UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
Certified Shareholder Report of
Registered Management Investment Companies
Investment Company Act File Number: 811-00862
The Growth Fund of America
(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: August 31
Date of reporting period: August 31, 2017
Michael W. Stockton
The Growth Fund of America
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
ITEM 1 – Reports to Stockholders
 |
The Growth Fund of America®
Annual report |
We believe high-
conviction investing
and diverse
perspectives lead
to better results.
The Growth Fund of America seeks to provide you with growth of capital.
This fund is one of more than 40 offered by one of the nation’s largest mutual fund families, American Funds, from Capital Group. For more than 85 years, Capital has invested with a long-term focus based on thorough research and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for 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.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended September 30, 2017 (the most recent calendar quarter-end):
| Class A shares | 1 year | 5 years | 10 years | |||
| Reflecting 5.75% maximum sales charge | 12.97% | 13.70% | 6.67% |
For other share class results, visit americanfunds.com and americanfundsretirement.com.
The total annual fund operating expense ratio was 0.64% for Class A shares as of the prospectus dated November 1, 2017 (unaudited).
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers, without which results would have been lower. Visit americanfunds.com for more information.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Refer to the fund prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
| Contents | |
| 1 | Letter to investors |
| 4 | The value of a long-term perspective |
| 6 | Summary investment portfolio |
| 11 | Financial statements |
| 34 | Board of trustees and other officers |
Fellow investors:
In a market environment noteworthy for a strong run-up in equity prices, The Growth Fund of America (GFA) achieved a positive return of 19.60% for the fiscal year ended August 31, 2017.
This return includes dividends totaling 25 cents a share, as well as a one-time capital gains payment of $2.53 per share. By way of comparison, the unmanaged Standard & Poor’s 500 Composite Index, a market capitalization-weighted index based on the results of approximately 500 widely held common stocks, gained 16.23% for the same period. The fund’s return surpassed two of its four Lipper peer indexes as well.
As you can see in the table below, the fund’s long-term results have generally surpassed those of its peer groups and benchmark over extended periods of time. We continue to stress our commitment to long-term investing, and we encourage our investors and their financial advisors to take a similar approach in working toward their financial goals.
Investment results analysis
The fund’s managers seek investments primarily in growth-oriented or capital appreciation-oriented equities domiciled in the United States, with a portion of stocks from overseas. The fund’s geographic flexibility has, over time, added to the fund’s returns.
The fund’s top 10 securities, in terms of percentage of total assets, all contributed to the fund’s positive return during the
Results at a glance
Total returns for periods ended August 31, 2017, with all distributions reinvested
| Cumulative total returns |
Average annual total returns | |||||||||||||||
| 1 year | 5 years | 10 years | Lifetime1 | |||||||||||||
| The Growth Fund of America (Class A shares) | 19.60 | % | 15.42 | % | 7.63 | % | 13.57 | % | ||||||||
| Standard & Poor’s 500 Composite Index2 | 16.23 | 14.34 | 7.61 | 10.97 | ||||||||||||
| Lipper Large-Cap Growth Funds Index3 | 21.57 | 14.62 | 8.10 | — | 4 | |||||||||||
| Lipper Growth Funds Index3 | 20.24 | 14.60 | 7.26 | 10.00 | ||||||||||||
| Lipper Large-Cap Core Funds Index3 | 15.82 | 13.36 | 6.78 | — | 4 | |||||||||||
| Lipper Capital Appreciation Funds Index3 | 17.64 | 13.18 | 7.25 | 10.80 | ||||||||||||
| 1 | Since Capital Research and Management Company (CRMC) began managing the fund on December 1, 1973. |
| 2 | The market index is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index. S&P 500 source: S&P Dow Jones Indices LLC. |
| 3 | Lipper Indexes track the largest mutual funds (no more than 30), represented by one share class per fund, in the corresponding Lipper category. Lipper source: Thomson Reuters Lipper. |
| 4 | This index was not in existence when CRMC began managing the fund. |
| The Growth Fund of America | 1 |
The New Geography of Investing®
Where a company does business can be more important than where it’s located. The charts below show the countries and regions where The Growth Fund of America’s equity investments are located and where the revenue is generated.
