including without limitation, providing for conversion into a different share class or for no conversion. In making its decision, the board of trustees will consider, among other things, the effect of any such amendment on shareholders.

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

American Funds Multi-Sector Income Fund — Page 83

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 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.

American Funds Multi-Sector Income Fund — Page 84

Sales charges

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 American Funds Distributors, 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.

American Funds Multi-Sector Income Fund — Page 85

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.

American Funds Multi-Sector Income Fund — Page 86

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 American Funds Distributors, 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 American Funds Distributors, 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

American Funds Multi-Sector Income Fund — Page 89

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).

American Funds Multi-Sector Income Fund — Page 90

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.

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

American Funds Multi-Sector Income Fund — Page 91

limits the tax-favored status of CollegeAmerica; or elimination of the fund by Virginia529 as an option for additional investment within CollegeAmerica.

Selling shares

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.

You may request that redemption proceeds of $1,000 or more from American Funds U.S. Government Money Market Fund be wired to your bank by writing American Funds Service Company. A signature guarantee is required on all requests to wire funds and you may be subject to a fee for the transaction.

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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.

American Funds Multi-Sector Income Fund — Page 93

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; redeem shares (up to $125,000 per American Funds shareholder each day); 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

American Funds Multi-Sector Income Fund — Page 94

services. However, you may elect to opt out of these services by writing the Transfer Agent (you may 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 declaration of trust permits 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 trustees of the fund may from time to time adopt.

While payment of redemptions normally will be in cash, the fund’s declaration of trust permits 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 trustees. 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.

American Funds Multi-Sector Income Fund — Page 95

General information

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 State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111, as custodian. If the fund holds securities of issuers outside the U.S., the custodian may hold these securities pursuant to subcustodial arrangements in banks outside the U.S. or branches of U.S. banks outside the U.S.

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.

American Funds Multi-Sector Income Fund — Page 96

During the 2022 fiscal year, transfer agent fees, gross of any payments made by American Funds Service Company to third parties, were:

   
 

Transfer agent fee

Class A

$468,000

Class C

13,000

Class T

—*

Class F-1

19,000

Class F-2

1,042,000

Class F-3

—*

Class 529-A

7,000

Class 529-C

—*

Class 529-E

—*

Class 529-T

—*

Class 529-F-1

—*

Class 529-F-2

1,000

Class 529-F-3

—*

Class R-1

—*

Class R-2

2,000

Class R-2E

—*

Class R-3

2,000

Class R-4

1,000

Class R-5E

1,000

Class R-5

—*

Class R-6

15,000

*Amount less than $1,000.

The fund’s transfer agent is currently waiving a portion of the expenses of Class F-3 shares of the fund. This waiver will be in effect through at least March 1, 2022. The transfer agent may elect at its discretion to extend, modify or terminate the waiver at that time. For each of the fiscal years ended December 31, 2020 and 2019, the total expense waived by the transfer agent were $6,000.

American Funds Multi-Sector Income Fund — Page 97

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 included in this statement of additional information that are from the fund's annual report have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements have been so 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 trustees.

Independent legal counsel — Morgan, Lewis & Bockius LLP, One Federal Street, Boston, MA 02110-1726, serves as independent legal counsel (“counsel”) for the fund and for independent trustees 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 trustees of the fund, as prescribed by applicable 1940 Act rules.

Prospectuses, reports to shareholders and proxy statements — The fund’s fiscal year ends on December 31. Shareholders are provided updated summary prospectuses annually and at least semi-annually with reports showing the fund’s investment portfolio or summary investment portfolio, financial statements and other information. 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.

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.

American Funds Multi-Sector Income Fund — Page 98

Determination of net asset value, redemption price and maximum offering price per share for Class A shares — December 31, 2022

   

Net asset value and redemption price per share
(Net assets divided by shares outstanding)  

$8.95

Maximum offering price per share
(100/96.25 of net asset value per share, which takes into account the fund’s current maximum sales charge)  

$9.30

The fund’s most-recently calculated net asset value per share for each share class is available on the American Funds website at capitalgroup.com.

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 annual report, are included in this statement of additional information.

American Funds Multi-Sector Income Fund — Page 99

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
Bond Fund® 

039

N/A

43039

439

639

739

American Funds® Strategic Bond Fund 

30112

33112

43112

34112

36112

37112

American Funds Tax-Exempt Fund of
New York® 

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
of America® 

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
Money Market Fund 

059

359

43059

459

659

759

American Funds Multi-Sector Income Fund — Page 100

                   
 

Fund numbers

Fund

Class
529-A

Class
529-C

Class
529-E

Class
529-T

Class
529-F-1

Class
529-F-2

Class
529-F-3

Class
ABLE-A

Class
ABLE-F-2

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
Money Market Fund 

1059

1359

1559

46059

1459

1659

1759

48059

60059

American Funds Multi-Sector Income Fund — Page 101

                 
 

Fund numbers

Fund

Class
R-1

Class
R-2

Class
R-2E

Class
R-3

Class
R-4

Class
R-5E

Class
R-5

Class
R-6

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
Money Market Fund 

2159

2259

4159

2359

2459

2759

2559

2659

American Funds Multi-Sector Income Fund — Page 102

             
 

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® 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

                 
 

Fund numbers

Fund

Class
R-1

Class
R-2

Class
R-2E

Class
R-3

Class
R-4

Class
R-5E

Class
R-5

Class
R-6

American Funds Target Date Retirement Series®

               

American Funds® 2065
Target Date Retirement Fund

21185

22185

41185

23185

24185

27185

25185

26185

American Funds 2060
Target Date Retirement Fund®

2183

2283

4183

2383

2483

2783

2583

2683

American Funds 2055
Target Date Retirement Fund®

2182

2282

4182

2382

2482

2782

2582

2682

American Funds 2050
Target Date Retirement Fund®

2169

2269

4169

2369

2469

2769

2569

2669

American Funds 2045
Target Date Retirement Fund®

2168

2268

4168

2368

2468

2768

2568

2668

American Funds 2040
Target Date Retirement Fund®

2167

2267

4167

2367

2467

2767

2567

2667

American Funds 2035
Target Date Retirement Fund®

2166

2266

4166

2366

2466

2766

2566

2666

American Funds 2030
Target Date Retirement Fund®

2165

2265

4165

2365

2465

2765

2565

2665

American Funds 2025
Target Date Retirement Fund®

2164

2264

4164

2364

2464

2764

2564

2664

American Funds 2020
Target Date Retirement Fund®

2163

2263

4163

2363

2463

2763

2563

2663

American Funds 2015
Target Date Retirement Fund®

2162

2262

4162

2362

2462

2762

2562

2662

American Funds 2010
Target Date Retirement Fund®

2161

2261

4161

2361

2461

2761

2561

2661

American Funds Multi-Sector Income Fund — Page 103

               
 

Fund numbers

Fund

Class
529-A

Class
529-C

Class
529-E

Class
529-T

Class
529-F-1

Class
529-F-2

Class
529-F-3

American Funds College Target Date Series®

             

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 2024 Fund® 

1092

1392

1592

46092

1492

1692

1792

American Funds College Enrollment Fund® 

1088

1388

1588

46088

1488

1688

1788

American Funds Multi-Sector Income Fund — Page 104

             
 

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
Growth and Income Portfolio 

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
529-A

Class
529-C

Class
529-E

Class
529-T

Class
529-F-1

Class
529-F-2

Class
529-F-3

Class
ABLE-A

Class
ABLE-F-2

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
R-1

Class
R-2

Class
R-2E

Class
R-3

Class
R-4

Class
R-5E

Class
R-5

Class
R-6

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
Growth and Income Portfolio 

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

American Funds Multi-Sector Income Fund — Page 105

             
 

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
R-1

Class
R-2

Class
R-2E

Class
R-3

Class
R-4

Class
R-5E

Class
R-5

Class
R-6

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

American Funds Multi-Sector Income Fund — Page 106

Appendix

The following descriptions of debt security ratings are based on information provided by Moody’s Investors Service, Standard & Poor’s Ratings Services 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.

American Funds Multi-Sector Income Fund — Page 107

Standard & Poor’s
Long-term issue credit ratings

AAA
An obligation rated AAA has the highest rating assigned by Standard & Poor’s. The obligor’s capacity to meet its financial commitment 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 commitment 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 commitment 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 lead to a weakened capacity of the obligor to meet its financial commitment 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 commitment 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 commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment 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 commitment 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 commitment 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 Standard & Poor’s expects default to be a virtual certainty, regardless of the anticipated time to default.

American Funds Multi-Sector Income Fund — Page 108

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 to 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 Standard & Poor’s believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 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. An obligation’s rating is lowered to D if it is subject to a distressed exchange offer.

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

This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor’s does not rate a particular obligation as a matter of policy.

American Funds Multi-Sector Income Fund — Page 109

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.

American Funds Multi-Sector Income Fund — Page 110

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.

American Funds Multi-Sector Income Fund — Page 111

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.

Standard & Poor’s

Commercial paper ratings (highest three ratings)

A-1

A short-term obligation rated A-1 is rated in the highest category by Standard & Poor’s. The obligor’s capacity to meet its financial commitment 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 commitment 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 commitment 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 lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

American Funds Multi-Sector Income Fund — Page 112

 

 

 

 

 

 

 

Investment portfolio December 31, 2022

 

Portfolio by type of security Percent of net assets

 

 

Portfolio quality summary*   Percent of
net assets
U.S. Treasury and agency     2.46 %
AAA/Aaa     2.21  
AA/Aa     10.20  
A/A     15.27  
BBB/Baa     23.34  
Below investment grade     39.80  
Unrated     .08  
Short-term securities & other assets less liabilities     6.64  
* Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor’s, Moody’s and/or Fitch as an indication of an issuer’s creditworthiness. In assigning a credit rating to a security, the fund looks specifically to the ratings assigned to the issuer of the security by Standard & Poor’s, Moody’s and/or Fitch. If agency ratings differ, the security will be considered to have received the highest of those ratings, consistent with the fund’s investment policies. Securities in the “unrated” category (above) have not been rated by a rating agency; however, the investment adviser performs its own credit analysis and assigns comparable ratings that are used for compliance with the fund’s investment policies. The ratings are not covered by the Report of Independent Registered Public Accounting Firm.
  These securities are guaranteed by the full faith and credit of the U.S. government.

 

Bonds, notes & other debt instruments 93.28% Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans 68.19%                
Financials 10.92%                
Advisor Group Holdings, LLC 6.25% 3/1/20281   USD 7,440     $ 6,849  
AerCap Ireland Capital DAC 2.45% 10/29/2026     1,322       1,158  
AerCap Ireland Capital DAC 3.00% 10/29/2028     980       823  
AerCap Ireland Capital DAC 3.30% 1/30/2032     11,651       9,137  
AerCap Ireland Capital DAC 3.40% 10/29/2033     300       228  
AerCap Ireland Capital DAC 3.85% 10/29/2041     32,419       23,035  
AG Merger Sub II, Inc. 10.75% 8/1/20271     4,643       4,707  
AG TTMT Escrow Issuer, LLC 8.625% 9/30/20271     14,938       15,087  
AIA Group, Ltd. 3.375% 4/7/2030     15,000       13,214  
Alliant Holdings Intermediate, LLC 4.25% 10/15/20271     9,840       8,828  
Alliant Holdings Intermediate, LLC 6.75% 10/15/20271     18,918       17,045  
Alliant Holdings Intermediate, LLC 5.875% 11/1/20291     10,490       8,641  
American Express Co. 4.42% 8/3/2033 (USD-SOFR + 1.76% on 8/3/2032)2     15,687       14,866  
American International Group, Inc. 4.375% 6/30/2050     11,250       9,575  
AmWINS Group, Inc. 4.875% 6/30/20291     19,105       16,229  
Aretec Escrow Issuer, Inc. 7.50% 4/1/20291     18,309       15,150  
Ascensus, Inc., Term Loan, (3-month USD-LIBOR + 6.50%) 10.25% 8/2/20293,4     3,415       3,005  
AssuredPartners, Inc. 7.00% 8/15/20251     335       324  
AssuredPartners, Inc. 8.00% 5/15/20271     9,122       8,752  
AssuredPartners, Inc. 5.625% 1/15/20291     5,773       4,759  
Australia & New Zealand Banking Group, Ltd. 6.742% 12/8/20321     3,706       3,754  
Banco Santander, SA 2.746% 5/28/2025     1,600       1,499  
Banco Santander, SA 5.294% 8/18/2027     3,200       3,130  
Bangkok Bank PCL 4.45% 9/19/2028     200       191  

 

4 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Financials (continued)                
Bangkok Bank PCL 3.733% 9/25/2034 (5-year UST Yield Curve Rate T Note Constant Maturity + 1.90% on 9/25/2029)2   USD 23,400     $ 19,605  
Bank of America Corp. 1.734% 7/22/2027 (USD-SOFR + 0.96% on 7/22/2026)2     7,330       6,431  
Bank of America Corp. 2.551% 2/4/2028 (USD-SOFR + 1.05% on 2/4/2027)2     700       623  
Bank of America Corp. 4.948% 7/22/2028 (USD-SOFR + 2.04% on 7/22/2027)2     46,160       45,158  
Bank of America Corp. 1.922% 10/24/2031 (USD-SOFR + 1.37% on 10/24/2030)2     1,042       798  
Bank of America Corp. 2.651% 3/11/2032 (USD-SOFR + 1.22% on 3/11/2031)2     190       153  
Bank of America Corp. 2.972% 2/4/2033 (USD-SOFR + 1.33% on 2/4/2032)2     210       170  
Bank of America Corp. 4.571% 4/27/2033 (USD-SOFR + 1.83% on 4/27/2032)2     1,790       1,642  
Bank of America Corp. 5.015% 7/22/2033 (USD-SOFR + 2.16% on 7/22/2032)2     12,202       11,621  
Bank of Nova Scotia 2.45% 2/2/2032     5,911       4,770  
BNP Paribas SA 2.871% 4/19/2032 (USD-SOFR + 1.387% on 4/19/2031)1,2     1,659       1,301  
Canadian Imperial Bank of Commerce (CIBC) 3.60% 4/7/2032     1,240       1,096  
Charles Schwab Corp. 2.45% 3/3/2027     16,130       14,728  
China Ping An Insurance Overseas (Holdings), Ltd. 2.85% 8/12/2031     2,888       2,258  
Chubb INA Holdings, Inc. 2.85% 12/15/2051     2,463       1,639  
Chubb INA Holdings, Inc. 3.05% 12/15/2061     155       101  
Citigroup, Inc. 3.057% 1/25/2033 (USD-SOFR + 1.351% on 1/25/2032)2     5,053       4,091  
Citigroup, Inc. 3.785% 3/17/2033 (USD-SOFR + 1.939% on 3/17/2032)2     23,215       19,918  
Citigroup, Inc. 6.27% 11/17/2033 (USD-SOFR + 2.338% on 11/17/2032)2     15,396       15,932  
CMB International Leasing Management, Ltd. 2.75% 8/12/2030     8,305       6,374  
Coinbase Global, Inc. 3.375% 10/1/20281     6,702       3,551  
Coinbase Global, Inc. 3.625% 10/1/20311     6,775       3,272  
Compass Diversified Holdings 5.25% 4/15/20291     31,725       27,191  
Compass Diversified Holdings 5.00% 1/15/20321     10,080       8,020  
Corebridge Financial, Inc. 3.85% 4/5/20291     5,959       5,440  
Corebridge Financial, Inc. 3.90% 4/5/20321     12,896       11,298  
Corebridge Financial, Inc. 4.35% 4/5/20421     1,724       1,421  
Corebridge Financial, Inc. 4.40% 4/5/20521     14,051       11,205  
Credit Suisse Group AG 4.194% 4/1/2031 (USD-SOFR + 3.73% on 4/1/2030)1,2     1,400       1,090  
Credit Suisse Group AG 3.091% 5/14/2032 (USD-SOFR + 1.73% on 5/14/2031)1,2     24,025       16,648  
Credit Suisse Group AG 9.016% 11/15/2033 (USD-SOFR + 5.02% on 11/15/2032)1,2     2,375       2,438  
Danske Bank AS 4.298% 4/1/2028 (1-year UST Yield Curve Rate T Note Constant Maturity + 1.75% on 4/1/2027)1,2     12,485       11,498  
Deutsche Bank AG 3.95% 2/27/2023     300       299  
Deutsche Bank AG 2.311% 11/16/2027 (USD-SOFR + 1.219% on 11/16/2026)2     2,094       1,778  
Deutsche Bank AG 2.552% 1/7/2028 (USD-SOFR + 1.318% on 1/7/2027)2     17,178       14,625  
Digital Currency Group, Inc., Term Loan, (3-month USD-LIBOR + 7.00%) 8.00% 11/30/20263,4,5     2,653       2,305  
Digital Currency Group, Inc., Term Loan, 8.75% 11/30/20263,5     3,536       2,835  
Discover Financial Services 6.70% 11/29/2032     4,450       4,537  
DNB Bank ASA 1.535% 5/25/2027 (5-year UST Yield Curve Rate T Note Constant Maturity + 0.72% on 5/25/2026)1,2     2,550       2,220  
FS Energy and Power Fund 7.50% 8/15/20231     6,804       6,826  
GE Capital Funding, LLC 4.55% 5/15/2032     7,019       6,684  
Goldman Sachs Group, Inc. 1.948% 10/21/2027 (USD-SOFR + 0.913% on 10/21/2026)2     1,995       1,747  
Goldman Sachs Group, Inc. 3.615% 3/15/2028 (USD-SOFR + 1.846% on 3/15/2027)2     9,660       9,012  
Goldman Sachs Group, Inc. 2.615% 4/22/2032 (USD-SOFR + 1.281% on 4/22/2031)2     22,422       17,935  
Goldman Sachs Group, Inc. 2.65% 10/21/2032 (USD-SOFR + 1.264% on 10/21/2031)2     21,500       17,029  
Goldman Sachs Group, Inc. 3.436% 2/24/2043 (USD-SOFR + 1.632% on 2/24/2042)2     3,010       2,224  
Groupe BPCE SA 1.652% 10/6/2026 (USD-SOFR + 1.52% on 10/6/2025)1,2     250       222  
Groupe BPCE SA 2.277% 1/20/2032 (USD-SOFR + 1.312% on 1/20/2031)1,2     8,770       6,576  
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)1,2     2,000       1,721  
Hightower Holding, LLC 6.75% 4/15/20291     6,955       5,846  
HSBC Holdings PLC 4.755% 6/9/2028 (USD-SOFR + 2.11% on 6/9/2027)2     1,065       1,008  
HSBC Holdings PLC 2.206% 8/17/2029 (USD-SOFR + 1.285% on 8/17/2028)2     2,093       1,693  
HSBC Holdings PLC 2.804% 5/24/2032 (USD-SOFR + 1.187% on 5/24/2031)2     20,003       15,522  
HSBC Holdings PLC 5.402% 8/11/2033 (USD-SOFR + 2.87% on 8/11/2032)2     13,131       12,197  
Huarong Finance 2017 Co., Ltd. (3-month USD-LIBOR + 1.325%) 5.068% 7/3/20234     1,360       1,349  
Huarong Finance 2017 Co., Ltd. 4.75% 4/27/2027     1,000       874  
Huarong Finance 2017 Co., Ltd. 4.25% 11/7/2027     3,500       2,995  
Huarong Finance 2019 Co., Ltd. 2.50% 2/24/2023     200       198  
Huarong Finance 2019 Co., Ltd. (3-month USD-LIBOR + 1.125%) 5.824% 2/24/20234     2,151       2,144  
Huarong Finance 2019 Co., Ltd. 3.75% 5/29/2024     200       190  
Huarong Finance 2019 Co., Ltd. (3-month USD-LIBOR + 1.25%) 6.007% 2/24/20254     1,862       1,755  
Huarong Finance II Co., Ltd. 5.50% 1/16/2025     438       416  

 

American Funds Multi-Sector Income Fund 5
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Financials (continued)                
Huarong Finance II Co., Ltd. 5.00% 11/19/2025   USD 200     $ 185  
Huarong Finance II Co., Ltd. 4.625% 6/3/2026     216       191  
Huarong Finance II Co., Ltd. 4.875% 11/22/2026     698       625  
HUB International, Ltd. 7.00% 5/1/20261     10,885       10,678  
HUB International, Ltd. 5.625% 12/1/20291     8,733       7,639  
ICBCIL Finance Co., Ltd. 3.625% 11/15/2027     5,800       5,446  
ING Groep NV 4.252% 3/28/2033 (USD-SOFR + 2.07% on 3/28/2032)2     3,976       3,511  
Intercontinental Exchange, Inc. 4.60% 3/15/2033     304       291  
Intercontinental Exchange, Inc. 2.65% 9/15/2040     575       400  
Intercontinental Exchange, Inc. 3.00% 6/15/2050     10,283       6,971  
Intercontinental Exchange, Inc. 4.95% 6/15/2052     15,906       14,819  
Intercontinental Exchange, Inc. 3.00% 9/15/2060     55       35  
Iron Mountain Information Management Services, Inc. 5.00% 7/15/20321     14,405       11,987  
JPMorgan Chase & Co. 1.561% 12/10/2025 (USD-SOFR + 0.605% on 12/10/2024)2     76       70  
JPMorgan Chase & Co. 1.578% 4/22/2027 (USD-SOFR + 0.885% on 4/22/2026)2     1,126       991  
JPMorgan Chase & Co. 4.851% 7/25/2028 (USD-SOFR + 1.99% on 7/25/2027)2     17,140       16,736  
JPMorgan Chase & Co. 1.953% 2/4/2032 (USD-SOFR + 1.065% on 2/4/2031)2     26,300       20,178  
JPMorgan Chase & Co. 2.58% 4/22/2032 (USD-SOFR + 1.25% on 4/22/2031)2     628       505  
JPMorgan Chase & Co. 2.963% 1/25/2033 (USD-SOFR + 1.26% on 1/25/2032)2     2,326       1,899  
JPMorgan Chase & Co. 4.586% 4/26/2033 (USD-SOFR + 1.80% on 4/26/2032)2     931       865  
JPMorgan Chase & Co. 4.912% 7/25/2033 (USD-SOFR + 2.08% on 7/25/2032)2     26,287       25,107  
Kasikornbank PCL HK 3.343% 10/2/2031 (5-year UST Yield Curve Rate T Note Constant Maturity + 1.70% on 10/2/2026)2     29,100       25,645  
Keb Hana Bank 3.25% 3/30/20271     4,110       3,834  
Keb Hana Bank 3.25% 3/30/2027     3,890       3,629  
LPL Holdings, Inc. 4.625% 11/15/20271     2,245       2,101  
LPL Holdings, Inc. 4.00% 3/15/20291     13,325       11,612  
LPL Holdings, Inc. 4.375% 5/15/20311     5,945       5,063  
Marsh & McLennan Companies, Inc. 2.375% 12/15/2031     1,644       1,332  
MetLife, Inc. 4.55% 3/23/2030     33       33  
MetLife, Inc. 5.00% 7/15/2052     1,045       1,001  
Metropolitan Life Global Funding I 1.95% 1/13/20231     150       150  
Mitsubishi UFJ Financial Group, Inc. 5.133% 7/20/2033 (1-year UST Yield Curve Rate T Note Constant Maturity + 2.125% on 7/20/2032)2     699       669  
Morgan Stanley 4.679% 7/17/2026 (USD-SOFR + 1.669% on 7/17/2025)2     15,040       14,797  
Morgan Stanley 1.512% 7/20/2027 (USD-SOFR + 0.858% on 7/20/2026)2     3,160       2,746  
Morgan Stanley 2.475% 1/21/2028 (USD-SOFR + 1.00% on 1/21/2027)2     1,490       1,326  
Morgan Stanley 4.21% 4/20/2028 (USD-SOFR + 1.61% on 4/20/2027)2     3,469       3,305  
Morgan Stanley 2.511% 10/20/2032 (USD-SOFR + 1.20% on 10/20/2031)2     459       360  
Morgan Stanley 2.943% 1/21/2033 (USD-SOFR + 1.29% on 1/21/2032)2     1,902       1,544  
Morgan Stanley 4.889% 7/20/2033 (USD-SOFR + 2.077% on 7/20/2032)2     22,325       21,040  
Morgan Stanley 5.297% 4/20/2037 (USD-SOFR + 2.62% on 4/20/2032)2     2,691       2,468  
MSCI, Inc. 4.00% 11/15/20291     3,385       2,954  
MSCI, Inc. 3.625% 9/1/20301     3,680       3,066  
MSCI, Inc. 3.875% 2/15/20311     4,546       3,788  
MSCI, Inc. 3.25% 8/15/20331     7,145       5,528  
National Financial Partners Corp. 6.875% 8/15/20281     14,269       11,793  
Navient Corp. 5.00% 3/15/2027     7,025       6,162  
Navient Corp. 4.875% 3/15/2028     1,775       1,462  
Navient Corp. 5.625% 8/1/2033     14,840       10,599  
NFP Corp. 7.50% 10/1/20301     7,000       6,626  
Oxford Finance, LLC 6.375% 2/1/20271     11,180       10,421  
PNC Financial Services Group, Inc. 6.037% 10/28/2033 (USD-SOFR + 2.14% on 10/28/2032)2     3,756       3,922  
Power Financial Corp., Ltd. 6.15% 12/6/2028     1,200       1,221  
Power Financial Corp., Ltd. 4.50% 6/18/2029     7,100       6,572  
Rede D’Or Finance SARL 4.50% 1/22/20301     2,451       2,113  
Royal Bank of Canada 6.00% 11/1/2027     10,570       11,038  
Ryan Specialty Group, LLC 4.375% 2/1/20301     14,500       12,574  
Shriram Transport Finance Co., Ltd. 4.40% 3/13/2024     5,500       5,297  
Shriram Transport Finance Co., Ltd. 4.40% 3/13/20241     834       803  
Shriram Transport Finance Co., Ltd. 4.15% 7/18/2025     2,700       2,491  
State Street Corp. 5.82% 11/4/2028 (USD-SOFR + 1.715% on 11/4/2027)2     1,124       1,163  
SVB Financial Group 4.70% junior subordinated perpetual bonds (5-year UST Yield Curve Rate T Note Constant Maturity + 3.064% on 11/15/2031)2     3,843       2,439  
Toronto-Dominion Bank 2.45% 1/12/2032     185       150  

 

6 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Financials (continued)                
Toronto-Dominion Bank 3.20% 3/10/2032   USD 290     $ 250  
Toronto-Dominion Bank 4.456% 6/8/2032     1,836       1,756  
Travelers Companies, Inc. 4.10% 3/4/2049     20       16  
Travelers Companies, Inc. 2.55% 4/27/2050     7,003       4,359  
Wells Fargo & Company 4.808% 7/25/2028 (USD-SOFR + 1.98% on 7/25/2027)2     5,500       5,381  
Wells Fargo & Company 4.478% 4/4/2031 (3-month USD-LIBOR + 3.77% on 4/4/2030)2     41,700       39,189  
Wells Fargo & Company 3.35% 3/2/2033 (USD-SOFR + 1.50% on 3/2/2032)2     3,255       2,751  
Wells Fargo & Company 4.611% 4/25/2053 (USD-SOFR + 2.13% on 4/25/2052)2     3,649       3,109  
Xiaomi Best Time International, Ltd. 2.875% 7/14/2031     3,500       2,541  
Xiaomi Best Time International, Ltd. 2.875% 7/14/20311     1,805       1,311  
Xiaomi Best Time International, Ltd. 4.10% 7/14/20511     1,120       651  
              1,001,509  
                 
Energy 9.19%                
AI Candelaria (Spain), SLU 5.75% 6/15/20331     2,135       1,627  
Apache Corp. 4.625% 11/15/2025     985       952  
Apache Corp. 4.25% 1/15/2030     4,000       3,547  
Apache Corp. 6.00% 1/15/2037     55       51  
Apache Corp. 5.25% 2/1/2042     4,450       3,664  
Apache Corp. 4.75% 4/15/2043     1,760       1,331  
Apache Corp. 5.35% 7/1/2049     50       40  
Ascent Resources Utica Holdings, LLC 7.00% 11/1/20261     5,155       5,008  
Ascent Resources Utica Holdings, LLC 8.25% 12/31/20281     5,077       4,983  
Ascent Resources Utica Holdings, LLC 5.875% 6/30/20291     3,240       2,893  
Baker Hughes Holdings, LLC 2.061% 12/15/2026     2,698       2,422  
BIP-V Chinook Holdco, LLC 5.50% 6/15/20311     13,735       12,023  
Blue Racer Midstream, LLC 7.625% 12/15/20251     7,043       6,999  
Bonanza Creek Energy, Inc. 5.00% 10/15/20261     12,815       11,732  
BP Capital Markets America, Inc. 1.749% 8/10/2030     19,500       15,590  
California Resources Corp. 7.125% 2/1/20261     12,000       11,547  
Callon Petroleum Co. 8.00% 8/1/20281     4,300       4,105  
Callon Petroleum Co. 7.50% 6/15/20301     7,165       6,565  
Canadian Natural Resources, Ltd. 3.85% 6/1/2027     4,270       4,028  
Canadian Natural Resources, Ltd. 2.95% 7/15/2030     658       556  
Canadian Natural Resources, Ltd. 4.95% 6/1/2047     65       57  
Cenovus Energy, Inc. 5.375% 7/15/2025     172       172  
Centennial Resource Production, LLC 6.875% 4/1/20271     30       28  
Cheniere Energy Partners, LP 4.50% 10/1/2029     12,157       10,959  
Cheniere Energy Partners, LP 4.00% 3/1/2031     3,655       3,117  
Cheniere Energy Partners, LP 3.25% 1/31/2032     6,155       4,900  
Cheniere Energy, Inc. 4.625% 10/15/2028     13,290       12,038  
Chesapeake Energy Corp. 5.50% 2/1/20261     3,110       3,005  
Chesapeake Energy Corp. 5.875% 2/1/20291     15,680       14,879  
Chesapeake Energy Corp. 6.75% 4/15/20291     1,280       1,248  
Chevron Corp. 1.995% 5/11/2027     21,734       19,552  
Chevron Corp. 2.236% 5/11/2030     5,035       4,326  
Chevron Corp. 3.078% 5/11/2050     5,214       3,768  
CNX Resources Corp. 7.25% 3/14/20271     5,045       5,016  
CNX Resources Corp. 6.00% 1/15/20291     8,304       7,653  
CNX Resources Corp. 7.375% 1/15/20311     5,085       4,881  
Comstock Resources, Inc. 6.75% 3/1/20291     5,215       4,716  
Comstock Resources, Inc. 5.875% 1/15/20301     7,635       6,574  
Continental Resources, Inc. 5.75% 1/15/20311     1,600       1,493  
Continental Resources, Inc. 2.875% 4/1/20321     3,734       2,771  
Crestwood Midstream Partners, LP 8.00% 4/1/20291     9,580       9,547  
CrownRock, LP 5.00% 5/1/20291     6,750       6,101  
Diamond Foreign Asset Co. 9.00% Cash 4/22/20271,4,6     102       97  
Diamond Foreign Asset Co. 9.00% Cash 4/22/20276     92       88  
DT Midstream, Inc. 4.125% 6/15/20291     1,755       1,511  
DT Midstream, Inc. 4.375% 6/15/20311     4,075       3,424  
Ecopetrol SA 6.875% 4/29/2030     5,990       5,446  
Enbridge, Inc. 3.40% 8/1/2051     718       491  
Energean Israel Finance, Ltd. 4.50% 3/30/20241     805       779  
Energean Israel Finance, Ltd. 5.875% 3/30/20311     930       815  
Energy Transfer Operating, LP 3.75% 5/15/2030     2,750       2,431  
Energy Transfer Partners, LP 6.125% 12/15/2045     20       19  
Energy Transfer Partners, LP 5.30% 4/15/2047     70       59  

