Elections Come and Go. Results Last a Lifetime. A Review of U.S. Presidential Elections

Transcription

1 Elections Come and Go. Results Last a Lifetime. A Review of U.S. Presidential Elections

2 Set Your Sights on the Long Term The only limit to our realization of tomorrow will be our doubts of today. Franklin D. Roosevelt Investor doubts may seem especially prevalent during presidential election years when campaigns spotlight the country s challenges. Yet even with election year rhetoric amplifying the negative, it s important to focus on your vision for the future. To help you stay the course, consider the following: Successful long-term investors stay the course and rely on time rather than timing. Investment success has depended more on the strength and resilience of the American economy than on which candidate or party holds office. The experience and time-tested process of your investment manager can be an important contributor to your long-term investment success. Democrat Republican Franklin D. Roosevelt Alf Landon Franklin D. Roosevelt Wendell Willkie Franklin D. Roosevelt Thomas Dewey Harry Truman Thomas Dewey Dwight Eisenhower Adlai Stevenson Dwight Eisenhower Adlai Stevenson John F. Kennedy Richard Nixon Lyndon Johnson Barry Goldwater Richard Nixon Hubert Humphrey Richard Nixon George McGovern U.S. remains in grip of Depression Nazi rise troubles Europe Isolationism engagement hotly debated Germany menaces Europe; France falls FDR s health in question Potential Post-War impact of New Deal debated Civil rights tension boils over at convention Berlin blockade accelerates Cold War U.S. detonates first hydrogen bomb Attempts at Korean War truce fail Mideast trouble as Egypt seizes Suez Canal Soviets invade Hungary Cuba nationalizes U.S. assets American U- spy plane shot down in Soviet airspace Civil Rights Act passes after lengthy filibuster Gulf of Tonkin signals Vietnam involvement Vietnam protests and civil rights issues roil conventions RFK and Martin Luther King Jr. assassinated Watergate scandal surfaces Vietnam War drags on Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

3 Market declines and recessions CLOSED Overseas conflict and war There have always been tumultuous events Businesses going bankrupt The current economic and political challenges may seem unprecedented, but a look back shows that controversy and uncertainty have surrounded every race. Civil unrest and protest Weather-related calamities Labor market struggles Jimmy Carter Gerald Ford Ronald Reagan Jimmy Carter Ronald Reagan Walter Mondale George H.W. Bush Michael Dukakis Bill Clinton George H.W. Bush Bill Clinton Bob Dole George W. Bush Al Gore George W. Bush John Kerry Barack Obama John McCain Barack Obama Mitt Romney New York City threatens bankruptcy Economy mired in recession Iran hostage crisis drags on Olympic boycott underscores Cold War divide Budget deficits rising rapidly Stock market slides over 0% in less than four months Savings and loan crisis reaches apex Iran-Contra indictments Los Angeles riots highlight racial tension Pending NAFTA ratification creates anxiety 9 American servicemen killed in Saudi Arabia bombing UN arms inspectors repeatedly thwarted in Iraq Tech bubble bursts; stock markets plummet Attack on USS Cole heightens terrorism concerns Oil prices soar Ongoing wars in Iraq and Afghanistan Subprime mortgage crisis Lehman Brothers collapse; world markets fall High-stakes negotiations lead to a deal to avert the fiscal cliff Superstorm Sandy kills 8 people, and causes $8 billion in damage

4 $00,000,000 00,000,000 70,000,000 0,000,000 0,000,000 0,000,000 0,000,000 0,000,000 8,000,000,000,000,000,000,000,000,000, ,000 00,000 00,000 00,000 00,000 80,000 0,000 0,000 0,000 Depression The Investment Company of America 0 elections and counting As you can see in the mountain chart below, a hypothetical $0,000 investment in The Investment Company of America has grown steadily and significantly over the fund s 8-year history. Additionally, a hypothetical $0,000 investment in ICA made at the beginning of an election year was always larger 0 years down the road. Civil war in Spain 9 Franklin Roosevelt $,70 $,98 9.9% Economy still struggling $0,000 investment 0 years later Recession War clouds gather War in Europe 90 Franklin Roosevelt $, $,7 9.% France falls Dividends reinvested during period Pearl Harbor Wartime price controls Industry mobilizes 9 Franklin Roosevelt $7, $7,00 0.% Consumer goods shortages Post-war recession predicted Dow tops 00 market too high Cold War begins 98 Harry Truman $, $,0.% Berlin blockade Soviets detonate A-bomb Korean War Excess profits tax 9 Dwight Eisenhower $,8 $,8.8% U.S. seizes steel mills Soviets detonate H-bomb 0,000 8,000 Year ended Dec Capital value ($ in 000) Dividends excluded: Value at year-end: $.8. Total value ($ in 000) Dividends reinvested: Value at year-end: $.8. Total return +8.% $..0 $ Results reflect payment of the maximum.7% sales charge for Class A shares on a hypothetical $0,000 investment. Thus the net amount invested was $9,. The maximum initial sales charge was 8.% prior to July, 988. As outlined in the prospectus, the sales charge is reduced for larger investments. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares. The results shown are before taxes on fund distributions and sale of fund shares. Past results are not predictive of results in future periods. Results for other share classes may differ Here distr Clas

