Form N-Q AMERICAN FUNDS INFLATION For: Aug 31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
Quarterly Schedule of Portfolio Holdings of
Registered Management Investment Company
Investment Company Act File Number: 811-22746
American Funds Inflation Linked Bond Fund
(Exact Name of Registrant as Specified in Charter)
6455 Irvine Center Drive
Irvine, California 92618
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (213) 486-9200
Date of fiscal year end: November 30
Date of reporting period: August 31, 2016
Steven I. Koszalka
American Funds Inflation Linked Bond Fund
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
ITEM 1 – Schedule of Investments
Bonds, notes & other debt instruments 94.68% U.S. Treasury bonds & notes 88.04% U.S. Treasury inflation-protected securities 86.93% |
Principal amount (000) |
Value (000) |
U.S. Treasury Inflation-Protected Security 0.125% 20181 | $6,881 | $6,915 |
U.S. Treasury Inflation-Protected Security 1.875% 20191 | 30,702 | 32,735 |
U.S. Treasury Inflation-Protected Security 1.375% 20201 | 28,978 | 30,532 |
U.S. Treasury Inflation-Protected Security 0.125% 20211 | 105,758 | 106,827 |
U.S. Treasury Inflation-Protected Security 0.625% 20211,2 | 74,854 | 77,722 |
U.S. Treasury Inflation-Protected Security 1.125% 20211 | 11,018 | 11,614 |
U.S. Treasury Inflation-Protected Security 0.125% 20221 | 60,696 | 61,262 |
U.S. Treasury Inflation-Protected Security 0.125% 20221 | 32,385 | 32,747 |
U.S. Treasury Inflation-Protected Security 0.125% 20231 | 31,272 | 31,459 |
U.S. Treasury Inflation-Protected Security 0.375% 20231 | 27,962 | 28,689 |
U.S. Treasury Inflation-Protected Security 0.125% 20241 | 142,509 | 143,126 |
U.S. Treasury Inflation-Protected Security 0.625% 20241 | 1,033 | 1,074 |
U.S. Treasury Inflation-Protected Security 0.25% 20251 | 221,930 | 223,902 |
U.S. Treasury Inflation-Protected Security 0.375% 20251 | 71,447 | 73,068 |
U.S. Treasury Inflation-Protected Security 2.375% 20251 | 29,983 | 35,474 |
U.S. Treasury Inflation-Protected Security 0.125% 20261 | 52,284 | 52,374 |
U.S. Treasury Inflation-Protected Security 0.625% 20261 | 31,951 | 33,314 |
U.S. Treasury Inflation-Protected Security 2.00% 20261 | 76,501 | 89,110 |
U.S. Treasury Inflation-Protected Security 2.375% 20271 | 37,287 | 45,353 |
U.S. Treasury Inflation-Protected Security 1.75% 20281 | 70,177 | 81,726 |
U.S. Treasury Inflation-Protected Security 2.50% 20291 | 2,245 | 2,841 |
U.S. Treasury Inflation-Protected Security 2.125% 20401 | 22,302 | 29,855 |
U.S. Treasury Inflation-Protected Security 2.125% 20411 | 33,017 | 44,630 |
U.S. Treasury Inflation-Protected Security 0.75% 20421 | 53,330 | 55,287 |
U.S. Treasury Inflation-Protected Security 0.625% 20431 | 10,483 | 10,577 |
U.S. Treasury Inflation-Protected Security 1.375% 20441 | 31,127 | 37,171 |
U.S. Treasury Inflation-Protected Security 1.00% 20461 | 101,966 | 113,705 |
1,493,089 | ||
U.S. Treasury 1.11% | ||
U.S. Treasury 1.50% 2026 | 19,250 | 19,113 |
Total U.S. Treasury bonds & notes | 1,512,202 | |
Bonds & notes of governments & government agencies outside the U.S. 3.85% | ||
Colombia (Republic of) 5.00% 2045 | 600 | 653 |
Japan, Series 18, 0.10% 20241 | ¥2,201,600 | 22,236 |
Japan, Series 20, 0.10% 20251 | 4,241,500 | 43,229 |
South Africa (Republic of), Series 197, 5.50% 20231 | ZAR651 | 55 |
66,173 | ||
Corporate bonds & notes 2.72% Information technology 1.31% |
||
Apple Inc. 3.85% 2046 | $9,040 | 9,394 |
Microsoft Corp. 3.70% 2046 | 12,500 | 13,022 |
