American Funds® Portfolio Series

Prospectus

January 1, 2023

                         
Class A C T F-1 F-2 F-3 529-A 529-C 529-E 529-T 529-F-1 529-F-2
American Funds® Global Growth Portfolio PGGAX GGPCX TPGGX PGGFX PGWFX PGXFX CPGAX CPGCX CGGEX TGPPX CGGFX FGGPX
American Funds® Growth Portfolio GWPAX GWPCX TGGPX GWPFX GWPEX GWPDX CGPAX CGPCX CGPEX TPGTX CGPFX FGPGX
American Funds® Growth and Income Portfolio GAIOX GAITX TGXIX GAIFX GAIEX GAIHX CGNAX CGNCX CGNEX TGGGX CGNFX FGGIX
American Funds® Moderate Growth
and Income Portfolio
BLPAX BLPCX TBBPX BLPFX BLPEX BLPDX CBAAX CBPCX CBAEX TBPBX CBAFX FBBPX
American Funds® Conservative Growth
and Income Portfolio
INPAX INPCX TTPPX INPFX INPEX INPDX CIPAX CIPCX CIPEX TPTPX CIPFX FTPPX
American Funds® Tax-Aware Conservative
Growth and Income Portfolio
TAIAX TAICX TATAX TAIFX TXIFX TYIFX N/A N/A N/A N/A N/A N/A
American Funds® Preservation Portfolio PPVAX PPVCX TPPPX PPVFX PPEFX PPFFX CPPAX CPPCX CPPEX TPAPX CPPFX FPPPX
American Funds® Tax-Exempt Preservation Portfolio TEPAX TEPCX TTEPX TEPFX TXEFX TYEFX N/A N/A N/A N/A N/A N/A
Class 529-F-3 ABLE-A ABLE-F-2 R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6  
American Funds Global Growth Portfolio FGPPX CGGGX CGHGX RGGAX RGGBX REBGX RGLCX RGGEX RGTFX RGGFX RGGGX  
American Funds Growth Portfolio FPGGX CGQGX CGRGX RGWAX RGWBX RBGEX RGPCX RGWEX RGSFX RGWFX RGWGX  
American Funds Growth and Income Portfolio FGIIX CGNGX CGLGX RGNAX RGNBX RBEGX RAICX RGNEX RGQFX RGNFX RGNGX  
American Funds Moderate Growth and Income Portfolio FPPBX CBAGX CBBGX RBAAX RBABX RBBEX RBACX RBAEX RGPFX RBAFX RBAGX  
American Funds Conservative Growth
and Income Portfolio
FPTPX CIPGX CIQGX RNCAX RINBX RNBEX RNCCX RINEX RGOFX RINFX RINGX  
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 N/A N/A  
American Funds Preservation Portfolio FFPPX CPPGX CPQGX RPPVX RPPBX RPBEX RPPCX RPPEX RGMFX RPPFX RPPGX  
American Funds Tax-Exempt Preservation Portfolio N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A  

 

 

Table of contents

     

Summaries:

American Funds Global Growth Portfolio 1

American Funds Growth Portfolio 7

American Funds Growth and Income Portfolio 13

American Funds Moderate Growth and Income Portfolio 19

American Funds Conservative Growth and Income Portfolio 25

American Funds Tax-Aware Conservative Growth and Income Portfolio 31

American Funds Preservation Portfolio 37

American Funds Tax-Exempt Preservation Portfolio 44

Investment objectives, strategies and risks 50

Information regarding the underlying funds 61

Management and organization 70

Shareholder information 72

 

Purchase, exchange and sale of shares 73

How to sell shares 77

Distributions and taxes 79

Choosing a share class 80

Sales charges 81

Sales charge reductions and waivers 85

Rollovers from retirement plans to IRAs 89

Plans of distribution 90

Other compensation to dealers 90

Fund expenses 92

Financial highlights 93

Appendix 109

 
The U.S. Securities and Exchange Commission has not approved or disapproved of these securities. Further, it has not determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.


 
 

 

American Funds Global Growth Portfolio

Investment objective The fund’s investment objective is to provide long-term growth of capital.

Fees and expenses of the fund This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. For example, in addition to the fees and expenses described below, you may also be required to pay brokerage commissions on purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund. You may qualify for a Class A sales charge discount if you and your family invest, or agree to invest in the future, at least $25,000 in American Funds. More information about these and other discounts is available from your financial professional, in the “Sales charge reductions and waivers” sections on page 85 of the prospectus and on page 109 of the fund’s statement of additional information, and in the sales charge waiver appendix to the prospectus.

               
Shareholder fees (fees paid directly from your investment)
Share class: A 529-A and
ABLE-A
C and
529-C
529-E T and
529-T
All F, 529-F and ABLE-F-2 share classes All R
share
classes
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) 5.75% 3.50 none none 2.50% none none
Maximum deferred sales charge (load) (as a percentage of the amount redeemed) 1.001 1.001 1.00% none none none none
Maximum sales charge (load) imposed on reinvested dividends none none none none none none none
Redemption or exchange fees none none none none none none none
                 
Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment)  
Share class: A C T F-1 F-2 F-3 529-A 529-C
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 0.24% 1.00% 0.25% 0.25% none none 0.23% 1.00%
Other expenses2 0.13 0.13 0.13 0.14 0.13% 0.01% 0.19 0.19
Acquired (underlying) fund fees and expenses 0.44 0.44 0.44 0.44 0.44 0.44 0.44 0.44
Total annual fund operating expenses 0.81 1.57 0.82 0.83 0.57 0.45 0.86 1.63
                 
Share class: 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE-A ABLE-F-2  
Management fees none none none none none none none  
Distribution and/or service (12b-1) fees 0.50% 0.25% 0.25% none none 0.18% none  
Other expenses2 0.14 0.18 0.20 0.14% 0.07% 0.14 0.14%  
Acquired (underlying) fund fees and expenses 0.44 0.44 0.44 0.44 0.44 0.44 0.44  
Total annual fund operating expenses 1.08 0.87 0.89 0.58 0.51 0.76 0.58  
Fee waiver           0.063 0.063  
Total annual fund operating expenses after fee waiver 1.08 0.87 0.89 0.58 0.51 0.70 0.52  
                 
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 1.00% 0.75% 0.60% 0.50% 0.25% none none none
Other expenses2 0.11 0.38 0.22 0.16 0.09 0.16% 0.06% 0.01%
Acquired (underlying) fund fees and expenses 0.44 0.44 0.44 0.44 0.44 0.44 0.44 0.44
Total annual fund operating expenses 1.55 1.57 1.26 1.10 0.78 0.60 0.50 0.45

1  A contingent deferred sales charge of 1.00% applies on certain redemptions made within 18 months following purchases of $1 million or more made without an initial sales charge. Contingent deferred sales charge is calculated based on the lesser of the offering price and market value of shares being sold.

2  Restated to reflect current fees.

3  Virginia529, as program administrator of ABLEAmerica, is currently waiving the fee owed to it as compensation for its oversight and administration of ABLEAmerica. This waiver will be in effect through at least January 1, 2024. Subject to the terms of its contractual arrangement with the investment adviser, Virginia529 may elect to extend, modify or terminate the waiver at that time.