 

American Funds Multi-Sector Income Fund 7
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Energy (continued)                
Energy Transfer Partners, LP 6.00% 6/15/2048   USD 260     $ 236  
Energy Transfer Partners, LP 6.25% 4/15/2049     13,700       12,805  
Energy Transfer Partners, LP 6.50% junior subordinated perpetual bonds (5-year UST Yield Curve Rate T Note Constant Maturity + 5.694% on 11/15/2049)2     1,107       955  
Enterprise Products Operating, LLC 3.20% 2/15/2052     118       78  
EQM Midstream Partners, LP 4.00% 8/1/2024     936       901  
EQM Midstream Partners, LP 6.00% 7/1/20251     3,525       3,408  
EQM Midstream Partners, LP 7.50% 6/1/20271     232       227  
EQM Midstream Partners, LP 6.50% 7/1/20271     7,550       7,229  
EQM Midstream Partners, LP 4.50% 1/15/20291     8,195       6,895  
EQM Midstream Partners, LP 7.50% 6/1/20301     5,167       4,986  
EQM Midstream Partners, LP 4.75% 1/15/20311     11,461       9,392  
EQT Corp. 6.125% 2/1/20252     80       80  
EQT Corp. 5.70% 4/1/2028     822       819  
EQT Corp. 5.00% 1/15/2029     1,195       1,126  
EQT Corp. 3.625% 5/15/20311     3,525       2,992  
Exxon Mobil Corp. 2.44% 8/16/2029     16,670       14,599  
Exxon Mobil Corp. 2.61% 10/15/2030     49,000       42,924  
Genesis Energy, LP 8.00% 1/15/2027     15,212       14,388  
Guara Norte SARL 5.198% 6/15/2034     5,718       4,847  
Guara Norte SARL 5.198% 6/15/20341     2,502       2,121  
Harvest Midstream I, LP 7.50% 9/1/20281     10,520       10,066  
Hess Midstream Operations, LP 5.50% 10/15/20301     5,620       5,149  
Hilcorp Energy I, LP 5.75% 2/1/20291     5,380       4,796  
Hilcorp Energy I, LP 6.00% 4/15/20301     7,441       6,628  
Hilcorp Energy I, LP 6.00% 2/1/20311     5,340       4,626  
Hilcorp Energy I, LP 6.25% 4/15/20321     6,940       5,999  
Kinder Morgan, Inc. 4.80% 2/1/2033     20,000       18,603  
Kinder Morgan, Inc. 5.20% 3/1/2048     15       13  
Kinder Morgan, Inc. 3.25% 8/1/2050     669       435  
Kinder Morgan, Inc. 5.45% 8/1/2052     6,191       5,589  
Leviathan Bond, Ltd. 5.75% 6/30/20231     5,100       5,096  
Leviathan Bond, Ltd. 6.75% 6/30/20301     5,870       5,555  
Magellan Midstream Partners, LP 3.95% 3/1/2050     1,000       736  
MPLX, LP 2.65% 8/15/2030     651       529  
MPLX, LP 4.95% 9/1/2032     34,163       32,135  
MPLX, LP 4.70% 4/15/2048     5,900       4,682  
MPLX, LP 4.95% 3/14/2052     10,000       8,216  
Murphy Oil Corp. 5.875% 12/1/2027     4,000       3,856  
MV24 Capital BV 6.748% 6/1/2034     12,034       11,017  
Nabors Industries, Inc. 7.375% 5/15/20271     1,520       1,474  
New Fortress Energy, Inc. 6.75% 9/15/20251     7,680       7,282  
New Fortress Energy, Inc. 6.50% 9/30/20261     18,500       17,216  
NGL Energy Operating, LLC 7.50% 2/1/20261     33,190       29,609  
NGL Energy Partners, LP 7.50% 11/1/2023     7,424       7,241  
Northern Oil and Gas, Inc. 8.125% 3/1/20281     15,385       14,792  
NorthRiver Midstream Finance, LP 5.625% 2/15/20261     1,250       1,186  
NuStar Logistics, LP 5.75% 10/1/2025     700       674  
NuStar Logistics, LP 6.00% 6/1/2026     1,625       1,568  
NuStar Logistics, LP 5.625% 4/28/2027     3,600       3,372  
Occidental Petroleum Corp. 2.90% 8/15/2024     210       201  
Occidental Petroleum Corp. 5.875% 9/1/2025     3,920       3,912  
Occidental Petroleum Corp. 8.875% 7/15/2030     5,630       6,366  
Occidental Petroleum Corp. 6.625% 9/1/2030     9,153       9,479  
Occidental Petroleum Corp. 6.125% 1/1/2031     5,540       5,602  
Occidental Petroleum Corp. 6.45% 9/15/2036     3,170       3,241  
Occidental Petroleum Corp. 6.60% 3/15/2046     1,255       1,294  
Occidental Petroleum Corp. 4.40% 8/15/2049     1,972       1,542  
Odebrecht Drilling Norbe 7.72% PIK 12/1/20266     49,380       13,209  
Oleoducto Central SA 4.00% 7/14/20271     5,210       4,605  
Oleoducto Central SA 4.00% 7/14/2027     1,250       1,105  
ONEOK, Inc. 5.85% 1/15/2026     27       27  
ONEOK, Inc. 5.20% 7/15/2048     582       487  
ONEOK, Inc. 4.45% 9/1/2049     1,600       1,196  
ONEOK, Inc. 4.50% 3/15/2050     2,000       1,499  
Petrobras Global Finance Co. 8.75% 5/23/2026     2,500       2,733  
Petrobras Global Finance Co. 7.375% 1/17/2027     1,600       1,676  

 

8 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Energy (continued)                
Petróleos Mexicanos 6.875% 10/16/2025   USD 6,250     $ 6,128  
Petróleos Mexicanos 6.875% 8/4/2026     120       114  
Petróleos Mexicanos 6.49% 1/23/2027     6,932       6,332  
Petróleos Mexicanos 6.50% 1/23/2029     1,716       1,473  
Petróleos Mexicanos 8.75% 6/2/2029     5,791       5,438  
Petróleos Mexicanos 6.84% 1/23/2030     200       166  
Petróleos Mexicanos 6.70% 2/16/2032     8,518       6,705  
Petróleos Mexicanos 6.95% 1/28/2060     5,000       3,172  
Petrorio Luxembourg SARL 6.125% 6/9/20261     6,090       5,804  
Plains All American Pipeline, LP 3.80% 9/15/2030     116       101  
PTT Exploration and Production PCL 2.993% 1/15/2030     1,474       1,282  
Qatar Petroleum 3.125% 7/12/20411     15,750       12,161  
Qatar Petroleum 3.30% 7/12/20511     12,995       9,627  
Range Resources Corp. 4.875% 5/15/2025     5,110       4,862  
Range Resources Corp. 8.25% 1/15/2029     5,290       5,458  
Range Resources Corp. 4.75% 2/15/20301     7,550       6,663  
Sanchez Energy Corp. 7.25% 2/15/20231,7     27       8 
Shell International Finance BV 3.875% 11/13/2028     2,750       2,654  
Shell International Finance BV 2.75% 4/6/2030     6,441       5,667  
Shell International Finance BV 3.25% 4/6/2050     24       17  
Shell International Finance BV 3.00% 11/26/2051     15,178       10,350  
SM Energy Co. 6.625% 1/15/2027     85       82  
SM Energy Co. 6.50% 7/15/2028     1,980       1,901  
Southwestern Energy Co. 5.95% 1/23/20252     2,825       2,780  
Southwestern Energy Co. 7.75% 10/1/2027     195       199  
Southwestern Energy Co. 8.375% 9/15/2028     9,335       9,640  
Southwestern Energy Co. 5.375% 2/1/2029     7,215       6,699  
Southwestern Energy Co. 5.375% 3/15/2030     8,305       7,590  
Southwestern Energy Co. 4.75% 2/1/2032     2,230       1,910  
Suburban Propane Partners, LP / Suburban Energy Finance Corp. 5.00% 6/1/20311     4,980       4,239  
Sunoco, LP 6.00% 4/15/2027     5,165       5,095  
Sunoco, LP 4.50% 5/15/2029     12,015       10,527  
Superior Plus, LP and Superior General Partner, Inc. 4.50% 3/15/20291     2,210       1,893  
Targa Resources Partners, LP 6.50% 7/15/2027     515       519  
Targa Resources Partners, LP 6.875% 1/15/2029     15       15  
Total Capital International 3.127% 5/29/2050     12,551       8,924  
Transocean Guardian, Ltd. 5.875% 1/15/20241     24       24  
Transocean Poseidon, Ltd. 6.875% 2/1/20271     216       211  
Venture Global Calcasieu Pass, LLC 4.125% 8/15/20311     13,480       11,509  
Western Gas Partners, LP 4.50% 3/1/2028     7,115       6,567  
Western Gas Partners, LP 5.45% 4/1/2044     112       93  
Western Midstream Operating, LP 3.35% 2/1/20252     2,165       2,052  
Western Midstream Operating, LP 4.75% 8/15/2028     3,005       2,750  
Western Midstream Operating, LP 4.30% 2/1/20302     22       19  
Western Midstream Operating, LP 5.50% 2/1/20502     200       165  
Williams Companies, Inc. 2.60% 3/15/2031     9,000       7,305  
Williams Companies, Inc. 4.65% 8/15/2032     7,500       7,004  
              842,832  
                 
Communication services 7.73%                
Alphabet, Inc. 2.25% 8/15/2060     6,030       3,426  
Altice France Holding SA 10.50% 5/15/20271     1,520       1,162  
Altice France SA 5.125% 7/15/20291     5,813       4,369  
América Móvil, SAB de CV, 4.70% 7/21/2032     10,000       9,611  
AT&T, Inc. 1.65% 2/1/2028     3,900       3,300  
AT&T, Inc. 4.30% 2/15/2030     14,000       13,216  
AT&T, Inc. 2.75% 6/1/2031     45       37  
AT&T, Inc. 2.25% 2/1/2032     500       393  
AT&T, Inc. 2.55% 12/1/2033     386       298  
AT&T, Inc. 3.50% 9/15/2053     3       2  
AT&T, Inc. 3.55% 9/15/2055     33,161       22,276  
Axiata SPV5 Labuan, Ltd. 3.064% 8/19/2050     8,400       5,599  
CCO Holdings, LLC 5.00% 2/1/20281     2,190       1,993  
CCO Holdings, LLC 6.375% 9/1/20291     13,275       12,501  
CCO Holdings, LLC 4.75% 3/1/20301     11,200       9,685  
CCO Holdings, LLC 4.50% 8/15/20301     9,135       7,568  
CCO Holdings, LLC 4.25% 2/1/20311     4,600       3,700  

 

American Funds Multi-Sector Income Fund 9
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Communication services (continued)                
CCO Holdings, LLC 4.75% 2/1/20321   USD 8,000     $ 6,502  
CCO Holdings, LLC 4.50% 5/1/2032     2,445       1,951  
CCO Holdings, LLC 4.50% 6/1/20331     22,030       16,946  
CCO Holdings, LLC 4.25% 1/15/20341     6,500       4,810  
Centerfield Media Parent, Inc. 6.625% 8/1/20261     833       534  
Charter Communications Operating, LLC 2.30% 2/1/2032     6,600       4,877  
Charter Communications Operating, LLC 5.125% 7/1/2049     13       10  
Charter Communications Operating, LLC 4.80% 3/1/2050     280       204  
Charter Communications Operating, LLC 3.70% 4/1/2051     49,320       30,167  
Charter Communications Operating, LLC 3.90% 6/1/2052     710       448  
Cogent Communications Group, Inc. 3.50% 5/1/20261     7,815       7,109  
Comcast Corp. 2.65% 2/1/2030     200       174  
Comcast Corp. 1.50% 2/15/2031     21,000       16,401  
Comcast Corp. 3.75% 4/1/2040     15       12  
Comcast Corp. 4.00% 3/1/2048     35       28  
Connect Finco SARL 6.75% 10/1/20261     230       214  
Consolidated Communications, Inc. 5.00% 10/1/20281     1,400       1,034  
CSC Holdings, LLC 4.625% 12/1/20301     400       222  
Diamond Sports Group, LLC 6.625% 8/15/20271     3,175       36  
DIRECTV Financing, LLC 5.875% 8/15/20271     7,770       6,966  
DIRECTV Financing, LLC, Term Loan, (3-month USD-LIBOR + 5.00%) 9.384% 8/2/20273,4     4,234       4,125  
DISH Network Corp. 11.75% 11/15/20271     15,850       16,344  
Embarq Corp. 7.995% 6/1/2036     475       222  
Front Range BidCo, Inc. 6.125% 3/1/20281     7,420       4,224  
Frontier Communications Corp. 5.875% 10/15/20271     4,535       4,221  
Frontier Communications Corp. 5.00% 5/1/20281     6,465       5,650  
Frontier Communications Corp. 6.75% 5/1/20291     6,012       4,982  
Frontier Communications Holdings, LLC 5.875% 11/1/2029     9       7  
Frontier Communications Holdings, LLC 8.75% 5/15/20301     5,105       5,200  
Gray Escrow II, Inc. 5.375% 11/15/20311     15,975       11,541  
Gray Television, Inc. 7.00% 5/15/20271     6,520       5,792  
Kantar Group, LLC, Term Loan B2, (3-month USD-LIBOR + 4.50%) 9.23% 12/4/20263,4     1,723       1,598  
Lamar Media Corp. 4.875% 1/15/2029     4,530       4,176  
Lamar Media Corp. 4.00% 2/15/2030     5,930       5,193  
Lamar Media Corp. 3.625% 1/15/2031     7,090       5,871  
Level 3 Financing, Inc. 4.25% 7/1/20281     1,710       1,351  
Level 3 Financing, Inc. 3.75% 7/15/20291     2,670       1,924  
Ligado Networks, LLC 15.50% PIK 11/1/20231,6     1,567       511  
Live Nation Entertainment, Inc. 4.75% 10/15/20271     4,010       3,576  
Meta Platforms, Inc. 3.85% 8/15/2032     60,000       52,968  
Meta Platforms, Inc. 4.45% 8/15/2052     40,000       31,994  
Midas OpCo Holdings, LLC 5.625% 8/15/20291     8,145       6,731  
Netflix, Inc. 4.875% 4/15/2028     18,225       17,639  
Netflix, Inc. 5.875% 11/15/2028     14,758       14,995  
Netflix, Inc. 5.375% 11/15/20291     11,510       11,185  
Netflix, Inc. 4.875% 6/15/20301     3,502       3,272  
News Corp. 3.875% 5/15/20291     22,325       19,397  
News Corp. 5.125% 2/15/20321     7,010       6,389  
Nexstar Broadcasting, Inc. 4.75% 11/1/20281     1,840       1,594  
Nexstar Escrow Corp. 5.625% 7/15/20271     11,667       10,727  
OUTFRONT Media Capital, LLC 4.25% 1/15/20291     3,000       2,493  
OUTFRONT Media Capital, LLC 4.625% 3/15/20301     1,990       1,650  
PLDT, Inc. 2.50% 1/23/2031     5,500       4,314  
SBA Tower Trust 1.631% 11/15/20261     4,000       3,403  
Scripps Escrow II, Inc. 3.875% 1/15/20291     1,500       1,206  
Sirius XM Radio, Inc. 5.00% 8/1/20271     3,175       2,942  
Sirius XM Radio, Inc. 4.00% 7/15/20281     9,230       8,051  
Sirius XM Radio, Inc. 4.125% 7/1/20301     2,185       1,808  
Sirius XM Radio, Inc. 3.875% 9/1/20311     16,500       12,905  
Sprint Corp. 7.625% 3/1/2026     837       883  
Sprint Corp. 6.875% 11/15/2028     11,460       11,921  
Sprint Corp. 8.75% 3/15/2032     4,330       5,163  
Tencent Holdings, Ltd. 3.975% 4/11/2029     900       830  
Tencent Holdings, Ltd. 3.68% 4/22/2041     1,675       1,234  
Tencent Holdings, Ltd. 3.24% 6/3/20501     9,960       6,315  

 

10 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Communication services (continued)                
Tencent Holdings, Ltd. 3.24% 6/3/2050   USD 2,105     $ 1,335  
Tencent Holdings, Ltd. 3.84% 4/22/2051     6,015       4,273  
Tencent Holdings, Ltd. 3.84% 4/22/20511     2,977       2,115  
T-Mobile US, Inc. 3.875% 4/15/2030     300       272  
T-Mobile US, Inc. 2.55% 2/15/2031     32,348       26,504  
T-Mobile US, Inc. 2.875% 2/15/2031     12,440       10,296  
T-Mobile US, Inc. 2.70% 3/15/2032     4,597       3,726  
T-Mobile US, Inc. 3.30% 2/15/2051     246       165  
T-Mobile US, Inc. 3.40% 10/15/2052     1,160       785  
Univision Communications, Inc. 4.50% 5/1/20291     28,995       24,302  
Univision Communications, Inc. 7.375% 6/30/20301     9,420       9,014  
UPC Broadband Finco BV 4.875% 7/15/20311     8,130       6,779  
Verizon Communications, Inc. 1.75% 1/20/2031     14,534       11,310  
Verizon Communications, Inc. 2.55% 3/21/2031     14,466       11,932  
Verizon Communications, Inc. 2.355% 3/15/2032     11,816       9,398  
Verizon Communications, Inc. 2.65% 11/20/2040     2,473       1,678  
Verizon Communications, Inc. 3.40% 3/22/2041     3,200       2,419  
Verizon Communications, Inc. 2.875% 11/20/2050     707       446  
VZ Secured Financing BV 5.00% 1/15/20321     8,090       6,589  
Warner Music Group 3.75% 12/1/20291     2,555       2,201  
Warner Music Group 3.875% 7/15/20301     8,865       7,652  
Warner Music Group 3.00% 2/15/20311     2,410       1,930  
WarnerMedia Holdings, Inc. 4.279% 3/15/20321     15,000       12,394  
WarnerMedia Holdings, Inc. 5.141% 3/15/20521     30,632       22,387  
WarnerMedia Holdings, Inc. 5.391% 3/15/20621     164       120  
Ziggo Bond Co. BV 5.125% 2/28/20301     1,300       1,052  
Ziggo Bond Finance BV 4.875% 1/15/20301     1,870       1,568  
              708,940  
                 
Consumer discretionary 7.38%                
Affinity Gaming 6.875% 12/15/20271     1,600       1,358  
Alibaba Group Holding, Ltd. 2.125% 2/9/2031     5,700       4,552  
Allied Universal Holdco, LLC 6.625% 7/15/20261     3,540       3,246  
Allied Universal Holdco, LLC 9.75% 7/15/20271     8,140       7,099  
Allied Universal Holdco, LLC 4.625% 6/1/20281     12,760       10,563  
Allied Universal Holdco, LLC 6.00% 6/1/20291     8,665       6,300  
Amazon.com, Inc. 1.65% 5/12/2028     7,330       6,306  
Amazon.com, Inc. 4.70% 12/1/2032     5,590       5,551  
Arcos Dorados BV 6.125% 5/27/20291     2,000       1,941  
Arcos Dorados BV 6.125% 5/27/2029     1,300       1,262  
Arcos Dorados Holdings, Inc. 5.875% 4/4/2027     6,900       6,721  
Asbury Automotive Group, Inc. 4.625% 11/15/20291     11,335       9,565  
Asbury Automotive Group, Inc. 5.00% 2/15/20321     2,325       1,916  
Atlas LuxCo 4 SARL 4.625% 6/1/20281     4,810       3,906  
AutoNation, Inc. 3.85% 3/1/2032     8,000       6,405  
Bath & Body Works, Inc. 6.625% 10/1/20301     5,470       5,142  
Bath & Body Works, Inc. 6.875% 11/1/2035     8,667       7,720  
Bath & Body Works, Inc. 6.75% 7/1/2036     2,370       2,087  
Bayerische Motoren Werke AG 3.45% 4/1/20271     2,075       1,962  
Bayerische Motoren Werke AG 3.70% 4/1/20321     1,100       986  
Boyd Gaming Corp. 4.75% 12/1/2027     11,120       10,373  
Boyd Gaming Corp. 4.75% 6/15/20311     3,500       3,049  
Boyne USA, Inc. 4.75% 5/15/20291     16,545       14,664  
Caesars Entertainment, Inc. 6.25% 7/1/20251     655       638  
Caesars Entertainment, Inc. 4.625% 10/15/20291     12,198       9,949  
Caesars Resort Collection, LLC 5.75% 7/1/20251     11,275       11,054  
Carnival Corp. 4.00% 8/1/20281     3,500       2,861  
CDI Escrow Issuer, Inc. 5.75% 4/1/20301     13,925       12,507  
Cedar Fair, LP 5.50% 5/1/20251     11,900       11,791  
Clarios Global, LP 6.75% 5/15/20251     180       181  
Daimler Trucks Finance North America, LLC 2.375% 12/14/20281     2,374       1,999  
Daimler Trucks Finance North America, LLC 2.50% 12/14/20311     4,750       3,694  
Empire Resorts, Inc. 7.75% 11/1/20261     10,370       8,332  
Fertitta Entertainment, Inc. 4.625% 1/15/20291     8,000       6,780  
Fertitta Entertainment, Inc. 6.75% 1/15/20301     10,000       8,085  
First Student Bidco, Inc. 4.00% 7/31/20291     15,395       12,756  
Ford Motor Co. 6.10% 8/19/2032     13,620       12,602  

 

American Funds Multi-Sector Income Fund 11
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Consumer discretionary (continued)                
Ford Motor Credit Company, LLC 3.664% 9/8/2024   USD 2,500     $ 2,386  
Ford Motor Credit Company, LLC 5.125% 6/16/2025     5,305       5,112  
Ford Motor Credit Company, LLC 4.542% 8/1/2026     455       420  
Ford Motor Credit Company, LLC 2.70% 8/10/2026     4,200       3,652  
Ford Motor Credit Company, LLC 4.95% 5/28/2027     8,075       7,548  
Ford Motor Credit Company, LLC 4.125% 8/17/2027     3,680       3,302  
Ford Motor Credit Company, LLC 3.815% 11/2/2027     5,000       4,403  
Ford Motor Credit Company, LLC 5.113% 5/3/2029     1,370       1,244  
Ford Motor Credit Company, LLC 4.00% 11/13/2030     1,720       1,415  
Grand Canyon University 4.375% 10/1/2026     6,750       6,213  
Hanesbrands, Inc. 4.625% 5/15/20241     7,120       6,907  
Hanesbrands, Inc. 4.875% 5/15/20261     12,889       11,540  
Hilton Worldwide Holdings, Inc. 5.75% 5/1/20281     2,070       2,011  
Hilton Worldwide Holdings, Inc. 4.875% 1/15/2030     3,460       3,141  
Hilton Worldwide Holdings, Inc. 4.00% 5/1/20311     11,905       9,985  
Home Depot, Inc. 2.70% 4/15/2030     50       44  
Home Depot, Inc. 3.35% 4/15/2050     130       96  
Home Depot, Inc. 2.375% 3/15/2051     10,559       6,346  
Hyundai Capital America 1.50% 6/15/20261     2,643       2,293  
Hyundai Capital America 2.00% 6/15/20281     3,827       3,124  
International Game Technology PLC 5.25% 1/15/20291     18,615       17,378  
LCM Investments Holdings II, LLC 4.875% 5/1/20291     8,508       6,824  
Levi Strauss & Co. 3.50% 3/1/20311     3,075       2,445  
Lithia Motors, Inc. 3.875% 6/1/20291     2,745       2,261  
Lithia Motors, Inc. 4.375% 1/15/20311     250       204  
Lowe’s Companies, Inc. 5.625% 4/15/2053     6,000       5,778  
Marriott International, Inc. 2.85% 4/15/2031     315       256  
Marriott International, Inc. 3.50% 10/15/2032     7,970       6,652  
Marriott International, Inc. 2.75% 10/15/2033     1,846       1,414  
Marriott Ownership Resorts, Inc. 4.50% 6/15/20291     7,540       6,265  
McDonald’s Corp. 4.60% 9/9/2032     21,560       21,149  
McDonald’s Corp. 5.15% 9/9/2052     13,425       12,952  
Meituan Dianping 3.05% 10/28/2030     11,200       8,648  
Meituan Dianping 3.05% 10/28/20301     1,400       1,081  
Melco International Development, Ltd. 5.375% 12/4/20291     3,040       2,444  
MercadoLibre, Inc. 2.375% 1/14/2026     300       269  
MercadoLibre, Inc. 3.125% 1/14/2031     8,276       6,409  
Merlin Entertainment 5.75% 6/15/20261     200       188  
MGM Resorts International 6.00% 3/15/2023     75       75  
MGM Resorts International 5.75% 6/15/2025     4,050       3,942  
MGM Resorts International 5.50% 4/15/2027     53       49  
Mohegan Gaming & Entertainment 8.00% 2/1/20261     6,925       6,489  
Motel 6 Operating, LP, Term Loan B, (1-month USD-LIBOR + 5.00%) 9.318% 9/9/20263,4     1,954       1,929  
NCL Corp., Ltd. 5.875% 3/15/20261     1,250       984  
NCL Corp., Ltd. 5.875% 2/15/20271     2,280       1,978  
NCL Corp., Ltd. 7.75% 2/15/20291     2,925       2,205  
NCL Finance, Ltd. 6.125% 3/15/20281     2,500       1,849  
Neiman Marcus Group, LLC 7.125% 4/1/20261     8,120       7,625  
New SK Holdco SUB, LLC, Term Loan, (30-day Average USD-SOFR + 6.75%) 1.50% PIK and 10.71% Cash 6/30/20273,4,6     10       9  
Panther BF Aggregator 2, LP 6.25% 5/15/20261     140       137  
Panther BF Aggregator 2, LP 8.50% 5/15/20271     5,170       5,059  
Party City Holdings, Inc. 6.125% 8/15/20231     50       3  
Party City Holdings, Inc. 8.75% 2/15/20261     24,400       7,076  
PECF USS Intermediate Holding III Corp. 8.00% 11/15/20291     3,130       2,038  
Premier Entertainment Sub, LLC 5.625% 9/1/20291     6,000       4,432  
Premier Entertainment Sub, LLC 5.875% 9/1/20311     6,000       4,252  
Royal Caribbean Cruises, Ltd. 4.25% 7/1/20261     12,260       9,926  
Royal Caribbean Cruises, Ltd. 3.70% 3/15/2028     4,780       3,521  
Royal Caribbean Cruises, Ltd. 5.50% 4/1/20281     14,800       11,837  
Royal Caribbean Cruises, Ltd. 8.25% 1/15/20291     20,090       20,216  
Sally Holdings, LLC 5.625% 12/1/2025     1,600       1,544  
Sands China, Ltd. 4.875% 6/18/2030     6,700       5,897  
Sands China, Ltd. 3.75% 8/8/20312     10,000       7,883  
Scientific Games Corp. 8.625% 7/1/20251     1,915       1,957  
Scientific Games Corp. 7.00% 5/15/20281     5,555       5,309  

 

12 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Consumer discretionary (continued)                
Scientific Games Corp. 7.25% 11/15/20291   USD 6,815     $ 6,555  
Scientific Games Holdings, LP 6.625% 3/1/20301     12,685       10,731  
Six Flags Theme Parks, Inc. 7.00% 7/1/20251     159       160  
Sonic Automotive, Inc. 4.625% 11/15/20291     13,520       10,843  
Sonic Automotive, Inc. 4.875% 11/15/20311     7,935       6,249  
Stellantis Finance US, Inc. 1.711% 1/29/20271     1,039       893  
Stellantis Finance US, Inc. 5.625% 1/12/20281     1,987       1,971  
Stellantis Finance US, Inc. 6.375% 9/12/20321     13,681       13,546  
Studio City Co., Ltd. 7.00% 2/15/20271     5,545       5,194  
Toyota Motor Credit Corp. 1.90% 1/13/2027     9,470       8,464  
Universal Entertainment Corp. 8.50% 12/11/20241     8,580       8,015  
Vail Resorts, Inc. 6.25% 5/15/20251     9,932       9,949  
Volkswagen Group of America Finance, LLC 3.125% 5/12/20231     248       246  
WASH Multifamily Acquisition, Inc. 5.75% 4/15/20261     19,855       18,736  
Wheel Pros, Inc. 6.50% 5/15/20291     14,750       5,236  
Wheel Pros, Inc., Term Loan, (3-month USD-LIBOR + 4.50%) 8.825% 5/11/20283,4     9,975       6,812  
Wyndham Worldwide Corp. 4.375% 8/15/20281     13,385       12,030  
Wynn Las Vegas, LLC 4.25% 5/30/20231     13,241       13,070  
Wynn Resorts Finance, LLC 7.75% 4/15/20251     5,020       5,000  
Wynn Resorts Finance, LLC 5.125% 10/1/20291     5,300       4,551  
              676,174  
                 
Industrials 5.97%                
Allegiant Travel Co. 7.25% 8/15/20271     10,511       10,013  
Ashtead Capital, Inc. 5.50% 8/11/20321     21,460       20,589  
Atkore, Inc. 4.25% 6/1/20311     5,750       4,939  
Atlantic Aviation FBO, Inc., Term Loan, (3-month USD-LIBOR + 2.75%) 7.134% 9/22/20283,4     3,960       3,910  
ATS Automation Tooling Systems, Inc. 4.125% 12/15/20281     225       194  
BOC Aviation, Ltd. 3.00% 9/11/2029     2,579       2,237  
BOC Aviation, Ltd. 2.625% 9/17/2030     1,121       928  
Boeing Company 1.167% 2/4/2023     250       249  
Boeing Company 4.508% 5/1/2023     725       724  
Boeing Company 2.75% 2/1/2026     500       464  
Boeing Company 2.196% 2/4/2026     25       23  
Boeing Company 3.25% 2/1/2028     1,078       981  
Boeing Company 5.15% 5/1/2030     13,333       13,041  
Boeing Company 3.625% 2/1/2031     4,738       4,163  
Boeing Company 3.50% 3/1/2039     7,463       5,408  
Boeing Company 5.705% 5/1/2040     14,095       13,501  
Boeing Company 3.75% 2/1/2050     83       57  
Boeing Company 5.805% 5/1/2050     7,924       7,387  
Bombardier, Inc. 7.125% 6/15/20261     13,665       13,283  
Bombardier, Inc. 7.875% 4/15/20271     13,400       13,025  
Bombardier, Inc. 6.00% 2/15/20281     10,940       10,130  
Builders FirstSource, Inc. 4.25% 2/1/20321     1,780       1,446  
Burlington Northern Santa Fe, LLC 3.55% 2/15/2050     750       578  
Burlington Northern Santa Fe, LLC 3.30% 9/15/2051     479       351  
Burlington Northern Santa Fe, LLC 2.875% 6/15/2052     23,990       16,109  
BWX Technologies, Inc. 4.125% 6/30/20281     8,135       7,338  
BWX Technologies, Inc. 4.125% 4/15/20291     3,415       2,994  
Canadian Pacific Railway, Ltd. 1.75% 12/2/2026     435       388  
Canadian Pacific Railway, Ltd. 2.45% 12/2/2031     469       390  
Canadian Pacific Railway, Ltd. 3.00% 12/2/2041     423       321  
Canadian Pacific Railway, Ltd. 3.10% 12/2/2051     23,487       15,899  
Clarivate Science Holdings Corp. 3.875% 7/1/20281     4,910       4,260  
Clarivate Science Holdings Corp. 4.875% 7/1/20291     4,470       3,807  
CoreLogic, Inc. 4.50% 5/1/20281     7,500       5,764  
CoreLogic, Inc., Term Loan, (3-month USD-LIBOR + 6.50%) 10.938% 6/4/20293,4     4,225       3,070  
Cornerstone Building Brands, Inc., Term Loan B, (3-month USD-LIBOR + 3.25%) 7.568% 4/12/20283,4     144       130  
Covanta Holding Corp. 4.875% 12/1/20291     8,120       6,663  
CSX Corp. 4.50% 3/15/2049     25       22  
CSX Corp. 2.50% 5/15/2051     37,495       22,944  
Dun & Bradstreet Corp. 5.00% 12/15/20291     13,398       11,483  
Eaton Corp. 4.15% 3/15/2033     7,589       7,079  
Eaton Corp. 4.70% 8/23/2052     3,778       3,440  