5 9 wight nhower,8,8 verage ual return:.8% U.S. seizes steel mills Soviets detonate H-bomb Dow tops 00 market too high Eisenhower illness 9 Dwight Eisenhower $0,78 $,97.9% Suez Crisis Soviets launch Sputnik Recession Castro seizes power in Cuba 90 John F. Kennedy $,9 $,0 0.0% Soviets down U- plane Berlin Wall is erected Cuban Missile Crisis Kennedy assassination 9 Lyndon Johnson $,90 $,78 8.% Gulf of Tonkin Value added by reinvestment of dividends Civil rights marches Vietnam War escalates Newark riots 98 Richard Nixon $,99 $,08.8% North Korea captures USS Pueblo Money tightens; market falls U.S. invades Cambodia Wage-price freeze 97 Richard Nixon $,0 $,7 7.9% Watergate Oil embargo Nixon resigns U.S. withdraws from Vietnam $ ann ,0.7,.,0. 80.,7.7, Here are ICA s average annual total returns on a $,000 investment with all distributions reinvested for periods ended December, 0: year years 0 years Class A shares.%.99%.7% ratio was 0.9% as of the fund s prospectus available at the time of publication. The s Comp relati and,

6 97 Jimmy Carter $,8 Figures shown are past results for Class A shares and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity. Results shown are at the.7% maximum sales charge for Class A shares with all distributions reinvested. For current information and month-end results, visit americanfunds.com. Nixon resigns U.S. withdraws from Vietnam $8,7.% New York City threatens bankruptcy Energy crisis Massacres in Cambodia Three Mile Island nuclear accident Abscam scandal rocks Congress Reagan and the pope are shot Worst recession in 0 years Soviets shoot down Korean airliner Iran-Iraq war escalates U.S. becomes a debtor nation U.S. bombs Libya Record-setting market decline Bank failures peak Problems with junk bonds Iraq invades Kuwait Recession in U.S.; Soviet Union dissolves Los Angeles riots Midwestern U.S. floods Fed raises interest rates six times Dow tops 000, then 000 market too high Technology stocks stumble Chaos in Asian markets 980 Ronald Reagan $9, 98 Ronald Reagan $8, George H.W. Bush $, 99 Bill Clinton $,78 99 Bill Clinton $,70 $9,8 $7, $, $,87 $,0 7.%.%.%.% 0.% ,07.9,00.,0.9,7.,.8,98.8,99.9,0.,.,80.,779.7,7.9, ,7.7,7.,.,7.,9.,80.,0.,.0,89.7,7.,9.9,8.7 7,09. 7,989. 0,8. 0,09.0,7.9,09.,79.,7.9 0,78.7,0., The stock market is represented by Standard & Poor s 00 Composite Index, a widely used measure of stocks issued by relatively large U.S. companies. The S&P 00 is unmanaged and, therefore, has no expenses. Investment results shown in each box are for 0-year periods beginning on January of the year shown. I r I o

7 Technology stocks stumble Chaos in Asian markets Global economic turmoil Fears of YK computer problems Internet bubble bursts Terrorist attacks in U.S. Corporate accounting scandals U.S. invades Iraq Oil prices soar Hurricanes devastate southern U.S. Dow Jones tops 000 for first time Subprime credit crisis U.S. recession U.S. unemployment tops 0% Gulf of Mexico oil spill European sovereign debt crisis U.S. faces fiscal cliff Year five of federal government s quantitative easing policy U.S. drawn into Syrian conflict ICA with dividends reinvested $09,9,9 annual return:.% Stock market with dividends reinvested $,9, annual return: 0.9% ICA with dividends excluded $0,0,7 annual return: 8.9% Stock market with dividends excluded $,08, annual return:.8% 99 Bill linton 000 George W. Bush,70 $,0,0 $,7 00 George W. Bush $8,79 $,78 Consumer Price Index (Inflation) $77,888 annual return:.% verage ual return:.%.9%.% Original investment $0, , ,.7 0., ,78..8,87. 7., ,.9 8.,7. 8., ,.,9.,0.,88. 9,9.,8. 7,.,8. 8,709. 8,89.,7. 7,.,0. 70,.8,98.8 8,8.,80.,9. 7,8. 97,0. 09, ,.,. 7,0.9,9.,8.7,.7,98.9,.7 f Includes dividends of $,7,8, and capital gain distributions of $8,70,8, reinvested in the years 9-0. Includes reinvested capital gains of $,87,0, but does not reflect income dividends of $,99,0 taken in cash.,9.8,7.,9.9,. 7,0.0,707. 9,79. 0,0.,8.,99. annual total return for 8 years: +.%