1     American Funds Portfolio Series / Prospectus


 
 

 

Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. You may be required to pay brokerage commissions on your purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund, which are not reflected in the example. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

                               
Share class: A C T F-1 F-2 F-3 529-A 529-C 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE A ABLE F-2
1 year $653 $260 $332 $85 $58 $46 $435 $266 $110 $337 $91 $59 $52 $419 $53
3 years 819 496 505 265 183 144 615 514 343 521 284 186 164 579 180
5 years 999 855 694 460 318 252 810 887 595 720 493 324 285 752 318
10 years 1,519 1,663 1,238 1,025 714 567 1,374 1,449 1,317 1,296 1,096 726 640 1,254 720
                         
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6 For the share classes listed to the right, you would pay the following if you did not redeem your shares: Share class: C 529-C
1 year $158 $160 $128 $112 $80 $61 $51 46 1 year $160 $166
3 years 490 496 400 350 249 192 160 144 3 years 496 514
5 years 845 855 692 606 433 335 280 252 5 years 855 887
10 years 1,845 1,867 1,523 1,340 966 750 628 567 10 years 1,663 1,449

Portfolio turnover The fund may pay transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s investment results. During the most recent fiscal year, the fund’s portfolio turnover rate was 5% of the average value of its portfolio.

Principal investment strategies The fund will attempt to achieve its investment objective by investing in a mix of American Funds in different combinations and weightings. The underlying American Funds will primarily consist of growth funds. The fund may also invest in growth-and-income funds. Through its investments in the underlying funds, the fund will have significant exposure to growth-oriented common stocks.

The fund will typically have significant exposure to issuers domiciled outside the United States. The fund will seek to invest at least 25% of its net assets in underlying funds that invest significantly (under normal market conditions, at least 40%) in issuers domiciled outside the United States. The fund will have exposure to issuers domiciled in at least three different countries. The fund may also have exposure to smaller capitalization issuers and issuers domiciled in emerging markets. The investment adviser believes that exposure to issuers domiciled outside the United States can help provide diversification when seeking long-term growth of capital. The fund may also invest in underlying funds that hold bonds rated BB+ or below and Ba1 or below by Nationally Recognized Statistical Rating Organizations designated by the fund’s investment adviser, or unrated but determined by the fund’s investment adviser to be of equivalent quality. Securities rated BB+ or below and Ba1 or below are sometimes referred to as “junk bonds.”

The fund’s investment adviser seeks to create combinations of underlying funds that complement each other with a goal of achieving the fund’s investment objective of providing long-term growth of capital. In making this determination, the fund’s investment adviser considers the historical volatility and returns of the underlying funds and how various combinations would have behaved in past market environments. It also considers, among other topics, current market conditions and the investment positions of the underlying funds.

The fund’s investment adviser periodically reviews the investment strategies and asset mix of the underlying funds. The investment adviser will also consider whether overall market conditions would favor a change in the exposure of the fund to various asset types or geographic regions. Based on these considerations, the investment adviser may make adjustments to underlying fund holdings by adjusting the percentage of individual underlying funds within the fund, or adding or removing underlying funds. The investment adviser may also determine not to change the underlying fund allocations, particularly in response to short-term market movements, if in its opinion the combination of underlying funds is appropriate to meet the fund’s investment objective.

American Funds Portfolio Series / Prospectus     2


 
 

 

Principal risks This section describes the principal risks associated with investing in the fund and its underlying funds. You may lose money by investing in the fund. The likelihood of loss may be greater if you invest for a shorter period of time. Investors in the fund should have a long-term perspective and be able to tolerate potentially sharp declines in value.

The following are principal risks associated with investing in the fund.

Allocation risk — Investments in the fund are subject to risks related to the investment adviser’s allocation choices. The selection of the underlying funds and the allocation of the fund’s assets could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.

Fund structure — The fund invests in underlying funds and incurs expenses related to the underlying funds. In addition, investors in the fund will incur fees to pay for certain expenses related to the operations of the fund. An investor holding the underlying funds directly and in the same proportions as the fund would incur lower overall expenses but would not receive the benefit of the portfolio management and other services provided by the fund. Additionally, in accordance with an exemption under the Investment Company Act of 1940, as amended, the investment adviser considers only proprietary funds when selecting underlying investment options and allocations. This means that the fund’s investment adviser did not, nor does it expect to, consider any unaffiliated funds as underlying investment options for the fund. This strategy could raise certain conflicts of interest when choosing underlying investments for the fund, including the selection of funds that result in greater compensation to the adviser or funds with relatively lower historical investment results. The investment adviser has policies and procedures designed to mitigate material conflicts of interest that may arise in connection with its management of the fund.

Underlying fund risks — Because the fund’s investments consist of underlying funds, the fund’s risks are directly related to the risks of the underlying funds. For this reason, it is important to understand the risks associated with investing in the underlying funds, as described below.

The following are principal risks associated with investing in the underlying funds.

Market conditions — The prices of, and the income generated by, the common stocks, bonds and other securities held by the underlying funds 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 underlying funds invest in securities of issuers located in or with significant exposure to the countries affected, the value and liquidity of the underlying funds’ 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 underlying funds 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 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 stocks — Investing in stocks may involve larger price swings and greater potential for loss than other types of investments. As a result, the value of the underlying funds may be subject to sharp declines in value. Income provided by an underlying fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the underlying fund invests. These risks may be even greater in the case of smaller capitalization stocks.

3     American Funds Portfolio Series / Prospectus


 
 

 

Investing in small companies — Investing in smaller companies may pose additional risks. For example, it is often more difficult to value or dispose of small company stocks and more difficult to obtain information about smaller companies than about larger companies. Furthermore, smaller companies often have limited product lines, operating histories, markets and/or financial resources, may be dependent on one or a few key persons for management, and can be more susceptible to losses. Moreover, the prices of their stocks may be more volatile than stocks of larger, more established companies, particularly during times of market turmoil.

Investing outside the United States — 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 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 United States. Investments outside the United States 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 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 an underlying 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.

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 underlying 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 underlying 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 underlying 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.

Management — The investment adviser to the fund and to the underlying funds actively manages each underlying fund’s investments. Consequently, the underlying funds are 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 an underlying fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.

Your investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, entity or person. You should consider how this fund fits into your overall investment program.

American Funds Portfolio Series / Prospectus     4


 
 

 

Investment results The following bar chart shows how the fund’s investment results have varied from year to year, and the following table shows how the fund’s average annual total returns for various periods compare with a broad measure of securities market results and other applicable measures of market results. This information provides some indication of the risks of investing in the fund. The Lipper Global Large-Cap Growth Funds Index includes funds that disclose investment objectives and/or strategies reasonably comparable to those of the fund. Past investment results (before and after taxes) are not predictive of future investment results. Prior to October 30, 2020, certain fees, such as 12b-1 fees, were not charged on Class 529-F-1 shares. If these expenses had been deducted, results would have been lower. Updated information on the fund’s investment results can be obtained by visiting capitalgroup.com.