 

American Funds Multi-Sector Income Fund 13
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Industrials (continued)                
Empresa de Transporte de Pasajeros Metro SA 4.70% 5/7/20501   USD 400     $ 336  
General Dynamics Corp. 1.15% 6/1/2026     5,600       4,979  
General Dynamics Corp. 3.625% 4/1/2030     5,230       4,873  
GFL Environmental, Inc. 4.00% 8/1/20281     4,500       3,853  
Gol Finance SA 8.00% 6/30/2026     823       490  
Harsco Corp. 5.75% 7/31/20271     11,774       9,315  
Honeywell International, Inc. 2.70% 8/15/2029     7,040       6,274  
Howmet Aerospace, Inc. 6.875% 5/1/2025     3       3  
JELD-WEN Holding, Inc. 4.875% 12/15/20271     2,050       1,546  
LABL Escrow Issuer, LLC 10.50% 7/15/20271     665       620  
Lima Metro Line 2 Finance, Ltd. 5.875% 7/5/20341     4,305       4,189  
Lima Metro Line 2 Finance, Ltd. 5.875% 7/5/2034     3,785       3,683  
Lockheed Martin Corp. 5.10% 11/15/2027     6,087       6,232  
Lockheed Martin Corp. 1.85% 6/15/2030     250       206  
Lockheed Martin Corp. 5.25% 1/15/2033     12,255       12,675  
Lockheed Martin Corp. 2.80% 6/15/2050     2,815       1,909  
Lockheed Martin Corp. 5.70% 11/15/2054     5,720       6,031  
Lockheed Martin Corp. 5.90% 11/15/2063     1,368       1,479  
LSC Communications, Inc. 8.75% 10/15/20231,5,7     45       8 
Masco Corp. 2.00% 2/15/2031     48       37  
Mexico City Airport Trust 4.25% 10/31/2026     5,400       5,160  
Mexico City Airport Trust 3.875% 4/30/2028     5,800       5,314  
Mexico City Airport Trust 5.50% 7/31/2047     7,300       5,638  
Mileage Plus Holdings, LLC 6.50% 6/20/20271     6,008       5,986  
Moog, Inc. 4.25% 12/9/20271     5,516       5,112  
Mueller Water Products, Inc. 4.00% 6/15/20291     1,200       1,056  
Norfolk Southern Corp. 3.05% 5/15/2050     16,043       10,818  
PGT Innovations, Inc. 4.375% 10/1/20291     7,830       6,566  
PM General Purchaser, LLC 9.50% 10/1/20281     8,000       6,111  
Raytheon Technologies Corp. 1.90% 9/1/2031     1,515       1,193  
Raytheon Technologies Corp. 2.82% 9/1/2051     28,515       18,602  
Republic Services, Inc. 1.45% 2/15/2031     18,975       14,674  
Republic Services, Inc. 2.375% 3/15/2033     1,390       1,113  
Roller Bearing Company of America, Inc. 4.375% 10/15/20291     2,830       2,451  
Rolls-Royce PLC 5.75% 10/15/20271     6,230       5,944  
Sensata Technologies Holding BV 4.00% 4/15/20291     13,995       12,090  
Sensata Technologies, Inc. 3.75% 2/15/20311     150       124  
SkyMiles IP, Ltd. 4.75% 10/20/20281     770       725  
SkyMiles IP, Ltd., Term Loan, (3-month USD-LIBOR + 3.75%) 7.993% 10/20/20273,4     750       766  
Spirit AeroSystems, Inc. 4.60% 6/15/2028     9,950       8,050  
Spirit AeroSystems, Inc. 9.375% 11/30/20291     9,109       9,600  
SRS Distribution, Inc. 4.625% 7/1/20281     5,810       5,158  
Stericycle, Inc. 3.875% 1/15/20291     11,010       9,621  
TransDigm, Inc. 6.25% 3/15/20261     5,095       5,036  
TransDigm, Inc. 5.50% 11/15/2027     3,400       3,200  
TransDigm, Inc. 4.625% 1/15/2029     8,765       7,722  
TransDigm, Inc. 4.875% 5/1/2029     1,990       1,738  
Triumph Group, Inc. 6.25% 9/15/20241     13,000       12,344  
Uber Technologies, Inc. 8.00% 11/1/20261     13,360       13,433  
Union Pacific Corp. 2.80% 2/14/2032     12,330       10,679  
Union Pacific Corp. 4.30% 3/1/2049     75       64  
Union Pacific Corp. 3.25% 2/5/2050     13       9  
Union Pacific Corp. 2.95% 3/10/2052     26,515       18,053  
United Airlines, Inc. 4.375% 4/15/20261     1,620       1,504  
United Airlines, Inc. 4.625% 4/15/20291     1,315       1,147  
United Rentals, Inc. 5.25% 1/15/2030     5,300       4,989  
United Rentals, Inc. 3.75% 1/15/2032     4,600       3,759  
Waste Management, Inc. 2.50% 11/15/2050     6,715       4,214  
WESCO Distribution, Inc. 7.125% 6/15/20251     1,975       2,004  
WESCO Distribution, Inc. 7.25% 6/15/20281     6,985       7,091  
              547,310  
                 
Health care 5.72%                
AbbVie, Inc. 4.05% 11/21/2039     1,500       1,290  
AbbVie, Inc. 4.25% 11/21/2049     325       271  
AmerisourceBergen Corp. 2.80% 5/15/2030     3,865       3,287  
AmerisourceBergen Corp. 2.70% 3/15/2031     6,634       5,523  

 

14 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Health care (continued)                
Amgen, Inc. 3.00% 2/22/2029   USD 425     $ 377  
Amgen, Inc. 4.05% 8/18/2029     11,250       10,538  
Amgen, Inc. 4.20% 3/1/2033     14,000       12,996  
Amgen, Inc. 3.375% 2/21/2050     6,371       4,458  
Amgen, Inc. 3.00% 1/15/2052     100       64  
Amgen, Inc. 4.875% 3/1/2053     5,675       5,064  
AstraZeneca Finance, LLC 1.75% 5/28/2028     5,266       4,530  
AstraZeneca Finance, LLC 2.25% 5/28/2031     65       54  
AstraZeneca PLC 1.375% 8/6/2030     56       44  
Avantor Funding, Inc. 4.625% 7/15/20281     5,615       5,114  
Avantor Funding, Inc. 3.875% 11/1/20291     18,375       15,454  
Bausch Health Americas, Inc. 9.25% 4/1/20261     1,670       1,172  
Bausch Health Americas, Inc. 8.50% 1/31/20271     765       401  
Bausch Health Companies, Inc. 9.00% 12/15/20251     2,430       1,921  
Bausch Health Companies, Inc. 5.75% 8/15/20271     200       136  
Bausch Health Companies, Inc. 7.00% 1/15/20281     2,375       1,152  
Bausch Health Companies, Inc. 5.00% 1/30/20281     660       318  
Bausch Health Companies, Inc. 5.00% 2/15/20291     14,685       7,057  
Bausch Health Companies, Inc. 7.25% 5/30/20291     795       385  
Bausch Health Companies, Inc. 5.25% 1/30/20301     1,220       587  
Bausch Health Companies, Inc. 5.25% 2/15/20311     20,949       10,179  
Baxter International, Inc. 1.915% 2/1/2027     2,150       1,909  
Baxter International, Inc. 2.272% 12/1/2028     1,125       962  
Baxter International, Inc. 2.539% 2/1/2032     21,380       17,040  
Becton, Dickinson and Company 4.298% 8/22/2032     10,000       9,390  
Boston Scientific Corp. 2.65% 6/1/2030     4,484       3,841  
Catalent Pharma Solutions, Inc. 5.00% 7/15/20271     4,785       4,460  
Catalent Pharma Solutions, Inc. 3.125% 2/15/20291     12,090       9,642  
Catalent Pharma Solutions, Inc. 3.50% 4/1/20301     6,015       4,757  
Centene Corp. 2.45% 7/15/2028     24,620       20,828  
Centene Corp. 4.625% 12/15/2029     30,621       28,052  
Centene Corp. 3.375% 2/15/2030     644       546  
Centene Corp. 3.00% 10/15/2030     610       501  
Centene Corp. 2.50% 3/1/2031     3,280       2,573  
Centene Corp. 2.625% 8/1/2031     4,440       3,498  
Charles River Laboratories International, Inc. 4.25% 5/1/20281     3,618       3,338  
Charles River Laboratories International, Inc. 3.75% 3/15/20291     5,730       5,076  
Charles River Laboratories International, Inc. 4.00% 3/15/20311     2,340       2,027  
Cigna Corp. 2.375% 3/15/2031     46       38  
Community Health Systems, Inc. 5.625% 3/15/20271     180       155  
Community Health Systems, Inc. 6.00% 1/15/20291     165       138  
Community Health Systems, Inc. 6.875% 4/15/20291     1,200       619  
CVS Health Corp. 1.75% 8/21/2030     3,625       2,865  
DaVita, Inc. 4.625% 6/1/20301     3,470       2,799  
Encompass Health Corp. 4.50% 2/1/2028     3,442       3,132  
Encompass Health Corp. 4.75% 2/1/2030     3,490       3,070  
Endo DAC 6.00% 6/30/20281,7     1,100       61  
Endo Luxembourg Finance Co. I SARL / Endo U.S., Inc. 6.125% 4/1/20291     3,610       2,745  
GE Healthcare Holding, LLC 5.857% 3/15/20301     2,710       2,780  
GE Healthcare Holding, LLC 5.905% 11/22/20321     15,140       15,736  
GE Healthcare Holding, LLC 6.377% 11/22/20521     3,075       3,285  
Gilead Sciences, Inc. 2.80% 10/1/2050     225       145  
Grifols Escrow Issuer SA 4.75% 10/15/20281     1,510       1,306  
HCA, Inc. 5.375% 9/1/2026     425       421  
HCA, Inc. 5.625% 9/1/2028     4,360       4,344  
HCA, Inc. 5.875% 2/1/2029     2,870       2,867  
HCA, Inc. 2.375% 7/15/2031     10,953       8,553  
HCA, Inc. 4.625% 3/15/20521     2,771       2,169  
HealthEquity, Inc. 4.50% 10/1/20291     7,590       6,642  
Humana, Inc. 3.70% 3/23/2029     225       206  
IMS Health Holdings, Inc. 5.00% 10/15/20261     10,395       9,949  
Johnson & Johnson 2.10% 9/1/2040     108       75  
Kaiser Foundation Hospitals 2.81% 6/1/2041     355       259  
Molina Healthcare, Inc. 4.375% 6/15/20281     5,681       5,194  
Molina Healthcare, Inc. 3.875% 5/15/20321     11,930       9,924  
Mozart Debt Merger Sub, Inc. 3.875% 4/1/20291     2,000       1,616  
Mozart Debt Merger Sub, Inc. 5.25% 10/1/20291     13,995       11,141  

 

American Funds Multi-Sector Income Fund 15
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Health care (continued)                
Novartis Capital Corp. 1.75% 2/14/2025   USD 32     $ 30  
Novartis Capital Corp. 2.00% 2/14/2027     329       300  
Option Care Health, Inc. 4.375% 10/31/20291     3,560       3,119  
Owens & Minor, Inc. 6.625% 4/1/20301     4,480       3,856  
Par Pharmaceutical, Inc. 7.50% 4/1/20271     450       343  
Partners HealthCare System, Inc. 3.192% 7/1/2049     42       29  
Pfizer, Inc. 3.45% 3/15/2029     383       362  
Radiology Partners, Inc. 9.25% 2/1/20281     12,830       7,222  
Rede D’Or Finance SARL 4.95% 1/17/2028     590       546  
Rede D’Or Finance SARL 4.50% 1/22/2030     5,865       5,056  
Roche Holdings, Inc. 1.93% 12/13/20281     4,670       4,000  
Roche Holdings, Inc. 2.076% 12/13/20311     4,653       3,798  
Roche Holdings, Inc. 2.607% 12/13/20511     791       516  
RP Escrow Issuer, LLC 5.25% 12/15/20251     5,735       4,387  
Select Medical Holdings Corp. 6.25% 8/15/20261     6,196       5,904  
Summa Health 3.511% 11/15/2051     1,325       899  
Surgery Center Holdings 10.00% 4/15/20271     3,802       3,875  
Syneos Health, Inc. 3.625% 1/15/20291     1,559       1,244  
Tenet Healthcare Corp. 4.625% 7/15/2024     771       753  
Tenet Healthcare Corp. 4.625% 9/1/20241     5,000       4,864  
Tenet Healthcare Corp. 4.875% 1/1/20261     2,135       2,023  
Tenet Healthcare Corp. 5.125% 11/1/20271     3,270       3,049  
Tenet Healthcare Corp. 6.125% 10/1/20281     10,640       9,549  
Tenet Healthcare Corp. 4.375% 1/15/20301     6,000       5,204  
Teva Pharmaceutical Finance Co. BV 6.00% 4/15/2024     788       774  
Teva Pharmaceutical Finance Co. BV 3.15% 10/1/2026     24,675       21,628  
Teva Pharmaceutical Finance Co. BV 4.75% 5/9/2027     21,075       19,076  
Teva Pharmaceutical Finance Co. BV 6.75% 3/1/2028     24,260       23,709  
Teva Pharmaceutical Finance Co. BV 5.125% 5/9/2029     22,085       19,696  
Teva Pharmaceutical Finance Co. BV 4.10% 10/1/2046     7,000       4,295  
Thermo Fisher Scientific, Inc. 4.95% 11/21/2032     1,397       1,421  
UnitedHealth Group, Inc. 5.30% 2/15/2030     8,500       8,780  
UnitedHealth Group, Inc. 5.35% 2/15/2033     8,500       8,797  
UnitedHealth Group, Inc. 2.90% 5/15/2050     10,868       7,404  
UnitedHealth Group, Inc. 3.25% 5/15/2051     221       159  
UnitedHealth Group, Inc. 4.75% 5/15/2052     1,210       1,124  
UnitedHealth Group, Inc. 5.875% 2/15/2053     4,300       4,671  
UnitedHealth Group, Inc. 4.95% 5/15/2062     159       150  
UnitedHealth Group, Inc. 6.05% 2/15/2063     124       135  
Valeant Pharmaceuticals International, Inc. 5.50% 11/1/20251     14,460       12,314  
Zoetis, Inc. 5.60% 11/16/2032     6,400       6,655  
              524,762  
                 
Utilities 5.37%                
AEP Transmission Co., LLC 2.75% 8/15/2051     2,476       1,582  
AES Panama Generation Holdings SRL 4.375% 5/31/2030     3,893       3,391  
AES Panama Generation Holdings SRL 4.375% 5/31/20301     875       762  
Alabama Power Co. 3.94% 9/1/2032     15,000       13,821  
Alfa Desarrollo SpA 4.55% 9/27/20511     7,119       5,422  
Alliant Energy Finance, LLC 3.60% 3/1/20321     3,254       2,815  
American Electric Power Company, Inc. 1.00% 11/1/2025     25       22  
AmeriGas Partners, LP 5.625% 5/20/2024     175       170  
Calpine Corp. 5.125% 3/15/20281     1,070       957  
CenterPoint Energy, Inc. 2.90% 7/1/2050     15,735       10,660  
CenterPoint Energy, Inc. 3.35% 4/1/2051     7,907       5,861  
CenterPoint Energy, Inc. 3.60% 3/1/2052     432       334  
Cleveland Electric Illuminating Co. 4.55% 11/15/20301     205       192  
Connecticut Light and Power Co. 2.05% 7/1/2031     175       141  
Consorcio Transmantaro SA 4.70% 4/16/2034     1,000       912  
Consumers Energy Co. 3.80% 11/15/2028     2,000       1,903  
Consumers Energy Co. 3.60% 8/15/2032     6,175       5,644  
Consumers Energy Co. 3.25% 8/15/2046     1,841       1,334  
Consumers Energy Co. 3.10% 8/15/2050     3,643       2,548  
Consumers Energy Co. 3.50% 8/1/2051     5,605       4,251  
Consumers Energy Co. 2.65% 8/15/2052     13,113       8,314  
DPL, Inc. 4.125% 7/1/2025     7,600       7,153  
DTE Electric Co. 2.625% 3/1/2031     16,599       14,154  

 

16 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Utilities (continued)                
DTE Electric Co. 3.65% 3/1/2052   USD 2,100     $ 1,635  
DTE Energy Company 1.90% 4/1/2028     1,010       880  
Duke Energy Carolinas, LLC 2.45% 8/15/2029     11,006       9,461  
Duke Energy Corp. 3.50% 6/15/2051     4,723       3,300  
Duke Energy Corp. 5.00% 8/15/2052     8,000       7,142  
Duke Energy Florida, LLC 1.75% 6/15/2030     74       59  
Duke Energy Florida, LLC 5.95% 11/15/2052     3,200       3,426  
Duke Energy Progress, LLC 2.00% 8/15/2031     3,925       3,111  
Duke Energy Progress, LLC 2.50% 8/15/2050     1,099       664  
Edison International 4.95% 4/15/2025     130       128  
Edison International 5.75% 6/15/2027     4,454       4,475  
Edison International 4.125% 3/15/2028     2,779       2,583  
Edison International 6.95% 11/15/2029     4,000       4,186  
Edison International 5.00% junior subordinated perpetual bonds (5-year UST Yield Curve Rate T Note Constant Maturity + 3.901% on 3/15/2049)2     4,000       3,354  
Emera US Finance, LP 2.639% 6/15/2031     3,395       2,667  
Empresas Publicas de Medellin ESP 4.25% 7/18/20291     500       398  
Empresas Publicas de Medellin ESP 4.25% 7/18/2029     200       159  
Empresas Publicas de Medellin ESP 4.375% 2/15/20311     950       740  
Enel Finance International SA 7.50% 10/14/20321     3,200       3,391  
Enfragen Energia Sur SA 5.375% 12/30/2030     6,300       4,419  
ENN Clean Energy International Investment, Ltd. 3.375% 5/12/20261     7,170       6,254  
ENN Energy Holdings, Ltd. 2.625% 9/17/20301     3,000       2,435  
ENN Energy Holdings, Ltd. 2.625% 9/17/2030     1,000       812  
Entergy Corp. 2.40% 6/15/2031     6,150       4,900  
Entergy Louisiana, LLC 2.35% 6/15/2032     10,000       7,974  
Entergy Louisiana, LLC 4.75% 9/15/2052     6,650       6,005  
FirstEnergy Corp. 4.10% 5/15/20281     834       786  
FirstEnergy Corp. 2.65% 3/1/2030     13,862       11,327  
FirstEnergy Corp. 2.25% 9/1/2030     1,518       1,208  
FirstEnergy Transmission, LLC 4.35% 1/15/20251     11,954       11,658  
FirstEnergy Transmission, LLC 2.866% 9/15/20281     2,961       2,589  
Florida Power & Light Company 2.45% 2/3/2032     1,046       874  
Florida Power & Light Company 2.875% 12/4/2051     18,685       12,621  
Instituto Costarricense de Electricidad 6.75% 10/7/2031     4,900       4,726  
Investment Energy Resources, Ltd. 6.25% 4/26/20291     350       335  
ITC Holdings Corp. 3.35% 11/15/2027     1,169       1,078  
Jersey Central Power & Light Co. 4.30% 1/15/20261     50       48  
Jersey Central Power & Light Co. 2.75% 3/1/20321     4,202       3,404  
Monongahela Power Co. 3.55% 5/15/20271     1,775       1,671  
NextEra Energy Capital Holdings, Inc. 0.65% 3/1/2023     5,300       5,264  
NextEra Energy Capital Holdings, Inc. 2.25% 6/1/2030     13,405       11,054  
NiSource Finance Corp. 5.00% 6/15/2052     3,049       2,790  
Northern States Power Co. 2.60% 6/1/2051     2,870       1,832  
Northern States Power Co. 4.50% 6/1/2052     138       126  
Oncor Electric Delivery Company, LLC 2.75% 5/15/2030     7,530       6,576  
Oncor Electric Delivery Company, LLC 4.15% 6/1/20321     1,892       1,792  
Oncor Electric Delivery Company, LLC 4.55% 9/15/20321     1,875       1,842  
Oncor Electric Delivery Company, LLC 3.75% 4/1/2045     9,121       7,376  
Oncor Electric Delivery Company, LLC 3.10% 9/15/2049     3,256       2,320  
Oncor Electric Delivery Company, LLC 2.70% 11/15/2051     8,174       5,377  
Pacific Gas and Electric Co. 2.95% 3/1/2026     258       237  
Pacific Gas and Electric Co. 3.30% 3/15/2027     373       332  
Pacific Gas and Electric Co. 2.10% 8/1/2027     17,728       15,167  
Pacific Gas and Electric Co. 3.30% 12/1/2027     183       162  
Pacific Gas and Electric Co. 3.00% 6/15/2028     54       47  
Pacific Gas and Electric Co. 3.75% 7/1/2028     1,094       972  
Pacific Gas and Electric Co. 4.65% 8/1/2028     125       115  
Pacific Gas and Electric Co. 4.55% 7/1/2030     13,487       12,256  
Pacific Gas and Electric Co. 2.50% 2/1/2031     14,836       11,545  
Pacific Gas and Electric Co. 3.25% 6/1/2031     9,497       7,743  
Pacific Gas and Electric Co. 3.30% 8/1/2040     920       626  
Pacific Gas and Electric Co. 3.75% 8/15/2042     850       573  
Pacific Gas and Electric Co. 3.50% 8/1/2050     11,405       7,127  
PG&E Corp. 5.00% 7/1/2028     1,610       1,472  
PG&E Corp. 5.25% 7/1/2030     11,890       10,838  
Progress Energy, Inc. 7.75% 3/1/2031     4,359       4,951  

 

American Funds Multi-Sector Income Fund 17
 
Bonds, notes & other debt instruments (continued) Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Utilities (continued)                
Progress Energy, Inc. 7.00% 10/30/2031   USD 2,389     $ 2,613  
Public Service Company of Colorado 1.90% 1/15/2031     2,784       2,241  
Public Service Company of Colorado 1.875% 6/15/2031     6,542       5,224  
Public Service Electric and Gas Co. 3.20% 5/15/2029     2,231       2,029  
Public Service Electric and Gas Co. 3.10% 3/15/2032     4,663       4,089  
Public Service Electric and Gas Co. 2.05% 8/1/2050     3,087       1,735  
Southern California Edison Co. 0.975% 8/1/2024     2,240       2,096  
Southern California Edison Co. 4.70% 6/1/2027     22,772       22,335  
Southern California Edison Co. 3.65% 3/1/2028     1,000       934  
Southern California Edison Co. 4.20% 3/1/2029     165       157  
Southern California Edison Co. 2.85% 8/1/2029     1,352       1,178  
Southern California Edison Co. 2.25% 6/1/2030     819       676  
Southern California Edison Co. 2.50% 6/1/2031     11,057       9,139  
Southern California Edison Co. 2.75% 2/1/2032     4,175       3,508  
Southern California Edison Co. 3.65% 2/1/2050     3,360       2,470  
Southern California Edison Co. 2.95% 2/1/2051     145       94  
Southern California Edison Co. 3.65% 6/1/2051     1,001       733  
Southern California Edison Co., Series C, 3.60% 2/1/2045     2,643       1,907  
Southwestern Electric Power Co. 3.25% 11/1/2051     4,154       2,749  
State Grid Overseas Investment, Ltd. 4.375% 5/22/2043     2,800       2,514  
State Grid Overseas Investment, Ltd. 4.85% 5/7/2044     2,000       1,902  
Talen Energy Corp. 10.50% 1/15/20261,7     7,960       3,821  
Talen Energy Corp. 7.25% 5/15/20271     1,255       1,305  
Talen Energy Corp., Term Loan, (3-month USD CME Term SOFR + 4.75%) 9.008% 11/13/20233,4     2,840       2,868  
Tampa Electric Co. 3.625% 6/15/2050     1,075       783  
Tampa Electric Co. 5.00% 7/15/2052     1,737       1,594  
Union Electric Co. 2.15% 3/15/2032     2,850       2,260  
Union Electric Co. 3.90% 4/1/2052     2,395       1,942  
Venture Global Calcasieu Pass, LLC 3.875% 8/15/20291     12,680       11,117  
Virginia Electric and Power Co. 2.875% 7/15/2029     4,095       3,615  
Virginia Electric and Power Co. 2.30% 11/15/2031     8,380       6,766  
Virginia Electric and Power Co. 2.40% 3/30/2032     8,169       6,623  
Virginia Electric and Power Co. 2.45% 12/15/2050     180       108  
WEC Energy Group, Inc. 5.15% 10/1/2027     3,350       3,392  
Wisconsin Power and Light Co. 1.95% 9/16/2031     2,240       1,763  
Wisconsin Power and Light Co. 3.95% 9/1/2032     1,660       1,524  
Xcel Energy, Inc. 3.35% 12/1/2026     1,130       1,063  
Xcel Energy, Inc. 1.75% 3/15/2027     4,217       3,700  
Xcel Energy, Inc. 2.60% 12/1/2029     181       155  
Xcel Energy, Inc. 3.40% 6/1/2030     16,744       14,977  
Xcel Energy, Inc. 2.35% 11/15/2031     1,660       1,331  
Xcel Energy, Inc. 3.50% 12/1/2049     2,360       1,732  
              492,500  
                 
Consumer staples 5.02%                
7-Eleven, Inc. 0.95% 2/10/20261     365       320  
7-Eleven, Inc. 1.30% 2/10/20281     340       282  
7-Eleven, Inc. 1.80% 2/10/20311     15,572       11,928  
7-Eleven, Inc. 2.50% 2/10/20411     900       597  
7-Eleven, Inc. 2.80% 2/10/20511     10,815       6,667  
Albertsons Companies, Inc. 3.50% 3/15/20291     3,185       2,679  
Altria Group, Inc. 3.40% 5/6/2030     2,696       2,311  
Altria Group, Inc. 3.875% 9/16/2046     18,606       12,510  
Altria Group, Inc. 4.45% 5/6/2050     13,286       9,464  
Altria Group, Inc. 3.70% 2/4/2051     27,559       17,364  
Anheuser-Busch Companies, LLC 4.90% 2/1/2046     9,051       8,274  
Anheuser-Busch InBev NV 4.60% 4/15/2048     39,050       34,132  
Anheuser-Busch InBev NV 4.439% 10/6/2048     180       155  
Anheuser-Busch InBev NV 5.55% 1/23/2049     14,070       13,989  
B&G Foods, Inc. 5.25% 4/1/2025     10,870       9,548  
B&G Foods, Inc. 5.25% 9/15/2027     5,735       4,407  
British American Tobacco PLC 2.726% 3/25/2031     2,750       2,152  
British American Tobacco PLC 4.54% 8/15/2047     186       132  
British American Tobacco PLC 4.758% 9/6/2049     512       373  
British American Tobacco PLC 3.984% 9/25/2050     34,940       22,996  
British American Tobacco PLC 5.65% 3/16/2052     2,532       2,098  

 

18 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Consumer staples (continued)                
Central Garden & Pet Co. 4.125% 10/15/2030   USD 3,600     $ 2,963  
Central Garden & Pet Co. 4.125% 4/30/20311     18,275       15,152  
Conagra Brands, Inc. 1.375% 11/1/2027     5,135       4,286  
Conagra Brands, Inc. 5.30% 11/1/2038     2       2  
Conagra Brands, Inc. 5.40% 11/1/2048     15,000       13,938  
Constellation Brands, Inc. 2.875% 5/1/2030     1,040       888  
Constellation Brands, Inc. 2.25% 8/1/2031     20,750       16,536  
Constellation Brands, Inc. 4.75% 5/9/2032     244       236  
Darling Ingredients, Inc. 5.25% 4/15/20271     2,055       1,981  
Darling Ingredients, Inc. 6.00% 6/15/20301     16,970       16,611  
Edgewell Personal Care Co. 5.50% 6/1/20281     5,550       5,200  
Energizer Holdings, Inc. 4.375% 3/31/20291     3,320       2,821  
Imperial Tobacco Finance PLC 6.125% 7/27/20271     5,470       5,453  
Ingles Markets, Inc. 4.00% 6/15/20311     11,345       9,556  
InRetail Consumer 3.25% 3/22/20281     1,100       947  
Kraft Heinz Company 4.375% 6/1/2046     10,880       8,891  
Kraft Heinz Company 5.50% 6/1/2050     4,500       4,326  
Kroger Co. 3.95% 1/15/2050     11,840       9,249  
Kronos Acquisition Holdings, Inc. 5.00% 12/31/20261     6,070       5,258  
Kronos Acquisition Holdings, Inc. 7.00% 12/31/20271     14,720       12,126  
Lamb Weston Holdings, Inc. 4.125% 1/31/20301     7,985       7,063  
MARB BondCo PLC 3.95% 1/29/20311     2,577       1,983  
Marfrig Global Foods SA 3.95% 1/29/2031     5,000       3,848  
Minerva Luxembourg SA 4.375% 3/18/2031     5,300       4,359  
Natura Cosmeticos SA 4.125% 5/3/20281     3,800       3,105  
NBM US Holdings, Inc. 6.625% 8/6/20299     500       484  
Nestle Skin Health SA, Term Loan B3, (3-month USD-LIBOR + 3.75%) 8.48% 10/1/20263,4     13,541       13,002  
PepsiCo, Inc. 1.625% 5/1/2030     6       5  
PepsiCo, Inc. 1.40% 2/25/2031     34       27  
PepsiCo, Inc. 1.95% 10/21/2031     2,459       1,994  
PepsiCo, Inc. 2.75% 10/21/2051     7,077       4,930  
Performance Food Group, Inc. 5.50% 10/15/20271     4,105       3,880  
Performance Food Group, Inc. 4.25% 8/1/20291     12,433       10,789  
Philip Morris International, Inc. 5.125% 11/17/2027     16,032       16,178  
Philip Morris International, Inc. 3.375% 8/15/2029     37       33  
Philip Morris International, Inc. 5.625% 11/17/2029     9,826       9,991  
Philip Morris International, Inc. 1.75% 11/1/2030     2,713       2,131  
Philip Morris International, Inc. 5.75% 11/17/2032     11,020       11,269  
Philip Morris International, Inc. 4.125% 3/4/2043     12       10  
Philip Morris International, Inc. 4.25% 11/10/2044     15       12  
Post Holdings, Inc. 5.625% 1/15/20281     7,370       6,949  
Post Holdings, Inc. 5.50% 12/15/20291     8,255       7,487  
Post Holdings, Inc. 4.625% 4/15/20301     12,811       11,079  
Post Holdings, Inc. 4.50% 9/15/20311     2,000       1,685  
Prestige Brands International, Inc. 5.125% 1/15/20281     5,345       5,026  
Prestige Brands International, Inc. 3.75% 4/1/20311     5,985       4,943  
PT Indofood CBP Sukses Makmur Tbk 3.398% 6/9/2031     2,847       2,371  
PT Indofood CBP Sukses Makmur Tbk 3.541% 4/27/2032     4,898       4,042  
PT Indofood CBP Sukses Makmur Tbk 4.745% 6/9/2051     560       414  
Simmons Foods, Inc. 4.625% 3/1/20291     16,820       13,713  
US Foods, Inc. 4.625% 6/1/20301     7,670       6,764  
Wal-Mart Stores, Inc. 4.15% 9/9/2032     1,350       1,319  
Wal-Mart Stores, Inc. 4.50% 9/9/2052     680       651  
              460,334  
                 