8 Red, Blue and You Beliefs about which political party is best for the markets might discourage you from investing. But as you can see from the chart below, whether the GOP or the Democrats claim the presidency historically has not been the deciding factor in how a $0,000 investment made at the beginning of an election year looked 0 years down the road. Growth of a Hypothetical $0,000 Investment Made at the Beginning of an Election Year ICA total ending value under Democrat S&P 00 total ending value ICA total ending value under Republican $,70 $,8 $, $,99 $7, $8,0 $, $,70 $,8 $,7 $0,78 $8, $,9 $,8 $,90 $7,908 $,99 $,0 $,0 $8,7 $,8 $8,9 $9, $0, $8,00 $0, $, $,8 $,78 $,77 $,70 $,80 $,0 $9,090 $8,79 $0, Source for ICA and S&P 00 0-year returns: Thomson InvestmentView Each 0-year period begins on January of the first year shown and ends on December of the final year shown. For example, the first period listed (9 9) covers // through //. All results for ICA shown on this page reflect payment of the maximum.7% sales charge for Class A shares on a hypothetical $0,000 investment. Thus, the net amount invested in each period was $9,. The S&P 00 is unmanaged and, therefore, has no expenses. There have been periods when the fund has lagged the index Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus and summary prospectus, which can be obtained from a financial professional and should be read carefully before investing. If used after March, 0, this brochure must be accompanied by a current American Funds quarterly statistical update. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. Lit. No. MFCPBR-0-0P Litho in USA CGD/CIP/00-S898 0 American Funds Distributors, Inc Printed on recycled paper

9 Quarterly Statistical Update January 0 Data as of December, 0 This update must be used (until superseded) with any American Funds and CollegeAmerica sales materials that include investment results for periods ended before the date above. As a practical matter, financial advisors should consider including this update with all American Funds and CollegeAmerica sales literature. This material may be photocopied. Investment results updated monthly, and daily share price information, are available at americanfunds.com. Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfunds.com. Returns shown are based on a $,000 investment. The return of principal for bond funds and funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. Fund shares of U.S. Government Securities Fund are not guaranteed by the U.S. government. An investment in the money market fund is not insured or guaranteed by the FDIC or any other government agency. Although the money market fund seeks to preserve the value of your investment at $.00 per share, it is possible to lose money by investing in the fund. The fund s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. Exchange privileges generally allow shareholders to transfer some or all of their holdings among American Funds in the same share class without a sales charge. CollegeAmerica allows exchanges twice per calendar year and when the beneficiary of the account is changed. Class A, C and F- shares generally may be ex changed into the corresponding 9 share class without a sales charge, but such exchanges from UGMA or UTMA custo dial accounts may create significant legal and tax consequences. Exchange privileges are subject to change or termination. American Funds American Funds Class A shares are subject to a.7% maximum up-front sales charge for equity funds and most Portfolio Series funds,.7% for most bond and tax-exempt bond funds and American Funds Tax-Advantaged Income Portfolio, and.0% for shorter term bond funds, American Funds Preservation Portfolio and American Funds Tax-Exempt Preservation Portfolio. There is no sales charge for the Class A money market fund. Share classes without an up-front sales charge are also available. Class C shares have a % contingent deferred sales charge on shares sold within the first year of purchase and convert to Class F- shares after 0 years. Class F- and F- shares have an annual asset-based fee charged by the sponsoring firm. New investments in Class B shares are no longer allowed. For more information and investment results, please see americanfunds.com. Class C shares are limited to a maximum purchase of $00,000, and are not available to certain employer-sponsored retirement plans. Class F- and F- shares are available only through certain fee-based programs offered by registered investment advisors. Your financial advisor can help you decide which share class is best for you. Class F- shares were introduced on August, 008. Fund results prior to the date of first sale are hypothetical, based on Class A share returns without a sales charge adjusted for typical additional expenses as described on pages 8 and 9. Individual fund expenses are also shown on pages 8 and 9. American Funds in CollegeAmerica CollegeAmerica, a 9 college savings plan sponsored by Virginia9 ȘM is available nationwide and allows federal-tax-free earnings and withdrawals for a beneficiary s qualified higher education expenses. (Qualified with drawals from 9 plans are exempt from federal income tax. Qualified withdrawals may also be exempt from state income tax. Check with a tax advisor. If withdrawals are used for purposes other than higher education, the earnings will be subject to a 0% federal tax penalty in addition to federal and, if applicable, state income tax.) Interests in CollegeAmerica are sold through unaffiliated intermediaries. CollegeAmerica is distributed by American Funds Distributors, Inc. If you reside in a state other than Virginia, there may be an in-state plan that offers tax and other benefits not available through CollegeAmerica. Before investing in any state s 9 plan, you should consult your tax advisor. CollegeAmerica features four share classes. Class 9-A, 9-C and 9-F- shares are structured similarly to American Funds Class A, C and F- shares, respectively. Unless otherwise indicated, 9 share class details (including sales charges and share conversion) are generally the same as the corresponding American Funds share class. Class 9-E shares are structured similarly to Class 9-F- shares but are available only through eligible employer-sponsored plans. Unless otherwise indicated, Class 9-E share details are generally the same as Class 9-F- shares. New investments in Class 9-B shares are no longer allowed. More information and investment results for Class 9-B and 9-E shares can be found on americanfunds.com. Class 9-C shares do not convert to Class 9-F- shares after 0 years. Class 9-F- shares are available only through certain fee-based programs offered by broker-dealer firms and registered investment advisors. CollegeAmerica investors can contribute up to $,000 a year per beneficiary ($8,000 for married couples) without gift-tax consequences. With a special gift-tax election, five years worth of investments can be accelerated, so investors can contribute up to $70,000 at one time ($0,000 for married couples). Each beneficiary is limited to $0,000 in combined account values (including investments and earnings) of all 9 plans administered by Virginia9. Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. Invest ments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