22,416 |
Bonds, notes & other debt instruments Corporate bonds & notes (continued) Energy 0.83% |
Principal amount (000) |
Value (000) |
Ecopetrol SA 5.375% 2026 | $2,820 | $2,905 |
Ecopetrol SA 5.875% 2045 | 545 | 513 |
Ensco PLC 5.20% 2025 | 1,625 | 1,174 |
Petróleos Mexicanos 7.47% 2026 | MXN199,130 | 9,593 |
14,185 | ||
Health care 0.45% | ||
AbbVie Inc. 4.45% 2046 | $2,000 | 2,150 |
Aetna Inc. 4.25% 2036 | 2,730 | 2,849 |
Aetna Inc. 4.375% 2046 | 2,355 | 2,459 |
Pfizer Inc. 0.953% 20183 | 300 | 301 |
7,759 | ||
Consumer discretionary 0.07% | ||
Newell Rubbermaid Inc. 3.85% 2023 | 1,190 | 1,269 |
Utilities 0.04% | ||
Exelon Corp. 4.45% 2046 | 660 | 737 |
Financials 0.02% | ||
American Express Co. 1.401% 20183 | 300 | 300 |
Total corporate bonds & notes | 46,666 | |
Asset-backed obligations 0.05% | ||
Avant Loans Funding Trust, Series 2015-A, Class A, 4.00% 20214,5 | 769 | 773 |
Mortgage-backed obligations 0.02% Commercial mortgage-backed securities 0.02% |
||
CS First Boston Mortgage Securities Corp., Series 2007-C2, Class A-M, 5.615% 20493,5 | 200 | 203 |
Greenwich Capital Commercial Funding Corp., Series 2007-GG11, Class A-M, 5.867% 20493,5 | 156 | 160 |
Total mortgage-backed obligations | 363 | |
Total bonds, notes & other debt instruments (cost: $1,577,618,000) | 1,626,177 | |
Short-term securities 0.74% | ||
General Electric Co. 0.34% due 9/1/2016 | 12,750 | 12,750 |
Total short-term securities (cost: $12,750,000) | 12,750 | |
Total investment securities 95.42% (cost: $1,590,368,000) | 1,638,927 | |
Other assets less liabilities 4.58% | 78,695 | |
Net assets 100.00% | $1,717,622 |
Settlement date |
Counterparty | Contract amount | Unrealized (depreciation) appreciation at 8/31/2016 (000) | ||
Receive (000) |
Deliver (000) | ||||
Purchases: | |||||
British pounds | 11/4/2016 | Bank of America, N.A. | £6,927 | $9,220 | $(111) |
Mexican pesos | 9/13/2016 | JPMorgan Chase | MXN286,000 | $15,077 | 111 |
Mexican pesos | 10/7/2016 | Bank of America, N.A. | MXN45,605 | $2,471 | (54) |
$(54) | |||||
Sales: | |||||
Canadian dollars | 10/6/2016 | JPMorgan Chase | $14,543 | C$19,000 | $52 |
Japanese yen | 9/12/2016 | JPMorgan Chase | $15,391 | ¥1,555,000 | 355 |
Japanese yen | 9/12/2016 | Citibank | $6,629 | ¥670,000 | 151 |
Japanese yen | 9/21/2016 | JPMorgan Chase | $15,366 | ¥1,555,000 | 322 |
Japanese yen | 9/28/2016 | Barclays Bank PLC | $45,143 | ¥4,525,000 | 1,351 |
Japanese yen | 9/28/2016 | UBS AG | $150 | ¥15,000 | 4 |
Japanese yen | 11/2/2016 | Bank of America, N.A. | $4,134 | ¥429,000 | (23) |
Mexican pesos | 9/26/2016 | Bank of America, N.A. | $12,071 | MXN221,200 | 339 |
Norwegian kroner | 9/8/2016 | Citibank | $13,231 | NKr113,650 | (408) |
South Korean won | 9/12/2016 | JPMorgan Chase | $14,858 | KRW16,369,550 | 178 |
$2,321 | |||||
Forward currency contracts — net | $2,267 |
Pay/receive fixed rate |
Clearinghouse | Floating rate index | Fixed rate |
Expiration date |
Notional (000) |
Unrealized appreciation (depreciation) at 8/31/2016 (000) |
Pay | LCH | 3-month USD-LIBOR | 1.0035% | 8/30/2018 | $430,000 | $392 |
Receive | LCH | 3-month USD-LIBOR | 2.8 | 9/2/2022 | 280,000 | 7,056 |
Receive | LCH | 3-month USD-LIBOR | 2.75 | 9/2/2022 | 280,000 | 6,787 |
Receive | LCH | 3-month USD-LIBOR | 1.5675 | 8/17/2023 | 270,000 | (35) |
Receive | LCH | 3-month USD-LIBOR | 1.2785 | 8/30/2023 | 126,000 | (333) |
Pay | LCH | 6-month JPY-LIBOR | 0.228 | 2/8/2026 | ¥4,250,000 | (631) |