Materials 4.87%                
Alcoa Nederland Holding BV 5.50% 12/15/20271     300       290  
Allegheny Technologies, Inc. 4.875% 10/1/2029     12,115       10,722  
Allegheny Technologies, Inc. 5.125% 10/1/2031     6,060       5,366  
Alpek, SAB de CV, 3.25% 2/25/2031     3,000       2,504  
Alpek, SAB de CV, 3.25% 2/25/20311     1,100       918  
Anglo American Capital PLC 2.625% 9/10/20301     5,960       4,857  
Anglo American Capital PLC 2.875% 3/17/20311     561       459  
Anglo American Capital PLC 3.95% 9/10/20501     206       151  
Arconic Corp. 6.00% 5/15/20251     115       113  
Ardagh Group SA 6.50% Cash 6/30/20271,6     7,753       5,405  
   
American Funds Multi-Sector Income Fund 19
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Materials (continued)                
Ardagh Metal Packaging Finance USA, LLC 4.00% 9/1/20291   USD 19,300     $ 15,332  
Ardagh Packaging Finance 5.25% 8/15/20271     6,000       4,496  
Ardagh Packaging Finance PLC 5.25% 4/30/20251     700       667  
Axalta Coating Systems, LLC 4.75% 6/15/20271     11,005       10,190  
Ball Corp. 6.875% 3/15/2028     23,230       23,891  
Bluestar Finance Holdings, Ltd. 3.875% perpetual bonds (3-year UST Yield Curve Rate T Note Constant Maturity + 6.651% on 6/24/2023)2     4,580       4,546  
Braskem Idesa SAPI 7.45% 11/15/2029     4,900       3,876  
Braskem Idesa SAPI 7.45% 11/15/20291     2,150       1,701  
Braskem Idesa SAPI 6.99% 2/20/2032     18,525       13,259  
Braskem Idesa SAPI 6.99% 2/20/20321     5,880       4,208  
Braskem Netherlands Finance BV 4.50% 1/31/20301     1,170       998  
Braskem SA 4.50% 1/31/2030     850       725  
Braskem SA 5.875% 1/31/20501     400       311  
BWAY Parent Co., Inc. 5.50% 4/15/20241     1,995       1,944  
CAN-PACK SA 3.875% 11/15/20291     12,535       9,895  
Celanese US Holdings, LLC 6.379% 7/15/2032     7,286       6,949  
Cleveland-Cliffs, Inc. 6.75% 3/15/20261     260       261  
Cleveland-Cliffs, Inc. 5.875% 6/1/2027     160       153  
Cleveland-Cliffs, Inc. 4.875% 3/1/20311     1,850       1,636  
CSN Resources SA 5.875% 4/8/2032     640       536  
CVR Partners, LP 6.125% 6/15/20281     5,965       5,359  
Element Solutions, Inc. 3.875% 9/1/20281     11,735       9,994  
First Quantum Minerals, Ltd. 6.50% 3/1/20241     15,245       14,936  
First Quantum Minerals, Ltd. 7.50% 4/1/20251     242       236  
First Quantum Minerals, Ltd. 6.875% 3/1/20261     522       495  
First Quantum Minerals, Ltd. 6.875% 10/15/20271     19,038       17,901  
Fresnillo PLC 4.25% 10/2/20501     1,100       868  
FXI Holdings, Inc. 7.875% 11/1/20241     7,501       6,248  
FXI Holdings, Inc. 12.25% 11/15/20261     19,783       16,410  
GC Treasury Center Co., Ltd. 4.40% 3/30/2032     11,500       10,216  
GC Treasury Center Co., Ltd. 4.40% 3/30/20321     1,600       1,421  
Glencore Funding, LLC 2.625% 9/23/20311     2,000       1,598  
Glencore Funding, LLC 3.875% 4/27/20511     2,000       1,441  
Gran Colombia Gold Corp. 6.875% 8/9/20261     1,860       1,461  
International Flavors & Fragrances, Inc. 1.832% 10/15/20271     24       20  
International Flavors & Fragrances, Inc. 2.30% 11/1/20301     1,044       831  
International Flavors & Fragrances, Inc. 3.468% 12/1/20501     22,705       15,468  
LABL, Inc. 8.25% 11/1/20291     2,535       2,024  
LSB Industries, Inc. 6.25% 10/15/20281     4,875       4,467  
LYB International Finance III, LLC 3.625% 4/1/2051     1,091       735  
Methanex Corp. 5.125% 10/15/2027     5,150       4,785  
Methanex Corp. 5.25% 12/15/2029     3,000       2,667  
Mineral Resources, Ltd. 8.50% 5/1/20301     11,900       12,078  
Nova Chemicals Corp. 5.25% 6/1/20271     3,100       2,792  
Nova Chemicals Corp. 4.25% 5/15/20291     14,955       12,248  
Novelis Corp. 4.75% 1/30/20301     6,326       5,623  
Novelis Corp. 3.875% 8/15/20311     7,021       5,741  
Nutrien, Ltd. 5.90% 11/7/2024     4,003       4,056  
Olin Corp. 5.00% 2/1/2030     3,000       2,743  
Praxair, Inc. 2.00% 8/10/2050     18       10  
Rio Tinto Finance (USA), Ltd. 2.75% 11/2/2051     7,587       5,055  
SCIH Salt Holdings, Inc. 4.875% 5/1/20281     22,390       19,254  
SCIH Salt Holdings, Inc. 6.625% 5/1/20291     13,505       10,896  
Scotts Miracle-Gro Co. 4.50% 10/15/2029     6,308       5,121  
Scotts Miracle-Gro Co. 4.375% 2/1/2032     9,015       6,808  
Sealed Air Corp. 4.00% 12/1/20271     11,364       10,328  
Sherwin-Williams Company 2.90% 3/15/2052     20,925       13,119  
Silgan Holdings, Inc. 4.125% 2/1/2028     5,374       4,981  
South32 Treasury, Ltd. 4.35% 4/14/20321     1,753       1,505  
Summit Materials, LLC 6.50% 3/15/20271     270       265  
Summit Materials, LLC 5.25% 1/15/20291     9,060       8,451  
Trivium Packaging BV 5.50% 8/15/20261     1,495       1,374  
Trivium Packaging BV 8.50% 8/15/20271     6,415       5,896  
Valvoline, Inc. 4.25% 2/15/20301     5,960       5,792  
Valvoline, Inc. 3.625% 6/15/20311     9,015       7,409  
Venator Finance SARL 9.50% 7/1/20251     8,610       6,242  
   
20 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Materials (continued)                
Venator Finance SARL 5.75% 7/15/20251   USD 3,015     $ 1,034  
W. R. Grace Holdings, LLC 5.625% 8/15/20291     2,055       1,664  
Warrior Met Coal, Inc. 7.875% 12/1/20281     12,415       12,255  
Yara International ASA 7.378% 11/14/20321     16,736       17,509  
              446,189  
                 
Information technology 3.59%                
Almonde, Inc., Term Loan B, (3-month USD-LIBOR + 3.50%) 6.871% 6/13/20243,4     2,353       2,088  
Almonde, Inc., Term Loan, (3-month USD-LIBOR + 7.25%) 10.621% 6/13/20253,4     6,800       5,113  
Analog Devices, Inc. 1.70% 10/1/2028     398       338  
Analog Devices, Inc. 2.10% 10/1/2031     19,575       15,857  
Analog Devices, Inc. 2.95% 10/1/2051     3,709       2,517  
Apple, Inc. 3.35% 8/8/2032     19,000       17,306  
Apple, Inc. 2.65% 2/8/2051     18,405       12,226  
Apple, Inc. 3.95% 8/8/2052     6,568       5,619  
Block, Inc. 3.50% 6/1/2031     15,000       11,988  
BMC Software, Inc. 7.125% 10/2/20251     5,100       4,968  
BMC Software, Inc., Term Loan, (3-month USD-LIBOR + 5.50%) 6.128% 3/31/20263,4     7,150       6,599  
Booz Allen Hamilton, Inc. 3.875% 9/1/20281     5,265       4,674  
Booz Allen Hamilton, Inc. 4.00% 7/1/20291     7,907       6,971  
Broadcom Corp. 3.875% 1/15/2027     53       50  
Broadcom, Inc. 4.00% 4/15/20291     992       903  
Broadcom, Inc. 4.75% 4/15/2029     220       210  
Broadcom, Inc. 4.15% 11/15/2030     350       314  
Broadcom, Inc. 2.45% 2/15/20311     8,141       6,431  
Broadcom, Inc. 4.15% 4/15/20321     3,121       2,748  
Broadcom, Inc. 4.30% 11/15/2032     1,000       884  
Broadcom, Inc. 2.60% 2/15/20331     6,660       5,017  
Broadcom, Inc. 3.469% 4/15/20341     474       380  
Broadcom, Inc. 3.137% 11/15/20351     802       592  
Broadcom, Inc. 3.187% 11/15/20361     111       80  
Broadcom, Inc. 4.926% 5/15/20371     9,780       8,567  
Broadcom, Inc. 3.50% 2/15/20411     4,787       3,416  
Broadcom, Inc. 3.75% 2/15/20511     4,334       3,011  
CDK Global, Inc. 7.25% 6/15/20291     14,770       14,466  
CommScope Finance, LLC 8.25% 3/1/20271     875       679  
CommScope Technologies, LLC 5.00% 3/15/20271     100       68  
CommScope, Inc. 7.125% 7/1/20281     5,000       3,582  
Diebold Nixdorf, Inc. 9.375% 7/15/20251     8,886       6,355  
Entegris Escrow Corp. 4.75% 4/15/20291     1,795       1,641  
Fair Isaac Corp. 4.00% 6/15/20281     8,495       7,724  
Finastra, Ltd., Term Loan B, (3-month EUR-EURIBOR + 3.00%) 4.00% 6/13/20243,4   EUR 2,621       2,425  
Gartner, Inc. 4.50% 7/1/20281   USD 3,270       3,054  
Gartner, Inc. 3.625% 6/15/20291     5,330       4,690  
Gartner, Inc. 3.75% 10/1/20301     5,165       4,460  
Global Payments, Inc. 2.90% 5/15/2030     67       55  
Mastercard, Inc. 1.90% 3/15/2031     18,110       14,756  
Mastercard, Inc. 3.85% 3/26/2050     100       84  
MoneyGram International, Inc. 5.375% 8/1/20261     12,555       12,741  
Oracle Corp. 2.875% 3/25/2031     2,479       2,061  
Oracle Corp. 3.60% 4/1/2050     50       34  
Oracle Corp. 3.95% 3/25/2051     212       152  
PayPal Holdings, Inc. 4.40% 6/1/2032     15,000       14,163  
PayPal Holdings, Inc. 5.05% 6/1/2052     22,655       20,639  
PayPal Holdings, Inc. 5.25% 6/1/2062     3,995       3,653  
Rocket Software, Inc. 6.50% 2/15/20291     5,800       4,580  
Sabre GLBL, Inc. 11.25% 12/15/20271     9,135       9,412  
salesforce.com, inc. 2.90% 7/15/2051     25,015       16,511  
ServiceNow, Inc. 1.40% 9/1/2030     18,684       14,336  
SK hynix, Inc. 1.50% 1/19/2026     4,300       3,728  
SK hynix, Inc. 1.50% 1/19/20261     200       173  
SK hynix, Inc. 2.375% 1/19/2031     7,600       5,580  
Tibco Software, Inc., Term Loan A, (3-month USD CME Term SOFR + 4.50%) 9.18% 9/29/20283,4     24,010       21,369  
UKG, Inc., Term Loan, (3-month USD-LIBOR + 5.25%) 8.998% 5/3/20273,4     6,605       6,101  
VeriSign, Inc. 2.70% 6/15/2031     729       596  
              328,735  
   
American Funds Multi-Sector Income Fund 21
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Corporate bonds, notes & loans (continued)                
Real estate 2.43%                
American Tower Corp. 2.30% 9/15/2031   USD 10,000     $ 7,798  
American Tower Corp. 4.05% 3/15/2032     1,400       1,252  
American Tower Corp. 2.95% 1/15/2051     15,000       9,349  
Anywhere Real Estate Group, LLC 5.75% 1/15/20291     6,890       5,220  
Anywhere Real Estate Group, LLC 5.25% 4/15/20301     6,725       4,915  
Brookfield Property REIT, Inc. 5.75% 5/15/20261     3,770       3,450  
Brookfield Property REIT, Inc. 4.50% 4/1/20271     3,780       3,165  
Corporacion Inmobiliaria Vesta, SAB de CV, 3.625% 5/13/20311     3,240       2,606  
Equinix, Inc. 1.45% 5/15/2026     2,260       1,990  
Equinix, Inc. 2.90% 11/18/2026     68       62  
Equinix, Inc. 1.55% 3/15/2028     105       87  
Equinix, Inc. 2.00% 5/15/2028     894       756  
Equinix, Inc. 3.20% 11/18/2029     75       65  
Equinix, Inc. 2.15% 7/15/2030     7,030       5,608  
Equinix, Inc. 2.50% 5/15/2031     1,645       1,326  
Equinix, Inc. 3.90% 4/15/2032     1,150       1,025  
Equinix, Inc. 2.95% 9/15/2051     3,250       2,038  
Equinix, Inc. 3.40% 2/15/2052     819       562  
Essex Portfolio, LP 2.55% 6/15/2031     1,762       1,396  
Extra Space Storage, Inc. 2.35% 3/15/2032     168       128  
FibraSOMA 4.375% 7/22/20311     3,933       2,946  
Howard Hughes Corp. 5.375% 8/1/20281     2,466       2,226  
Howard Hughes Corp. 4.125% 2/1/20291     9,840       8,255  
Howard Hughes Corp. 4.375% 2/1/20311     12,035       9,755  
Iron Mountain, Inc. 5.25% 3/15/20281     3,185       2,935  
Iron Mountain, Inc. 5.00% 7/15/20281     2,224       2,001  
Iron Mountain, Inc. 4.875% 9/15/20291     7,610       6,650  
Iron Mountain, Inc. 5.25% 7/15/20301     3,000       2,614  
Iron Mountain, Inc. 4.50% 2/15/20311     2,665       2,196  
Kennedy-Wilson Holdings, Inc. 4.75% 3/1/2029     10,210       8,105  
Kennedy-Wilson Holdings, Inc. 4.75% 2/1/2030     19,620       14,986  
Kennedy-Wilson Holdings, Inc. 5.00% 3/1/2031     3,020       2,277  
Ladder Capital Finance Holdings LLLP 4.25% 2/1/20271     2,820       2,374  
Ladder Capital Finance Holdings LLLP 4.75% 6/15/20291     5,500       4,449  
Medical Properties Trust, Inc. 5.00% 10/15/2027     90       76  
Medical Properties Trust, Inc. 3.50% 3/15/2031     16,215       11,149  
Park Intermediate Holdings, LLC 5.875% 10/1/20281     9,000       8,173  
Park Intermediate Holdings, LLC 4.875% 5/15/20291     10,330       8,758  
Public Storage 1.95% 11/9/2028     417       357  
Public Storage 2.25% 11/9/2031     8,155       6,561  
RHP Hotel Properties, LP 4.50% 2/15/20291     5,755       4,972  
RLJ Lodging Trust, LP 3.75% 7/1/20261     2,610       2,328  
RLJ Lodging Trust, LP 4.00% 9/15/20291     3,380       2,745  
Sun Communities Operating, LP 2.30% 11/1/2028     198       165  
Sun Communities Operating, LP 2.70% 7/15/2031     3,382       2,678  
Sun Communities Operating, LP 4.20% 4/15/2032     24,225       21,402  
VICI Properties, LP 4.625% 6/15/20251     325       312  
VICI Properties, LP 4.75% 2/15/2028     876       833  
VICI Properties, LP 3.875% 2/15/20291     3,880       3,406  
VICI Properties, LP 4.95% 2/15/2030     8,380       7,988  
VICI Properties, LP 4.125% 8/15/20301     145       127  
VICI Properties, LP 5.125% 5/15/2032     6,694       6,211  
VICI Properties, LP 5.625% 5/15/2052     4,250       3,766  
Westfield Corp., Ltd. 3.50% 6/15/20291     10       8  
WeWork Companies, LLC 5.00% 7/10/20251     14,325       4,759  
Xenia Hotels & Resorts, Inc. 4.875% 6/1/20291     2,120       1,739  
              223,080  
                 
Total corporate bonds, notes & loans             6,252,365  
                 
Bonds & notes of governments & government agencies outside the U.S. 8.13%          
Abu Dhabi (Emirate of) 2.50% 9/30/20291     15,000       13,481  
Abu Dhabi (Emirate of) 3.125% 4/16/2030     6,500       6,046  
Abu Dhabi (Emirate of) 1.70% 3/2/20311     12,800       10,588  
Abu Dhabi (Emirate of) 1.875% 9/15/2031     1,500       1,245  
Abu Dhabi (Emirate of) 3.875% 4/16/2050     9,900       8,423  
Angola (Republic of) 8.25% 5/9/2028     2,500       2,287  
   
22 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Bonds & notes of governments & government agencies outside the U.S. (continued)      
Angola (Republic of) 8.00% 11/26/2029   USD 25,240     $ 22,218  
Angola (Republic of) 8.75% 4/14/2032     3,100       2,692  
Argentine Republic 1.00% 7/9/2029     5,233       1,402  
Argentine Republic 0.50% 7/9/2030 (0.75% on 7/9/2023)2     62,185       16,926  
Argentine Republic 1.50% 7/9/2035 (3.625% on 7/9/2023)2     71,472       18,307  
Armenia (Republic of) 7.15% 3/26/2025     200       203  
Bahrain (Kingdom of) 6.125% 8/1/2023     1,300       1,301  
Brazil (Federative Republic of) 4.75% 1/14/2050     12,300       8,657  
Chile (Republic of) 3.10% 5/7/2041     10,120       7,305  
Chile (Republic of) 4.34% 3/7/2042     1,815       1,540  
Colombia (Republic of) 4.50% 3/15/2029     300       260  
Colombia (Republic of) 3.00% 1/30/2030     3,800       2,918  
Colombia (Republic of) 3.125% 4/15/2031     1,311       978  
Colombia (Republic of) 3.25% 4/22/2032     10,720       7,830  
Colombia (Republic of) 8.00% 4/20/2033     8,870       8,908  
Colombia (Republic of) 7.375% 9/18/2037     300       282  
Colombia (Republic of) 5.625% 2/26/2044     902       666  
Colombia (Republic of) 5.00% 6/15/2045     11,144       7,623  
Colombia (Republic of) 5.20% 5/15/2049     200       137  
Colombia (Republic of) 4.125% 5/15/2051     400       241  
Costa Rica (Republic of) 6.125% 2/19/2031     4,228       4,122  
Costa Rica (Republic of) 6.125% 2/19/20311     1,700       1,657  
Costa Rica (Republic of) 7.158% 3/12/2045     1,200       1,152  
Cote d’Ivoire (Republic of) 5.75% 12/31/20322     2,835       2,689  
Development Bank of Mongolia, LLC 7.25% 10/23/2023     6,210       5,575  
Dominican Republic 5.50% 1/27/2025     1,400       1,391  
Dominican Republic 6.875% 1/29/2026     1,000       1,012  
Dominican Republic 5.95% 1/25/2027     1,650       1,620  
Dominican Republic 5.50% 2/22/2029     2,757       2,547  
Dominican Republic 4.50% 1/30/2030     8,243       7,048  
Dominican Republic 4.50% 1/30/20301     5,789       4,950  
Dominican Republic 6.00% 2/22/2033     5,120       4,638  
Dominican Republic 6.00% 2/22/20331     1,285       1,164  
Dominican Republic 5.30% 1/21/20411     412       319  
Dominican Republic 6.85% 1/27/2045     1,100       959  
Dominican Republic 5.875% 1/30/2060     18,700       13,785  
Dominican Republic 5.875% 1/30/20601     1,700       1,253  
Egypt (Arab Republic of) 6.588% 2/21/2028     7,100       5,810  
Egypt (Arab Republic of) 6.588% 2/21/20281     1,200       982  
Egypt (Arab Republic of) 7.6003% 3/1/2029     3,600       2,943  
Egypt (Arab Republic of) 5.875% 2/16/2031     18,000       12,580  
Egypt (Arab Republic of) 5.875% 2/16/20311     6,930       4,843  
Egypt (Arab Republic of) 7.625% 5/29/20321     4,200       3,123  
Egypt (Arab Republic of) 8.75% 9/30/2051     1,600       1,080  
Egypt (Arab Republic of) 8.15% 11/20/2059     18,200       11,966  
Ethiopia (Federal Democratic Republic of) 6.625% 12/11/2024     9,000       5,655  
Export-Import Bank of India 3.25% 1/15/2030     14,100       12,253  
Gabonese Republic 6.95% 6/16/2025     7,400       7,030  
Gabonese Republic 7.00% 11/24/20311     6,000       4,934  
Gabonese Republic 7.00% 11/24/2031     2,200       1,809  
Georgia (Republic of) 2.75% 4/22/20261     2,880       2,617  
Georgia (Republic of) 2.75% 4/22/2026     2,667       2,423  
Ghana (Republic of) 8.125% 1/18/2026     1,210       496  
Ghana (Republic of) 6.375% 2/11/2027     14,090       5,460  
Ghana (Republic of) 7.75% 4/7/20291     3,600       1,355  
Ghana (Republic of) 8.125% 3/26/2032     15,400       5,650  
Ghana (Republic of) 8.125% 3/26/20321     1,500       550  
Honduras (Republic of) 6.25% 1/19/2027     10,360       9,167  
Honduras (Republic of) 5.625% 6/24/20301     6,175       4,981  
Honduras (Republic of) 5.625% 6/24/2030     5,548       4,475  
Indonesia (Republic of) 6.625% 2/17/2037     900       1,021  
Indonesia (Republic of) 5.25% 1/17/2042     10,210       10,063  
Indonesia (Republic of) 4.625% 4/15/2043     5,800       5,303  
Indonesia (Republic of) 6.75% 1/15/2044     575       646  
Indonesia (Republic of) 5.125% 1/15/2045     1,515       1,473  
Israel (State of) 3.375% 1/15/2050     2,500       1,931  
Jordan (Hashemite Kingdom of) 5.75% 1/31/20271     10,100       9,762  
   
American Funds Multi-Sector Income Fund 23
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Bonds & notes of governments & government agencies outside the U.S. (continued)      
Jordan (Hashemite Kingdom of) 5.85% 7/7/20301   USD 2,100     $ 1,889  
Kazakhstan (Republic of) 4.875% 10/14/2044     3,200       2,872  
Kenya (Republic of) 6.875% 6/24/20241     200       185  
Kenya (Republic of) 7.25% 2/28/2028     13,400       11,788  
Kenya (Republic of) 7.25% 2/28/20281     2,600       2,287  
Kenya (Republic of) 8.00% 5/22/2032     2,000       1,714  
Kenya (Republic of) 6.30% 1/23/20341     2,700       2,093  
Kenya (Republic of) 6.30% 1/23/2034     2,000       1,550  
Kenya (Republic of) 8.25% 2/28/2048     1,200       935  
Mongolia (State of) 3.50% 7/7/2027     472       381  
Mongolia (State of) 4.45% 7/7/2031     3,290       2,567  
Mozambique (Republic of) 5.00% 9/15/2031 (9.00% on 9/15/2023)2     13,260       10,210  
Nigeria (Republic of) 8.25% 9/28/20511     15,000       10,063  
Oman (Sultanate of) 5.375% 3/8/2027     16,650       16,341  
Oman (Sultanate of) 6.75% 10/28/2027     7,350       7,631  
Pakistan (Islamic Republic of) 8.25% 4/15/2024     400       218  
Pakistan (Islamic Republic of) 6.00% 4/8/2026     6,244       2,513  
Pakistan (Islamic Republic of) 6.00% 4/8/20261     3,510       1,413  
Pakistan (Islamic Republic of) 6.875% 12/5/2027     3,850       1,526  
Panama (Republic of) 7.125% 1/29/2026     200       211  
Panama (Republic of) 3.16% 1/23/2030     400       345  
Panama (Republic of) 4.50% 4/16/2050     2,400       1,819  
Panama (Republic of) 4.30% 4/29/2053     2,800       2,033  
Panama (Republic of) 4.50% 4/1/2056     2,000       1,466  
Panama (Republic of) 3.87% 7/23/2060     5,450       3,534  
Panama (Republic of) 4.50% 1/19/2063     14,545       10,303  
Paraguay (Republic of) 4.70% 3/27/20271     400       395  
Paraguay (Republic of) 4.95% 4/28/2031     16,350       15,862  
Peru (Republic of) 4.125% 8/25/2027     300       288  
Peru (Republic of) 2.783% 1/23/2031     1,200       996  
Peru (Republic of) 3.00% 1/15/2034     4,990       3,947  
Peru (Republic of) 6.55% 3/14/2037     9,500       10,044  
Peru (Republic of) 3.55% 3/10/2051     1,200       859  
Peru (Republic of) 2.78% 12/1/2060     4,949       2,903  
Peru (Republic of) 3.23% 7/28/2121     1,400       818  
PETRONAS Capital, Ltd. 3.50% 4/21/2030     9,700       8,871  
PETRONAS Capital, Ltd. 3.50% 4/21/20301     1,300       1,189  
PETRONAS Capital, Ltd. 4.55% 4/21/20501     800       717  
Philippines (Republic of) 3.00% 2/1/2028     8,300       7,754  
Philippines (Republic of) 1.648% 6/10/2031     1,200       962  
Philippines (Republic of) 3.95% 1/20/2040     9,200       7,825  
Philippines (Republic of) 3.70% 2/2/2042     2,500       2,053  
Philippines (Republic of) 2.95% 5/5/2045     12,600       9,130  
Philippines (Republic of) 3.20% 7/6/2046     4,800       3,525  
Philippines (Republic of) 4.20% 3/29/2047     4,000       3,436  
PT Indonesia Asahan Aluminium Tbk 5.45% 5/15/2030     10,000       9,543  
Qatar (State of) 3.75% 4/16/20301     14,100       13,685  
Qatar (State of) 4.625% 6/2/2046     1,500       1,422  
Qatar (State of) 5.103% 4/23/2048     1,600       1,612  
Qatar (State of) 4.40% 4/16/20501     16,100       14,776  
Republika Srpska 4.75% 4/27/2026   EUR 835       816  
Romania 2.00% 1/28/2032     7,500       5,386  
Romania 2.00% 1/28/2032     3,300       2,370  
Romania 2.00% 4/14/2033     2,720       1,874  
Romania 3.50% 4/3/2034     30       24  
Romania 5.125% 6/15/2048   USD 2,900       2,316  
Romania 5.125% 6/15/20481     300       240  
Russian Federation 4.75% 5/27/20267     1,600       704  
Russian Federation 4.25% 6/23/20277     4,200       1,806  
Russian Federation 4.375% 3/21/20297     1,000       410  
Russian Federation 5.10% 3/28/20357     6,400       2,624  
Russian Federation 5.25% 6/23/20477     1,800       738  
Senegal (Republic of) 4.75% 3/13/2028   EUR 4,500       4,170  
Senegal (Republic of) 4.75% 3/13/2028     1,500       1,390  
Senegal (Republic of) 6.75% 3/13/2048   USD 8,000       5,678  
South Africa (Republic of) 4.875% 4/14/2026     8,200       7,964  
South Africa (Republic of) 4.30% 10/12/2028     2,200       1,969  
   
24 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Bonds & notes of governments & government agencies outside the U.S. (continued)          
South Africa (Republic of) 5.875% 6/22/2030   USD 500     $ 467  
South Africa (Republic of) 5.875% 4/20/2032     11,300       10,234  
South Africa (Republic of) 5.00% 10/12/2046     7,500       5,285  
South Africa (Republic of) 6.30% 6/22/2048     12,200       9,791  
Sri Lanka (Democratic Socialist Republic of) 5.75% 4/18/20237     3,798       1,206  
Sri Lanka (Democratic Socialist Republic of) 6.125% 6/3/20257     2,300       753  
Sri Lanka (Democratic Socialist Republic of) 6.85% 11/3/20257     20,400       6,581  
Sri Lanka (Democratic Socialist Republic of) 6.20% 5/11/20277     1,780       568  
Sri Lanka (Democratic Socialist Republic of) 7.85% 3/14/20297     3,271       1,048  
Sri Lanka (Democratic Socialist Republic of) 7.55% 3/28/20307     14,029       4,476  
Tunisia (Republic of) 6.75% 10/31/2023   EUR 200       181  
Tunisia (Republic of) 5.75% 1/30/2025   USD 17,990       12,530  
Turkey (Republic of) 6.375% 10/14/2025     5,700       5,484  
Turkey (Republic of) 5.125% 6/22/20261     4,000       3,678  
Turkey (Republic of) 7.625% 4/26/2029     2,450       2,318  
Turkey (Republic of) 5.875% 6/26/2031     21,050       17,326  
Turkey (Republic of) 6.50% 9/20/2033     2,000       1,671  
Turkey (Republic of) 6.00% 1/14/2041     200       146  
Turkey (Republic of) 5.75% 5/11/2047     12,100       8,289  
Ukraine 8.994% 2/1/20267     6,377       1,428  
Ukraine 7.75% 9/1/20287     4,500       973  
Ukraine 7.75% 9/1/20297     200       43  
Ukraine 9.75% 11/1/20307     200       41  
Ukraine 6.876% 5/21/20311,7     4,800       924  
Ukraine 7.375% 9/25/20347     4,500       858  
United Mexican States 3.75% 1/11/2028     200       189  
United Mexican States 4.50% 4/22/2029     18,100       17,294  
United Mexican States 2.659% 5/24/2031     649       525  
United Mexican States 4.875% 5/19/2033     2,338       2,151  
United Mexican States 6.05% 1/11/2040     13,600       13,239  
United Mexican States 4.75% 3/8/2044     200       162  
United Mexican States 5.00% 4/27/2051     1,200       978  
United Mexican States 4.40% 2/12/2052     550       406  
United Mexican States 3.75% 4/19/2071     4,770       2,982  
              745,929  
                 