10 Results at net asset value (NAV) do not reflect the funds maximum sales charges. If these had been deducted, results would have been lower. Results at maximum offering price (MOP) reflect deduction of the funds maximum sales charges (.7% for equity funds,.7% for most bond funds and.0% for shorter term* bond funds). Class A shares December, 0 annual total returns Without sales charge (NAV) With maximum sales charge (MOP) year % years % 0 years % year % years % 0 years % 0-day at MOP % Growth funds AMCAP Fund EuroPacific Growth Fund The Growth Fund of America The New Economy Fund New Perspective Fund New World Fund SMALLCAP World Fund Growth-and-income funds American Funds Developing World Growth and Income Fund SM American Mutual Fund Capital World Growth and Income Fund Fundamental Investors International Growth and Income Fund SM The Investment Company of America Washington Mutual Investors Fund SM Equity-income funds Capital Income Builder The Income Fund of America Balanced funds American Balanced Fund American Funds Global Balanced Fund Bond funds American Funds Inflation Linked Bond Fund * / American Funds Mortgage Fund American High-Income Trust The Bond Fund of America Capital World Bond Fund Intermediate Bond Fund of America * Short-Term Bond Fund of America * U.S. Government Securities Fund Tax-exempt bond funds American Funds Short-Term Tax-Exempt Bond Fund * American Funds Tax-Exempt Fund of New York / American High-Income Municipal Bond Fund Limited Term Tax-Exempt Bond Fund of America * The Tax-Exempt Bond Fund of America The Tax-Exempt Fund of California The Tax-Exempt Fund of Maryland The Tax-Exempt Fund of Virginia From January 0, 000, to October, 00, the maximum sales charge for Intermediate Bond Fund of America and Limited Term Tax-Exempt Bond Fund of America was.7%. expenses. ratios are as of each fund s prospectus available at the time of publication. The expense ratio for American Funds Inflation Linked Bond Fund is estimated. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. The investment adviser is currently reimbursing a portion of other expenses for American Funds Tax-Exempt Fund of New York. Investment results reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. This reimbursement will be in effect through at least September 0, 0, unless modified or terminated by the fund s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. Please see each fund s most recent prospectus for details. Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not. (net/gross) Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations October, 008. Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations December, 0. Fund lifetime return. The fund began operations November, Fund lifetime return. The fund began operations October, The Tax-Exempt Money Fund of America (inception: October, 989) converted to American Funds Short-Term Tax-Exempt Bond Fund on August 7, 009. Investment results shown do not include the fund s results for the period it operated as The Tax-Exempt Money Fund of America, whose results can be found in American Funds Short-Term Tax-Exempt Bond Fund s prospectus. 9 Fund lifetime return. The fund began operations August 7, 009.