         
Average annual total returns For the periods ended December 31, 2021:
Share class Inception date 1 year 5 years Lifetime
F-2 — Before taxes 5/18/2012 13.21% 16.88% 13.71%
— After taxes on distributions   12.31 15.76 12.83
— After taxes on distributions and sale of fund shares   8.51 13.43 11.28
         
Share classes (before taxes) Inception date 1 year 5 years Lifetime
A (with maximum sales charge) 5/18/2012 6.50% 15.23% 12.75%
C 5/18/2012 11.11 15.73 12.73
F-1 5/18/2012 12.97 16.58 13.43
F-3 1/27/2017 13.34 N/A 16.13
529-A (with maximum sales charge) 5/18/2012 8.96 15.72 12.99
529-C 5/18/2012 11.11 15.66 12.92
529-E 5/18/2012 12.68 16.29 13.13
529-F-1 5/18/2012 13.16 16.81 13.64
529-F-2 10/30/2020 13.19 N/A 29.54
529-F-3 10/30/2020 13.27 N/A 29.65
ABLE-A 7/13/2018 9.21 N/A 13.46
ABLE-F-2 10/30/2020 13.33 N/A 29.70
R-1 5/18/2012 12.24 15.79 12.63
R-2 5/18/2012 12.16 15.74 12.61
R-2E 8/29/2014 12.46 16.08 10.93
R-3 5/18/2012 12.65 16.25 13.10
R-4 5/18/2012 12.99 16.62 13.46
R-5E 11/20/2015 13.21 16.87 13.84
R-5 5/18/2012 13.27 16.94 13.77
R-6 5/18/2012 13.39 17.01 13.81
       
Indexes 1 year 5 years Lifetime
(from Class F-2 inception)
MSCI® All Country World Index (reflects no deductions for sales charges, account fees, expenses or U.S. federal income taxes) 18.54% 14.40% 12.27%
Lipper Global Large-Cap Growth Funds Index (reflects no deductions for sales charges, account fees or U.S. federal income taxes) 15.06 18.08 13.89

After-tax returns are shown only for Class F-2 shares; after-tax returns for other share classes will vary. After-tax returns are calculated using the highest individual federal income tax rates in effect during each year of the periods shown and do not reflect the impact of state and local taxes. Your actual after-tax returns depend on your individual tax situation and likely will differ from the results shown above. In addition, after-tax returns are not relevant if you hold your fund shares through a tax-deferred arrangement, such as a 401(k) plan, individual retirement account (IRA) or 529 college savings plan.

5     American Funds Portfolio Series / Prospectus


 
 

 

Management

Investment adviser Capital Research and Management Company

Portfolio Solutions Committee The investment adviser’s Portfolio Solutions Committee develops the allocation approach and selects the underlying funds in which the fund invests. The members of the Portfolio Solutions Committee, who are jointly and primarily responsible for the portfolio management of the fund, are:

     
Investment professional/
Series title (if applicable)
Investment professional
experience in this fund
Primary title with investment adviser
Samir Mathur President 3 years Partner – Capital Solutions Group
Alan N. Berro Senior Vice President 11 years Partner – Capital World Investors
Michelle J. Black Senior Vice President 3 years Partner – Capital Solutions Group
Wesley K. Phoa Senior Vice President 11 years Partner – Capital Solutions Group
John R. Queen Senior Vice President 3 years Partner – Capital Fixed Income Investors
William L. Robbins Senior Vice President 3 years Partner – Capital International Investors
Andrew B. Suzman Senior Vice President 11 years Partner – Capital World Investors

Purchase and sale of fund shares The minimum amount to establish an account for all share classes is normally $250 and the minimum to add to an account is $50. For a payroll deduction retirement plan account, payroll deduction savings plan account or employer-sponsored 529 account, the minimum is $25 to establish or add to an account. For accounts with Class F-3 shares held and serviced by the fund’s transfer agent, the minimum investment amount is $1 million.

If you are a retail investor, you may sell (redeem) shares on any business day through your dealer or financial professional or by writing to American Funds Service Company® at P.O. Box 6007, Indianapolis, Indiana 46206-6007; telephoning American Funds Service Company at (800) 421-4225; faxing American Funds Service Company at (888) 421-4351; or accessing our website at capitalgroup.com. Please contact your plan administrator or recordkeeper to sell (redeem) shares from your retirement plan.

Tax information Dividends and capital gain distributions you receive from the fund are subject to federal income taxes and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-favored.

Payments to broker-dealers and other financial intermediaries If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and the fund’s distributor or its affiliates may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your individual financial professional to recommend the fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

American Funds Portfolio Series / Prospectus     6


 
 

 

American Funds Growth Portfolio

Investment objective The fund’s investment objective is to provide long-term growth of capital.

Fees and expenses of the fund This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. For example, in addition to the fees and expenses described below, you may also be required to pay brokerage commissions on purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund. You may qualify for a Class A sales charge discount if you and your family invest, or agree to invest in the future, at least $25,000 in American Funds. More information about these and other discounts is available from your financial professional, in the “Sales charge reductions and waivers” sections on page 85 of the prospectus and on page 109 of the fund’s statement of additional information, and in the sales charge waiver appendix to the prospectus.

               
Shareholder fees (fees paid directly from your investment)
Share class: A 529-A and
ABLE-A
C and
529-C
529-E T and
529-T
All F, 529-F and ABLE-F-2 share classes All R
share
classes
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) 5.75% 3.50 none none 2.50% none none
Maximum deferred sales charge (load) (as a percentage of the amount redeemed) 1.001 1.001 1.00% none none none none
Maximum sales charge (load) imposed on reinvested dividends none none none none none none none
Redemption or exchange fees none none none none none none none
                 
Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment)
Share class: A C T F-1 F-2 F-3 529-A 529-C
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 0.25% 1.00% 0.25% 0.25% none none 0.24% 1.00%
Other expenses2 0.12 0.12 0.12 0.14 0.12% 0.01% 0.18 0.18
Acquired (underlying) fund fees and expenses 0.37 0.37 0.37 0.37 0.37 0.37 0.37 0.37
Total annual fund operating expenses 0.74 1.49 0.74 0.76 0.49 0.38 0.79 1.55
                 
Share class: 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE-A ABLE-F-2  
Management fees none none none none none none none  
Distribution and/or service (12b-1) fees 0.50% 0.25% 0.25% none none 0.20% none  
Other expenses2 0.13 0.18 0.20 0.14% 0.07% 0.13 0.13%  
Acquired (underlying) fund fees and expenses 0.37 0.37 0.37 0.37 0.37 0.37 0.37  
Total annual fund operating expenses 1.00 0.80 0.82 0.51 0.44 0.70 0.50  
Fee waiver           0.063 0.063  
Total annual fund operating expenses after fee waiver 1.00 0.80 0.82 0.51 0.44 0.64 0.44  
                 
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 1.00% 0.75% 0.60% 0.50% 0.25% none none none
Other expenses2 0.11 0.37 0.22 0.16 0.10 0.15% 0.06% 0.01%
Acquired (underlying) fund fees and expenses 0.37 0.37 0.37 0.37 0.37 0.37 0.37 0.37
Total annual fund operating expenses 1.48 1.49 1.19 1.03 0.72 0.52 0.43 0.38

1  A contingent deferred sales charge of 1.00% applies on certain redemptions made within 18 months following purchases of $1 million or more made without an initial sales charge. Contingent deferred sales charge is calculated based on the lesser of the offering price and market value of shares being sold.

2  Restated to reflect current fees.

3  Virginia529, as program administrator of ABLEAmerica, is currently waiving the fee owed to it as compensation for its oversight and administration of ABLEAmerica. This waiver will be in effect through at least January 1, 2024. Subject to the terms of its contractual arrangement with the investment adviser, Virginia529 may elect to extend, modify or terminate the waiver at that time.