Mortgage-backed obligations 7.09%                
Commercial mortgage-backed securities 4.85%                
3650R Commercial Mortgage Trust, Series 2022-PF2, Class B, 5.289% 11/15/20554,10     12,673       11,207  
Arbor Multi Family Mortgage Securities Trust, Series 2020-MF1, Class B, 3.599% 5/15/20534,10     500       401  
Banc of America Commercial Mortgage, Inc., Series 2016-UB10, Class C, 4.838% 7/15/20494,10     3,560       3,196  
Banc of America Commercial Mortgage, Inc., Series 2017-BNK3, Class A4, 3.574% 2/15/205010     10       9  
Bank Commercial Mortgage Trust, Series 2022-BNK44, Class B, 5.746% 11/15/20324,10     8,333       7,856  
Bank Commercial Mortgage Trust, Series 2022-BNK44, Class C, 5.746% 11/15/20324,10     7,500       6,156  
Bank Commercial Mortgage Trust, Series 2017-BNK9, Class A4, 3.538% 11/15/205410     10       9  
Bank Commercial Mortgage Trust, Series 2022-BNK43, Class B, 5.153% 8/15/20554,10     5,250       4,668  
Bank Commercial Mortgage Trust, Series 2019-BN19, Class B, 3.647% 8/15/206110     4,000       3,243  
Barclays Commercial Mortgage Securities, LLC, Series 2022-C17, Class B, 4.889% 9/15/20554,10     11,003       9,677  
Barclays Commercial Mortgage Securities, LLC, Series 2022-C18, Class C, 6.148% 12/15/20554,10     10,328       8,894  
Benchmark Mortgage Trust, Series 2018-B2, Class A4, 3.615% 2/15/205110     25       23  
Benchmark Mortgage Trust, Series 2018-B3, Class A5, 4.025% 4/10/205110     10       10  
Benchmark Mortgage Trust, Series 2018-B3, Class B, 4.295% 4/10/20514,10     1,445       1,267  
Benchmark Mortgage Trust, Series 2018-B4, Class A5, 4.121% 7/15/20514,10     10       10  
Benchmark Mortgage Trust, Series 2021-B25, Class B, 2.635% 4/15/205410     5,500       4,015  
Benchmark Mortgage Trust, Series 2022-B35, Class C, 4.445% 5/15/20554,10     9,225       7,234  
Benchmark Mortgage Trust, Series 2022-B36, Class B, 4.87% 7/15/20554,10     7,500       6,387  
Benchmark Mortgage Trust, Series 2019-B13, Class A4, 2.952% 8/15/205710     20       18  
BOCA Commercial Mortgage Trust, Series 2022-BOCA, Class A, (1-month USD CME Term SOFR + 1.77%) 6.105% 5/15/20391,4,10     2,750       2,700  
BOCA Commercial Mortgage Trust, Series 2022-BOCA, Class B, (1-month USD CME Term SOFR + 2.319%) 6.655% 5/15/20391,4,10     2,694       2,603  
   
American Funds Multi-Sector Income Fund 25
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Mortgage-backed obligations (continued)                
Commercial mortgage-backed securities (continued)                
BX Trust, Series 2022-CSMO, Class B, (1-month USD CME Term SOFR + 3.141%) 7.476% 6/15/20271,4,10   USD 10,000     $ 9,950  
BX Trust, Series 2021-MFM1, Class B, (1-month USD-LIBOR + 0.95%) 5.268% 1/15/20341,4,10     4,000       3,836  
BX Trust, Series 2021-SDMF, Class B, (1-month USD-LIBOR + 0.738%) 5.056% 9/15/20341,4,10     3,000       2,831  
BX Trust, Series 2021-SDMF, Class C, (1-month USD-LIBOR + 0.888%) 5.206% 9/15/20341,4,10     2,100       1,975  
BX Trust, Series 2021-SDMF, Class D, (1-month USD-LIBOR + 1.387%) 5.705% 9/15/20341,4,10     2,000       1,880  
BX Trust, Series 2021-VOLT, Class A, (1-month USD-LIBOR + 0.70%) 5.018% 9/15/20361,4,10     1,733       1,672  
BX Trust, Series 2021-VOLT, Class B, (1-month USD-LIBOR + 0.95%) 5.268% 9/15/20361,4,10     2,696       2,547  
BX Trust, Series 2021-ARIA, Class A, (1-month USD-LIBOR + 0.899%) 5.217% 10/15/20361,4,10     1,992       1,898  
BX Trust, Series 2021-ARIA, Class B, (1-month USD-LIBOR + 1.297%) 5.615% 10/15/20361,4,10     10,749       10,110  
BX Trust, Series 2021-ARIA Class C, (1-month USD-LIBOR + 1.646%) 5.964% 10/15/20361,4,10     1,992       1,861  
BX Trust, Series 2021-ARIA, Class D, (1-month USD-LIBOR + 1.895%) 6.213% 10/15/20361,4,10     1,380       1,280  
BX Trust, Series 2022-IND, Class D, (1-month USD CME Term SOFR + 2.839%) 7.175% 4/15/20371,4,10     735       696  
BX Trust, Series 2021-SOAR, Class B, (1-month USD-LIBOR + 0.87%) 5.188% 6/15/20381,4,10     811       774  
BX Trust, Series 2021-SOAR, Class C, (1-month USD-LIBOR + 1.10%) 5.418% 6/15/20381,4,10     731       693  
BX Trust, Series 2021-SOAR, Class D, (1-month USD-LIBOR + 1.40%) 5.718% 6/15/20381,4,10     9,259       8,746  
BX Trust, Series 2021-ACNT, Class A, (1-month USD-LIBOR + 0.85%) 5.168% 11/15/20381,4,10     2,102       2,026  
BX Trust, Series 2021-ACNT, Class B, (1-month USD-LIBOR + 1.25%) 5.568% 11/15/20381,4,10     12,188       11,693  
BX Trust, Series 2021-ACNT, Class C, (1-month USD-LIBOR + 1.50%) 5.818% 11/15/20381,4,10     1,962       1,868  
BX Trust, Series 2021-ACNT, Class D, (1-month USD-LIBOR + 1.85%) 6.168% 11/15/20381,4,10     2,982       2,826  
BX Trust, Series 2022-AHP, Class B, (1-month USD CME Term SOFR + 1.84%) 6.176% 2/15/20391,4,10     3,000       2,849  
BX Trust, Series 2022-LP2, Class D, (1-month USD CME Term SOFR + 1.961%) 6.296% 2/15/20391,4,10     2,785       2,602  
BX Trust, Series 2022-AHP, Class C, (1-month USD CME Term SOFR + 2.09%) 6.426% 2/15/20391,4,10     4,000       3,801  
BX Trust, Series 2022-PSB, Class A, (1-month USD CME Term SOFR + 2.451%) 6.787% 8/15/20391,4,10     19,771       19,757  
BX Trust, Series 2022-PSB, Class B, (1-month USD CME Term SOFR + 2.949%) 7.285% 8/15/20391,4,10     6,591       6,550  
BX Trust, Series 2022-PSB, Class C, (1-month USD CME Term SOFR + 3.697%) 8.033% 8/15/20391,4,10     9,612       9,583  
BX Trust, Series 2022-GPA, Class B, (1-month USD CME Term SOFR + 2.664%) 7.00% 10/15/20391,4,10     7,858       7,810  
BX Trust, Series 2022-GPA, Class C, (1-month USD CME Term SOFR + 3.213%) 7.549% 10/15/20391,4,10     4,977       4,937  
BX Trust, Series 2022-GPA, Class D, (1-month USD CME Term SOFR + 4.061%) 8.397% 10/15/20391,4,10     1,855       1,839  
BX Trust, Series 2020-VIV4, Class A, 2.843% 3/9/20441,10     3,000       2,433  
BXSC Commercial Mortgage Trust, Series 2022-WSS, Class B, (1-month USD CME Term SOFR + 2.092%) 6.428% 3/15/20351,4,10     13,740       13,320  
BXSC Commercial Mortgage Trust, Series 2022-WSS, Class D, (1-month USD CME Term SOFR + 3.188%) 7.524% 3/15/20351,4,10     2,485       2,376  
CD Commercial Mortgage Trust, Series 2017-CD6, Class A5, 3.456% 11/13/205010     10       9  
Citigroup Commercial Mortgage Trust, Series 2013-GC11, Class B, 3.732% 4/10/20464,10     893       886  
Citigroup Commercial Mortgage Trust, Series 2013-GC11, Class C, 4.134% 4/10/20464,10     2,000       1,982  
   
26 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Mortgage-backed obligations (continued)                
Commercial mortgage-backed securities (continued)                
Citigroup Commercial Mortgage Trust, Series 2014-GC21, Class AS, 4.026% 5/10/204710   USD 420     $ 403  
Citigroup Commercial Mortgage Trust, Series 2014-GC21, Class B, 4.328% 5/10/20474,10     1,900       1,779  
Citigroup Commercial Mortgage Trust, Series 2014-GC25, Class AS, 4.017% 10/10/204710     438       416  
Citigroup Commercial Mortgage Trust, Series 2015-GC27, Class B, 3.772% 2/10/204810     7,892       7,204  
Citigroup Commercial Mortgage Trust, Series 2015-GC27, Class C, 4.418% 2/10/20484,10     3,656       3,320  
Citigroup Commercial Mortgage Trust, Series 2015-GC29, Class C, 4.14% 4/10/20484,10     2,660       2,396  
Citigroup Commercial Mortgage Trust, Series 2015-GC33, Class A3, 3.515% 9/10/205810     296       282  
Commercial Mortgage Trust, Series 2012-CR3, Class AM, 3.416% 10/15/20451,10     262       237  
Commercial Mortgage Trust, Series 2013-LC6, Class B, 3.739% 1/10/204610     55       55  
Commercial Mortgage Trust, Series 2013-CR7, Class AM, 3.314% 3/10/20461,10     560       555  
Commercial Mortgage Trust, Series 2013-CR6, Class B, 3.397% 3/10/20461,10     1,505       1,496  
Commercial Mortgage Trust, Series 2013-CRE7, Class B, 3.613% 3/10/20461,10     500       493  
Commercial Mortgage Trust, Series 2013-CR6, Class C, 3.777% 3/10/20461,4,10     1,310       1,274  
Commercial Mortgage Trust, Series 2013-CR10, Class C, 4.869% 8/10/20461,4,10     1,309       1,274  
Commercial Mortgage Trust, Series 2014-UBS4, Class B, 4.701% 3/10/204710     1,024       989  
Commercial Mortgage Trust, Series 2014-CR16, Class C, 4.917% 4/10/20474,10     460       417  
Commercial Mortgage Trust, Series 2014-CR18, Class B, 4.456% 7/15/20474,10     381       362  
Commercial Mortgage Trust, Series 2014-UBS4, Class AM, 3.968% 8/10/204710     108       103  
Commercial Mortgage Trust, Series 2014-CR19, Class AM, 4.08% 8/10/204710     500       480  
Commercial Mortgage Trust, Series 2014-LC17, Class B, 4.49% 10/10/20474,10     950       901  
Commercial Mortgage Trust, Series 2014-UBS6, Class C, 4.436% 12/10/20474,10     605       555  
Commercial Mortgage Trust, Series 2015-CR26, Class B, 4.467% 10/10/20484,10     8,035       7,482  
Commercial Mortgage Trust, Series 2015-CCRE-26, Class C, 4.467% 10/10/20484,10     860       776  
Commercial Mortgage Trust, Series 2016-COR1, Class A4, 3.091% 10/10/204910     25       23  
Commercial Mortgage Trust, Series 2015-PC1, Class AM, 4.29% 7/10/20504,10     250       237  
Commercial Mortgage Trust, Series 2013-CR11, Class B, 5.11% 8/10/20504,10     570       556  
Commercial Mortgage Trust, Series 2013-CR11, Class C, 5.118% 8/10/20501,4,10     1,250       1,209  
Extended Stay America Trust, Series 2021-ESH, Class A, (1-month USD-LIBOR + 1.08%) 5.398% 7/15/20381,4,10     7,115       6,921  
Extended Stay America Trust, Series 2021-ESH, Class B, (1-month USD-LIBOR + 1.38%) 5.698% 7/15/20381,4,10     374       360  
Extended Stay America Trust, Series 2021-ESH, Class C, (1-month USD-LIBOR + 1.70%) 6.018% 7/15/20381,4,10     2,344       2,255  
Extended Stay America Trust, Series 2021-ESH, Class D, (1-month USD-LIBOR + 2.25%) 6.568% 7/15/20381,4,10     8,494       8,154  
Great Wolf Trust, Series 2019-WOLF, Class A, (1-month USD-LIBOR + 1.034%) 5.352% 12/15/20361,4,10     7,301       7,098  
Great Wolf Trust, Series 2019-WOLF, Class D, (1-month USD-LIBOR + 1.933%) 6.251% 12/15/20361,4,10     1,213       1,157  
GS Mortgage Securities Trust, Series 2022-SHIP, Class B, (1-month USD CME Term SOFR + 1.424%) 5.76% 8/15/20241,4,10     1,464       1,436  
GS Mortgage Securities Trust, Series 2022-SHIP, Class C, (1-month USD CME Term SOFR + 1.919%) 6.255% 8/15/20241,4,10     757       742  
GS Mortgage Securities Trust, Series 2018-HULA, Class A, 5.238% 7/15/20251,4,10     2,287       2,229  
GS Mortgage Securities Trust, Series 2013-GC12, Class B, 3.777% 6/10/20464,10     650       641  
GS Mortgage Securities Trust, Series 2013-GC16, Class A3, 4.244% 11/10/204610     87       86  
GS Mortgage Securities Trust, Series 2020-GS1, Class A2, 3.47% 11/10/204810     200       190  
Hilton USA Trust, Series 2016-HHV, Class D, 4.194% 11/5/20381,10     1,230       1,088  
ILPT Commercial Mortgage Trust, Series 2022-LPF2, Class B, (1-month USD CME Term SOFR + 2.744%) 7.08% 10/15/20391,4,10     3,273       3,265  
ILPT Commercial Mortgage Trust, Series 2022-LPF2, Class C, (1-month USD CME Term SOFR + 3.493%) 7.829% 10/15/20391,4,10     4,364       4,324  
INTOWN Mortgage Trust, Series 2022-STAY, Class B, (1-month USD CME Term SOFR + 3.286%) 7.622% 8/15/20371,4,10     7,882       7,855  
INTOWN Mortgage Trust, Series 2022-STAY, Class C, (1-month USD CME Term SOFR + 3.685%) 8.021% 8/15/20371,4,10     3,120       3,069  
JPMBB Commercial Mortgage Securities Trust, Series 2014-C19, Class B, 4.394% 4/15/20474,10     920       877  
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2022-OPO, Class C, 3.377% 1/5/20391,10     2,602       2,123  
   
American Funds Multi-Sector Income Fund 27
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Mortgage-backed obligations (continued)                
Commercial mortgage-backed securities (continued)                
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2022-OPO, Class C, 3.565% 1/5/20391,4,10   USD 2,092     $ 1,626  
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2021-410T, Class A, 2.287% 3/5/20421,10     768       628  
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-LC11, Class B, 3.499% 4/15/204610     2,000       1,961  
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class AS, 3.372% 12/15/204710     500       499  
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class B, 3.674% 12/15/20474,10     650       633  
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C10, Class C, 4.181% 12/15/20474,10     500       465  
LUXE Commercial Mortgage Trust, Series 2021-TRIP, Class A, (1-month USD-LIBOR + 1.05%) 5.368% 10/15/20381,4,10     476       456  
LUXE Commercial Mortgage Trust, Series 2021-TRIP, Class B, (1-month USD-LIBOR + 1.40%) 5.718% 10/15/20381,4,10     1,142       1,082  
LUXE Commercial Mortgage Trust, Series 21-TRIP, Class C, (1-month USD-LIBOR + 1.75%) 6.068% 10/15/20381,4,10     5,000       4,669  
MHC Commercial Mortgage Trust, CMO, Series 2021-MHC, Class A, (1-month USD-LIBOR + 0.801%) 5.119% 4/15/20261,4,10     1,534       1,490  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C9, Class B, 3.708% 5/15/20464,10     923       876  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C11, Class A4, 4.198% 8/15/20464,10     2,876       2,835  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C12, Class AS, 4.482% 10/15/20464,10     500       490  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C14, Class C, 5.059% 2/15/20474,10     5,800       5,586  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C17, Class A4, 3.443% 8/15/204710     151       147  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C18, Class AS, 4.11% 10/15/20474,10     1,189       1,134  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C20, Class B, 4.16% 2/15/204810     18,113       16,929  
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C25, Class B, 4.526% 10/15/20484,10     74       69  
Morgan Stanley Capital I Trust, Series 2017-H1, Class A5, 3.53% 6/15/205010     45       42  
Morgan Stanley Capital I Trust, Series 2019-L3, Class B, 3.659% 11/15/20524,10     5,300       4,320  
Multifamily Connecticut Avenue Securities, Series 2019-1, Class M10, (1-month USD-LIBOR + 3.25%) 7.639% 10/15/20491,4,10     1,335       1,257  
Multifamily Connecticut Avenue Securities, Series 2020-1, Class M10, (1-month USD-LIBOR + 3.75%) 8.139% 3/25/20501,4,10     3,400       3,153  
One Market Plaza Trust, Series 2017-1MKT, Class C, 4.016% 2/10/20321,10     3,000       2,827  
SREIT Trust, Series 2021-FLWR, Class A, (1-month USD-LIBOR + 0.577%) 4.894% 7/15/20361,4,10     1,558       1,498  
SREIT Trust, Series 2021-FLWR, Class B, (1-month USD-LIBOR + 0.926%) 5.244% 7/15/20361,4,10     8,000       7,633  
SREIT Trust, Series 2021-MFP, Class A, (1-month USD-LIBOR + 0.731%) 5.049% 11/15/20381,4,10     1,442       1,389  
SREIT Trust, Series 2021-MFP, Class B, (1-month USD-LIBOR + 1.079%) 5.398% 11/15/20381,4,10     1,545       1,474  
SREIT Trust, Series 2021-MFP, Class C, (1-month USD-LIBOR + 1.329%) 5.647% 11/15/20381,4,10     2,077       1,977  
SREIT Trust, Series 2021-MFP, Class D, (1-month USD-LIBOR + 1.578%) 5.896% 11/15/20381,4,10     2,500       2,368  
StorageMart Commercial Mortgage Trust, Series 2022-MINI, Class D, (1-month USD CME Term SOFR + 1.95%) 6.286% 1/15/20391,4,10     9,500       8,863  
StorageMart Commercial Mortgage Trust, Series 2022-MINI, Class A, (1-month USD CME Term SOFR + 1.00%) 5.336% 1/15/20391,4,10     5,970       5,771  
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS1, Class C, 3.848% 5/15/20484,10     1,000       901  
Wells Fargo Commercial Mortgage Trust, Series 2016-C34, Class A4, 3.096% 6/15/204910     25       23  
Wells Fargo Commercial Mortgage Trust, Series 2017-C40, Class C, 4.311% 10/15/20504,10     2,154       1,824  
Wells Fargo Commercial Mortgage Trust, Series 2018-C46, Class B, 4.633% 8/15/205110     2,903       2,564  
   
28 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Mortgage-backed obligations (continued)                
Commercial mortgage-backed securities (continued)                
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS3, Class D, 3.153% 9/15/20571,10   USD 3,561     $ 2,900  
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS3, Class B, 4.497% 9/17/20574,10     4,100       3,784  
Wells Fargo Commercial Mortgage Trust, Series 2015-LC22, Class B, 4.550% 9/15/20584,10     6,750       6,205  
Wells Fargo Commercial Mortgage Trust, Series 2015-LC22, Class C, 4.55% 9/15/20584,10     110       99  
Wells Fargo Commercial Mortgage Trust, Series 2016-NXS5, Class B, 4.949% 1/15/20594,10     5,760       5,150  
WF-RBS Commercial Mortgage Trust, Series 2012-C10, Class AS, 3.241% 12/15/204510     221       217  
WF-RBS Commercial Mortgage Trust, Series 2013-C16, Class B, 4.983% 9/15/20464,10     1,251       1,196  
WF-RBS Commercial Mortgage Trust, Series 2014-C19, Class AS, 4.271% 3/15/204710     417       405  
WF-RBS Commercial Mortgage Trust, Series 2014-C19, Class B, 4.723% 3/15/20474,10     512       490  
WF-RBS Commercial Mortgage Trust, Series 2013-C12, Class B, 3.863% 3/15/20484,10     500       496  
WF-RBS Commercial Mortgage Trust, Series 2014-C22, Class AS, 4.069% 9/15/20574,10     100       94  
WMRK Commercial Mortgage Trust, Series 2022-WMRK, Class A, (1-month USD CME Term SOFR + 2.789%) 7.125% 11/15/20271,4,10     15,228       15,215  
              444,333  
                 
Collateralized mortgage-backed obligations (privately originated) 2.24%          
Bellemeade Re, Ltd., Series 2019-3A, Class M1B, (1-month USD-LIBOR + 1.60%) 5.989% 7/25/20291,4,10     99       99  
BINOM Securitization Trust, Series 2022-RPL1, Class A1, 3.00% 2/25/20611,4,10     1,182       1,055  
BRAVO Residential Funding Trust, Series 2020-RPL2, Class A1, 2.00% 5/25/20591,4,10     195       176  
BRAVO Residential Funding Trust, Series 2022-RPL1, Class A1, 2.75% 9/25/20611,10     1,623       1,407  
BRAVO Residential Funding Trust, Series 2022-R1, Class A, 3.125% 1/29/2070 (6.125% on 1/29/2025)1,2,10     11,266       10,036  
Cascade Funding Mortgage Trust, Series 2020-HB4, Class M3, 2.72% 12/26/20301,4,10     225       209  
Cascade Funding Mortgage Trust, Series 2021-HB5, Class A, 0.801% 2/25/20311,4,10     141       136  
Cascade Funding Mortgage Trust, Series 2021-HB7, Class A, 1.151% 10/27/20311,4,10     734       692  
Cascade Funding Mortgage Trust, Series 2021-HB7, Class M1, 2.125% 10/27/20311,4,10     1,296       1,195  
Cascade Funding Mortgage Trust, Series 2021-HB6, Class A, 0.898% 6/25/20361,4,10     833       792  
Cascade Funding Mortgage Trust, Series 2018-RM2, Class B, 4.00% 10/25/20681,4,10     998       948  
Cascade Funding Mortgage Trust, Series 2018-RM2, Class A, 4.00% 10/25/20681,4,10     862       832  
Cascade Funding Mortgage Trust, Series 2018-RM2, Class C, 4.00% 10/25/20681,4,10     734       694  
Cascade Funding Mortgage Trust, Series 2018-RM2, Class D, 4.00% 10/25/20681,4,10     734       684  
Cascade MH Asset Trust, Series 2022-MH1, Class A, 4.25% 8/25/2054 (5.25% on 11/25/2027)1,2,10     15,724       13,810  
CFCRE Commercial Mortgage Trust, Series 2016-C7, Class A2, 3.585% 12/10/205410     182       169  
Citigroup Mortgage Loan Trust, Series 2020-EXP1, Class A1A, 1.804% 5/25/20601,4,10     42       38  
Connecticut Avenue Securities Trust, Series 2021-R01, Class 1M1, (30-day Average USD-SOFR + 0.75%) 4.678% 10/25/20411,4,10     547       542  
Connecticut Avenue Securities Trust, Series 2021-R03, Class 1M1, (30-day Average USD-SOFR + 0.85%) 4.778% 12/25/20411,4,10     3,162       3,103  
Connecticut Avenue Securities Trust, Series 2022-R06, Class 1M1, (30-day Average USD-SOFR + 2.75%) 6.678% 5/25/20421,4,10     9,264       9,384  
Credit Suisse Mortgage Trust, Series 2020-NET, Class A, 2.257% 8/15/20371,10     110       99  
Credit Suisse Mortgage Trust, Series 2017-RPL3, Class A1, 2.00% 1/25/20601,4,10     537       461  
Flagstar Mortgage Trust, Series 2021-10INV, Class A3, 2.50% 10/25/20511,4,10     759       613  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2013-DN1, Class M2, (1-month USD-LIBOR + 7.15%) 11.539% 7/25/20234,10     11,473       11,736  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2021-DNA6, Class M1, (30-day Average USD-SOFR + 0.80%) 4.728% 10/25/20411,4,10     6,181       6,102  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2022-DNA2, Class M1A, (30-day Average USD-SOFR + 1.30%) 5.228% 2/25/20421,4,10     14,596       14,360  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2022-DNA3, Class M1A, (30-day Average USD-SOFR + 2.00%) 5.928% 4/25/20421,4,10     1,550       1,543  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2022-DNA4, Class M1A, (30-day Average USD-SOFR + 2.20%) 6.128% 5/25/20421,4,10     1,851       1,846  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2022-DNA5, Class M1A, (30-day Average USD-SOFR + 2.95%) 6.878% 6/25/20421,4,10     10,767       10,898  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2022-DNA6, Class M1A, (30-day Average USD-SOFR + 2.15%) 6.078% 9/25/20421,4,10     604       605  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2022-DNA6, Class M1B, (30-day Average USD-SOFR + 3.70%) 7.628% 9/25/20421,4,10     1,460       1,492  
   
American Funds Multi-Sector Income Fund 29
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Mortgage-backed obligations (continued)                
Collateralized mortgage-backed obligations (privately originated) (continued)          
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2020-DNA1, Class M2, (1-month USD-LIBOR + 1.70%) 6.089% 1/25/20501,4,10   USD 2,026     $ 2,020  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2020-DNA2, Class M2, (1-month USD-LIBOR + 1.85%) 6.239% 2/25/20501,4,10     4,831       4,823  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2020-DNA3, Class B1, (1-month USD-LIBOR + 5.10%) 9.489% 6/27/20501,4,10     11,787       12,292  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2020-DNA4, Class B1, (1-month USD-LIBOR + 6.00%) 10.389% 8/25/20501,4,10     8,665       9,224  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2020-DNA5, Class M2, (30-day Average USD-SOFR + 2.80%) 6.321% 10/25/20501,4,10     1,763       1,777  
Freddie Mac Structured Agency Credit Risk Debt Notes, Series 2020-DNA6, Class M2, (30-day Average USD-SOFR + 2.00%) 5.928% 12/25/20501,4,10     4,355       4,327  
Home Partners of America Trust, Series 2021-2, Class A, 1.901% 12/17/20261,10     2,152       1,862  
Hundred Acre Wood Trust, Series 2021-INV1, Class A9, 2.50% 7/25/20511,4,10     2,529       2,205  
Hundred Acre Wood Trust, Series 2021-INV1, Class A27, 2.50% 7/25/20511,4,10     2,529       1,938  
JPMorgan Mortgage Trust, Series 2018-3, Class A1, 3.50% 9/25/20481,4,10     197       173  
JPMorgan Mortgage Trust, Series 2020-1, Class A15, 3.50% 6/25/20501,4,10     815       692  
Legacy Mortgage Asset Trust, Series 2019-GS7, Class A1, 6.25% 11/25/20591,4,10     208       208  
Legacy Mortgage Asset Trust, Series 2020-GS4, Class A1, 3.25% 2/25/20601,4,10     238       235  
Legacy Mortgage Asset Trust, Series 2022-GS1, Class A1, 4.00% 2/25/2061 (7.00% on 4/25/2025)1,2,10     12,235       11,330  
Legacy Mortgage Asset Trust, Series 2021-GS2, Class A1, 1.75% 4/25/20611,4,10     858       780  
Legacy Mortgage Asset Trust, Series 2021-GS5, Class A1, 2.25% 7/25/2067 (5.25% on 11/25/2024)1,2,10     2,644       2,380  
Mello Warehouse Securitization Trust, Series 2021-3, Class A, (1-month USD-LIBOR + 0.85%) 5.239% 11/25/20551,4,10     1,616       1,564  
New Residential Mortgage Loan Trust, Series 2018-1A, Class A1A, 4.00% 12/25/20571,4,10     47       44  
New Residential Mortgage Loan Trust, Series 2019-2A, Class A1, 4.25% 12/25/20571,4,10     134       127  
New Residential Mortgage Loan Trust, Series 2018-5A, Class A1, 4.75% 12/25/20571,4,10     104       101  
NewRez Warehouse Securitization Trust, Series 2021-1, Class A, (1-month USD-LIBOR + 0.75%) 5.139% 5/25/20551,4,10     2,250       2,218  
Progress Residential Trust, Series 2019-SFR3, Class A, 2.271% 9/17/20361,10     396       375  
Progress Residential Trust, Series 2020-SFR2, Class A, 2.078% 6/18/20371,10     100       92  
Progress Residential Trust, Series 2021-SFR4, Class F, 3.407% 5/17/20381,10     4,305       3,670  
Reverse Mortgage Investment Trust, Series 2021-HB1, Class A, 1.259% 11/25/20311,4,10     661       623  
RMF Proprietary Issuance Trust, Series 2019-1, Class A, 2.75% 10/25/20631,4,10     61       57  
Sequoia Mortgage Trust, Series 2013-2, Class A, 1.874% 2/25/20434,10     38       32  
Sequoia Mortgage Trust, Series 2018-CH1, Class A2, 3.50% 2/25/20481,4,10     63       57  
Towd Point Mortgage Trust, Series 2015-3, Class B1, 4.195% 3/25/20541,4,10     2,504       2,404  
Towd Point Mortgage Trust, Series 2017-2, Class B2, 4.084% 4/25/20571,4,10     2,400       2,100  
Towd Point Mortgage Trust, Series 2018-1, Class A2, 3.25% 1/25/20581,4,10     2,477       2,304  
Towd Point Mortgage Trust, Series 2018-5, Class A1A, 3.25% 7/25/20581,4,10     260       251  
Towd Point Mortgage Trust, Series 2019-4, Class M1B, 3.00% 10/25/20591,4,10     3,000       2,317  
Treehouse Park Improvement Association No.1 - Anleihen 9.75% 12/1/20331,5     22,184       19,624  
Tricon American Homes, Series 2017-SFR2, Class E, 4.216% 1/17/20361,10     6,500       6,325  
Tricon Residential Trust, Series 2021-SFR1, Class A, 1.943% 7/17/20381,10     2,342       2,039  
VM Fund I, LLC 8.625% 1/15/20281,5     7,142       7,035  
              205,381  
                 
Total mortgage-backed obligations             649,714  
                 
Asset-backed obligations 7.07%                
Affirm Asset Securitization Trust, Series 2021-B, Class A, 1.03% 8/17/20261,10     2,597       2,464  
Allegro CLO, Ltd., Series 2016-1A, Class AR2, (3-month USD-LIBOR + 0.95%) 5.029% 1/15/20301,4,10     2,802       2,773  
Allegro CLO, Ltd., Series 2017-1A, Class AR, (3-month USD-LIBOR + 0.95%) 5.029% 10/16/20301,4,10     477       469  
American Credit Acceptance Receivables Trust, Series 2020-3, Class C, 1.85% 6/15/20261,10     45       45  
American Credit Acceptance Receivables Trust, Series 2021-1, Class C, 0.83% 3/15/20271,10     72       71  
American Credit Acceptance Receivables Trust, Series 2021-1, Class D, 1.14% 3/15/20271,10     100       94  
   