11 Results at net asset value (NAV) do not reflect the funds maximum sales charges. If these had been deducted, results would have been lower. Results at maximum offering price (MOP) reflect deduction of the funds maximum sales charges (.7% for target date, Retirement Income Portfolio Series and most Portfolio Series* funds,.7% for American Funds Tax-Advantaged Income Portfolio and.0% for American Funds Preservation Portfolio and American Funds Tax-Exempt Preservation Portfolio). Class A shares December, 0 annual total returns Without sales charge (NAV) With maximum sales charge (MOP) year % years % 0 years % year % years % 0 years % 0-day at MOP % (net/gross) Money market fund American Funds Money Market Fund / Portfolio Series funds American Funds Global Growth Portfolio SM * / American Funds Growth Portfolio SM * / American Funds Growth and Income Portfolio SM * / American Funds Balanced Portfolio SM * / American Funds Income Portfolio SM * /. 0. American Funds Tax-Advantaged Income Portfolio SM / American Funds Preservation Portfolio SM / American Funds Tax-Exempt Preservation Portfolio SM /. 0.7 Target date funds American Funds 00 Target Date Retirement Fund SM / /. American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund /. 0.7 American Funds 0 Target Date Retirement Fund /. 0.7 American Funds 00 Target Date Retirement Fund / American Funds 0 Target Date Retirement Fund /. 0.7 American Funds 00 Target Date Retirement Fund /. 0.7 American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund / American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund / Retirement Income Portfolio Series funds American Funds Retirement Income Portfolio - Enhanced SM /. 0.7/0.8 American Funds Retirement Income Portfolio - Moderate SM /.8 0.7/0.8 American Funds Retirement Income Portfolio - Conservative SM /.7 0.7/0.80 expenses. ratios are as of each fund s prospectus available at the time of publication. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. Although American Funds Money Market Fund has b- plans for some share classes, the fund is currently suspending certain b- payments in this low interest rate environment. Should payments commence, the fund s investment results will be lower and expenses will be higher. Investment results for target date funds assume all distributions are reinvested and reflect applicable fees and expenses. The investment adviser is currently reimbursing a portion of other expenses for each share class of American Funds 00 Target Date Retirement Fund. The reimbursement will be in effect through at least January, 07, unless modified or terminated by the investment adviser. Investment results and net expense ratios reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. The expense ratios are as of each fund s prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for American Funds 00 Target Date Retirement Fund is estimated. Investment results for American Funds Retirement Income Portfolio Series funds assume all distributions are reinvested and reflect applicable fees and expenses. The investment adviser is currently reimbursing a portion of other expenses for funds in the American Funds Retirement Income Portfolio Series. Investment results and net expense ratios reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. The reimbursement will be in effect through at least January, 07, unless modified or terminated by the investment adviser. The expense ratios are as of each fund s prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratios for funds in the American Funds Retirement Income Portfolio Series are estimated. Investment allocations may not achieve fund objectives. Adequate income through retirement is not guaranteed for the Retirement Income Portfolio Series. There are expenses associated with the underlying funds in addition to fund-of-funds expenses. The funds risks are directly related to the risks of the underlying funds. For the Retirement Income Portfolio Series, payments consisting of return of capital will result in a decrease in an investor s fund share balance. Higher rates of withdrawal and withdrawals during declining markets may result in a more rapid decrease in an investor s fund share balance. Persistent returns of capital could ultimately result in a zero account balance. Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not. Fund lifetime return. The fund began operations May, 009. seven-day SEC yield, which more accurately reflects the fund s current earnings than does total return. Fund lifetime return. The fund began operations May 8, 0. Cumulative fund lifetime return. The fund began operations March 7, 0. Fund lifetime return. The fund began operations February, Fund lifetime return. The fund began operations February, Cumulative fund lifetime return. The fund began operations August 8, 0.