Equity portion breakdown by domicile (%)
| Region | Fund | Index | |||||||
| n | United States | 86 | % | 100 | % | ||||
| n | Canada | 2 | — | ||||||
| n | Europe | 6 | — | ||||||
| n | Japan | 1 | — | ||||||
| n | Emerging markets | 5 | — | ||||||
| Total | 100 | % | 100 | % | |||||
Equity portion breakdown by revenue (%)
| Region | Fund | Index | |||||||
| n | United States | 56 | % | 63 | % | ||||
| n | Canada | 3 | 2 | ||||||
| n | Europe | 13 | 12 | ||||||
| n | Japan | 3 | 3 | ||||||
| n | Asia-Pacific ex. Japan | 1 | 1 | ||||||
| n | Emerging markets | 24 | 19 | ||||||
| Total | 100 | % | 100 | % | |||||
Source: Capital Group (as of August 31, 2017).
Compared with the S&P 500 Index as a percent of net assets.
fiscal year. Largest holding Amazon returned 27.5%, while fifth-ranked Netflix gained 79.3%, making it the top contributor to the fund’s relative return against the S&P 500.
Overall, the fund’s holdings in consumer discretionary and information technology helped returns the most on a relative basis. Broadcom, the third-largest holding, advanced 42.9%, while Chinese online retailer Alibaba climbed 76.7%. On the other hand, stocks in the energy sector were a large detractor, with Southwestern Energy declining 60.8%.
We would also note that the fund’s holdings in the industrials, telecommunications, consumer staples and health care sectors were generally less than the weightings within the S&P 500, but the overall returns surpassed those of the index due to good stock selection. We believe this illustrates the strength of our bottom-up investment process.
In terms of geography, 14% of the fund’s assets were invested in companies based outside the United States. Of these, investments in emerging markets equities benefited returns the most, followed by euro-zone companies. Other European companies outside the euro zone hindered the fund’s returns, several of them energy holdings.
Finally, the fund retained 7.7% of its assets in cash and other short-term instruments, up slightly from a year ago. Cash holdings provide the fund’s managers with a measure of liquidity, allowing them to quickly take advantage of promising
| 2 | The Growth Fund of America |
investment opportunities when they arise, as well as a cushion in the event of a down market.
The road ahead
The market continues to trade on sound fundamentals and economic activity. Earnings growth remains strong domestically and has seen improvement overseas as well, while economic growth remains solid, if not exciting. We expect this strength to continue over the near term, which should be helpful to returns.
That said, investors have ignored any number of headlines that could have impacted share prices. Geopolitical risks, while low, have increased in the last fiscal year; the situation in North Korea, the Middle East and the specter of a trade war with China are all worrisome. We currently believe the probability of real market risk from these situations remains low, but has increased nonetheless.
One of the interesting things of note this year is the surge in value of large-cap consumer discretionary and technology companies such as Alphabet, Amazon, Apple, Facebook and Microsoft. These companies have strong competitive positions and good growth rates, so the increase in value is understandable. At the same time, we know technology firms, in particular, must constantly meet the challenge of potential disruption. We continue to do our homework on this group, monitoring for positive or negative change in potential.
We remain committed to bottom-up fundamental research, both in terms of identifying future investments as well as testing our current investment theses. This approach has served the fund well in the past, and we believe it will continue to do so in the future.
As always, we thank you for the trust you’ve placed in us. We look forward to reporting to you again in six months.
Cordially,
Donald D. O’Neal
Vice Chairman of the Board
Michael T. Kerr
President
October 9, 2017
For current information about the fund, visit americanfunds.com.