Pay | LCH | 6-month JPY-LIBOR | 0.20125 | 2/18/2026 | 1,515,000 | (187) |
Pay | LCH | 3-month USD-LIBOR | 1.615 | 5/10/2026 | $68,000 | (1,150) |
Pay | LCH | 3-month USD-LIBOR | 1.5465 | 6/22/2026 | 32,000 | (329) |
Pay | LCH | 6-month GBP-LIBOR | 0.7677 | 8/9/2026 | £35,000 | (400) |
Pay | LCH | 3-month USD-LIBOR | 2.97125 | 9/2/2030 | $57,050 | (6,445) |
Pay | LCH | 3-month USD-LIBOR | 3.005 | 9/2/2030 | 57,050 | (6,620) |
Pay | LCH | 3-month USD-LIBOR | 1.83 | 8/17/2031 | 58,000 | (293) |
Pay | LCH | 3-month USD-LIBOR | 2.6565 | 8/21/2045 | 20,000 | (4,692) |
Pay | LCH | 3-month USD-LIBOR | 2.616 | 1/5/2046 | 34,000 | (7,712) |
Pay | LCH | US Federal Funds Effective Rate | 1.46 | 7/25/2046 | 24,000 | (1,117) |
Pay | LCH | 3-month USD-LIBOR | 1.826 | 7/28/2046 | 20,000 | (644) |
Pay | LCH | 3-month USD-LIBOR | 1.741 | 8/17/2046 | 21,000 | (228) |
$(16,581) |
Referenced index | Clearinghouse | Pay fixed rate |
Expiration date |
Notional (000) |
Value (000) |
Upfront premiums paid (000) |
Unrealized depreciation at 8/31/2016 (000) |
CDX.NA.IG.26 | ICE | 1.00% | 6/20/2021 | $105,000 | $(1,316) | $(995) | $(321) |
Contracts | Clearinghouse | Type | Number of contracts |
Expiration | Notional amount (000) |
Unrealized appreciation (depreciation) at 8/31/2016 (000) |
90 Day Euro Dollar Futures | CME | Long | 6,400 | December 2016 | $1,584,721 | $79 |
10 Year U.S. Treasury Note Futures | CME | Long | 1,955 | December 2016 | 256,013 | (61) |
20 Year U.S. Treasury Bond Futures | CME | Short | 794 | December 2016 | 135,277 | (1) |
30 Year Ultra U.S. Treasury Bond Futures | CME | Short | 80 | December 2016 | 14,989 | (9) |
5 Year U.S. Treasury Note Futures | CME | Long | 1,171 | January 2017 | 141,778 | 206 |
90 Day Euro Dollar Futures | CME | Short | 800 | December 2017 | 197,708 | (51) |
$163 |
1 | Index-linked bond whose principal amount moves with a government price index. |
2 | A portion of this security was pledged as collateral. The total value of pledged collateral was $33,429,000, which represented 1.95% of the net assets of the fund. |
3 | Coupon rate may change periodically. |
4 | Acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $773,000, which represented .05% of the net assets of the fund. |
5 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
Fixed-income class | Examples of standard inputs |
All | Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”) |
Corporate bonds & notes; convertible securities | Standard inputs and underlying equity of the issuer |
Bonds & notes of governments & government agencies | Standard inputs and interest rate volatilities |
Mortgage-backed; asset-backed obligations | Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information |
Investment securities | ||||
Level 1 | Level 2 | Level 3 | Total | |
Assets: | ||||
Bonds, notes & other debt instruments: | ||||
U.S. Treasury bonds & notes | $— | $1,512,202 | $— | $1,512,202 |
Bonds & notes of governments & government agencies outside the U.S. | — | 66,173 | — | 66,173 |
Corporate bonds & notes | — | 46,666 | — | 46,666 |
Asset-backed obligations | — | 773 | — | 773 |
Mortgage-backed obligations | — | 363 | — | 363 |
Short-term securities | — | 12,750 | — | 12,750 |
Total | $— | $1,638,927 | $— | $1,638,927 |
Other investments* | ||||
Level 1 | Level 2 | Level 3 | Total | |
Assets: | ||||
Unrealized appreciation on open forward currency contracts | $— | $2,863 | $— | $2,863 |
Unrealized appreciation on interest rate swaps | — | 14,235 | — | 14,235 |