12 Results without CDSC do not reflect the contingent deferred sales charge. If the CDSC had been deducted, these results would have been lower. Results with CDSC reflect deduction of the % contingent deferred sales charge. Class C shares December, 0 annual total returns Without CDSC With CDSC year % years % 0 years % year % 0-day at NAV % Growth funds AMCAP Fund EuroPacific Growth Fund The Growth Fund of America The New Economy Fund New Perspective Fund New World Fund SMALLCAP World Fund Growth-and-income funds American Funds Developing World Growth and Income Fund American Mutual Fund Capital World Growth and Income Fund Fundamental Investors International Growth and Income Fund The Investment Company of America Washington Mutual Investors Fund Equity-income funds Capital Income Builder The Income Fund of America Balanced funds American Balanced Fund American Funds Global Balanced Fund Bond funds American Funds Inflation Linked Bond Fund /-..8 American Funds Mortgage Fund American High-Income Trust The Bond Fund of America Capital World Bond Fund Intermediate Bond Fund of America Short-Term Bond Fund of America U.S. Government Securities Fund Tax-exempt bond funds American Funds Tax-Exempt Fund of New York /0.90. American High-Income Municipal Bond Fund Limited Term Tax-Exempt Bond Fund of America The Tax-Exempt Bond Fund of America The Tax-Exempt Fund of California The Tax-Exempt Fund of Maryland The Tax-Exempt Fund of Virginia expenses. ratios are as of each fund s prospectus available at the time of publication. The expense ratio for American Funds Inflation Linked Bond Fund is estimated. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. The investment adviser is currently reimbursing a portion of other expenses for American Funds Tax-Exempt Fund of New York. Investment results reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. This reimbursement will be in effect through at least September 0, 0, unless modified or terminated by the fund s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. Please see each fund s most recent prospectus for details. Two SEC yields are shown for some funds. The first number reflects an expense reimbursement; the second does not. Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations October, 008. Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations December, 0. Fund lifetime return. The fund began operations November, Results for Short-Term Bond Fund of America include hypothetical returns based on Class A share results without a sales charge, adjusted for estimated additional annual expenses, because that fund s Class C shares sold after the fund s inception date of October, 00. Please see americanfunds.com for more information on specific expense adjustments and the actual date of first sale. 8 Fund lifetime return. The fund began operations October, 00.

13 Results without CDSC do not reflect the contingent deferred sales charge. If the CDSC had been deducted, these results would have been lower. Results with CDSC reflect deduction of the % contingent deferred sales charge. Class C shares December, 0 annual total returns Without CDSC With CDSC year % years % 0 years % year % 0-day at NAV % (net/gross) Money market fund American Funds Money Market Fund / Portfolio Series funds American Funds Global Growth Portfolio /0.. American Funds Growth Portfolio /-0.. American Funds Growth and Income Portfolio / American Funds Balanced Portfolio /0..9 American Funds Income Portfolio /.. American Funds Tax-Advantaged Income Portfolio /.88.9 American Funds Preservation Portfolio /0.9. American Funds Tax-Exempt Preservation Portfolio /.. Target date funds American Funds 00 Target Date Retirement Fund /-0..7/.8 American Funds 0 Target Date Retirement Fund /0.. American Funds 00 Target Date Retirement Fund /0.. American Funds 0 Target Date Retirement Fund /0.. American Funds 00 Target Date Retirement Fund /0.. American Funds 0 Target Date Retirement Fund /0.8. American Funds 00 Target Date Retirement Fund /0..9 American Funds 0 Target Date Retirement Fund /0..8 American Funds 00 Target Date Retirement Fund /0.7. American Funds 0 Target Date Retirement Fund /.. American Funds 00 Target Date Retirement Fund /.. Retirement Income Portfolio Series funds American Funds Retirement Income Portfolio - Enhanced /.8./. American Funds Retirement Income Portfolio - Moderate /../. American Funds Retirement Income Portfolio - Conservative /0../.0 expenses. ratios are as of each fund s prospectus available at the time of publication. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. Although American Funds Money Market Fund has b- plans for some share classes, the fund is currently suspending certain b- payments in this low interest rate environment. Should payments commence, the fund s investment results will be lower and expenses will be higher. Investment results for American Funds Retirement Income Portfolio Series funds assume all distributions are reinvested and reflect applicable fees and expenses. The investment adviser is currently reimbursing a portion of other expenses for funds in the American Funds Retirement Income Portfolio Series. Investment results and net expense ratios reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. The reimbursement will be in effect through at least January, 07, unless modified or terminated by the investment adviser. The expense ratios are as of each fund s prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratios for funds in the American Funds Retirement Income Portfolio Series are estimated. Investment results for target date funds assume all distributions are reinvested and reflect applicable fees and expenses. The investment adviser is currently reimbursing a portion of other expenses for each share class of American Funds 00 Target Date Retirement Fund. The reimbursement will be in effect through at least January, 07, unless modified or terminated by the investment adviser. Investment results and net expense ratios reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. The expense ratios are as of each fund s prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for American Funds 00 Target Date Retirement Fund is estimated. Investment allocations may not achieve fund objectives. Adequate income through retirement is not guaranteed for the Retirement Income Portfolio Series. There are expenses associated with the underlying funds in addition to fund-of-funds expenses. The funds risks are directly related to the risks of the underlying funds. For the Retirement Income Portfolio Series, payments consisting of return of capital will result in a decrease in an investor s fund share balance. Higher rates of withdrawal and withdrawals during declining markets may result in a more rapid decrease in an investor s fund share balance. Persistent returns of capital could ultimately result in a zero account balance. Class C shares were first offered on March, 00 (on February, 0, in funds in the American Funds Target Date Retirement Series). Class C share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for estimated additional annual expenses. Class C shares convert to Class F- shares after 0 years. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale. Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not. Fund lifetime return. The fund began operations May, 009. seven-day SEC yield, which more accurately reflects the fund s current earnings than does total return. Fund lifetime return. The fund began operations May 8, 0. Cumulative fund lifetime return. The fund began operations March 7, 0. 7 Fund lifetime return. The fund began operations February, Fund lifetime return. The fund began operations February, Cumulative fund lifetime return. The fund began operations August 8, 0.

