Form N-Q AMERICAN FUNDS PORTFOLIO For: Jul 31
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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: 811-22656
American Funds Portfolio Series
(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: October 31
Date of reporting period: July 31, 2016
Steven I. Koszalka
American Funds Portfolio Series
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
ITEM 1 – Schedule of Investments
unaudited
| Fund investments Growth funds 70% |
Shares | Value (000) |
| The New Economy Fund, Class R-6 | 9,926,963 | $360,647 |
| New Perspective Fund, Class R-6 | 14,501,217 | 539,445 |
| New World Fund, Inc., Class R-6 | 6,725,235 | 359,934 |
| 1,260,026 | ||
| Growth-and-income funds 30% | ||
| Capital World Growth and Income Fund, Class R-6 | 11,890,274 | 538,273 |
| Total investment securities 100% (cost: $1,767,106,000) | 1,798,299 | |
| Other assets less liabilities 0% | (629) | |
| Net assets 100% | $1,797,670 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $43,982 |
| Gross unrealized depreciation on investment securities | (14,606) |
| Net unrealized appreciation on investment securities | 29,376 |
| Cost of investment securities | 1,768,923 |
American Funds Portfolio Series — American
Funds Global Growth Portfolio — Page 1 of 9
unaudited
| Fund investments Growth funds 70% |
Shares | Value (000) |
| AMCAP Fund, Class R-6 | 44,327,205 | $1,204,370 |
| EuroPacific Growth Fund, Class R-6 | 21,888,991 | 1,019,589 |
| SMALLCAP World Fund, Inc., Class R-6 | 13,152,684 | 611,469 |
| 2,835,428 | ||
| Growth-and-income funds 30% | ||
| Fundamental Investors, Class R-6 | 22,476,745 | 1,202,955 |
| Total investment securities 100% (cost: $3,924,112,000) | 4,038,383 | |
| Other assets less liabilities 0% | (1,550) | |
| Net assets 100% | $4,036,833 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $113,014 |
| Gross unrealized depreciation on investment securities | — |
| Net unrealized appreciation on investment securities | 113,014 |
| Cost of investment securities | 3,925,369 |
American Funds Portfolio Series — American
Funds Growth Portfolio — Page 2 of 9
unaudited
| Fund investments Growth funds 20% |
Shares | Value (000) |
| The Growth Fund of America, Class R-6 | 27,674,185 | $1,198,016 |
| Growth-and-income funds 40% | ||
| Capital World Growth and Income Fund, Class R-6 | 26,470,391 | 1,198,314 |
| The Investment Company of America, Class R-6 | 32,422,879 | 1,187,326 |
| 2,385,640 | ||
| Equity-income and Balanced funds 25% | ||
| Capital Income Builder, Class R-6 | 24,706,917 | 1,478,956 |
| Fixed income funds 15% | ||
| Capital World Bond Fund, Class R-6 | 43,707,460 | 894,255 |
| Total investment securities 100% (cost: $5,702,420,000) | 5,956,867 | |
| Other assets less liabilities 0% | (2,222) | |
| Net assets 100% | $5,954,645 |
Investments in affiliates
This holding is an affiliate of
the fund under the Investment Company Act of 1940 since the fund holds 5% or more of its outstanding voting shares. Further details on this holding and related transactions during the nine months ended July 31, 2016,
appear below.
| Beginning shares |
Additions | Reductions | Ending shares |
Dividend income (000) |
Value of affiliates at 7/31/2016 (000) | |
| Capital World Bond Fund, Class R-6 | 38,079,140 | 5,740,975 | 112,655 | 43,707,460 | $11,020 | $894,255 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $253,546 |
| Gross unrealized depreciation on investment securities | — |
| Net unrealized appreciation on investment securities | 253,546 |
| Cost of investment securities | 5,703,321 |
American Funds Portfolio Series — American
Funds Growth and Income Portfolio — Page 3 of 9
unaudited
| Fund investments Growth funds 20% |
Shares | Value (000) |
| New Perspective Fund, Class R-6 | 27,762,743 | $1,032,774 |
| Growth-and-income funds 20% | ||
| Capital World Growth and Income Fund, Class R-6 | 11,309,540 | 511,983 |
| Washington Mutual Investors Fund, Class R-6 | 12,221,797 | 502,683 |
| 1,014,666 | ||
| Equity-income and Balanced funds 40% | ||
| American Balanced Fund, Class R-6 | 40,253,685 | 1,009,160 |
| American Funds Global Balanced Fund, Class R-6 | 33,363,927 | 1,013,596 |
| 2,022,756 | ||
| Fixed income funds 20% | ||
| The Bond Fund of America, Class R-6 | 76,715,138 | 1,010,338 |
| Total investment securities 100% (cost: $4,811,125,000) | 5,080,534 | |
| Other assets less liabilities 0% | (2,129) | |
| Net assets 100% | $5,078,405 |
Investments in affiliates
This holding is an affiliate of
the fund under the Investment Company Act of 1940 since the fund holds 5% or more of its outstanding voting shares. Further details on this holding and related transactions during the nine months ended July 31, 2016,
appear below.