7     American Funds Portfolio Series / Prospectus


 
 

 

Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. You may be required to pay brokerage commissions on your purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund, which are not reflected in the example. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

                               
Share class: A C T F-1 F-2 F-3 529-A 529-C 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE A ABLE F-2
1 year $646 $252 $324 $78 $50 $39 $428 $258 $102 $330 $84 $52 $45 $413 $45
3 years 798 471 481 243 157 122 593 490 318 499 262 164 141 560 154
5 years 963 813 651 422 274 213 773 845 552 683 455 285 246 720 274
10 years 1,441 1,576 1,145 942 616 480 1,294 1,364 1,225 1,215 1,014 640 555 1,185 622
                         
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6 For the share classes listed to the right, you would pay the following if you did not redeem your shares: Share class: C 529-C
1 year $151 $152 $121 $105 $74 $53 $44 $39 1 year $152 $158
3 years 468 471 378 328 230 167 138 122 3 years 471 490
5 years 808 813 654 569 401 291 241 213 5 years 813 845
10 years 1,768 1,779 1,443 1,259 894 653 542 480 10 years 1,576 1,364

Portfolio turnover The fund may pay transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s investment results. During the most recent fiscal year, the fund’s portfolio turnover rate was 2% of the average value of its portfolio.

Principal investment strategies The fund will attempt to achieve its investment objective by investing in a mix of American Funds in different combinations and weightings. The underlying American Funds will primarily consist of growth funds. The fund may also invest in growth-and-income funds. Through its investments in the underlying funds, the fund will have significant exposure to growth-oriented common stocks.

The fund will typically have significant exposure to issuers domiciled outside the United States. The fund may also have exposure to smaller capitalization issuers and issuers domiciled in emerging markets. The investment adviser believes that exposure to issuers domiciled outside the United States can help provide diversification when seeking long-term growth of capital.

The fund’s investment adviser seeks to create combinations of underlying funds that complement each other with a goal of achieving the fund’s investment objective of providing long-term growth of capital. In making this determination, the fund’s investment adviser considers the historical volatility and returns of the underlying funds and how various combinations would have behaved in past market environments. It also considers, among other topics, current market conditions and the investment positions of the underlying funds.

The fund’s investment adviser periodically reviews the investment strategies and asset mix of the underlying funds. The investment adviser will also consider whether overall market conditions would favor a change in the exposure of the fund to various asset types or geographic regions. Based on these considerations, the investment adviser may make adjustments to underlying fund holdings by adjusting the percentage of individual underlying funds within the fund, or adding or removing underlying funds. The investment adviser may also determine not to change the underlying fund allocations, particularly in response to short-term market movements, if in its opinion the combination of underlying funds is appropriate to meet the fund’s investment objective.

American Funds Portfolio Series / Prospectus     8


 
 

 

Principal risks This section describes the principal risks associated with investing in the fund and its underlying funds. You may lose money by investing in the fund. The likelihood of loss may be greater if you invest for a shorter period of time. Investors in the fund should have a long-term perspective and be able to tolerate potentially sharp declines in value.

The following are principal risks associated with investing in the fund.

Allocation risk — Investments in the fund are subject to risks related to the investment adviser’s allocation choices. The selection of the underlying funds and the allocation of the fund’s assets could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.

Fund structure — The fund invests in underlying funds and incurs expenses related to the underlying funds. In addition, investors in the fund will incur fees to pay for certain expenses related to the operations of the fund. An investor holding the underlying funds directly and in the same proportions as the fund would incur lower overall expenses but would not receive the benefit of the portfolio management and other services provided by the fund. Additionally, in accordance with an exemption under the Investment Company Act of 1940, as amended, the investment adviser considers only proprietary funds when selecting underlying investment options and allocations. This means that the fund’s investment adviser did not, nor does it expect to, consider any unaffiliated funds as underlying investment options for the fund. This strategy could raise certain conflicts of interest when choosing underlying investments for the fund, including the selection of funds that result in greater compensation to the adviser or funds with relatively lower historical investment results. The investment adviser has policies and procedures designed to mitigate material conflicts of interest that may arise in connection with its management of the fund.

Underlying fund risks — Because the fund’s investments consist of underlying funds, the fund’s risks are directly related to the risks of the underlying funds. For this reason, it is important to understand the risks associated with investing in the underlying funds, as described below.

The following are principal risks associated with investing in the underlying funds.

Market conditions — The prices of, and the income generated by, the common stocks, bonds and other securities held by the underlying funds 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 underlying funds invest in securities of issuers located in or with significant exposure to the countries affected, the value and liquidity of the underlying funds’ 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 underlying funds 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 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 stocks — Investing in stocks may involve larger price swings and greater potential for loss than other types of investments. As a result, the value of the underlying funds may be subject to sharp declines in value. Income provided by an underlying fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the underlying fund invests. These risks may be even greater in the case of smaller capitalization stocks.

Investing in small companies — Investing in smaller companies may pose additional risks. For example, it is often more difficult to value or dispose of small company stocks and more difficult to obtain information about smaller companies than about larger companies. Furthermore, smaller companies often have limited product lines, operating histories, markets and/or financial resources, may be dependent on one or a few key persons for management, and can be more susceptible to losses. Moreover, the prices of their stocks may be more volatile than stocks of larger, more established companies, particularly during times of market turmoil.

9     American Funds Portfolio Series / Prospectus


 
 

 

Investing outside the United States — 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 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 United States. Investments outside the United States 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 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 an underlying 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.

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 underlying 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 underlying 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 underlying 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.

Management — The investment adviser to the fund and to the underlying funds actively manages each underlying fund’s investments. Consequently, the underlying funds are 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 an underlying fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.

Your investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, entity or person. You should consider how this fund fits into your overall investment program.

American Funds Portfolio Series / Prospectus     10


 
 

 

Investment results The following bar chart shows how the fund’s investment results have varied from year to year, and the following table shows how the fund’s average annual total returns for various periods compare with a broad measure of securities market results and other applicable measures of market results. This information provides some indication of the risks of investing in the fund. The Lipper Global Multi-Cap Growth Funds Index includes funds that disclose investment objectives and/or strategies reasonably comparable to those of the fund. Past investment results (before and after taxes) are not predictive of future investment results. Prior to October 30, 2020, certain fees, such as 12b-1 fees, were not charged on Class 529-F-1 shares. If these expenses had been deducted, results would have been lower. Updated information on the fund’s investment results can be obtained by visiting capitalgroup.com.

         
Average annual total returns For the periods ended December 31, 2021:
Share class Inception date 1 year 5 years Lifetime
F-2 − Before taxes 5/18/2012 18.85% 17.46% 15.10%
− After taxes on distributions   17.88 16.23 14.11
− After taxes on distributions and sale of fund shares   11.88 13.89 12.46
         
Share classes (before taxes) Inception date 1 year 5 years Lifetime
A (with maximum sales charge) 5/18/2012 11.78 15.79 14.14
C 5/18/2012 16.70 16.30 14.11
F-1 5/18/2012 18.56 17.16 14.81
F-3 1/27/2017 18.96 N/A 16.85
529-A (with maximum sales charge) 5/18/2012 14.40 16.29 14.37
529-C 5/18/2012 16.67 16.23 14.31
529-E 5/18/2012 18.29 16.87 14.50
529-F-1 5/18/2012 18.73 17.39 15.02
529-F-2 10/30/2020 18.79 N/A 33.50
529-F-3 10/30/2020 18.89 N/A 33.63
ABLE-A 7/13/2018 14.61 N/A 14.52
ABLE-F-2 10/30/2020 18.92 N/A 33.70
R-1 5/18/2012 17.69 16.31 13.98
R-2 5/18/2012 17.71 16.32 13.99
R-2E 8/29/2014 18.01 16.65 12.20
R-3 5/18/2012 18.21 16.83 14.48
R-4 5/18/2012 18.59 17.18 14.84
R-5E 11/20/2015 18.82 17.45 15.02
R-5 5/18/2012 18.94 17.54 15.16
R-6 5/18/2012 18.95 17.58 15.21
       