14 Class F- shares December, 0 annual total returns year % years % 0 years % 0-day at NAV % Growth funds AMCAP Fund EuroPacific Growth Fund The Growth Fund of America The New Economy Fund New Perspective Fund New World Fund SMALLCAP World Fund Growth-and-income funds American Funds Developing World Growth and Income Fund American Mutual Fund Capital World Growth and Income Fund Fundamental Investors International Growth and Income Fund The Investment Company of America Washington Mutual Investors Fund Equity-income funds Capital Income Builder The Income Fund of America Balanced funds American Balanced Fund American Funds Global Balanced Fund Bond funds American Funds Inflation Linked Bond Fund American Funds Mortgage Fund American High-Income Trust The Bond Fund of America Capital World Bond Fund Intermediate Bond Fund of America Short-Term Bond Fund of America U.S. Government Securities Fund Tax-exempt bond funds American Funds Short-Term Tax-Exempt Bond Fund 7, American Funds Tax-Exempt Fund of New York / American High-Income Municipal Bond Fund Limited Term Tax-Exempt Bond Fund of America The Tax-Exempt Bond Fund of America The Tax-Exempt Fund of California The Tax-Exempt Fund of Maryland The Tax-Exempt Fund of Virginia expenses. ratios are as of each fund s prospectus available at the time of publication. The expense ratio for American Funds Inflation Linked Bond Fund is estimated. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. The investment adviser is currently reimbursing a portion of other expenses for American Funds Tax-Exempt Fund of New York. Investment results reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. This reimbursement will be in effect through at least September 0, 0, unless modified or terminated by the fund s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. Please see each fund s most recent prospectus for details. Two SEC yields are shown for some funds. The first number reflects an expense reimbursement; the second does not. Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations October, 008. Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations December, 0. Fund lifetime return. The fund began operations November, Results for Short-Term Bond Fund of America and American Funds Short-Term Tax-Exempt Bond Fund include hypothetical returns based on Class A share results without a sales charge, adjusted for estimated additional annual expenses, because those funds Class F- shares sold after the funds inception dates of October, 00, and August 7, 009, respectively. Please see americanfunds.com for more information on specific expense adjustments and actual dates of first sale. 8 Fund lifetime return. The fund began operations October, The Tax-Exempt Money Fund of America (inception: October, 989) converted to American Funds Short-Term Tax-Exempt Bond Fund on August 7, 009. Investment results shown do not include the fund s results for the period it operated as The Tax-Exempt Money Fund of America, whose results can be found in American Funds Short-Term Tax-Exempt Bond Fund s prospectus. 0 Fund lifetime return. The fund began operations August 7, 009.