| Beginning shares |
Additions | Reductions | Ending shares |
Dividend income (000) |
Value of affiliates at 7/31/2016 (000) | |
| American Funds Global Balanced Fund, Class R-6 | 26,894,799 | 6,469,128 | — | 33,363,927 | $13,146 | $1,013,596 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $267,985 |
| Gross unrealized depreciation on investment securities | — |
| Net unrealized appreciation on investment securities | 267,985 |
| Cost of investment securities | 4,812,549 |
American Funds Portfolio Series — American
Funds Balanced Portfolio — Page 4 of 9
unaudited
| Fund investments Growth-and-income funds 20% |
Shares | Value (000) |
| American Mutual Fund, Class R-6 | 20,048,326 | $748,003 |
| Equity-income and Balanced funds 50% | ||
| Capital Income Builder, Class R-6 | 15,649,878 | 936,802 |
| The Income Fund of America, Class R-6 | 43,062,365 | 934,884 |
| 1,871,686 | ||
| Fixed income funds 30% | ||
| American High-Income Trust, Class R-6 | 56,112,519 | 561,686 |
| U.S. Government Securities Fund, Class R-6 | 39,494,077 | 562,396 |
| 1,124,082 | ||
| Total investment securities 100% (cost: $3,578,521,000) | 3,743,771 | |
| Other assets less liabilities 0% | (1,429) | |
| Net assets 100% | $3,742,342 |
Investments in affiliates
This holding is an affiliate of
the fund under the Investment Company Act of 1940 since the fund holds 5% or more of its outstanding voting shares. Further details on this holding and related transactions during the nine months ended July 31, 2016,
appear below.
| Beginning shares |
Additions | Reductions | Ending shares |
Dividend income (000) |
Value of affiliates at (000) | |
| U.S. Government Securities Fund, Class R-6 | 43,703,109 | 7,589,927 | 11,798,959 | 39,494,077 | $6,197 | $562,396 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $221,288 |
| Gross unrealized depreciation on investment securities | (59,419) |
| Net unrealized appreciation on investment securities | 161,869 |
| Cost of investment securities | 3,581,902 |
American Funds Portfolio Series — American
Funds Income Portfolio — Page 5 of 9
unaudited
| Fund investments Growth-and-income funds 50% |
Shares | Value (000) |
| Capital World Growth and Income Fund, Class R-6 | 6,058,563 | $274,271 |
| Washington Mutual Investors Fund, Class R-6 | 6,543,791 | 269,146 |
| 543,417 | ||
| Tax-exempt fixed income funds 50% | ||
| American High-Income Municipal Bond Fund, Class R-6 | 16,602,354 | 269,124 |
| The Tax-Exempt Bond Fund of America, Class R-6 | 20,083,892 | 269,125 |
| 538,249 | ||
| Total investment securities 100% (cost: $1,025,309,000) | 1,081,666 | |
| Other assets less liabilities 0% | (472) | |
| Net assets 100% | $1,081,194 |
Investments in affiliates
This holding is an affiliate of
the fund under the Investment Company Act of 1940 since the fund holds 5% or more of its outstanding voting shares. Further details on this holding and related transactions during the nine months ended July 31, 2016,
appear below.
| Beginning shares |
Additions | Reductions | Ending shares |
Dividend income (000) |
Value of affiliates at 7/31/2016 (000) | |
| American High-Income Municipal Bond Fund, Class R-6 | 12,970,358 | 3,659,009 | 27,013 | 16,602,354 | $7,134 | $269,124 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $55,833 |
| Gross unrealized depreciation on investment securities | — |
| Net unrealized appreciation on investment securities | 55,833 |
| Cost of investment securities | 1,025,833 |
American Funds Portfolio Series — American
Funds Tax-Advantaged Income Portfolio — Page 6 of 9
unaudited
| Fund investments Fixed income funds 100% |
Shares | Value (000) |
| The Bond Fund of America, Class R-6 | 17,636,373 | $232,271 |
| Intermediate Bond Fund of America, Class R-6 | 33,957,754 | 464,542 |
| Short-Term Bond Fund of America, Class R-6 | 46,407,800 | 464,542 |
| 1,161,355 | ||
| Total investment securities 100% (cost: $1,152,903,000) | 1,161,355 | |
| Other assets less liabilities 0% | (505) | |
| Net assets 100% | $1,160,850 |
Investments in affiliates
This holding is an affiliate of
the fund under the Investment Company Act of 1940 since the fund holds 5% or more of its outstanding voting shares. Further details on this holding and related transactions during the nine months ended July 31, 2016,
appear below.