Indexes 1 year 5 years Lifetime
(from Class F-2 inception)
S&P 500 Index (reflects no deductions for sales charges, account fees, expenses or U.S. federal income taxes) 28.71% 18.47% 16.79%
MSCI® All Country World ex USA Index (reflects no deductions for sales charges, account fees, expenses or U.S. federal income taxes) 7.82 9.61 7.80
Lipper Global Multi-Cap Growth Funds Index (reflects no deductions for sales charges, account fees or U.S. federal income taxes) 12.93 18.39 14.04

After-tax returns are shown only for Class F-2 shares; after-tax returns for other share classes will vary. After-tax returns are calculated using the highest individual federal income tax rates in effect during each year of the periods shown and do not reflect the impact of state and local taxes. Your actual after-tax returns depend on your individual tax situation and likely will differ from the results shown above. In addition, after-tax returns are not relevant if you hold your fund shares through a tax-deferred arrangement, such as a 401(k) plan, individual retirement account (IRA) or 529 college savings plan.

11     American Funds Portfolio Series / Prospectus


 
 

 

Management

Investment adviser Capital Research and Management Company

Portfolio Solutions Committee The investment adviser’s Portfolio Solutions Committee develops the allocation approach and selects the underlying funds in which the fund invests. The members of the Portfolio Solutions Committee, who are jointly and primarily responsible for the portfolio management of the fund, are:

     
Investment professional/
Series title (if applicable)
Investment professional
experience in this fund
Primary title with investment adviser
Samir Mathur President 3 years Partner – Capital Solutions Group
Alan N. Berro Senior Vice President 11 years Partner – Capital World Investors
Michelle J. Black Senior Vice President 3 years Partner – Capital Solutions Group
Wesley K. Phoa Senior Vice President 11 years Partner – Capital Solutions Group
John R. Queen Senior Vice President 3 years Partner – Capital Fixed Income Investors
William L. Robbins Senior Vice President 3 years Partner – Capital International Investors
Andrew B. Suzman Senior Vice President 11 years Partner – Capital World Investors

Purchase and sale of fund shares The minimum amount to establish an account for all share classes is normally $250 and the minimum to add to an account is $50. For a payroll deduction retirement plan account, payroll deduction savings plan account or employer-sponsored 529 account, the minimum is $25 to establish or add to an account. For accounts with Class F-3 shares held and serviced by the fund’s transfer agent, the minimum investment amount is $1 million.

If you are a retail investor, you may sell (redeem) shares on any business day through your dealer or financial professional or by writing to American Funds Service Company® at P.O. Box 6007, Indianapolis, Indiana 46206-6007; telephoning American Funds Service Company at (800) 421-4225; faxing American Funds Service Company at (888) 421-4351; or accessing our website at capitalgroup.com. Please contact your plan administrator or recordkeeper to sell (redeem) shares from your retirement plan.

Tax information Dividends and capital gain distributions you receive from the fund are subject to federal income taxes and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-favored.

Payments to broker-dealers and other financial intermediaries If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and the fund’s distributor or its affiliates may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your individual financial professional to recommend the fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

American Funds Portfolio Series / Prospectus     12


 
 

 

American Funds Growth and Income Portfolio

Investment objective The fund’s investment objective is to provide long-term growth of capital while providing current income.

Fees and expenses of the fund This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. For example, in addition to the fees and expenses described below, you may also be required to pay brokerage commissions on purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund. You may qualify for a Class A sales charge discount if you and your family invest, or agree to invest in the future, at least $25,000 in American Funds. More information about these and other discounts is available from your financial professional, in the “Sales charge reductions and waivers” sections on page 85 of the prospectus and on page 109 of the fund’s statement of additional information, and in the sales charge waiver appendix to the prospectus.

               
Shareholder fees (fees paid directly from your investment)
Share class: A 529-A and
ABLE-A
C and
529-C
529-E T and
529-T
All F, 529-F and ABLE-F-2 share classes All R
share
classes
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) 5.75% 3.50 none none 2.50% none none
Maximum deferred sales charge (load) (as a percentage of the amount redeemed) 1.001 1.001 1.00% none none none none
Maximum sales charge (load) imposed on reinvested dividends none none none none none none none
Redemption or exchange fees none none none none none none none
                 
Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment)
Share class: A C T F-1 F-2 F-3 529-A 529-C
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 0.27% 1.00% 0.25% 0.25% none none 0.24% 1.00%
Other expenses2 0.08 0.08 0.08 0.13 0.12% 0.01% 0.14 0.14
Acquired (underlying) fund fees and expenses 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33
Total annual fund operating expenses 0.68 1.41 0.66 0.71 0.45 0.34 0.71 1.47
                 
Share class: 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE-A ABLE-F-2  
Management fees none none none none none none none  
Distribution and/or service (12b-1) fees 0.50% 0.25% 0.25% none none 0.20% none  
Other expenses2 0.11 0.14 0.19 0.12% 0.07% 0.11 0.11%  
Acquired (underlying) fund fees and expenses 0.33 0.33 0.33 0.33 0.33 0.33 0.33  
Total annual fund operating expenses 0.94 0.72 0.77 0.45 0.40 0.64 0.44  
Fee waiver           0.063 0.063  
Total annual fund operating expenses after fee waiver 0.94 0.72 0.77 0.45 0.40 0.58 0.38  
                 
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 1.00% 0.75% 0.60% 0.50% 0.25% none none none
Other expenses2 0.09 0.34 0.22 0.16 0.10 0.15% 0.06% 0.01%
Acquired (underlying) fund fees and expenses 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33
Total annual fund operating expenses 1.42 1.42 1.15 0.99 0.68 0.48 0.39 0.34

1  A contingent deferred sales charge of 1.00% applies on certain redemptions made within 18 months following purchases of $1 million or more made without an initial sales charge. Contingent deferred sales charge is calculated based on the lesser of the offering price and market value of shares being sold.

2  Restated to reflect current fees.

3  Virginia529, as program administrator of ABLEAmerica, is currently waiving the fee owed to it as compensation for its oversight and administration of ABLEAmerica. This waiver will be in effect through at least January 1, 2024. Subject to the terms of its contractual arrangement with the investment adviser, Virginia529 may elect to extend, modify or terminate the waiver at that time.

13     American Funds Portfolio Series / Prospectus


 
 

 

Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. You may be required to pay brokerage commissions on your purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund, which are not reflected in the example. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

                               
Share class: A C T F-1 F-2 F-3 529-A 529-C 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE A ABLE F-2
1 year $640 $244 $316 $73 $46 $35 $420 $250 $96 $322 $79 $46 $41 $407 $39
3 years 780 446 456 227 144 109 569 465 300 474 246 144 128 542 135
5 years 932 771 609 395 252 191 731 803 520 641 428 252 224 689 240
10 years 1,373 1,492 1,052 883 567 431 1,202 1,273 1,155 1,122 954 567 505 1,115 549
                         
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6 For the share classes listed to the right, you would pay the following if you did not redeem your shares: Share class: C 529-C
1 year $145 $145 $117 $101 $69 $49 $40 $35 1 year $144 $150
3 years 449 449 365 315 218 154 125 109 3 years 446 465
5 years 776 776 633 547 379 269 219 191 5 years 771 803
10 years 1,702 1,702 1,398 1,213 847 604 493 431 10 years 1,492 1,273

Portfolio turnover The fund may pay transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s investment results. During the most recent fiscal year, the fund’s portfolio turnover rate was 7% of the average value of its portfolio.