15 Class F- shares December, 0 annual total returns year % years % 0 years % 0-day at NAV % (net/gross) Money market fund American Funds Money Market Fund / Portfolio Series funds American Funds Global Growth Portfolio / American Funds Growth Portfolio..7 0./ American Funds Growth and Income Portfolio / American Funds Balanced Portfolio / American Funds Income Portfolio -...8/ American Funds Tax-Advantaged Income Portfolio /. 0.7 American Funds Preservation Portfolio / American Funds Tax-Exempt Preservation Portfolio.9..8/ Target date funds American Funds 00 Target Date Retirement Fund / /.09 American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund / American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund / American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund / American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund /. 0.7 American Funds 0 Target Date Retirement Fund / American Funds 00 Target Date Retirement Fund /. 0.7 Retirement Income Portfolio Series funds American Funds Retirement Income Portfolio - Enhanced.0 9./. 0.7/0.8 American Funds Retirement Income Portfolio - Moderate.0 9.8/.8 0.7/0.8 American Funds Retirement Income Portfolio - Conservative /. 0.7/0.8 expenses. ratios are as of each fund s prospectus available at the time of publication. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. Although American Funds Money Market Fund has b- plans for some share classes, the fund is currently suspending certain b- payments in this low interest rate environment. Should payments commence, the fund s investment results will be lower and expenses will be higher. Investment results for American Funds Retirement Income Portfolio Series funds assume all distributions are reinvested and reflect applicable fees and expenses. The investment adviser is currently reimbursing a portion of other expenses for funds in the American Funds Retirement Income Portfolio Series. Investment results and net expense ratios reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. The reimbursement will be in effect through at least January, 07, unless modified or terminated by the investment adviser. The expense ratios are as of each fund s prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratios for funds in the American Funds Retirement Income Portfolio Series are estimated. Investment results for target date funds assume all distributions are reinvested and reflect applicable fees and expenses. The investment adviser is currently reimbursing a portion of other expenses for each share class of American Funds 00 Target Date Retirement Fund. The reimbursement will be in effect through at least January, 07, unless modified or terminated by the investment adviser. Investment results and net expense ratios reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. The expense ratios are as of each fund s prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for American Funds 00 Target Date Retirement Fund is estimated. Investment allocations may not achieve fund objectives. Adequate income through retirement is not guaranteed for the Retirement Income Portfolio Series. There are expenses associated with the underlying funds in addition to fund-of-funds expenses. The funds risks are directly related to the risks of the underlying funds. For the Retirement Income Portfolio Series, payments consisting of return of capital will result in a decrease in an investor s fund share balance. Higher rates of withdrawal and withdrawals during declining markets may result in a more rapid decrease in an investor s fund share balance. Persistent returns of capital could ultimately result in a zero account balance. Class F- shares were first offered on March, 00 (on February, 0, in funds in the American Funds Target Date Retirement Series). Class F- share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for estimated additional annual expenses. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale. Two SEC yields are shown for some funds. The first number reflects the fee waiver and/or reimbursement; the second does not. Fund lifetime return. The fund began operations May, 009. seven-day SEC yield, which more accurately reflects the fund s current earnings than does total return. Fund lifetime return. The fund began operations May 8, 0. Cumulative fund lifetime return. The fund began operations March 7, 0. 7 Fund lifetime return. The fund began operations February, Fund lifetime return. The fund began operations February, Cumulative fund lifetime return. The fund began operations August 8, 0. 7

16 Class F- shares December, 0 annual total returns year % years % 0 years % 0-day at NAV % Growth funds AMCAP Fund EuroPacific Growth Fund The Growth Fund of America The New Economy Fund New Perspective Fund New World Fund SMALLCAP World Fund Growth-and-income funds American Funds Developing World Growth and Income Fund American Mutual Fund Capital World Growth and Income Fund Fundamental Investors International Growth and Income Fund The Investment Company of America Washington Mutual Investors Fund Equity-income funds Capital Income Builder The Income Fund of America Balanced funds American Balanced Fund American Funds Global Balanced Fund Bond funds American Funds Inflation Linked Bond Fund American Funds Mortgage Fund American High-Income Trust The Bond Fund of America Capital World Bond Fund Intermediate Bond Fund of America Short-Term Bond Fund of America U.S. Government Securities Fund Tax-exempt bond funds American Funds Short-Term Tax-Exempt Bond Fund American Funds Tax-Exempt Fund of New York /.8 0. American High-Income Municipal Bond Fund Limited Term Tax-Exempt Bond Fund of America The Tax-Exempt Bond Fund of America The Tax-Exempt Fund of California The Tax-Exempt Fund of Maryland The Tax-Exempt Fund of Virginia expenses. ratios are as of each fund s prospectus available at the time of publication. The expense ratio for American Funds Inflation Linked Bond Fund is estimated. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. The investment adviser is currently reimbursing a portion of other expenses for American Funds Tax-Exempt Fund of New York. Investment results reflect the reimbursement, without which the results would have been lower and the expenses would have been higher. This reimbursement will be in effect through at least September 0, 0, unless modified or terminated by the fund s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. Please see each fund s most recent prospectus for details. Results for certain funds with an inception date after August, 008, also include hypothetical returns because those funds Class F- shares sold after the funds date of first offering. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale. Two SEC yields are shown for some funds. The first number reflects an expense reimbursement; the second does not. Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations October, 008. Fund lifetime return. The fund began operations February, 0. Fund lifetime return. The fund began operations December, 0. 7 Fund lifetime return. The fund began operations November, Fund lifetime return. The fund began operations October, The Tax-Exempt Money Fund of America (inception: October, 989) converted to American Funds Short-Term Tax-Exempt Bond Fund on August 7, 009. Investment results shown do not include the fund s results for the period it operated as The Tax-Exempt Money Fund of America, whose results can be found in American Funds Short-Term Tax-Exempt Bond Fund s prospectus. 0 Fund lifetime return. The fund began operations August 7,