30 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Asset-backed obligations (continued)            
American Credit Acceptance Receivables Trust, Series 2021-3, Class C, 0.98% 11/15/20271,10   USD 5,000     $ 4,868  
American Credit Acceptance Receivables Trust, Series 2022-1, Class C, 2.12% 3/13/20281,10     2,000       1,888  
American Credit Acceptance Receivables Trust, Series 2022-1, Class D, 2.46% 3/13/20281,10     2,000       1,801  
American Credit Acceptance Receivables Trust, Series 2022-1, Class E, 3.64% 3/13/20281,10     1,236       1,017  
American Credit Acceptance Receivables Trust, Series 2022-3, Class C, 4.86% 10/13/20281,10     7,009       6,824  
American Credit Acceptance Receivables Trust, Series 2022-3, Class D, 5.83% 10/13/20281,10     1,663       1,599  
American Credit Acceptance Receivables Trust, Series 2022-2, Class F, 7.74% 2/13/20291,10     8,782       7,860  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2020-1A, Class D 3.34% 8/20/20261,10     10,000       8,485  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2020-2A, Class B, 2.96% 2/20/20271,10     100       90  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2020-2A, Class C, 4.25% 2/20/20271,10     6,550       5,860  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2022-5, Class A, 6.12% 4/20/20271,10     5,911       5,898  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2022-5, Class B, 7.09% 4/20/20271,10     14,733       14,678  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2021-1A, Class B, 1.63% 8/20/20271,10     1,062       899  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2021-1A, Class C, 2.13% 8/20/20271,10     551       459  
Avis Budget Rental Car Funding (AESOP), LLC, Series 2021-1A, Class D, 3.71% 8/20/20271,10     8,000       6,580  
Ballyrock CLO, Ltd., Series 2019-2A, Class A1AR, (3-month USD-LIBOR + 1.00%) 5.675% 11/20/20301,4,10     1,290       1,274  
Bankers Healthcare Group Securitization Trust, Series 2020-A, Class A, 2.56% 9/17/20311,10     123       120  
Bankers Healthcare Group Securitization Trust, Series 2020-A, Class B, 3.59% 9/17/20311,10     300       281  
Bankers Healthcare Group Securitization Trust, Series 2020-A, Class C, 5.17% 9/17/20311,10     300       275  
Bankers Healthcare Group Securitization Trust, Series 2021-A, Class A, 1.42% 11/17/20331,10     559       520  
Bankers Healthcare Group Securitization Trust, Series 2021-A, Class B, 2.79% 11/17/20331,10     4,733       3,975  
Bankers Healthcare Group Securitization Trust, Series 2021-A, Class C, 3.69% 11/17/20331,10     1,420       1,146  
Bankers Healthcare Group Securitization Trust, Series 2021-B, Class A, 0.90% 10/17/20341,10     504       475  
Bankers Healthcare Group Securitization Trust, Series 2022-A, Class A, 1.71% 2/20/20351,10     3,165       2,959  
Bankers Healthcare Group Securitization Trust, Series 2022-A, Class B, 2.70% 2/20/20351,10     5,000       4,355  
Blackbird Capital II Aircraft Lease, Ltd. / Blackbird Capital II Aircraft Lease US, LLC, Series 2021-1, Class A, 2.443% 7/15/20461,10     2,271       1,868  
Blackbird Capital II Aircraft Lease, Ltd. / Blackbird Capital II Aircraft Lease US, LLC, Series 2021-1, Class B, 3.446% 7/15/20461,10     753       569  
Carvana Auto Receivables Trust, Series 2021-N4, Class C, 1.72% 9/11/202810     757       723  
Castlelake Aircraft Securitization Trust, Series 2021-1, Class A, 2.868% 5/11/20371,10     2,545       2,166  
Castlelake Aircraft Securitization Trust, Series 2017-1R, Class A, 2.741% 8/15/20411,10     591       517  
Cent CLO, Ltd., Series 2014-21A, Class AR, (3-month USD-LIBOR + 0.97%) 5.328% 7/27/20301,4,10     1,412       1,392  
CF Hippolyta, LLC, Series 2020-1, Class A1, 1.69% 7/15/20601,10     5,300       4,736  
CF Hippolyta, LLC, Series 2020-1, Class A2, 1.99% 7/15/20601,10     315       261  
CF Hippolyta, LLC, Series 2021-1, Class A1, 1.53% 3/15/20611,10     95       82  
CF Hippolyta, LLC, Series 2022-1, Class A1, 5.97% 8/15/20621,10     26,276       25,736  
CFG Investments, Ltd., Series 2021-1, Class B, 5.82% 5/20/20321,10     3,000       2,855  
CIFC Funding, Ltd., CLO, Series 2017-1A, Class B, (3-month USD-LIBOR + 1.70%) 5.978% 4/23/20291,4,10     1,750       1,729  
CLI Funding V, LLC, Series 2020-2A, Class B, 3.56% 9/15/20451,10     215       189  
   
American Funds Multi-Sector Income Fund 31
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Asset-backed obligations (continued)            
CLI Funding V, LLC, Series 2020-1A, Class B, 3.62% 9/18/20451,10   USD 278     $ 242  
CPS Auto Receivables Trust, Series 2020-B, Class D, 4.75% 4/15/20261,10     91       90  
CPS Auto Receivables Trust, Series 2021-A, Class C, 0.83% 9/15/20261,10     130       129  
CPS Auto Receivables Trust, Series 2021-B, Class C, 1.23% 3/15/20271,10     2,250       2,185  
CPS Auto Receivables Trust, Series 2021-B, Class D, 1.52% 3/15/20271,10     2,000       1,874  
CPS Auto Receivables Trust, Series 2022-B, Class D, 5.19% 8/15/20281,10     6,000       5,702  
CPS Auto Receivables Trust, Series 2022-C, Class C, 5.28% 4/15/20301,10     3,770       3,691  
CPS Auto Receivables Trust, Series 2022-C, Class D, 6.45% 4/15/20301,10     3,377       3,283  
Credit Acceptance Auto Loan Trust, Series 2021-3A, Class B, 1.38% 7/15/20301,10     2,000       1,836  
Credit Acceptance Auto Loan Trust, Series 2021-3A, Class C, 1.63% 9/16/20301,10     3,000       2,707  
Credit Acceptance Auto Loan Trust, Series 2022-1A, Class C, 5.70% 10/15/20321,10     6,000       5,804  
Credit Acceptance Auto Loan Trust, Series 2022-1A, Class D, 6.63% 12/15/20321,10     8,000       7,672  
Drive Auto Receivables Trust, Series 2021-3, Class B, 1.11% 5/15/202610     3,960       3,851  
Drive Auto Receivables Trust, Series 2020-2, Class D, 3.05% 5/15/202810     200       196  
DriveTime Auto Owner Trust, Series 2020-2A, Class D, 4.73% 3/16/20261,10     850       836  
DriveTime Auto Owner Trust, Series 2021-1A, Class C, 0.84% 10/15/20261,10     100       96  
DriveTime Auto Owner Trust, Series 2021-1A, Class D, 1.16% 11/16/20261,10     100       92  
DriveTime Auto Owner Trust, Series 2021-2A, Class C, 1.10% 2/16/20271,10     616       585  
DriveTime Auto Owner Trust, Series 2021-2A, Class D, 1.50% 2/16/20271,10     277       254  
DriveTime Auto Owner Trust, Series 2021-3A, Class C, 0.87% 5/17/20271,10     2,000       1,872  
DriveTime Auto Owner Trust, Series 2021-3A, Class D, 1.31% 5/17/20271,10     2,000       1,754  
Dryden Senior Loan Fund, CLO, Series 2017-47A, Class A2R, (3-month USD-LIBOR + 1.27%) 5.349% 4/15/20281,4,10     2,000       1,967  
Dryden Senior Loan Fund, CLO, Series 2017-47A, Class BR, (3-month USD-LIBOR + 1.47%) 5.549% 4/15/20281,4,10     2,000       1,966  
Dryden Senior Loan Fund, CLO, Series 2017-47A, Class CR, (3-month USD-LIBOR + 2.05%) 6.129% 4/15/20281,4,10     2,000       1,936  
Dryden Senior Loan Fund, CLO, Series 2013-28A, Class A2LR, (3-month USD-LIBOR + 1.65%) 6.256% 8/15/20301,4,10     3,000       2,927  
EDvestinU Private Education Loan, LLC, Series 2021-A, Class A, 1.80% 11/25/20451,10     143       121  
Exeter Automobile Receivables Trust, Series 2020-2A, Class C, 3.28% 5/15/20251,10     33       33  
Exeter Automobile Receivables Trust, Series 2020-2, Class D, 4.73% 4/15/20261,10     100       99  
Exeter Automobile Receivables Trust, Series 2019-3, Class E, 4.00% 8/17/20261,10     3,595       3,439  
Exeter Automobile Receivables Trust, Series 2021-4A, Class E, 4.02% 1/17/20281,10     8,060       7,153  
Exeter Automobile Receivables Trust, Series 2022-2A, Class D, 4.56% 7/17/202810     469       440  
Exeter Automobile Receivables Trust, Series 2022-4A, Class C, 4.92% 12/15/202810     9,678       9,349  
Exeter Automobile Receivables Trust, Series 2022-4A, Class D, 5.98% 12/15/202810     5,907       5,606  
Exeter Automobile Receivables Trust, Series 2022-2A, Class E, 6.34% 10/15/20291,10     9,625       8,378  
Exeter Automobile Receivables Trust, Series 2022-3A, Class E, 9.09% 1/15/20301,10     10,000       9,724  
Exeter Automobile Receivables Trust, Series 2022-4A, Class E, 8.23% 3/15/20301,10     5,833       5,306  
Exeter Automobile Receivables Trust, Series 2022-5, Class E, 10.45% 4/15/20301,10     26,790       26,371  
Exeter Automobile Receivables Trust, Series 2022-6, Class E, 11.61% 6/17/20301,10     21,500       21,753  
First Investors Auto Owner Trust, Series 2021-1A, Class B, 0.89% 3/15/20271,10     300       290  
First Investors Auto Owner Trust, Series 2021-1A, Class D, 1.62% 3/15/20271,10     300       273  
FirstKey Homes Trust, Series 2022-SFR2, Class S, 5.197% 5/17/20391,10     3,043       2,806  
Freedom Financial, Series 2022-1FP, Class A, 0.94% 3/19/20291,10     55       54  
Freedom Financial, Series 2022-1FP, Class B, 1.91% 3/19/20291,10     2,462       2,389  
GCI Funding I, LLC, Series 2020-1, Class B, 3.81% 10/18/20451,10     116       103  
GCI Funding I, LLC, Series 2021-1, Class B, 3.04% 6/18/20461,10     2,556       2,160  
Global SC Finance SRL, Series 2021-1A, Class B, 2.76% 4/17/20411,10     1,633       1,393  
Global SC Finance V SRL, Series 2019-1A, Class B, 4.81% 9/17/20391,10     333       313  
Global SC Finance V SRL, Series 2020-1A, Class B, 3.55% 10/17/20401,10     375       336  
Global SC Finance VII SRL, Series 2021-2A, Class B, 2.49% 8/17/20411,10     678       574  
GSAMP Trust, Series 2005-SD2, Class M3, (1-month USD-LIBOR + 1.35%) 5.739% 4/25/20351,4,10     698       684  
Hertz Vehicle Financing III, LLC, Series 2021-A, Class B, 3.65% 6/30/20231,5,10     7,110       6,821  
Hertz Vehicle Financing III, LLC, Series 2021-1A, Class B, 1.56% 12/26/20251,10     1,220       1,119  
Hertz Vehicle Financing III, LLC, Series 2021-1A, Class C, 2.05% 12/26/20251,10     2,336       2,107  
Hertz Vehicle Financing III, LLC, Series 2022-1A, Class B, 2.19% 6/25/20261,10     1,776       1,596  
Hertz Vehicle Financing III, LLC, Series 2022-1A, Class C, 2.63% 6/25/20261,10     3,492       3,104  
Hertz Vehicle Financing III, LLC, Series 2021-2A, Class B, 2.12% 12/27/20271,10     1,317       1,131  
Hertz Vehicle Financing III, LLC, Series 2021-2A, Class C, 2.52% 12/27/20271,10     826       683  
Hertz Vehicle Financing III, LLC, Series 2022-2A, Class C, 2.95% 6/26/20281,10     4,025       3,326  
KKR Static CLO I, Ltd., Series 2022-1A, Class B, (3-month USD CME Term SOFR + 2.60%) 5.077% 7/20/20311,4,10     16,000       15,912  
LAD Auto Receivables Trust, Series 2021-1A, Class B, 1.94% 11/16/20261,10     751       705  
LAD Auto Receivables Trust, Series 2021-1A, Class C, 2.35% 4/15/20271,10     3,000       2,732  
   
32 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Asset-backed obligations (continued)            
LAD Auto Receivables Trust, Series 2022-1, Class C, 6.85% 4/15/20301,10   USD 4,463     $ 4,266  
Longfellow Place CLO, Ltd., Series 2013-1A, Class AR3, (3-month USD-LIBOR + 1.00%) 5.079% 4/15/20291,4,10     1,124       1,120  
Madison Park Funding, Ltd., CLO, Series 2015-17A, Class AR2, (3-month USD-LIBOR + 1.00%) 5.278% 7/21/20301,4,10     1,983       1,952  
Marathon CLO, Ltd., Series 2017-9A, Class A1AR, (3-month USD-LIBOR + 1.15%) 5.229% 4/15/20291,4,10     1,273       1,260  
Mercury Financial Credit Card Master Trust, Series 2021-1A, Class A, 1.54% 3/20/20261,10     1,500       1,432  
Mission Lane Credit Card Master Trust, Series 2021-A, Class A, 1.59% 9/15/20261,10     1,140       1,104  
Mission Lane Credit Card Master Trust, Series 2022-A, Class A, 6.92% 9/15/20271,10     11,934       11,662  
Mission Lane Credit Card Master Trust, Series 2022-A, Class B, 9.20% 9/15/20271,10     500       489  
Mission Lane Credit Card Master Trust, Series 2022-A, Class C, 11.82% 9/15/20271,10     9,600       9,337  
Mission Lane Credit Card Master Trust, Series 2022-B, Class A1, 8.25% 1/15/20285,9,10     20,015       20,012  
Mission Lane Credit Card Master Trust, Series 2022-B, Class A2, 8.73% 1/15/20285,9,10     3,200       3,199  
Mission Lane Credit Card Master Trust, Series 2022-B, Class B, 10.42% 1/15/20285,9,10     6,980       6,980  
Mission Lane Credit Card Master Trust, Series 2022-B, Class C, 12.09% 1/15/20285,9,10     10,745       10,745  
Mission Lane Credit Card Master Trust, Series 2022-B, Class D, 14.45% 1/15/20285,9,10     3,500       3,499  
Navient Student Loan Trust, Series 2021-FA, Class A, 1.11% 2/18/20701,10     3,016       2,543  
Navigator Aircraft ABS, Ltd., Series 2021-1, Class A, 2.771% 11/15/20461,10     3,806       3,205  
Navigator Aircraft ABS, Ltd., Series 2021-1, Class B, 3.571% 11/15/20461,10     865       708  
Nelnet Student Loan Trust, Series 2021-C, Class AFX, 1.32% 4/20/20621,10     2,908       2,584  
Nelnet Student Loan Trust, Series 2021-A, Class APT1, 1.36% 4/20/20621,10     2,662       2,358  
Nelnet Student Loan Trust, Series 2021-B, Class AFX, 1.42% 4/20/20621,10     2,224       1,978  
Nelnet Student Loan Trust, Series 2021-CA, Class C, 3.36% 4/20/20621,10     1,328       1,029  
Nelnet Student Loan Trust, Series 2021-CA, Class D, 4.44% 4/20/20621,10     1,889       1,492  
New Economy Assets Phase 1 Issuer, LLC, Series 2021-1, Class A1, 1.91% 10/20/20611,10     4,653       3,940  
Newark BSL CLO 2, Ltd., Series 2017-1A, Class A1R, (3-month USD-LIBOR + 0.97%) 5.328% 7/25/20301,4,10     635       628  
OCP CLO, Ltd., Series 2016-11A, Class A2R, (3-month USD-LIBOR + 1.75%) 6.077% 10/26/20301,4,10     1,000       984  
OnDeck Asset Securitization Trust, LLC, Series 2021-1A, Class A, 1.59% 5/17/20271,10     2,475       2,265  
OnDeck Asset Securitization Trust, LLC, Series 2021-1A, Class B, 2.28% 5/17/20271,10     1,167       1,051  
OnDeck Asset Securitization Trust, LLC, Series 2021-1A, Class C, 2.97% 5/17/20271,10     1,150       1,024  
OnDeck Asset Securitization Trust, LLC, Series 2021-1A, Class D, 4.94% 5/17/20271,10     1,150       1,014  
Oportun Funding, LLC, Series 2021-A, Class A, 1.21% 3/8/20281,10     2,722       2,536  
Oportun Funding, LLC, Series 2021-B, Class A, 1.47% 5/8/20311,10     1,727       1,510  
Oportun Funding, LLC, Series 2021-B, Class B, 1.96% 5/8/20311,10     2,958       2,558  
Oportun Funding, LLC, Series 2021-B, Class C, 3.65% 5/8/20311,10     2,525       2,124  
Oportun Funding, LLC, Series 2021-B, Class D, 5.41% 5/8/20311,10     1,000       773  
Oportun Funding, LLC, Series 2022-A, Class B, 5.25% 6/9/20311,10     8,500       7,763  
Palmer Square Loan Funding, CLO, Series 2021-1, Class A2, (3-month USD-LIBOR + 1.25%) 5.493% 4/20/20291,4,10     500       490  
Palmer Square Loan Funding, CLO, Series 2021-1, Class B, (3-month USD-LIBOR + 1.80%) 6.043% 4/20/20291,4,10     890       861  
Palmer Square Loan Funding, CLO, Series 2021-2A, Class A1, (3-month USD-LIBOR + 0.80%) 5.475% 5/20/20291,4,10     337       333  
Palmer Square Loan Funding, CLO, Series 2021-2A, Class A2, (3-month USD-LIBOR + 1.25%) 5.925% 5/20/20291,4,10     1,000       977  
Palmer Square Loan Funding, CLO, Series 2021-2A, Class B, (3-month USD-LIBOR + 1.40%) 6.075% 5/20/20291,4,10     500       480  
Palmer Square Loan Funding, CLO, Series 2021-4A, Class A2, (3-month USD-LIBOR + 1.40%) 5.479% 10/15/20291,4,10     4,278       4,142  
Palmer Square Loan Funding, CLO, Series 2022-5, Class A2, (3-month USD CME Term SOFR + 2.65%) 5.174% 1/15/20311,4,10     15,000       14,888  
PFS Financing Corp., Series 2022-D, Class A, 4.27% 8/16/20271,10     4,546       4,439  
PFS Financing Corp., Series 2022-D, Class B, 4.90% 8/16/20271,10     3,594       3,488  
PPM CLO, Ltd., Series 2022-6, Class B, (3-month USD CME Term SOFR + 3.60%) 3.60% 1/20/20311,4,10     14,933       14,876  
Race Point CLO, Ltd., Series 2015-9A, Class A1A2, (3-month USD-LIBOR + 0.94%) 5.019% 10/15/20301,4,10     1,266       1,249  
Regatta VIII Funding, Ltd., CLO, Series 2017-1A, Class B, (3-month USD-LIBOR + 1.70%) 5.779% 10/17/20301,4,10     3,000       2,945  
Research-Driven Pagaya Motor Asset Trust I, Series 2022-3, Class A, 5.38% 11/25/20301,10     17,894       17,446  
   
American Funds Multi-Sector Income Fund 33
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Asset-backed obligations (continued)                
Research-Driven Pagaya Motor Asset Trust I, Series 2022-3, Class B, 6.58% 11/25/20301,10   USD 13,833     $ 12,923  
Rockford Tower CLO, Ltd., Series 2018-2A, Class B, (3-month USD-LIBOR + 1.80%) 6.043% 10/20/20311,4,10     1,260       1,214  
Santander Consumer Auto Receivables Trust, Series 2020-A, Class C, 3.71% 2/17/20261,10     200       198  
Santander Drive Auto Receivables Trust, Series 2022-5, Class B, 4.43% 3/15/202710     2,589       2,519  
Santander Drive Auto Receivables Trust, Series 2021-3, Class C, 0.95% 9/15/202710     1,105       1,063  
Santander Drive Auto Receivables Trust, Series 2021-3, Class D, 1.33% 9/15/202710     1,474       1,367  
Santander Drive Auto Receivables Trust, Series 2022-7, Class B, 5.95% 1/17/202810     1,100       1,112  
Santander Drive Auto Receivables Trust, Series 2022-5, Class C, 4.74% 10/15/202810     8,222       7,955  
Santander Drive Auto Receivables Trust, Series 2022-7, Class C, 6.69% 3/17/203110     3,981       4,064  
Shackleton CLO, Ltd., Series 2013-4RA, Class A2A, (3-month USD-LIBOR + 1.60%) 5.541% 4/13/20311,4,10     2,275       2,200  
SMB Private Education Loan Trust, Series 2021-A, Class APT2, 1.07% 1/15/20531,10     363       312  
SMB Private Education Loan Trust, Series 2022-A, Class D, 4.75% 11/16/20541,10     2,083       1,892  
SMB Private Education Loan Trust, Series 2022-B, Class D, 5.95% 2/16/20551,10     13,111       12,223  
SMB Private Education Loan Trust, Series 2022-D, Class D, 7.23% 10/15/20581,10     12,789       12,578  
SOLRR Aircraft Aviation Holding, Ltd., Series 2021-1, Class A, 2.636% 10/15/20461,10     2,761       2,219  
Sound Point CLO, Ltd., Series 2015-1RA, Class AR, (3-month USD-LIBOR + 1.08%) 5.159% 4/15/20301,4,10     1,050       1,039  
SPRITE, Ltd., Series 2021-1, Class A, 3.75% 11/15/20461,10     1,808       1,568  
Stellar Jay Ireland DAC, Series 2021-1, Class A, 3.967% 10/15/20411,10     1,692       1,429  
Stonepeak Infrastructure Partners, Series 2021-1A, Class AA, 2.301% 2/28/20331,10     1,590       1,416  
Stonepeak Infrastructure Partners, Series 2021-1A, Class B, 3.821% 2/28/20331,10     1,472       1,271  
Stratus Static CLO, Ltd., Series 2022-1A, Class B, (3-month USD CME Term SOFR + 2.35%) 4.632% 7/20/20301,4,10     11,140       11,076  
Stratus Static CLO, Ltd., Series 2022-3, Class B, (3-month USD CME Term SOFR + 3.05%) 7.127% 10/20/20311,4,10     23,000       22,940  
SuttonPark Structured Settlements, Series 2021-1, Class A, 1.95% 9/15/20751,10     3,286       2,989  
Textainer Marine Containers, Ltd., Series 2020-1A, Class B, 4.94% 8/21/20451,10     1,978       1,859  
Textainer Marine Containers, Ltd., Series 2020-2A, Class B, 3.34% 9/20/20451,10     381       332  
Textainer Marine Containers, Ltd., Series 2021-1A, Class B, 2.52% 2/20/20461,10     315       262  
Textainer Marine Containers, Ltd., Series 2021-2A, Class B, 2.82% 4/20/20461,10     867       722  
TIF Funding II, LLC, Series 2020-1A, Class B, 3.82% 8/20/20451,10     1,146       1,005  
TIF Funding II, LLC, Series 2021-1A, Class B, 2.54% 2/20/20461,10     1,873       1,532  
Triton Container Finance VIII, LLC, Series 2020-1, Class B, 3.74% 9/20/20451,10     356       308  
Triton Container Finance VIII, LLC, Series 2021-1A, Class B, 2.58% 3/20/20461,10     3,094       2,546  
Voya CLO, Ltd., Series 2016-3A, Class A3R, 5.944% 10/18/20311,4,10     1,750       1,687  
Westlake Automobile Receivables Trust, Series 2022-2A, Class D, 5.48% 9/15/20271,10     7,813       7,466  
              647,879  
                 
U.S. Treasury bonds & notes 2.46%                
U.S. Treasury 2.46%                
U.S. Treasury 4.00% 12/15/2025     3,437       3,416  
U.S. Treasury 3.875% 11/30/2027     37,849       37,644  
U.S. Treasury 3.875% 11/30/2029     643       639  
U.S. Treasury 4.125% 11/15/2032     44,328       45,211  
U.S. Treasury 4.25% 5/15/203911     117,265       121,027  
U.S. Treasury 4.00% 11/15/2042     6,994       6,853  
U.S. Treasury 3.00% 8/15/2052     13,206       10,950  
              225,740  
                 
Municipals 0.34%                
California 0.03%                
Golden State Tobacco Securitization Corp., Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2021-B-1, 1.85% 6/1/2031     160       158  
Golden State Tobacco Securitization Corp., Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2021-B, 2.746% 6/1/2034     65       52  
Golden State Tobacco Securitization Corp., Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2021-A-1, 3.487% 6/1/2036     1,490       1,191  
Golden State Tobacco Securitization Corp., Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2021-A-1, 3.714% 6/1/2041     2,235       1,680  
Regents of the University of California, General Rev. Bonds, Series 2020-BG, 1.614% 5/15/2030     35       28  
              3,109  
   
34 American Funds Multi-Sector Income Fund
 
Bonds, notes & other debt instruments (continued)   Principal amount
(000)
    Value
(000)
 
Municipals (continued)                
Florida 0.00%                
County of Broward, Airport System Rev. Ref. Bonds, Series 2019-C, 3.477% 10/1/2043   USD 75     $ 57  
                 
Illinois 0.04%                
City of Chicago, Board of Education, Unlimited Tax G.O. Rev. Ref. Bonds (Dedicated Rev.), Series 2018-A, Assured Guaranty Municipal insured, 5.00% 12/1/2034     150       152  
City of Chicago, Board of Education, Unlimited Tax G.O. Rev. Ref. Bonds (Dedicated Rev.), Series 2022-A, 4.00% 12/1/2047     4,020       3,256  
G.O. Bonds, Pension Funding, Series 2003, 5.10% 6/1/2033     90       86  
Metropolitan Pier and Exposition Auth., McCormick Place Expansion Project Rev. Ref. Bonds, Capital Appreciation Bonds, Series 2017-A, Assured Guaranty Municipal insured, 0% 12/15/2056     1,810       328  
              3,822  
                 
Kansas 0.03%                
City of Manhattan, Health Care Facs. Rev. Bonds (Meadowlark Hills), Series 2021-B, 2.44% 6/1/2025     2,760       2,663  
                 
Ohio 0.06%                
Cleveland-Cuyahoga Port Auth., Federal Lease Rev. Bonds (VA Cleveland Health Care Center Project), Series 2021, 4.425% 5/1/2031     6,355       5,365  
Higher Educational Facs. Commission, Healthcare Fac. Rev. Bond (Judson Obligated Group 2020 Project), Series 2020-A, 3.75% 12/1/2023     310       302  
              5,667  
                 
Puerto Rico 0.16%                
G.O. Restructured Bonds, Series 2022-A-1, 5.25% 7/1/2023     490       490  
G.O. Restructured Bonds, Series 2022-A-1, 5.375% 7/1/2025     977       985  
G.O. Restructured Bonds, Series 2022-A-1, 5.625% 7/1/2027     968       988  
G.O. Restructured Bonds, Series 2022-A-1, 5.625% 7/1/2029     953       976  
G.O. Restructured Bonds, Series 2022-A-1, 5.75% 7/1/2031     925       959  
G.O. Restructured Bonds, Series 2022-A-1, 4.00% 7/1/2033     877       763  
G.O. Restructured Bonds, Series 2022-A-1, 4.00% 7/1/2035     789       666  
G.O. Restructured Bonds, Series 2022-A-1, 4.00% 7/1/2037     677       555  
G.O. Restructured Bonds, Series 2022-A-1, 4.00% 7/1/2041     920       723  
G.O. Restructured Bonds, Series 2022-A-1, 4.00% 7/1/2046     957       720  
G.O. Restructured Bonds, Capital Appreciation Bonds, Series 2022-A-1, 0% 7/1/2024     293       272  
G.O. Restructured Bonds, Capital Appreciation Bonds, Series 2022-A-1, 0% 7/1/2033     1,129       612  
G.O. Taxable Bonds (CVI), Series 2022, 0% 11/1/2043     4,143       1,818  
Sales Tax Fncg. Corp., Sales Tax Rev. Restructured Bonds, Capital Appreciation Bonds, Series 2018-A-1, 0% 7/1/2046     14,745       3,651  
              14,178  
                 
Washington 0.02%                
Econ. Dev. Fin. Auth., Environmental Facs. Rev. Bonds (North Pacific Paper Co. Recycling Project), Series 2020-B, 9.00% 12/1/20361     2,000       1,916  
                 
Total municipals             31,412  
                 
Total bonds, notes & other debt instruments (cost: $9,173,359,000)             8,553,039  
                 
Convertible bonds & notes 0.00%                
Energy 0.00%                
Mesquite Energy, Inc., convertible notes, 13.14% Cash 7/15/20231,5,6     3       3  
                 
Total convertible bonds & notes (cost: $3,000)             3  
                 
Common stocks 0.08%     Shares          
Energy 0.08%                
Chesapeake Energy Corp.     75,595       7,134  
California Resources Corp.     633       27  
Mesquite Energy, Inc.5,12     126       1  
              7,162  
   
American Funds Multi-Sector Income Fund 35
 
Common stocks (continued)   Shares     Value
(000)
 
Consumer discretionary 0.00%                
NMG Parent, LLC12     309     $ 47  
MYT Holding Co., Class B5,12     8,984       14  
              61  
                 
Total common stocks (cost: $3,902,000)             7,223  
                 
Preferred securities 0.00%                
Industrials 0.00%                
ACR III LSC Holdings, LLC, Series B, preferred shares1,5,12     5       2  
                 
Total preferred securities (cost: $5,000)             2  
                 
Rights & warrants 0.00%                
Consumer discretionary 0.00%                
NMG Parent, LLC, warrants, expire 9/24/202712     374       11  
Carnelian Point Holdings, L.P. warrants, expire 6/30/20275,12     11       8 
              11  
                 
Total rights & warrants (cost: $2,000)             11  
                 
Short-term securities 5.25%                
Money market investments 5.25%                
Capital Group Central Cash Fund 4.31%13,14     4,810,432       480,995  
                 
Total short-term securities (cost: $480,897,000)             480,995  
Total investment securities 98.61% (cost: $9,658,168,000)             9,041,273  
Other assets less liabilities 1.39%             127,838  
                 
Net assets 100.00%           $ 9,169,111  
                           
Futures contracts                          
                           
Contracts   Type   Number of
contracts
  Expiration   Notional
amount
(000)
    Value and
unrealized
(depreciation)
appreciation
at 12/31/2022
(000)
 
90 Day Eurodollar Futures   Long   3,288   September 2023   USD 780,284               $ (34,561 )
90 Day Eurodollar Futures   Short   3,597   December 2023     (856,176 )       34,185  
2 Year U.S. Treasury Note Futures   Long   3,600   March 2023     738,281         854  
5 Year U.S. Treasury Note Futures   Long   1,832   March 2023     197,727         (2,951 )
10 Year Euro-Bund Futures   Short   34   March 2023     (4,838 )       313  
10 Year U.S. Treasury Note Futures   Long   674   March 2023     75,688         (935 )
10 Year Ultra U.S. Treasury Note Futures   Short   5,724   March 2023     (677,042 )       5,202  
20 Year U.S. Treasury Bond Futures   Long   1,582   March 2023     198,294         (2,956 )
30 Year Ultra U.S. Treasury Bond Futures   Short   2,756   March 2023     (370,165 )       4,619  
                          $ 3,770  

 

Forward currency contracts

 

                Unrealized  
Contract amount           (depreciation)
appreciation
 
Currency purchased
(000)
  Currency sold
(000)
  Counterparty   Settlement
date
  at 12/31/2022
(000)
 
USD   12,449   EUR   11,818   Goldman Sachs   1/12/2023                $ (213 )
EUR   85   USD   90   Barclays Bank PLC   1/13/2023       1  
USD   206   EUR   195   JPMorgan Chase   1/13/2023       (3 )
                          $ (215 )
   
36 American Funds Multi-Sector Income Fund
 

Swap contracts

 

Credit default swaps

 

Centrally cleared credit default swaps on credit indices — buy protection

 

Reference
index
  Financing
rate paid
  Payment
frequency
  Expiration
date
  Notional
amount
(000)
    Value at
12/31/2022
(000)
    Upfront
premium
paid
(000)
    Unrealized
depreciation
at 12/31/2022
(000)
 
CDX.NA.IG.39   1.00%   Quarterly   12/20/2027     USD 385,028       $(3,079 )     $1,201       $(4,280 )

 

Investments in affiliates14

 

    Value of
affiliate at
1/1/2022
(000)
    Additions
(000)
    Reductions
(000)
    Net
realized
gain
(000)
    Net
unrealized
appreciation
(000)
    Value of
affiliate at
12/31/2022
(000)
    Dividend
income
(000)
 
Short-term securities 5.25%                                                        
Money market investments 5.25%                                                        
Capital Group Central Cash Fund 4.31%13   $ 143,838     $ 5,172,707     $ 4,835,832     $ 195     $ 87     $ 480,995     $ 11,791  

 

Restricted securities9

 

    Acquisition
date
  Cost
(000)
    Value
(000)
    Percent
of net
assets
 
Mission Lane Credit Card Master Trust, Series 2022-B, Class A1, 8.25% 1/15/20285,10   12/6/2022   $ 20,013     $ 20,012       .22 %
Mission Lane Credit Card Master Trust, Series 2022-B, Class C, 12.09% 1/15/20285,10   12/6/2022     10,745       10,745       .12  
Mission Lane Credit Card Master Trust, Series 2022-B, Class B, 10.42% 1/15/20285,10   12/6/2022     6,980       6,980       .07  
Mission Lane Credit Card Master Trust, Series 2022-B, Class D, 14.45% 1/15/20285,10   12/6/2022     3,499       3,499       .04  
Mission Lane Credit Card Master Trust, Series 2022-B, Class A2, 8.73% 1/15/20285,10   12/6/2022     3,199       3,199       .03  
NBM US Holdings, Inc. 6.625% 8/6/2029   9/22/2020     528       484       .01  
Total       $ 44,964     $ 44,919       .49 %
   
1 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 $3,935,612,000, which represented 42.92% of the net assets of the fund.
2 Step bond; coupon rate may change at a later date.
3 Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $90,059,000, which represented .98% of the net assets of the fund.
4 Coupon rate may change periodically. Reference rate and spread are as of the most recent information available. Some coupon rates are determined by the issuer or agent based on current market conditions; therefore, the reference rate and spread are not available.
5 Value determined using significant unobservable inputs.
6 Payment in kind; the issuer has the option of paying additional securities in lieu of cash. Payment methods and rates are as of the most recent payment when available.
7 Scheduled interest and/or principal payment was not received.
8 Amount less than one thousand.
9 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 $44,919,000, which represented .49% of the net assets of the fund.
10 Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
11 All or a portion of this security was pledged as collateral. The total value of pledged collateral was $29,452,000, which represented .32% of the net assets of the fund.
12 Security did not produce income during the last 12 months.
13 Rate represents the seven-day yield at 12/31/2022.
14 Part of the same “group of investment companies” as the fund as defined under the Investment Company Act of 1940, as amended.