Principal investment strategies The fund will attempt to achieve its investment objective by investing in a mix of American Funds in different combinations and weightings. The underlying American Funds will predominately consist of equity funds in the growth, growth-and-income, equity-income and balanced categories. However, the fund may also invest in fixed income funds.

Through its investments in the underlying funds, the fund will have significant exposure to growth-oriented common stocks. The fund will seek to generate some of its income from exposure to dividend paying stocks. The fund will seek exposure to issuers domiciled outside the United States, including those domiciled in emerging markets. The investment adviser believes that exposure to issuers domiciled outside the United States can help provide diversification when seeking current income and long-term growth of capital.

With respect to its fixed income investments, the underlying funds in which the fund invests may hold debt securities with a wide range of quality and maturities. The fund may invest in underlying funds with significant exposure to bonds rated BB+ or below and Ba1 or below by Nationally Recognized Statistical Rating Organizations designated by the fund’s investment adviser, or unrated but determined by the fund’s investment adviser to be of equivalent quality. Securities rated BB+ or below and Ba1 or below are sometimes referred to as “junk bonds.” Exposure to lower rated securities may help the fund achieve its objective of providing current income.

The underlying funds may hold securities issued and guaranteed by the U.S. government, securities issued by federal agencies and instrumentalities and securities backed by mortgages or other assets. The underlying funds may also invest in the debt securities of governments, agencies, corporations and other entities domiciled outside the United States.

The fund’s investment adviser seeks to create combinations of underlying funds that complement each other with a goal of achieving the fund’s investment objective of providing long-term growth of capital while providing current income. In making this determination, the fund’s investment adviser considers the historical volatility and returns of the underlying funds and how various combinations would have behaved in past market environments. It also considers, among other topics, current market conditions and the investment positions of the underlying funds.

The fund’s investment adviser periodically reviews the investment strategies and asset mix of the underlying funds. The investment adviser will also consider whether overall market conditions would favor a change in the exposure of the fund to various asset types or geographic regions. Based on these considerations, the investment adviser may make adjustments to underlying fund holdings by adjusting the percentage of individual underlying funds within the fund, or adding or removing underlying funds. The investment adviser may also determine not to change the underlying fund allocations, particularly in response to short-term market movements, if in its opinion the combination of underlying funds is appropriate to meet the fund’s investment objective.

American Funds Portfolio Series / Prospectus     14


 
 

 

Principal risks This section describes the principal risks associated with investing in the fund and its underlying funds. You may lose money by investing in the fund. The likelihood of loss may be greater if you invest for a shorter period of time. Investors in the fund should have a long-term perspective and be able to tolerate potentially sharp declines in value.

The following are principal risks associated with investing in the fund.

Allocation risk — Investments in the fund are subject to risks related to the investment adviser’s allocation choices. The selection of the underlying funds and the allocation of the fund’s assets could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.

Fund structure — The fund invests in underlying funds and incurs expenses related to the underlying funds. In addition, investors in the fund will incur fees to pay for certain expenses related to the operations of the fund. An investor holding the underlying funds directly and in the same proportions as the fund would incur lower overall expenses but would not receive the benefit of the portfolio management and other services provided by the fund. Additionally, in accordance with an exemption under the Investment Company Act of 1940, as amended, the investment adviser considers only proprietary funds when selecting underlying investment options and allocations. This means that the fund’s investment adviser did not, nor does it expect to, consider any unaffiliated funds as underlying investment options for the fund. This strategy could raise certain conflicts of interest when choosing underlying investments for the fund, including the selection of funds that result in greater compensation to the adviser or funds with relatively lower historical investment results. The investment adviser has policies and procedures designed to mitigate material conflicts of interest that may arise in connection with its management of the fund.

Underlying fund risks — Because the fund’s investments consist of underlying funds, the fund’s risks are directly related to the risks of the underlying funds. For this reason, it is important to understand the risks associated with investing in the underlying funds, as described below.

The following are principal risks associated with investing in the underlying funds.

Market conditions — The prices of, and the income generated by, the common stocks, bonds and other securities held by the underlying funds 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 underlying funds invest in securities of issuers located in or with significant exposure to the countries affected, the value and liquidity of the underlying funds’ 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 underlying funds 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 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 stocks — Investing in stocks may involve larger price swings and greater potential for loss than other types of investments. As a result, the value of the underlying funds may be subject to sharp declines in value. Income provided by an underlying fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the underlying fund invests. These risks may be even greater in the case of smaller capitalization stocks.

15     American Funds Portfolio Series / Prospectus


 
 

 

Investing outside the United States — 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 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 United States. Investments outside the United States 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 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 an underlying 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.

Investing in debt instruments — The prices of, and the income generated by, bonds and other debt securities held by an underlying 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 underlying funds’ securities could cause the value of the underlying funds’ shares to decrease. Credit risk is gauged, in part, by the credit ratings of the debt securities in which the underlying 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 underlying funds’ investment adviser relies on its own credit analysts to research issuers and issues in assessing credit and default risks.

Management — The investment adviser to the fund and to the underlying funds actively manages each underlying fund’s investments. Consequently, the underlying funds are 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 an underlying fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.

Your investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, entity or person. You should consider how this fund fits into your overall investment program.

American Funds Portfolio Series / Prospectus     16


 
 

 

Investment results The following bar chart shows how the fund’s investment results have varied from year to year, and the following table shows how the fund’s average annual total returns for various periods compare with a broad measure of securities market results and other applicable measures of market results. This information provides some indication of the risks of investing in the fund. The Lipper Mixed-Asset Target Allocation Growth Funds Index includes funds that disclose investment objectives and/or strategies reasonably comparable to those of the fund. Past investment results (before and after taxes) are not predictive of future investment results. Prior to October 30, 2020, certain fees, such as 12b-1 fees, were not charged on Class 529-F-1 shares. If these expenses had been deducted, results would have been lower. Updated information on the fund’s investment results can be obtained by visiting capitalgroup.com.