Why your annual report has a different look
You have probably noticed that this annual report doesn’t look like the glossier reports of the past. After surveying a large, representative sample of our investors, we have decided to make a few key changes to these documents and have adjusted the look and feel of our reports (e.g., paper stock and design standards) to reflect the prevailing industry norm. These changes will reduce costs and the amount of paper we consume.
You also told us that we should be considering ways to deliver the valuable perspective of our investment professionals to you digitally. We are in the process of building our digital investor education content on our website, which will provide a platform for investment professionals to communicate with investors using the channels that you access more often.
If you have not already done so, you can elect to receive your annual reports electronically. Once you do, you will receive an email notification as soon as the documents are available. To learn more, visit americanfunds.com/gopaperless. n
| The Growth Fund of America | 3 |
The value of a long-term perspective
The results shown are before taxes on fund distributions and sale of fund shares.
| 1 | As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares. |
| 2 | The maximum initial sales charge was 8.5% prior to July 1, 1988. |
| 3 | Includes reinvested dividends of $151,287 and reinvested capital gain distributions of $1,009,713. |
| 4 | The S&P 500 is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index. S&P 500 source: S&P Dow Jones Indices LLC. |
| 5 | Results of the Lipper Growth Funds Index do not reflect any sales charges. Lipper indexes track the largest mutual funds (no more than 30), represented by one share class per fund, in the corresponding Lipper category. Lipper source: Thomson Reuters Lipper. |
| 6 | Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics. |
| 7 | For the period December 1, 1973 (when Capital Research and Management Company became the fund’s investment adviser), through August 31, 1974. |
| 4 | The Growth Fund of America |
How a $10,000 investment has grown
Fund results shown are for Class A shares and reflect deduction of the maximum sales charge of 5.75% on the $10,000 investment.¹ Thus, the net amount invested was $9,425.² Results are for past periods and are not predictive of results for 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. For current information and month-end results, visit americanfunds.com.
| The Growth Fund of America | 5 |
Summary investment portfolio August 31, 2017
| Industry sector diversification | Percent of net assets |
| Largest equity holdings | Percent of net assets | |||
| Amazon | 6.13 | % | ||
| Alphabet | 3.91 | |||
| Broadcom | 2.80 | |||
| Microsoft | 2.62 | |||
| Netflix | 2.46 | |||
| 2.29 | ||||
| UnitedHealth Group | 2.26 | |||
| Home Depot | 1.89 | |||
| Priceline Group | 1.43 | |||
| ASML Holding | 1.43 | |||
| Common stocks 91.82% | Shares | Value (000) |
||||||
| Information technology 28.60% | ||||||||
| Alphabet Inc., Class C1 | 4,155,253 | $ | 3,903,154 | |||||
| Alphabet Inc., Class A1 | 2,730,470 | 2,608,254 | ||||||
| Broadcom Ltd. | 18,467,428 | 4,655,085 | ||||||
| Microsoft Corp. | 58,385,100 | 4,365,454 | ||||||
| Facebook, Inc., Class A1 | 22,167,000 | 3,812,059 | ||||||
| ASML Holding NV (New York registered) | 8,518,000 | 1,331,449 | ||||||
| ASML Holding NV2 | 6,729,442 | 1,048,415 | ||||||