 

Refer to the notes to financial statements.

 

American Funds Multi-Sector Income Fund 37
 

Key to abbreviations

Auth. = Authority

CLO = Collateralized Loan Obligations

CME = CME Group

CMO = Collateralized Mortgage Obligations

CVI = Contingent Value Instrument

DAC = Designated Activity Company

Dev. = Development

Econ. = Economic

EUR = Euros

EURIBOR = Euro Interbank Offered Rate

Fac. = Facility

Facs. = Facilities

Fin. = Finance

Fncg. = Financing

G.O. = General Obligation

LIBOR = London Interbank Offered Rate

PIK = Payment In Kind

Ref. = Refunding

REIT = Real Estate Investment Trust

Rev. = Revenue

SOFR = Secured Overnight Financing Rate

USD = U.S. dollars

 

38 American Funds Multi-Sector Income Fund
 

Financial statements

 

Statement of assets and liabilities
at December 31, 2022
(dollars in thousands)

 

Assets:                
Investment securities, at value:                
Unaffiliated issuers (cost: $9,177,271)   $ 8,560,278          
Affiliated issuers (cost: $480,897)     480,995     $ 9,041,273  
Cash             5,151  
Cash collateral pledged for swap contracts             5,880  
Cash denominated in currencies other than U.S. dollars (cost: $18)             18  
Unrealized appreciation on open forward currency contracts             1  
Unrealized appreciation on unfunded commitments             1,317  
Receivables for:                
Sales of investments     5,114          
Sales of fund’s shares     22,270          
Dividends and interest     111,755          
Variation margin on futures contracts     2,179          
Variation margin on centrally cleared swap contracts     18       141,336  
              9,194,976  
Liabilities:                
Unrealized depreciation on open forward currency contracts             216  
Unrealized depreciation on unfunded commitments             *
Payables for:                
Purchases of investments     13,507          
Repurchases of fund’s shares     7,203          
Dividends on fund’s shares     255          
Investment advisory services     2,596          
Services provided by related parties     518          
Trustees’ deferred compensation     5          
Variation margin on futures contracts     1,449          
Variation margin on centrally cleared swap contracts     21          
Other     95       25,649  
Net assets at December 31, 2022           $ 9,169,111  
                 
Net assets consist of:                
Capital paid in on shares of beneficial interest           $ 9,879,318  
Total accumulated loss             (710,207 )
Net assets at December 31, 2022           $ 9,169,111  
   
* Amount less than one thousand.

 

Refer to the notes to financial statements.

 

American Funds Multi-Sector Income Fund 39
 

Financial statements (continued)

 

Statement of assets and liabilities
at December 31, 2022 (continued)
 
  (dollars and shares in thousands, except per-share amounts)

 

Shares of beneficial interest issued and outstanding (no stated par value) —
unlimited shares authorized (1,024,842 total shares outstanding)

 

          Shares     Net asset  
    Net assets     outstanding     value per share  
Class A   $ 618,795       69,163     $ 8.95  
Class C     16,690       1,865       8.95  
Class T     23       3       8.95  
Class F-1     15,352       1,716       8.95  
Class F-2     1,525,643       170,523       8.95  
Class F-3     442,575       49,467       8.95  
Class 529-A     10,112       1,130       8.95  
Class 529-C     677       76       8.95  
Class 529-E     202       22       8.95  
Class 529-T     26       3       8.95  
Class 529-F-1     26       3       8.95  
Class 529-F-2     3,350       374       8.95  
Class 529-F-3     10       1       8.95  
Class R-1     78       9       8.95  
Class R-2     826       92       8.95  
Class R-2E     23       3       8.95  
Class R-3     1,061       119       8.95  
Class R-4     1,200       134       8.95  
Class R-5E     283       32       8.95  
Class R-5     199       22       8.95  
Class R-6     6,531,960       730,085       8.95  

 

Refer to the notes to financial statements.

 

40 American Funds Multi-Sector Income Fund
 

Financial statements (continued)

 

Statement of operations
for the year ended December 31, 2022
 
  (dollars in thousands)

 

Investment income:                
Income:                
Interest from unaffiliated issuers   $ 308,265          
Dividends (includes $11,791 from affiliates)     12,521     $ 320,786  
Fees and expenses*:                
Investment advisory services     20,232          
Distribution services     2,172          
Transfer agent services     1,571          
Administrative services     1,749          
529 plan services     8          
Reports to shareholders     94          
Registration statement and prospectus     715          
Trustees’ compensation     9          
Auditing and legal     73          
Custodian     54          
Other     19          
Total fees and expenses before waiver     26,696          
Less waiver of fees and expenses:                
Investment advisory services waiver     106          
Total fees and expenses after waiver             26,590  
Net investment income             294,196  
                 
Net realized loss and unrealized depreciation:                
Net realized (loss) gain on:                
Investments:                
Unaffiliated issuers     (181,746 )        
Affiliated issuers     195          
Futures contracts     83,355          
Forward currency contracts     859          
Swap contracts     (3,169 )        
Currency transactions     (44 )     (100,550 )
Net unrealized (depreciation) appreciation on:                
Investments:                
Unaffiliated issuers     (619,352 )        
Affiliated issuers     87          
Futures contracts     7,288          
Forward currency contracts     (210 )        
Swap contracts     (4,361 )        
Currency translations     (66 )     (616,614 )
Net realized loss and unrealized depreciation             (717,164 )
                 
Net decrease in net assets resulting from operations           $ (422,968 )
   
* Additional information related to class-specific fees and expenses is included in the notes to financial statements.

 

Refer to the notes to financial statements.

 

American Funds Multi-Sector Income Fund 41
 

Financial statements (continued)

 

Statements of changes in net assets  
  (dollars in thousands)

 

    Year ended December 31,  
    2022     2021  
Operations:                
Net investment income   $ 294,196     $ 73,700  
Net realized (loss) gain     (100,550 )     25,430  
Net unrealized depreciation     (616,614 )     (24,476 )
Net (decrease) increase in net assets resulting from operations     (422,968 )     74,654  
                 
Distributions paid or accrued to shareholders     (291,851 )     (95,868 )
                 
Net capital share transactions     6,588,114       2,761,750  
                 
Total increase in net assets     5,873,295       2,740,536  
                 
Net assets:                
Beginning of year     3,295,816       555,280  
End of year   $ 9,169,111     $ 3,295,816  

 

Refer to the notes to financial statements.

 

42 American Funds Multi-Sector Income Fund
 

Notes to financial statements

 

1. Organization

 

American Funds Multi-Sector Income Fund (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, diversified management investment company. The fund seeks to provide a high level of current income. Its secondary investment objective is capital appreciation.

 

The fund has 21 share classes consisting of six retail share classes (Classes A, C, T, F-1, F-2 and F-3), seven 529 college savings plan share classes (Classes 529-A, 529-C, 529-E, 529-T, 529-F-1, 529-F-2 and 529-F-3) and eight retirement plan share classes (Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education. The retirement plan share classes are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described further in the following table:

 

Share class   Initial sales charge   Contingent deferred sales
charge upon redemption
  Conversion feature
Classes A and 529-A   Up to 3.75% 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
* Class T and 529-T shares are not available for purchase.

 

Holders of all share classes have equal pro rata rights to the assets, dividends and liquidation proceeds of the fund. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution, transfer agent and administrative services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each share class.

 

2. Significant accounting policies

 

The fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The fund’s financial statements have been prepared to comply with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles require the fund’s investment adviser to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Subsequent events, if any, have been evaluated through the date of issuance in the preparation of the financial statements. The fund follows the significant accounting policies described in this section, as well as the valuation policies described in the next section on valuation.

 

Security transactions and related investment income — Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

 

Class allocations — Income, fees and expenses (other than class-specific fees and expenses) are allocated daily among the various share classes based on the relative value of their settled shares. Realized gains and losses and unrealized appreciation and depreciation are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, transfer agent and administrative services, are charged directly to the respective share class.

 

American Funds Multi-Sector Income Fund 43
 

Distributions paid or accrued to shareholders — Income dividends are declared daily after the determination of the fund’s net investment income and are paid to shareholders monthly. Capital gain distributions are recorded on the ex-dividend date. The fund may deem a portion of the income dividends and/or capital gain distributions as a return of capital for tax purposes.

 

Currency translation — Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates supplied by one or more pricing vendors on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. The effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments in the fund’s statement of operations. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.

 

3. Valuation

 

Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by U.S. GAAP. The net asset value per share is calculated once daily as of the close of regular trading on the New York Stock Exchange, normally 4 p.m. New York time, each day the New York Stock Exchange is open.

 

Methods and inputs — The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

 

Equity securities, including depositary receipts, are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.

 

Fixed-income securities, including short-term securities, are generally valued at evaluated prices obtained from third-party pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.

 

Fixed-income class   Examples of standard inputs
All   Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”)
Corporate bonds, notes & loans; convertible securities   Standard inputs and underlying equity of the issuer
Bonds & notes of governments & government agencies   Standard inputs and interest rate volatilities
Mortgage-backed; asset-backed obligations   Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information
Municipal securities   Standard inputs and, for certain distressed securities, cash flows or liquidation values using a net present value calculation based on inputs that include, but are not limited to, financial statements and debt contracts

 

Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described for either equity or fixed-income securities, depending on which method is deemed most appropriate by the fund’s investment adviser. The Capital Group Central Cash Fund (“CCF”), a fund within the Capital Group Central Fund Series (“Central Funds”), is valued based upon a floating net asset value, which fluctuates with changes in the value of CCF’s portfolio securities. The underlying securities are valued based on the policies and procedures in CCF’s statement of additional information. Exchange-traded futures are generally valued at the official settlement price of the exchange or market on which such instruments are traded, as of the close of business on the day the futures are being valued. Forward currency contracts are valued based on the spot and forward exchange rates obtained from a third-party pricing vendor. Swaps are generally valued using evaluated prices obtained from third-party pricing vendors who calculate these values based on market inputs that may include the 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.

 

44 American Funds Multi-Sector Income Fund
 

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the fund’s investment adviser are fair valued as determined in good faith under fair valuation guidelines adopted by the fund’s investment adviser and approved by the board of trustees as further described. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security, contractual or legal restrictions on resale of the security, relevant financial or business developments of the issuer, actively traded similar or related securities, dealer or broker quotes, conversion or exchange rights on the security, related corporate actions, significant events occurring after the close of trading in the security, and changes in overall market conditions. In addition, the closing prices of equity securities that trade in markets outside U.S. time zones may be adjusted to reflect significant events that occur after the close of local trading but before the net asset value of each share class of the fund is determined. Fair valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.

 

Processes and structure — The fund’s board of trustees has designated the fund’s investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation team. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees. The fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.

 

The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews facilitated by the investment adviser’s global risk management group.

 

Classifications — The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Certain securities trading outside the U.S. may transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following tables present the fund’s valuation levels as of December 31, 2022 (dollars in thousands):

 

    Investment securities  
    Level 1     Level 2     Level 3     Total  
Assets:                                
Bonds, notes & other debt instruments:                                
Corporate bonds, notes & loans   $     $ 6,247,225     $ 5,140     $ 6,252,365  
Bonds & notes of governments & government agencies outside the U.S.           745,929             745,929  
Mortgage-backed obligations           623,055       26,659       649,714  
Asset-backed obligations           596,623       51,256       647,879  
U.S. Treasury bonds & notes           225,740             225,740  
Municipals           31,412             31,412  
Convertible bonds & notes                 3       3  
Common stocks     7,161       47       15       7,223  
Preferred securities                 2       2  
Rights & warrants           11       *     11  
Short-term securities     480,995                   480,995  
Total   $ 488,156     $ 8,470,042     $ 83,075     $ 9,041,273  

 

Refer to the end of the table for footnotes.

 

American Funds Multi-Sector Income Fund 45
 
    Other investments  
    Level 1     Level 2     Level 3     Total  
Assets:                                
Unrealized appreciation on futures contracts   $ 45,173     $     $     $ 45,173  
Unrealized appreciation on open forward currency contracts           1             1  
Liabilities:                                
Unrealized depreciation on futures contracts     (41,403 )                 (41,403 )
Unrealized depreciation on open forward currency contracts           (216 )           (216 )
Unrealized depreciation on centrally cleared credit default swaps           (4,280 )           (4,280 )
Total   $ 3,770     $ (4,495 )   $     $ (725 )
   
* Amount less than one thousand.
Futures contracts, forward currency contracts and credit default swaps are not included in the fund’s investment portfolio.

 

4. Risk factors

 

Investing in the fund may involve certain risks including, but not limited to, those described below.

 

Market conditions — The prices of, and the income generated by, the securities held by the fund may decline — sometimes rapidly or unpredictably — due to various factors, including events or conditions affecting the general economy or particular industries or companies; overall market changes; local, regional or global political, social or economic instability; governmental, governmental agency or central bank responses to economic conditions; and currency exchange rate, interest rate and commodity price fluctuations.

 

Economies and financial markets throughout the world are highly interconnected. Economic, financial or political events, trading and tariff arrangements, wars, terrorism, cybersecurity events, natural disasters, public health emergencies (such as the spread of infectious disease) and other circumstances in one country or region, including actions taken by governmental or quasi-governmental authorities in response to any of the foregoing, could have impacts on global economies or markets. As a result, whether or not the fund invests in securities of issuers located in or with significant exposure to the countries affected, the value and liquidity of the fund’s investments may be negatively affected by developments in other countries and regions.

 

Issuer risks — The prices of, and the income generated by, securities held by the fund may decline in response to various factors directly related to the issuers of such securities, including reduced demand for an issuer’s goods or services, poor management performance, major litigation, investigations or other controversies related to the issuer, changes in the issuer’s financial condition or credit rating, changes in government regulations affecting the issuer or its competitive environment and strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives.

 

Investing in debt instruments — The prices of, and the income generated by, bonds and other debt securities held by the fund may be affected by factors such as the interest rates, maturities and credit quality of these securities.

 

Rising interest rates will generally cause the prices of bonds and other debt securities to fall. Also, when interest rates rise, issuers are less likely to refinance existing debt securities, causing the average life of such securities to extend. A general rise in interest rates may cause investors to sell debt securities on a large scale, which could also adversely affect the price and liquidity of debt securities and could also result in increased redemptions from the fund. Falling interest rates may cause an issuer to redeem, call or refinance a debt security before its stated maturity, which may result in the fund failing to recoup the full amount of its initial investment and having to reinvest the proceeds in lower yielding securities. Longer maturity debt securities generally have greater sensitivity to changes in interest rates and may be subject to greater price fluctuations than shorter maturity debt securities.

 

Bonds and other debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer or guarantor will weaken or be perceived to be weaker, and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. Changes in actual or perceived creditworthiness may occur quickly. A downgrade or default affecting any of the fund’s securities could cause the value of the fund’s shares to decrease. Lower quality debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality debt securities. Credit risk is gauged, in part, by the credit ratings of the debt securities in which the fund invests. However, ratings are only the opinions of the rating agencies issuing them and are not guarantees as to credit quality or an evaluation of market risk. The fund’s investment adviser relies on its own credit analysts to research issuers and issues in assessing credit and default risks.

 

46 American Funds Multi-Sector Income Fund
 

Investing in lower rated debt instruments — Lower rated bonds and other lower rated debt securities generally have higher rates of interest and involve greater risk of default or price declines due to changes in the issuer’s creditworthiness than those of higher quality debt securities. The market prices of these securities may fluctuate more than the prices of higher quality debt securities and may decline significantly in periods of general economic difficulty. These risks may be increased with respect to investments in junk bonds.

 

Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations or revenues outside the U.S., may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts, terrorism and war) in the countries or regions in which the issuers operate or generate revenue. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Issuers of these securities may be more susceptible to actions of foreign governments, such as nationalization, currency blockage or the imposition of price controls, sanctions, or punitive taxes, each of which could adversely impact the value of these securities. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different regulatory, legal, accounting, auditing, financial reporting and recordkeeping requirements, and may be more difficult to value, than those in the U.S. In addition, the value of investments outside the U.S. may be reduced by foreign taxes, including foreign withholding taxes on interest and dividends. Further, there may be increased risks of delayed settlement of securities purchased or sold by the fund, which could impact the liquidity of the fund’s portfolio. The risks of investing outside the U.S. may be heightened in connection with investments in emerging markets.

 

Investing in emerging markets — Investing in emerging markets may involve risks in addition to and greater than those generally associated with investing in the securities markets of developed countries. For instance, emerging market 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 emerging markets 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 more developed markets are subject. The fund’s rights with respect to its investments in emerging markets, if any, will generally be governed by local law, which may make it difficult or impossible for 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, and may be more difficult to value, than securities issued in countries with more developed economies and/or markets. Less certainty with respect to security valuations may lead to additional challenges and risks in calculating the fund’s net asset value. Additionally, emerging markets 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.

 

Investing in mortgage-related and other asset-backed securities — Mortgage-related securities, such as mortgage-backed securities, and other asset-backed securities, include debt obligations that represent interests in pools of mortgages or other income-bearing assets, such as consumer loans or receivables. While such securities are subject to the risks associated with investments in debt instruments generally (for example, credit, extension and interest rate risks), they are also subject to other and different risks. Mortgage-backed and other asset-backed securities are subject to changes in the payment patterns of borrowers of the underlying debt, potentially increasing the volatility of the securities and the fund’s net asset value. When interest rates fall, borrowers are more likely to refinance or prepay their debt before its stated maturity. This may result in the fund having to reinvest the proceeds in lower yielding securities, effectively reducing the fund’s income. Conversely, if interest rates rise and borrowers repay their debt more slowly than expected, the time in which the mortgage-backed and other asset-backed securities are paid off could be extended, reducing the fund’s cash available for reinvestment in higher yielding securities. Mortgage-backed securities are also subject to the risk that underlying borrowers will be unable to meet their obligations and the value of property that secures the mortgages may decline in value and be insufficient, upon foreclosure, to repay the associated loans. Investments in asset-backed securities are subject to similar risks.

 

American Funds Multi-Sector Income Fund 47
 

Investing in derivatives — The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds. Changes in the value of a derivative may not correlate perfectly with, and may be more sensitive to market events than, the underlying asset, rate or index, and a derivative instrument may cause the fund to lose significantly more than its initial investment. Derivatives may be difficult to value, difficult for the fund to buy or sell at an opportune time or price and difficult, or even impossible, to terminate or otherwise offset. The fund’s use of derivatives may result in losses to the fund, and investing in derivatives may reduce the fund’s returns and increase the fund’s price volatility. The fund’s counterparty to a derivative transaction (including, if applicable, the fund’s clearing broker, the derivatives exchange or the clearinghouse) may be unable or unwilling to honor its financial obligations in respect of the transaction. In certain cases, the fund may be hindered or delayed in exercising remedies against or closing out derivative instruments with a counterparty, which may result in additional losses. Derivatives are also subject to 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).

 

Currency — The prices of, and the income generated by, many debt securities held by the fund may also be affected by changes in relative currency values. If the U.S. dollar appreciates against foreign currencies, the value in U.S. dollars of the fund’s securities denominated in such currencies would generally fall and vice versa.

 

Liquidity risk — Certain fund holdings may be or may become difficult or impossible to sell, particularly during times of market turmoil. Liquidity may be impacted by the lack of an active market for a holding, legal or contractual restrictions on resale, or the reduced number and capacity of market participants to make a market in such holding. Market prices for less liquid or illiquid holdings may be volatile or difficult to determine, and reduced liquidity may have an adverse impact on the market price of such holdings. Additionally, the sale of less liquid or illiquid holdings may involve substantial delays (including delays in settlement) and additional costs and the fund may be unable to sell such holdings when necessary to meet its liquidity needs, or to try to limit losses, or may be forced to sell at a loss.

 

Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses, including models, tools and data, employed by the investment adviser in this process may be flawed or incorrect and may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.

 

5. Certain investment techniques

 

Loan transactions — The fund has entered into loan transactions in which the fund acquires a loan either through an agent, by assignment from another holder, or as a participation interest in another holder’s portion of a loan. The loan is 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 sale of the investment. The loan’s interest rate and maturity date may change based on the terms of the loan, including potential early payments of principal.

 

Unfunded commitments — The fund has participated in transactions that involve unfunded commitments, which may obligate the fund to purchase new or additional bonds if certain contingencies are met. As of December 31, 2022, the fund’s maximum exposure of unfunded bond commitments was $5,287,000, which would represent .06% of the net assets of the fund should such commitments become due. Unrealized appreciation of $1,317,000 is disclosed as unrealized appreciation on unfunded commitments and unrealized depreciation of less than $1,000 is disclosed as unrealized depreciation on unfunded commitments in the fund’s statement of assets and liabilities. Both are included in net unrealized depreciation on investments in unaffiliated issuers in the fund’s statement of operations.

 

Futures contracts — The fund has entered into futures contracts, which provide for the future sale by one party and purchase by another party of a specified amount of a specific financial instrument for a specified price, date, time and place designated at the time the contract is made. Futures contracts are used to strategically manage the fund’s interest rate sensitivity by increasing or decreasing the duration of the fund or a portion of the fund’s portfolio.

 

Upon entering into futures contracts, and to maintain the fund’s open positions in futures contracts, the fund is required to deposit with a futures broker, known as a futures commission merchant (“FCM”), in a segregated account in the name of the FCM an amount of cash, U.S. government securities or other liquid securities, known as initial margin. The margin required for a particular futures contract is set by the exchange on which the contract is traded to serve as collateral, and may be significantly modified from time to time by the exchange during the term of the contract.

 

48 American Funds Multi-Sector Income Fund
 

On a daily basis, the fund pays or receives variation margin based on the increase or decrease in the value of the futures contracts and records variation margin on futures contracts in the statement of assets and liabilities. Futures contracts may involve a risk of loss in excess of the variation margin shown on the fund’s statement of assets and liabilities. The fund records realized gains or losses at the time the futures contract is closed or expires. Net realized gains or losses and net unrealized appreciation or depreciation from futures contracts are recorded in the fund’s statement of operations. The average month-end notional amount of futures contracts while held was $4,375,980,000.

 

Forward currency contracts — The fund has entered into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The fund’s investment adviser uses forward currency contracts to manage the fund’s exposure to changes in exchange rates. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates.

 

On a daily basis, the fund’s investment adviser values forward currency contracts and records unrealized appreciation or depreciation for open forward currency contracts in the fund’s statement of assets and liabilities. Realized gains or losses are recorded at the time the forward currency contract is closed or offset by another contract with the same broker for the same settlement date and currency.

 

Closed forward currency contracts that have not reached their settlement date are included in the respective receivables or payables for closed forward currency contracts in the fund’s statement of assets and liabilities. Net realized gains or losses from closed forward currency contracts and net unrealized appreciation or depreciation from open forward currency contracts are recorded in the fund’s statement of operations. The average month-end notional amount of open forward currency contracts while held was $13,482,000.

 

Swap contracts — The fund has entered into swap agreements, which are two-party contracts entered into primarily by institutional investors for a specified time period. In a typical swap transaction, two parties agree to exchange the returns earned or realized from one or more underlying assets or rates of return. Swap agreements can be traded on a swap execution facility (SEF) and cleared through a central clearinghouse (cleared), traded over-the-counter (OTC) and cleared, or traded bilaterally and not cleared. 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 swap transactions, the fund will enter into swap agreements only with counterparties that meet certain credit standards and subject to agreed collateralized procedures. The term of a swap can be days, months or years and certain swaps may be less liquid than others.

 

Upon entering into a centrally cleared swap contract, the fund is required to deposit cash, U.S. government securities or other liquid securities, which is known as initial margin. Generally, the initial margin required for a particular swap is set and held as collateral by the clearinghouse on which the contract is cleared. The amount of initial margin required may be significantly modified from time to time by the clearinghouse during the term of the contract.

 

On a daily basis, interest accruals related to the exchange of future payments are recorded as a receivable and payable in the fund’s statement of assets and liabilities for centrally cleared swaps and as unrealized appreciation or depreciation in the fund’s statement of assets and liabilities for bilateral swaps. For centrally cleared swaps, the fund also pays or receives a variation margin based on the increase or decrease in the value of the swaps, including accrued interest as applicable, and records variation margin in the statement of assets and liabilities. The fund records realized gains and losses on both the net accrued interest and any gain or loss recognized at the time the swap is closed or expires. Net realized gains or losses, as well as any net unrealized appreciation or depreciation, from swaps are recorded in the fund’s statement of operations.

 

American Funds Multi-Sector Income Fund 49
 

Swap agreements can take different forms. The fund has entered into the following types of swap agreements:

 

Credit default swap indices — The fund has entered into centrally cleared credit default swap indices, including CDX and iTraxx indices (collectively referred to as “CDSIs”), in order to assume exposure to a diversified portfolio of credits or to hedge against existing credit risks. 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.

 

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 transaction. The average month-end notional amount of credit default swaps while held was $372,721,000.

 

Total return swaps — The fund has entered into bilateral total return swaps in order to gain exposure to a market without 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 in exchange for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. The fund may invest in total return swaps where the asset underlying the contract is a securities index. As of December 31, 2022, the fund did not have any total return swaps. The average month-end notional amount of total return swaps while held was $750,000.

 

The following tables identify the location and fair value amounts on the fund’s statement of assets and liabilities and the effect on the fund’s statement of operations resulting from the fund’s use of futures contracts, forwards currency contracts, credit default swaps and total return swaps as of, or for the year ended, December 31, 2022 (dollars in thousands):

 

        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*   $ 45,173     Unrealized depreciation*   $ 41,403  
Forward currency   Currency   Unrealized appreciation on open forward currency contracts     1     Unrealized depreciation on open forward currency contracts     216  
Swap (centrally cleared)   Credit   Unrealized appreciation*         Unrealized depreciation*     4,280  
            $ 45,174         $ 45,899  
                             
        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 on futures contracts   $ 83,355     Net unrealized appreciation on futures contracts   $ 7,288  
Forward currency   Currency   Net realized gain on forward currency contracts     859     Net unrealized depreciation on forward currency contracts     (210 )
Swap   Credit   Net realized loss on swap contracts     (3,169 )   Net unrealized depreciation on swap contracts     (4,361 )
            $ 81,045         $ 2,717  

 

* Includes cumulative appreciation/depreciation on futures contracts and centrally cleared credit default swaps as reported in the applicable tables following the fund’s investment portfolio. Only current day’s variation margin is reported within the fund’s statement of assets and liabilities.

 

50 American Funds Multi-Sector Income Fund
 

Collateral — The fund receives or pledges highly liquid assets, such as cash or U.S. government securities, as collateral due to its use of futures contracts, forward currency contracts, credit default swaps and total return swaps. For futures contracts and centrally cleared credit default swaps, the fund pledges collateral for initial and variation margin by contract. For forward currency contracts and bilateral total return swaps, the fund either receives or pledges collateral based on the net gain or loss on unsettled contracts by counterparty. The purpose of the collateral is to cover potential losses that could occur in the event that either party cannot meet its contractual obligation. Non-cash collateral pledged by the fund, if any, is disclosed in the fund’s investment portfolio, and cash collateral pledged by the fund, if any, is held in a segregated account with the fund’s custodian, which is reflected as pledged cash collateral in the fund’s statement of assets and liabilities.