Unrealized appreciation on futures contracts | 285 | — | — | 285 |
Liabilities: | ||||
Unrealized depreciation on open forward currency contracts | — | (596) | — | (596) |
Unrealized depreciation on interest rate swaps | — | (30,816) | — | (30,816) |
Unrealized depreciation on credit default swaps | — | (321) | — | (321) |
Unrealized depreciation on futures contracts | (122) | — | — | (122) |
Total | $163 | $(14,635) | $— | $(14,472) |
* | Forward currency contracts, interest rate swaps, credit default swaps and futures contracts are not included in the investment portfolio. |
Federal income tax information | (dollars in thousands) |
Gross unrealized appreciation on investment securities | $55,442 |
Gross unrealized depreciation on investment securities | (7,862) |
Net unrealized appreciation on investment securities | 47,580 |
Cost of investment securities | 1,591,347 |
Key to abbreviations and symbols | ||
C$ = Canadian dollars | LCH = LCH.Clearnet | |
CME = CME Group | LIBOR = London Interbank Offered Rate | |
GBP/£ = British pounds | MXN = Mexican pesos | |
ICE = Intercontinental Exchange, Inc. | NKr = Norwegian kroner | |
JPY/¥ = Japanese yen | ZAR = South African rand | |
KRW = South Korean won |
MFGEFPX-060-1016O-S54067 | American Funds Inflation Linked Bond Fund — Page 7 of 7 |
ITEM 2 – Controls and Procedures
The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.
There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 3 – Exhibits
The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN FUNDS INFLATION LINKED BOND FUND | |
By /s/ David A. Hoag | |
David A. Hoag, President and Principal Executive Officer | |
Date: October 28, 2016 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By /s/ David A. Hoag |
David A. Hoag, President and Principal Executive Officer |
Date: October 28, 2016 |
By /s/ Brian C. Janssen |
Brian C. Janssen, Treasurer and Principal Financial Officer |
Date: October 28, 2016 |
American Funds Inflation Linked Bond Fund 6455 Irvine Center Drive Irvine, California 92618 (213) 486-9200 |
CERTIFICATION
I, David A. Hoag, certify that:
1. | I have reviewed this report on Form N-Q of American Funds Inflation Linked Bond Fund; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which this report is filed; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and | |
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's Board of Trustees (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and | |
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: October 28, 2016
/s/ David A. Hoag
David A. Hoag, President and
Principal Executive Officer
American Funds Inflation Linked Bond Fund
American Funds Inflation Linked Bond Fund 6455 Irvine Center Drive Irvine, California 92618 (213) 486-9200 |
CERTIFICATION
I, Brian C. Janssen, certify that:
1. | I have reviewed this report on Form N-Q of American Funds Inflation Linked Bond Fund; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which this report is filed; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and | |
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
5. | The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's Board of Trustees (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and | |
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: October 28, 2016
/s/ Brian C. Janssen
Brian C. Janssen, Treasurer and
Principal Financial Officer
American Funds Inflation Linked Bond Fund
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