| Oracle Corp. | 45,531,396 | 2,291,595 | ||||||
| Apple Inc. | 13,894,700 | 2,278,731 | ||||||
| Alibaba Group Holding Ltd. (ADR)1 | 11,594,100 | 1,991,171 | ||||||
| Visa Inc., Class A | 17,786,000 | 1,841,207 | ||||||
| Samsung Electronics Co., Ltd.2 | 779,310 | 1,609,241 | ||||||
| Samsung Electronics Co., Ltd., nonvoting preferred2 | 98,800 | 165,878 | ||||||
| Taiwan Semiconductor Manufacturing Co., Ltd.2 | 167,560,000 | 1,206,233 | ||||||
| Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 8,743,800 | 323,258 | ||||||
| MasterCard Inc., Class A | 9,034,000 | 1,204,232 | ||||||
| Intel Corp. | 24,152,000 | 847,011 | ||||||
| Activision Blizzard, Inc. | 11,615,900 | 761,538 | ||||||
| Skyworks Solutions, Inc. | 7,012,000 | 738,784 | ||||||
| Other securities | 10,608,613 | |||||||
| 47,591,362 | ||||||||
| Consumer discretionary 20.83% | ||||||||
| Amazon.com, Inc.1 | 10,402,836 | 10,201,021 | ||||||
| Netflix, Inc.1,3 | 23,435,808 | 4,094,470 | ||||||
| Home Depot, Inc. | 20,953,100 | 3,140,241 | ||||||
| Priceline Group Inc.1 | 1,288,709 | 2,386,792 | ||||||
| Comcast Corp., Class A | 48,014,000 | 1,949,849 | ||||||
| Charter Communications, Inc., Class A1 | 4,570,200 | 1,821,407 | ||||||
| Twenty-First Century Fox, Inc., Class A | 38,278,400 | 1,056,101 | ||||||
| MGM Resorts International3 | 29,550,000 | 973,968 | ||||||
| Starbucks Corp. | 15,449,200 | 847,543 | ||||||
| NIKE, Inc., Class B | 14,614,800 | 771,808 | ||||||
| Other securities | 7,425,048 | |||||||
| 34,668,248 | ||||||||
| Health care 12.04% | ||||||||
| UnitedHealth Group Inc. | 18,912,405 | 3,761,677 | ||||||
| Illumina, Inc.1,3 | 8,001,089 | 1,635,903 | ||||||
| Thermo Fisher Scientific Inc. | 8,420,000 | 1,575,719 | ||||||
| AbbVie Inc. | 17,266,657 | 1,300,179 | ||||||
| Amgen Inc. | 6,945,940 | 1,234,780 | ||||||
| Stryker Corp. | 7,256,499 | 1,025,851 | ||||||
| Boston Scientific Corp.1 | 35,265,000 | 971,551 | ||||||
| Humana Inc. | 3,498,000 | 901,155 | ||||||
| Express Scripts Holding Co.1 | 13,587,800 | 853,586 | ||||||
| Regeneron Pharmaceuticals, Inc.1 | 1,625,000 | 807,462 | ||||||
| 6 | The Growth Fund of America |
| Shares | Value (000) |
|||||||
| Aetna Inc. | 5,001,000 | $ | 788,658 | |||||
| BioMarin Pharmaceutical Inc.1 | 8,133,515 | 733,562 | ||||||
| Other securities | 4,442,270 | |||||||
| 20,032,353 | ||||||||
| Financials 7.88% | ||||||||
| Berkshire Hathaway Inc., Class A1 | 4,865 | 1,320,604 | ||||||
| Berkshire Hathaway Inc., Class B1 | 5,704,508 | 1,033,429 | ||||||
| American International Group, Inc. | 25,242,273 | 1,526,653 | ||||||
| Goldman Sachs Group, Inc. | 5,524,490 | 1,236,049 | ||||||
| Other securities | 8,004,369 | |||||||
| 13,121,104 | ||||||||
| Energy 6.19% | ||||||||
| EOG Resources, Inc. | 24,563,508 | 2,087,653 | ||||||
| Schlumberger Ltd. | 22,675,484 | 1,440,120 | ||||||
| Concho Resources Inc.1,3 | 9,803,819 | 1,087,930 | ||||||
| Canadian Natural Resources, Ltd. | 25,116,565 | 773,761 | ||||||
| Halliburton Co. | 19,243,000 | 749,900 | ||||||
| Other securities | 4,154,328 | |||||||
| 10,293,692 | ||||||||
| Industrials 4.88% | ||||||||
| CSX Corp. | 27,469,166 | 1,378,952 | ||||||
| Other securities | 6,739,269 | |||||||
| 8,118,221 | ||||||||
| Consumer staples 4.16% | ||||||||
| Philip Morris International Inc. | 15,717,367 | 1,837,832 | ||||||
| Costco Wholesale Corp. | 5,929,817 | 929,440 | ||||||
| Coca-Cola Co. | 15,920,000 | 725,156 | ||||||
| Other securities | 3,427,768 | |||||||