         
Average annual total returns For the periods ended December 31, 2021:
Share class Inception date 1 year 5 years Lifetime
F-2 — Before taxes 5/18/2012 16.62% 13.33% 11.82%
— After taxes on distributions   15.19 12.00 10.69
— After taxes on distributions and sale of fund shares   10.84 10.43 9.52
         
Share classes (before taxes) Inception date 1 year 5 years Lifetime
A (with maximum sales charge) 5/18/2012 9.66% 11.74% 10.88%
C 5/18/2012 14.52 12.23 10.86
F-1 5/18/2012 16.33 13.04 11.53
F-3 1/27/2017 16.75 N/A 12.96
529-A (with maximum sales charge) 5/18/2012 12.27 12.22 11.10
529-C 5/18/2012 14.40 12.16 11.06
529-E 5/18/2012 16.08 12.76 11.24
529-F-1 5/18/2012 16.49 13.26 11.74
529-F-2 10/30/2020 16.56 N/A 27.48
529-F-3 10/30/2020 16.63 N/A 27.56
ABLE-A 7/13/2018 12.45 N/A 11.36
ABLE-F-2 10/30/2020 16.69 N/A 27.62
R-1 5/18/2012 15.44 12.22 10.72
R-2 5/18/2012 15.48 12.23 10.73
R-2E 8/29/2014 15.78 12.54 9.20
R-3 5/18/2012 15.97 12.71 11.21
R-4 5/18/2012 16.31 13.05 11.56
R-5E 11/20/2015 16.55 13.30 11.82
R-5 5/18/2012 16.63 13.38 11.87
R-6 5/18/2012 16.72 13.44 11.91
       
Indexes 1 year 5 years Lifetime
(from Class F-2
inception)
S&P 500 Index (reflects no deductions for sales charges, account fees, expenses or U.S. federal income taxes) 28.71% 18.47% 16.79%
MSCI® All Country World ex USA Index (reflects no deductions for sales charges, account fees, expenses or U.S. federal income taxes) 7.82 9.61 7.80
Bloomberg Global Aggregate Index (reflects no deductions for sales charges, account fees, expenses or U.S. federal income taxes) 4.71 3.36 1.71
Lipper Mixed-Asset Target Allocation Growth Funds Index (reflects no deductions for sales charges, account fees or U.S. federal income taxes) 15.07 12.22 10.95

After-tax returns are shown only for Class F-2 shares; after-tax returns for other share classes will vary. After-tax returns are calculated using the highest individual federal income tax rates in effect during each year of the periods shown and do not reflect the impact of state and local taxes. Your actual after-tax returns depend on your individual tax situation and likely will differ from the results shown above. In addition, after-tax returns are not relevant if you hold your fund shares through a tax-deferred arrangement, such as a 401(k) plan, individual retirement account (IRA) or 529 college savings plan.

17     American Funds Portfolio Series / Prospectus


 
 

 

Management

Investment adviser Capital Research and Management Company

Portfolio Solutions Committee The investment adviser’s Portfolio Solutions Committee develops the allocation approach and selects the underlying funds in which the fund invests. The members of the Portfolio Solutions Committee, who are jointly and primarily responsible for the portfolio management of the fund, are:

     
Investment professional/
Series title (if applicable)
Investment professional
experience in this fund
Primary title with investment adviser
Samir Mathur President 3 years Partner – Capital Solutions Group
Alan N. Berro Senior Vice President 11 years Partner – Capital World Investors
Michelle J. Black Senior Vice President 3 years Partner – Capital Solutions Group
Wesley K. Phoa Senior Vice President 11 years Partner – Capital Solutions Group
John R. Queen Senior Vice President 3 years Partner – Capital Fixed Income Investors
William L. Robbins Senior Vice President 3 years Partner – Capital International Investors
Andrew B. Suzman Senior Vice President 11 years Partner – Capital World Investors

Purchase and sale of fund shares The minimum amount to establish an account for all share classes is normally $250 and the minimum to add to an account is $50. For a payroll deduction retirement plan account, payroll deduction savings plan account or employer-sponsored 529 account, the minimum is $25 to establish or add to an account. For accounts with Class F-3 shares held and serviced by the fund’s transfer agent, the minimum investment amount is $1 million.

If you are a retail investor, you may sell (redeem) shares on any business day through your dealer or financial professional or by writing to American Funds Service Company® at P.O. Box 6007, Indianapolis, Indiana 46206-6007; telephoning American Funds Service Company at (800) 421-4225; faxing American Funds Service Company at (888) 421-4351; or accessing our website at capitalgroup.com. Please contact your plan administrator or recordkeeper to sell (redeem) shares from your retirement plan.

Tax information Dividends and capital gain distributions you receive from the fund are subject to federal income taxes and may also be subject to state and local taxes, unless you are tax-exempt or your account is tax-favored.

Payments to broker-dealers and other financial intermediaries If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and the fund’s distributor or its affiliates may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your individual financial professional to recommend the fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

American Funds Portfolio Series / Prospectus     18


 
 

 

American Funds Moderate Growth and Income Portfolio

Investment objectives The fund’s investment objectives are to provide current income and long-term growth of capital and income.

Fees and expenses of the fund This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. For example, in addition to the fees and expenses described below, you may also be required to pay brokerage commissions on purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund. You may qualify for a Class A sales charge discount if you and your family invest, or agree to invest in the future, at least $25,000 in American Funds. More information about these and other discounts is available from your financial professional, in the “Sales charge reductions and waivers” sections on page 85 of the prospectus and on page 109 of the fund’s statement of additional information, and in the sales charge waiver appendix to the prospectus.

               
Shareholder fees (fees paid directly from your investment)
Share class: A 529-A and
ABLE-A
C and
529-C
529-E T and
529-T
All F, 529-F and ABLE-F-2 share classes All R
share
classes
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) 5.75% 3.50 none none 2.50% none none
Maximum deferred sales charge (load) (as a percentage of the amount redeemed) 1.001 1.001 1.00% none none none none
Maximum sales charge (load) imposed on reinvested dividends none none none none none none none
Redemption or exchange fees none none none none none none none
                 
Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment)
Share class: A C T F-1 F-2 F-3 529-A 529-C
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 0.27% 1.00% 0.25% 0.25% none none 0.24% 1.00%
Other expenses2 0.06 0.06 0.06 0.12 0.11% 0.01% 0.12 0.12
Acquired (underlying) fund fees and expenses 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33
Total annual fund operating expenses 0.66 1.39 0.64 0.70 0.44 0.34 0.69 1.45
                 
Share class: 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE-A ABLE-F-2  
Management fees none none none none none none none  
Distribution and/or service (12b-1) fees 0.50% 0.25% 0.25% none none 0.21% none  
Other expenses2 0.10 0.12 0.18 0.11% 0.07% 0.10 0.10%  
Acquired (underlying) fund fees and expenses 0.33 0.33 0.33 0.33 0.33 0.33 0.33  
Total annual fund operating expenses 0.93 0.70 0.76 0.44 0.40 0.64 0.43  
Fee waiver           0.063 0.063  
Total annual fund operating expenses after fee waiver 0.93 0.70 0.76 0.44 0.40 0.58 0.37  
                 
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6
Management fees none none none none none none none none
Distribution and/or service (12b-1) fees 1.00% 0.75% 0.60% 0.50% 0.25% none none none
Other expenses2 0.11 0.34 0.22 0.16 0.11 0.16% 0.06% 0.01%
Acquired (underlying) fund fees and expenses 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33
Total annual fund operating expenses 1.44 1.42 1.15 0.99 0.69 0.49 0.39 0.34

1  A contingent deferred sales charge of 1.00% applies on certain redemptions made within 18 months following purchases of $1 million or more made without an initial sales charge. Contingent deferred sales charge is calculated based on the lesser of the offering price and market value of shares being sold.

2  Restated to reflect current fees.

3  Virginia529, as program administrator of ABLEAmerica, is currently waiving the fee owed to it as compensation for its oversight and administration of ABLEAmerica. This waiver will be in effect through at least January 1, 2024. Subject to the terms of its contractual arrangement with the investment adviser, Virginia529 may elect to extend, modify or terminate the waiver at that time.