 

Rights of offset — The fund has entered into enforceable master netting agreements with certain counterparties for forward currency contracts and bilateral total return swaps, where on any date amounts payable by each party to the other (in the same currency with respect to the same transaction) may be closed or offset by each party’s payment obligation. If an early termination date occurs under these agreements following an event of default or termination event, all obligations of each party to its counterparty are settled net through a single payment in a single currency (“close-out netting”). For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to these master netting arrangements in the statement of assets and liabilities.

 

The following table presents the fund’s forward currency contracts and bilateral total return swaps by counterparty that are subject to master netting agreements but that are not offset in the fund’s statement of assets and liabilities. The net amount column shows the impact of offsetting on the fund’s statement of assets and liabilities as of December 31, 2022, if close-out netting was exercised (dollars in thousands):

 

    Gross amounts
recognized in the
    Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
       
Counterparty   statement of assets
and liabilities
    Available
to offset
    Non-cash
collateral*
    Cash
collateral*
    Net
amount
 
Assets:                                        
Barclays Bank PLC   $ 1     $     $     $     $ 1  
Liabilities:                                        
Goldman Sachs   $ 213     $     $     $     $ 213  
JPMorgan Chase     3                         3  
Total   $ 216     $     $     $     $ 216  

 

* Collateral is shown on a settlement basis.

 

6. Taxation and distributions

 

Federal income taxation — The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to regulated investment companies and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.

 

As of and during the year ended December 31, 2022, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the year, the fund did not incur any significant interest or penalties.

 

The fund’s tax returns are generally not subject to examination by federal, state and, if applicable, non-U.S. tax authorities after the expiration of each jurisdiction’s statute of limitations, which is typically three years after the date of filing but can be extended in certain jurisdictions.

 

Non-U.S. taxation — Dividend and interest income are recorded net of non-U.S. taxes paid. The fund may file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. These reclaims are recorded when the amount is known and there are no significant uncertainties on collectability. Gains realized by the fund on the sale of securities in certain countries, if any, may be subject to non-U.S. taxes. If applicable, the fund records an estimated deferred tax liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.

 

American Funds Multi-Sector Income Fund 51
 

Distributions — Distributions determined on a tax basis may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to different treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; cost of investments sold; net capital losses and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.

 

During the year ended December 31, 2022, the fund reclassified $2,000 from total accumulated loss to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.

 

As of December 31, 2022, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investments were as follows (dollars in thousands):

 

Undistributed ordinary income   $ 2,312  
Late year ordinary loss deferral1      (967 )
Capital loss carryforward2      (89,939 )
Gross unrealized appreciation on investments     90,604  
Gross unrealized depreciation on investments     (710,881 )
Net unrealized depreciation on investments     (620,277 )
Cost of investments     9,659,624  

 

1  This deferral is considered incurred in the subsequent year.
2  The capital loss carryforward will be used to offset any capital gains realized by the fund in future years. The fund will not make distributions from capital gains while a capital loss carryforward remains.

 

Distributions paid or accrued were characterized for tax purposes as follows (dollars in thousands):

 

    Year ended December 31, 2022     Year ended December 31, 2021  
Share class   Ordinary
income
    Long-term
capital gains
    Total
distributions
paid or
accrued
    Ordinary
income
    Long-term
capital gains
    Total
distributions
paid or
accrued
 
Class A   $ 27,340     $     $ 27,340     $ 19,707     $ 1,823     $ 21,530  
Class C     638             638       545       63       608  
Class T     1             1       1       3      1  
Class F-1     627             627       427       39       466  
Class F-2     50,742             50,742       20,378       2,162       22,540  
Class F-3     17,905             17,905       7,841       799       8,640  
Class 529-A     429             429       227       26       253  
Class 529-C     22             22       12       2       14  
Class 529-E     8             8       7       1       8  
Class 529-T     1             1       1       3      1  
Class 529-F-1     1             1       1       3      1  
Class 529-F-2     155             155       67       8       75  
Class 529-F-3     1             1       3      3      3 
Class R-1     3             3       4       3      4  
Class R-2     40             40       23       4       27  
Class R-2E     1             1       1       3      1  
Class R-3     45             45       32       3       35  
Class R-4     65             65       80       6       86  
Class R-5E     16             16       19       1       20  
Class R-5     11             11       6       1       7  
Class R-6     193,800             193,800       37,647       3,904       41,551  
Total   $ 291,851     $     $ 291,851     $ 87,026     $ 8,842     $ 95,868  

 

3  Amount less than one thousand.

 

7. Fees and transactions with related parties

 

CRMC, the fund’s investment adviser, is the parent company of American Funds Distributors®, Inc. (“AFD”), the principal underwriter of the fund’s shares, and American Funds Service Company® (“AFS”), the fund’s transfer agent. CRMC, AFD and AFS are considered related parties to the fund.

 

52 American Funds Multi-Sector Income Fund
 

Investment advisory services — The fund has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. At the beginning of the year, these fees were based on a series of decreasing annual rates beginning with 0.440% on the first $1.5 billion of daily net assets and decreasing to 0.390% on such assets in excess of $1.5 billion. On March 9, 2022, the fund’s board of trustees approved an amended investment advisory and service agreement effective May 1, 2022, replacing the prior series of rates and breakpoints with a new series of decreasing annual rates beginning with 0.332% on the first $15.0 billion of daily net assets and decreasing to 0.300% on such assets in excess of $15.0 billion. CRMC waived investment advisory services fees of $106,000 in advance of the amended investment advisory agreement. CRMC does not intend to recoup this waiver. As a result, the fees shown on the fund’s statement of operations of $20,232,000, which were equivalent to an annualized rate of 0.347% of average daily net assets, were reduced to $20,126,000, which were equivalent to an annualized rate of 0.345% of average daily net assets.

 

Class-specific fees and expenses — Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are further described below:

 

Distribution services — The fund has plans of distribution for all share classes, except Class F-2, F-3, 529-F-2, 529-F-3, R-5E, R-5 and R-6 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.30% to 1.00% as noted in this section. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.30% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

 

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  

 

For Class A and 529-A shares, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These share classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limits are not exceeded. As of December 31, 2022, unreimbursed expenses subject to reimbursement totaled $574,000 for Class A shares. There were no unreimbursed expenses subject to reimbursement for Class 529-A shares.

 

Transfer agent services — The fund has a shareholder services agreement with AFS under which the fund compensates AFS for providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.

 

Administrative services — The fund has an administrative services agreement with CRMC under which the fund compensates CRMC for providing administrative services to all share classes. Administrative services are provided by CRMC 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. The agreement provides the fund the ability to charge an administrative services fee at the annual rate of 0.05% of the average daily net assets attributable to each share class of the fund. Currently the fund pays CRMC an administrative services fee at the annual rate of 0.03% of the average daily net assets attributable to each share class of the fund for CRMC’s provision of administrative services.

 

529 plan services — Each 529 share class is subject to service fees to compensate the Virginia College Savings Plan (“Virginia529”) for its oversight and administration of the CollegeAmerica 529 college savings plan. The fees are based on the combined net assets invested in Class 529 and ABLE shares of the American Funds. Class ABLE shares are offered on other American Funds by Virginia529 through ABLEAmerica®, a tax-advantaged savings program for individuals with disabilities. Virginia529 is not considered a related party to the fund.

 

American Funds Multi-Sector Income Fund 53
 

The quarterly fees are based on a series of decreasing annual rates beginning with 0.09% on the first $20 billion of the combined net assets invested in the American Funds and decreasing to 0.03% on such assets in excess of $75 billion. The fees for any given calendar quarter are accrued and calculated on the basis of the average net assets of Class 529 and ABLE shares of the American Funds for the last month of the prior calendar quarter. For the year ended December 31, 2022, the 529 plan services fees were $8,000, which were equivalent to 0.058% of the average daily net assets of each 529 share class.

 

For the year ended December 31, 2022, class-specific expenses under the agreements were as follows (dollars in thousands):

 

Share class   Distribution
services
    Transfer agent
services
    Administrative
services
    529 plan
services
 
Class A   $1,909     $468     $191     Not applicable  
Class C   179     13     6     Not applicable  
Class T       *   *   Not applicable  
Class F-1   36     19     4     Not applicable  
Class F-2   Not applicable     1,042     316     Not applicable  
Class F-3   Not applicable     *   112     Not applicable  
Class 529-A   22     7     3     $6  
Class 529-C   6     *   *   *
Class 529-E   1     *   *   *
Class 529-T       *   *   *
Class 529-F-1       *   *   *
Class 529-F-2   Not applicable     1     1     2  
Class 529-F-3   Not applicable     *   *   *
Class R-1   1     *   *   Not applicable  
Class R-2   8     2     *   Not applicable  
Class R-2E   *   *   *   Not applicable  
Class R-3   6     2     *   Not applicable  
Class R-4   4     1     1     Not applicable  
Class R-5E   Not applicable     1     *   Not applicable  
Class R-5   Not applicable     *   *   Not applicable  
Class R-6   Not applicable     15     1,115     Not applicable  
Total class-specific expenses   $2,172     $1,571     $1,749     $8  

 

* Amount less than one thousand.

 

Trustees deferred compensation — Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation in the fund’s statement of operations reflects the current fees (either paid in cash or deferred) and a net increase or decrease in the value of the deferred amounts.

 

Affiliated officers and trustees — Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFD and AFS. No affiliated officers or trustees received any compensation directly from the fund.

 

Investment in CCF — The fund holds shares of CCF, an institutional prime money market fund managed by CRMC. CCF invests in high-quality, short-term money market instruments. CCF is used as the primary investment vehicle for the fund’s short-term instruments. CCF shares are only available for purchase by CRMC, its affiliates, and other funds managed by CRMC or its affiliates, and are not available to the public. CRMC does not receive an investment advisory services fee from CCF.

 

Security transactions with related funds — The fund purchased investment securities from, and sold investment securities to, other funds managed by CRMC (or funds managed by certain affiliates of CRMC) under procedures adopted by the fund’s board of trustees. The funds involved in such transactions are considered related by virtue of having a common investment adviser (or affiliated investment advisers), common trustees and/or common officers. Each transaction was executed at the current market price of the security and no brokerage commissions or fees were paid in accordance with Rule 17a-7 of the 1940 Act. During the year ended December 31, 2022, the fund engaged in such purchase and sale transactions with related funds in the amounts of $645,762,000 and $16,400,000, respectively, which generated $483,000 of net realized losses from such sales.

 

54 American Funds Multi-Sector Income Fund
 

Interfund lending — Pursuant to an exemptive order issued by the SEC, the fund, along with other CRMC-managed funds (or funds managed by certain affiliates of CRMC), may participate in an interfund lending program. The program provides an alternate credit facility that permits the funds to lend or borrow cash for temporary purposes directly to or from one another, subject to the conditions of the exemptive order. The fund did not lend or borrow cash through the interfund lending program at any time during the year ended December 31, 2022.

 

8. Indemnifications

 

The fund’s organizational documents provide board members and officers with indemnification against certain liabilities or expenses in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown since it is dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote. Insurance policies are also available to the fund’s board members and officers.

 

9. Capital share transactions

 

Capital share transactions in the fund were as follows (dollars and shares in thousands):

 

    Sales*     Reinvestments of
distributions
    Repurchases*     Net increase
(decrease)
 
Share class   Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares  
                                                                 
Year ended December 31, 2022                                                  
                                                   
Class A   $ 190,654       19,943     $ 27,002       2,904     $ (165,549 )     (17,663 )   $ 52,107       5,184  
Class C     8,311       862       628       68       (12,464 )     (1,277 )     (3,525 )     (347 )
Class T                                                
Class F-1     7,410       777       619       67       (4,650 )     (495 )     3,379       349  
Class F-2     1,193,478       127,991       49,976       5,447       (360,662 )     (38,557 )     882,792       94,881  
Class F-3     282,039       29,670       17,321       1,877       (93,594 )     (10,048 )     205,766       21,499  
Class 529-A     3,753       389       428       46       (2,016 )     (212 )     2,165       223  
Class 529-C     275       29       22       2       (166 )     (17 )     131       14  
Class 529-E     51       5       8       1       (53 )     (6 )     6        
Class 529-T                 1                         1        
Class 529-F-1                 1                         1        
Class 529-F-2     1,382       142       154       16       (698 )     (76 )     838       82  
Class 529-F-3                                                
Class R-1     14       2       2             (2 )           14       2  
Class R-2     298       32       39       4       (704 )     (74 )     (367 )     (38 )
Class R-2E                             (7 )           (7 )      
Class R-3     887       91       44       5       (874 )     (92 )     57       4  
Class R-4     807       82       65       7       (1,458 )     (152 )     (586 )     (63 )
Class R-5E     162       17       15       2       (301 )     (33 )     (124 )     (14 )
Class R-5     225       24       10       1       (344 )     (37 )     (109 )     (12 )
Class R-6     5,360,397       583,828       193,558       21,364       (108,380 )     (12,206 )     5,445,575       592,986  
Total net increase (decrease)   $ 7,050,143       763,884     $ 289,893       31,811     $ (751,922 )     (80,945 )   $ 6,588,114       714,750  

 

Refer to the end of the table for footnotes.

 

American Funds Multi-Sector Income Fund 55
 
    Sales*     Reinvestments of
distributions
    Repurchases*     Net increase
(decrease)
 
Share class   Amount     Shares     Amount     Shares     Amount     Shares     Amount     Shares  
                                                 
Year ended December 31, 2021                                            
                                             
Class A   $ 398,079       37,138     $ 21,004       1,966     $ (86,231 )     (8,062 )   $ 332,852       31,042  
Class C     18,790       1,754       599       56       (5,627 )     (526 )     13,762       1,284  
Class T                             1             1        
Class F-1     11,542       1,075       458       43       (4,274 )     (398 )     7,726       720  
Class F-2     787,020       73,558       22,299       2,086       (118,245 )     (11,022 )     691,074       64,622  
Class F-3     258,332       24,132       8,558       801       (22,019 )     (2,052 )     244,871       22,881  
Class 529-A     7,977       744       252       23       (868 )     (81 )     7,361       686  
Class 529-C     609       57       13       1       (97 )     (9 )     525       49  
Class 529-E     240       22       7       1       (78 )     (7 )     169       16  
Class 529-T                 1                         1        
Class 529-F-1                 1                         1        
Class 529-F-2     1,979       185       76       8       (160 )     (15 )     1,895       178  
Class 529-F-3                                                
Class R-1     124       12       3             (140 )     (13 )     (13 )     (1 )
Class R-2     1,267       118       25       2       (36 )     (3 )     1,256       117  
Class R-2E     7                                     7        
Class R-3     967       90       35       3       (264 )     (24 )     738       69  
Class R-4     1,328       124       85       8       (1,263 )     (119 )     150       13  
Class R-5E     582       54       19       2       (202 )     (19 )     399       37  
Class R-5     432       40       6       1       (184 )     (17 )     254       24  
Class R-6     1,420,510       133,414       41,565       3,887       (3,354 )     (313 )     1,458,721       136,988  
Total net increase (decrease)   $ 2,909,785       272,517     $ 95,006       8,888     $ (243,041 )     (22,680 )   $ 2,761,750       258,725  

 

* Includes exchanges between share classes of the fund.
  Amount less than one thousand.

 

10. Investment transactions

 

The fund engaged in purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $7,777,650,000 and $1,758,785,000, respectively, during the year ended December 31, 2022.

 

11. Ownership concentration

 

At December 31, 2022, three shareholders held more than 10% of the fund’s outstanding shares. The three shareholders were American Funds Conservative Growth and Income Portfolio, American Funds Target Date Fund 2025 and American Funds Target Date Fund 2030, with aggregate ownership of the fund’s outstanding shares of 12%, 12% and 12%, respectively. CRMC is the investment adviser to all three funds.

 

56 American Funds Multi-Sector Income Fund
 

Financial highlights

 

          (Loss) income from
investment operations1
    Dividends and distributions                                      
Year ended   Net asset
value,
beginning
of year
    Net
investment
income
    Net (losses)
gains 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
waivers/
reimburse-
ments4 
    Ratio of
expenses to
average net
assets after
waivers/
reimburse-
ments3,4 
    Ratio of
net income
to average
net assets3
 
Class A:                                                                                                        
12/31/2022   $ 10.63     $ .42     $ (1.70 )   $ (1.28   $ (.40 )   $ 5    $ (.40 )   $ 8.95       (12.05 )%   $ 619       .79 %     .78 %     4.44 %
12/31/2021     10.81       .36       (.11 )     .25       (.36 )     (.07 )     (.43 )     10.63       2.38       680       .84       .83       3.34  
12/31/2020     10.32       .41       .68       1.09       (.43 )     (.17 )     (.60 )     10.81       11.07       356       1.09       .85       3.96  
12/31/20196,7      10.00       .37       .40       .77       (.35 )     (.10     (.45 )     10.32       7.76 8,9      52       .60 9,10      .53 9,10      4.61 9,10 
Class C:                                                                                                        
12/31/2022     10.63       .35       (1.69 )     (1.34 )     (.34 )     5      (.34 )     8.95       (12.67 )     17       1.49       1.49       3.70  
12/31/2021     10.81       .28       (.10 )     .18       (.29 )     (.07 )     (.36 )     10.63       1.67       24       1.54       1.53       2.63  
12/31/20206,11      9.67       .22       1.20       1.42       (.24 )     (.04     (.28 )     10.81       14.78 8      10       1.67 10      1.55 10      3.12 10 
Class T:                                                                                                        
12/31/2022     10.63       .45       (1.70 )     (1.25 )     (.43 )     5      (.43 )     8.95       (11.79 )9      12      .48 9      .48 9      4.74 9 
12/31/2021     10.81       .39       (.11 )     .28       (.39 )     (.07 )     (.46 )     10.63       2.63 9      12      .59 9      .59 9      3.61 9 
12/31/20206,11      9.67       .29       1.19       1.48       (.30 )     (.04     (.34 )     10.81       15.45 8,9      12      .94 9,10      .62 9,10      4.22 9,10 
Class F-1:                                                                                                        
12/31/2022     10.63       .42       (1.70 )     (1.28 )     (.40 )     5      (.40 )     8.95       (12.06 )     15       .79       .79       4.45  
12/31/2021     10.81       .36       (.11 )     .25       (.36 )     (.07 )     (.43 )     10.63       2.37       15       .85       .85       3.33  
12/31/20206,11      9.67       .27       1.19       1.46       (.28 )     (.04     (.32 )     10.81       15.26 8      7       1.09 10      .88 10      3.84 10 
Class F-2:                                                                                                        
12/31/2022     10.63       .46       (1.71 )     (1.25 )     (.43 )     5      (.43 )     8.95       (11.81 )     1,526       .50       .50       4.90  
12/31/2021     10.81       .38       (.10 )     .28       (.39 )     (.07 )     (.46 )     10.63       2.66       804       .56       .56       3.55  
12/31/2020     10.32       .44       .67       1.11       (.45 )     (.17 )     (.62 )     10.81       11.26       119       .78       .59       4.13  
12/31/20196,7      10.00       .36       .40       .76       (.34 )     (.10     (.44 )     10.32       7.75 8,9      12      .62 9,10      .54 9,10      4.59 9,10 
Class F-3:                                                                                                        
12/31/2022     10.63       .46       (1.70 )     (1.24 )     (.44 )     5      (.44 )     8.95       (11.72 )     443       .41       .40       4.92  
12/31/2021     10.81       .39       (.10 )     .29       (.40 )     (.07 )     (.47 )     10.63       2.73       297       .49       .48       3.64  
12/31/2020     10.32       .44       .68       1.12       (.46 )     (.17 )     (.63 )     10.81       11.32       55       .73       .53       4.18  
12/31/20196,7      10.00       .36       .40       .76       (.34 )     (.10     (.44 )     10.32       7.72 8,9      12      .64 9,10      .57 9,10      4.57 9,10 
Class 529-A:                                                                                                        
12/31/2022     10.63       .42       (1.69 )     (1.27 )     (.41 )     5      (.41 )     8.95       (12.03 )     10       .76       .75       4.50  
12/31/2021     10.81       .36       (.10 )     .26       (.37 )     (.07 )     (.44 )     10.63       2.43       10       .81       .80       3.35  
12/31/20206,11      9.67       .27       1.19       1.46       (.28 )     (.04     (.32 )     10.81       15.23 8      3       1.05 10      .92 10      3.78 10 

 

Refer to the end of the table for footnotes.

 

American Funds Multi-Sector Income Fund 57
 

Financial highlights (continued)

 

          (Loss) income from
investment operations1
    Dividends and distributions                                      
Year ended   Net asset
value,
beginning
of year
    Net
investment
income
    Net (losses)
gains 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
waivers/
reimburse-
ments4
    Ratio of
expenses to
average net
assets after
waivers/
reimburse-
ments3,4
    Ratio of
net income
to average
net assets3
 
Class 529-C:                                                                                                        
12/31/2022   $ 10.63     $ .35     $ (1.69 )   $ (1.34 )   $ (.34 )   $ 5    $ (.34 )   $ 8.95       (12.68 )%   $ 1       1.49 %     1.49 %     3.75 %
12/31/2021     10.81       .28       (.11 )     .17       (.28 )     (.07 )     (.35 )     10.63       1.65       1       1.54       1.54       2.61  
12/31/20206,11      9.67       .24       1.20       1.44       (.26 )     (.04     (.30 )     10.81       14.97 8,9      12      1.58 9,10      1.39 9,10      3.36 9,10 
Class 529-E:                                                                                                        
12/31/2022     10.63       .41       (1.70 )     (1.29 )     (.39 )     5      (.39 )     8.95       (12.18 )9      12      .93 9      .92 9      4.29 9 
12/31/2021     10.81       .34       (.10 )     .24       (.35 )     (.07 )     (.42 )     10.63       2.25 9      12      .98 9      .97 9      3.18 9 
12/31/20206,11      9.67       .28       1.19       1.47       (.29 )     (.04     (.33 )     10.81       15.38 8,9      12      .99 9,10      .75 9,10      4.03 9,10 
Class 529-T:                                                                                                        
12/31/2022     10.63       .44       (1.69 )     (1.25 )     (.43 )     5      (.43 )     8.95       (11.82 )9      12      .53 9      .52 9      4.71 9 
12/31/2021     10.81       .38       (.11 )     .27       (.38 )     (.07 )     (.45 )     10.63       2.57 9      12      .65 9      .65 9      3.55 9 
12/31/20206,11      9.67       .29       1.19       1.48       (.30 )     (.04     (.34 )     10.81       15.40 8,9      12      1.00 9,10      .68 9,10      4.15 9,10 
Class 529-F-1:                                                                                                        
12/31/2022     10.63       .44       (1.70 )     (1.26 )     (.42 )     5      (.42 )     8.95       (11.88 )9      12      .60 9      .59 9      4.64 9 
12/31/2021     10.81       .38       (.11 )     .27       (.38 )     (.07 )     (.45 )     10.63       2.57 9      12      .66 9      .65 9      3.54 9 
12/31/20206,11      9.67       .30       1.18       1.48       (.30 )     (.04     (.34 )     10.81       15.43 8,9      12      .82 9,10      .59 9,10      4.29 9,10 
Class 529-F-2:                                                                                                        
12/31/2022     10.63       .45       (1.70 )     (1.25 )     (.43 )     5      (.43 )     8.95       (11.81 )     3       .51       .50       4.75  
12/31/2021     10.81       .38       (.11 )     .27       (.38 )     (.07 )     (.45 )     10.63       2.59       3       .63       .63       3.55  
12/31/20206,13      10.41       .07       .45       .52       (.08 )     (.04     (.12 )     10.81       4.96 8      2       .12 8      .11 8      .65 8 
Class 529-F-3:                                                                                                        
12/31/2022     10.63       .45       (1.70 )     (1.25 )     (.43 )     5      (.43 )     8.95       (11.79 )     12      .49       .49       4.74  
12/31/2021     10.81       .39       (.11 )     .28       (.39 )     (.07 )     (.46 )     10.63       2.67       12      .59       .57       3.64  
12/31/20206,13      10.41       .07       .45       .52       (.08 )     (.04     (.12 )     10.81       4.97 8      12      .14 8      .10 8      .66 8 
Class R-1:                                                                                                        
12/31/2022     10.63       .39       (1.70 )     (1.31 )     (.37 )     5      (.37 )     8.95       (12.34 )9      12      1.11 9      1.11 9      4.14 9 
12/31/2021     10.81       .31       (.10 )     .21       (.32 )     (.07 )     (.39 )     10.63       1.97 9      12      1.29 9      1.28 9      2.90 9 
12/31/20206,11      9.67       .25       1.20       1.45       (.27 )     (.04     (.31 )     10.81       15.12 8,9      12      1.35 9,10      1.14 9,10      3.62 9,10 

 

Refer to the end of the table for footnotes.

 

58 American Funds Multi-Sector Income Fund
 

Financial highlights (continued)

 

          (Loss) income from
investment operations1
    Dividends and distributions                                      
Year ended   Net asset
value,
beginning
of year
    Net
investment
income
    Net (losses)
gains 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
waivers/
reimburse-
ments4
    Ratio of
expenses to
average net
assets after
waivers/
reimburse-
ments3,4
    Ratio of
net income
to average
net assets3
 
Class R-2:                                                                                                        
12/31/2022   $ 10.63     $ .37     $ (1.70 )   $ (1.33 )   $ (.35 )   $ 5    $ (.35 )   $ 8.95       (12.55 )%   $ 1       1.34 %     1.34 %     3.85 %
12/31/2021     10.81       .30       (.10 )     .20       (.31 )     (.07 )     (.38 )     10.63       1.87       1       1.31       1.31       2.82  
12/31/20206,11      9.67       .26       1.19       1.45       (.27 )     (.04     (.31 )     10.81       15.15 8,9      12      1.30 9,10      1.09 9,10      3.67 9,10 
Class R-2E:                                                                                                        
12/31/2022     10.63       .44       (1.69 )     (1.25 )     (.43 )     5      (.43 )     8.95       (11.79 )9      12      .50 9      .49 9      4.68 9 
12/31/2021     10.81       .39       (.11 )     .28       (.39 )     (.07 )     (.46 )     10.63       2.69 9      12      .54 9      .54 9      3.66 9 
12/31/20206,11      9.67       .29       1.19       1.48       (.30 )     (.04     (.34 )     10.81       15.44 8,9      12      .95 9,10      .63 9,10      4.21 9,10 
Class R-3:                                                                                                        
12/31/2022     10.63       .39       (1.69 )     (1.30 )     (.38 )     5      (.38 )     8.95       (12.30 )     1       1.06       1.06       4.14  
12/31/2021     10.81       .33       (.10 )     .23       (.34 )     (.07 )     (.41 )     10.63       2.15       1       1.07       1.07       3.11  
12/31/20206,11      9.67       .26       1.20       1.46       (.28 )     (.04     (.32 )     10.81       15.24 8      12      1.11 10      .99 10      3.73 10 
Class R-4:                                                                                                        
12/31/2022     10.63       .42       (1.69 )     (1.27 )     (.41 )     5      (.41 )     8.95       (12.02 )     1       .75       .75       4.34  
12/31/2021     10.81       .37       (.11 )     .26       (.37 )     (.07 )     (.44 )     10.63       2.44       2       .78       .77       3.44  
12/31/20206,11      9.67       .26       1.21       1.47       (.29 )     (.04     (.33 )     10.81       15.38 8      2       .85 10      .78 10      3.69 10 
Class R-5E:                                                                                                        
12/31/2022     10.63       .43       (1.69 )     (1.26 )     (.42 )     5      (.42 )     8.95       (11.88 )     12      .59       .59       4.49  
12/31/2021     10.81       .38       (.11 )     .27       (.38 )     (.07 )     (.45 )     10.63       2.60       1       .63       .63       3.56  
12/31/20206,11      9.67       .29       1.19       1.48       (.30 )     (.04     (.34 )     10.81       15.45 8      12      .76 10      .59 10      4.17 10 
Class R-5:                                                                                                        
12/31/2022     10.63       .44       (1.68 )     (1.24 )     (.44 )     5      (.44 )     8.95       (11.77 )     12      .48       .48       4.58  
12/31/2021     10.81       .39       (.11 )     .28       (.39 )     (.07 )     (.46 )     10.63       2.69       12      .51       .51       3.64  
12/31/20206,11      9.67       .30       1.19       1.49       (.31 )     (.04     (.35 )     10.81       15.50 8      12      .82 10      .53 10      4.23 10 
Class R-6:                                                                                                        
12/31/2022     10.63       .48       (1.72 )     (1.24 )     (.44 )     5      (.44 )     8.95       (11.72 )     6,532       .39       .39       5.21  
12/31/2021     10.81       .39       (.10 )     .29       (.40 )     (.07 )     (.47 )     10.63       2.74       1,457       .47       .47       3.61  
12/31/2020     10.32       .44       .68       1.12       (.46 )     (.17 )     (.63 )     10.81       11.32       1       .69       .52       4.17  
12/31/20196,7      10.00       .36       .40       .76       (.34 )     (.10     (.44 )     10.32       7.72 8,9      12      .64 9,10      .56 9,10      4.57 9,10 

 

    Year ended December 31,   For the period ended
    2022   2021   2020   December 31, 20196,7
Portfolio turnover rate for all share classes14    40%   36%   73%   115%

 

1  Based on average shares outstanding.
2  Total returns exclude any applicable sales charges, including contingent deferred sales charges.
3  This column reflects the impact, if any, of certain waivers/reimbursements from CRMC and/or AFS. During one of the years shown, CRMC waived a portion of investment advisory services fees. In addition, during one of the years shown, AFS waived a portion of transfer agent services fees for Class F-3 shares. In addition, during some of the years shown, CRMC reimbursed a portion of transfer agent services fees for certain share classes and/or reimbursed a portion of miscellaneous fees and expenses.
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  Amount less than $.01.
6  Based on operations for a period that is less than a full year.
7  For the period March 22, 2019, commencement of operations, through December 31, 2019.
8  Not annualized.
9  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.
10  Annualized.
11  This share class began investment operations on May 1, 2020.
12  Amount less than $1 million.
13  Class 529-F-2 and 529-F-3 shares began investment operations on October 30, 2020.
14  Rate does not include the fund’s portfolio activity with respect to any Central Funds.

 

Refer to the notes to financial statements.

 

American Funds Multi-Sector Income Fund 59
 

Report of Independent Registered Public Accounting Firm

 

To the Shareholders and Board of Trustees of American Funds Multi-Sector Income Fund:

 

Opinion on the Financial Statements and Financial Highlights

 

We have audited the accompanying statement of assets and liabilities of American Funds Multi-Sector Income Fund (the “Fund”), including the investment portfolio, as of December 31, 2022, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for the three years then ended and for the period from March 22, 2019 (commencement of operations) to December 31, 2019, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the three years then ended and for the period from March 22, 2019 (commencement of operations) to December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audit provides a reasonable basis for our opinion.

 

Deloitte & Touche LLP

 

Costa Mesa, California

February 13, 2023

 

We have served as the auditor of one or more American Funds investment companies since 1956.

 

60 American Funds Multi-Sector Income Fund