| Beginning shares |
Additions | Reductions | Ending shares |
Dividend income (000) |
Value of affiliates at 7/31/2016 (000) | |
| Short-Term Bond Fund of America, Class R-6 | 35,637,520 | 11,473,841 | 703,561 | 46,407,800 | $3,369 | $464,542 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $7,805 |
| Gross unrealized depreciation on investment securities | (656) |
| Net unrealized appreciation on investment securities | 7,149 |
| Cost of investment securities | 1,154,206 |
American Funds Portfolio Series — American
Funds Preservation Portfolio — Page 7 of 9
unaudited
| Fund investments Tax-exempt fixed income funds 100% |
Shares | Value (000) |
| Limited Term Tax-Exempt Bond Fund of America, Class R-6 | 17,678,402 | $283,562 |
| The Tax-Exempt Bond Fund of America, Class R-6 | 9,069,134 | 121,526 |
| 405,088 | ||
| Total investment securities 100% (cost: $402,945,000) | 405,088 | |
| Other assets less liabilities 0% | (115) | |
| Net assets 100% | $404,973 |
Investments in affiliates
This holding is an affiliate of
the fund under the Investment Company Act of 1940 since the fund holds 5% or more of its outstanding voting shares. Further details on this holding and related transactions during the nine months ended July 31, 2016,
appear below.
| Beginning shares |
Additions | Reductions | Ending shares |
Dividend income (000) |
Value of affiliates at 7/31/2016 (000) | |
| Limited Term Tax-Exempt Bond Fund of America, Class R-6 | 13,293,797 | 5,180,802 | 796,197 | 17,678,402 | $4,430 | $283,562 |
| Federal income tax information | (dollars in thousands) |
| Gross unrealized appreciation on investment securities | $3,177 |
| Gross unrealized depreciation on investment securities | (2,065) |
| Net unrealized appreciation on investment securities | 1,112 |
| Cost of investment securities | 403,976 |
American Funds Portfolio Series — American
Funds Tax-Exempt Preservation Portfolio — Page 8 of 9
unaudited
Valuation disclosures
Security valuation — The net asset value of each share class of each fund is calculated based on the reported net asset values of the underlying funds in which each fund invests. The net asset value of
each underlying fund is calculated based on the policies and procedures of the underlying fund contained in each underlying fund’s statement of additional information. Generally, the funds and the underlying
funds determine the net asset value of each share class as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Processes and structure — The series’ board of trustees has delegated authority to the series’ investment adviser to make fair value determinations, subject to board oversight. The investment
adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair
Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation teams. The Fair Valuation Committee reviews
changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair
Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees with supplemental information to support the changes. The series’ board and audit committee also regularly review
reports that describe fair value determinations and methods. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control
self-evaluation program facilitated by the investment adviser’s compliance group.
Classifications — The series’ investment adviser classifies each fund’s assets and liabilities into three levels based on the method used to value the assets or liabilities. Level 1
values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in
inactive markets. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the
securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. At July 31, 2016, all of the investment securities held by each fund were
classified as Level 1.
Investments are not FDIC-insured, nor
are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider
investment objectives, risks, charges and expenses. This and other important information is contained in the series prospectus and summary prospectuses, which can be obtained from your financial professional and
should be read carefully before investing. You may also call American Funds Service Company (AFS) at (800) 421-4225 or visit the American Funds website at americanfunds.com.
| MFGEFPX-900-0916O-S54179 | American Funds Portfolio Series — Page 9 of 9 |
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 PORTFOLIO SERIES | |
| By /s/ Walter R. Burkley | |
|
Walter R. Burkley, President and Principal Executive Officer | |
| Date: September 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/ Walter R. Burkley |
|
Walter R. Burkley, President and Principal Executive Officer |
| Date: September 28, 2016 |
| By /s/ Gregory F. Niland |
|
Gregory F. Niland, Treasurer and Principal Financial Officer |
| Date: September 28, 2016 |
 |
American Funds Portfolio Series 6455 Irvine Center Drive Irvine, California 92618 (213) 486-9200 |
CERTIFICATION
I, Walter R. Burkley, certify that:
| 1. | I have reviewed this report on Form N-Q of American Funds Portfolio Series; |
| 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: September 28, 2016
/s/ Walter R. Burkley
Walter R. Burkley, President and
Principal Executive Officer
American Funds Portfolio Series
 |
American Funds Portfolio Series 6455 Irvine Center Drive Irvine, California 92618 (213) 486-9200 |
CERTIFICATION
I, Gregory F. Niland, certify that:
| 1. | I have reviewed this report on Form N-Q of American Funds Portfolio Series; |
| 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: September 28, 2016
/s/ Gregory F. Niland
Gregory F. Niland, Treasurer and
Principal Financial Officer
American Funds Portfolio Series
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