19     American Funds Portfolio Series / Prospectus


 
 

 

Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same. You may be required to pay brokerage commissions on your purchases and sales of Class F-2, F-3, 529-F-2, 529-F-3 or ABLE-F-2 shares of the fund, which are not reflected in the example. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

                               
Share class: A C T F-1 F-2 F-3 529-A 529-C 529-E 529-T 529-F-1 529-F-2 529-F-3 ABLE A ABLE F-2
1 year $639 $242 $314 $72 $45 $35 $418 $248 $95 $320 $78 $45 $41 $407 $38
3 years 774 440 450 224 141 109 563 459 296 468 243 141 128 542 132
5 years 922 761 598 390 246 191 721 792 515 630 422 246 224 689 235
10 years 1,350 1,469 1,028 871 555 431 1,178 1,250 1,143 1,099 942 555 505 1,115 536
                         
Share class: R-1 R-2 R-2E R-3 R-4 R-5E R-5 R-6 For the share classes listed to the right, you would pay the following if you did not redeem your shares: Share class: C 529-C
1 year $147 $145 $117 $101 $70 $50 $40 $35 1 year $142 $148
3 years 456 449 365 315 221 157 125 109 3 years 440 459
5 years 787 776 633 547 384 274 219 191 5 years 761 792
10 years 1,724 1,702 1,398 1,213 859 616 493 431 10 years 1,469 1,250

Portfolio turnover The fund may pay transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s investment results. During the most recent fiscal year, the fund’s portfolio turnover rate was 2% of the average value of its portfolio.

Principal investment strategies The fund will attempt to achieve its investment objectives by investing in a mix of American Funds in different combinations and weightings. The underlying American Funds may include growth, growth-and-income, equity-income, balanced and fixed income funds.

Normally through its investments in the underlying funds, the fund will maintain at least 45% of the value of its net assets in common stocks and other equity investments and at least 25% of the value of its net assets in bonds and other debt securities (including money market instruments).

The fund will have exposure to growth-oriented common stocks. The fund will seek to generate some of its income from exposure to dividend paying stocks. The fund will seek exposure to issuers domiciled outside the United States, including those domiciled in emerging markets. The investment adviser believes that exposure to issuers domiciled outside the United States can help provide diversification when seeking current income and long-term growth of capital.

With respect to its fixed income investments, the underlying funds in which the fund invests may hold debt securities with a wide range of maturities. The fund may invest in underlying funds with significant exposure to bonds rated BB+ or below and Ba1 or below by Nationally Recognized Statistical Rating Organizations designated by the fund’s investment adviser, or unrated but determined by the fund’s investment adviser to be of equivalent quality. Securities rated BB+ or below and Ba1 or below are sometimes referred to as “junk bonds.” Exposure to lower rated securities may help the fund achieve its objective of providing current income.

The underlying funds may hold securities issued and guaranteed by the U.S. government, securities issued by federal agencies and instrumentalities and securities backed by mortgages or other assets. The underlying funds may also invest in the debt securities of governments, agencies, corporations and other entities domiciled outside the United States.

The fund’s investment adviser seeks to create combinations of underlying funds that complement each other with a goal of achieving the fund’s investment objective of providing current income and long-term growth of capital and income. In making this determination, the fund’s investment adviser considers the historical volatility and returns of the underlying funds and how various combinations would have behaved in past market environments. It also considers, among other topics, current market conditions and the investment positions of the underlying funds.

The fund’s investment adviser periodically reviews the investment strategies and asset mix of the underlying funds. The investment adviser will also consider whether overall market conditions would favor a change in the exposure of the fund to various asset types or geographic regions. Based on these considerations, the investment adviser may make adjustments to underlying fund holdings by adjusting the percentage of individual underlying funds within the fund, or adding or removing underlying funds. The investment adviser may also determine not to change the underlying fund allocations, particularly in response to short-term market movements, if in its opinion the combination of underlying funds is appropriate to meet the fund’s investment objective.

American Funds Portfolio Series / Prospectus     20


 
 

 

Principal risks This section describes the principal risks associated with investing in the fund and its underlying funds. You may lose money by investing in the fund. The likelihood of loss may be greater if you invest for a shorter period of time. Investors in the fund should have a long-term perspective and be able to tolerate potentially sharp declines in value.

The following are principal risks associated with investing in the fund.

Allocation risk — Investments in the fund are subject to risks related to the investment adviser’s allocation choices. The selection of the underlying funds and the allocation of the fund’s assets could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.

Fund structure — The fund invests in underlying funds and incurs expenses related to the underlying funds. In addition, investors in the fund will incur fees to pay for certain expenses related to the operations of the fund. An investor holding the underlying funds directly and in the same proportions as the fund would incur lower overall expenses but would not receive the benefit of the portfolio management and other services provided by the fund. Additionally, in accordance with an exemption under the Investment Company Act of 1940, as amended, the investment adviser considers only proprietary funds when selecting underlying investment options and allocations. This means that the fund’s investment adviser did not, nor does it expect to, consider any unaffiliated funds as underlying investment options for the fund. This strategy could raise certain conflicts of interest when choosing underlying investments for the fund, including the selection of funds that result in greater compensation to the adviser or funds with relatively lower historical investment results. The investment adviser has policies and procedures designed to mitigate material conflicts of interest that may arise in connection with its management of the fund.

Underlying fund risks — Because the fund’s investments consist of underlying funds, the fund’s risks are directly related to the risks of the underlying funds. For this reason, it is important to understand the risks associated with investing in the underlying funds, as described below.

The following are principal risks associated with investing in the underlying funds.

Market conditions — The prices of, and the income generated by, the common stocks, bonds and other securities held by the underlying funds 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 underlying funds invest in securities of issuers located in or with significant exposure to the countries affected, the value and liquidity of the underlying funds’ 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 underlying funds 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 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 stocks — Investing in stocks may involve larger price swings and greater potential for loss than other types of investments. As a result, the value of the underlying funds may be subject to sharp declines in value. Income provided by an underlying fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the underlying fund invests. These risks may be even greater in the case of smaller capitalization stocks.

Investing outside the United States — 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 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 United States. Investments outside the United States 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 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 an underlying 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.

21     American Funds Portfolio Series / Prospectus


 
 

 

Investing in debt instruments — The prices of, and the income generated by, bonds and other debt securities held by an underlying 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 underlying funds’ securities could cause the value of the underlying funds’ shares to decrease. Credit risk is gauged, in part, by the credit ratings of the debt securities in which the underlying 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 underlying funds’ investment adviser relies on its own credit analysts to research issuers and issues in assessing credit and default risks.

Management — The investment adviser to the fund and to the underlying funds actively manages each underlying fund’s investments. Consequently, the underlying funds are 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 an underlying fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.

Your investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, entity or person. You should consider how this fund fits into your overall investment program.

American Funds Portfolio Series / Prospectus     22


 
 

 

Investment results The following bar chart shows how the fund’s investment results have varied from year to year, and the following table shows how the fund’s average annual total returns for various periods compare with a broad measure of securities market results and other applicable measures of market results. This information provides some indication of the risks of investing in the fund. The Lipper Mixed-Asset Target Allocation Growth Funds Index includes funds that disclose investment objectives and/or strategies reasonably comparable to those of the fund. Past investment results (before and after taxes) are not predictive of future investment results. Prior to October 30, 2020, certain fees, such as 12b-1 fees, were not charged on Class 529-F-1 shares. If these expenses had been deducted, results would have been lower. Updated information on the fund’s investment results can be obtained by visiting capitalgroup.com.

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