| 6,920,196 | ||||||||
| Materials 2.22% | ||||||||
| E.I. du Pont de Nemours and Co. | 10,017,500 | 840,769 | ||||||
| Other securities | 2,859,200 | |||||||
| 3,699,969 | ||||||||
| Other 1.24% | ||||||||
| Other securities | 2,059,708 | |||||||
| Miscellaneous 3.78% | ||||||||
| Other common stocks in initial period of acquisition | 6,289,515 | |||||||
| Total common stocks (cost: $83,209,626,000) | 152,794,368 | |||||||
| Preferred securities 0.20% | ||||||||
| Financials 0.04% | ||||||||
| Other securities | 64,834 | |||||||
| Miscellaneous 0.16% | ||||||||
| Other preferred securities in initial period of acquisition | 277,556 | |||||||
| Total preferred securities (cost: $391,578,000) | 342,390 | |||||||
| Rights & warrants 0.11% | ||||||||
| Financials 0.11% | ||||||||
| Other securities | 186,633 | |||||||
| Total rights & warrants (cost: $117,996,000) | 186,633 | |||||||
| The Growth Fund of America | 7 |
| Convertible stocks 0.07% | Shares | Value (000) |
||||||
| Consumer discretionary 0.07% | ||||||||
| Other securities | $ | 125,230 | ||||||
| Total convertible stocks (cost: $114,350,000) | 125,230 | |||||||
| Bonds, notes & other debt instruments 0.15% | Principal amount (000) |
|||||||
| Other 0.15% | ||||||||
| U.S. Treasury 1.625% 2026 | 149,700 | 144,271 | ||||||
| Other securities | 99,065 | |||||||
| 243,336 | ||||||||
| Total bonds, notes & other debt instruments (cost: $247,586,000) | 243,336 | |||||||
| Short-term securities 7.69% | ||||||||
| Apple Inc. 1.17%–1.27% due 9/27/2017–1/2/20184 | $ | 263,500 | 262,831 | |||||
| Federal Home Loan Bank 0.95%–1.13% due 9/1/2017–2/23/2018 | 5,313,793 | 5,305,444 | ||||||
| Microsoft Corp. 1.19% due 10/17/20174 | 100,000 | 99,851 | ||||||
| U.S. Treasury Bills 0.87%–1.11% due 9/7/2017–3/1/2018 | 3,519,800 | 3,509,096 | ||||||
| Other securities | 3,615,514 | |||||||
| Total short-term securities (cost: $12,791,720,000) | 12,792,736 | |||||||
| Total investment securities 100.04% (cost: $96,872,856,000) | 166,484,693 | |||||||
| Other assets less liabilities (0.04)% | (74,643 | ) | ||||||
| Net assets 100.00% | $ | 166,410,050 | ||||||
This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.
As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.
“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. Some securities in “Other securities” (with an aggregate value of $256,714,000, an aggregate cost of $309,365,000, and which represented .15% of the net assets of the fund) were acquired from 5/7/2015-4/28/2017 through private placement transactions exempt from registration under the Securities Act of 1933, which may subject them to legal or contractual restrictions on resale.
Investments in affiliates
A company is an affiliate of the fund under the Investment Company Act of 1940 if the fund’s holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund’s affiliated-company holdings is either shown in the summary investment portfolio or included in the value of “Other securities” under the respective industry sectors. Further details on such holdings and related transactions during the year ended August 31, 2017, appear below.
| Beginning shares or principal amount |
Additions | Reductions | Ending shares or principal amount |
Net realized gain (loss) (000) |
Net unrealized (depreciation) appreciation (000) |
Dividend or interest income (000) |
Value of affiliates at 8/31/2017 (000) |
|||||||||||||||||
| Common stocks 7.56% | ||||||||||||||||||||||||
| Information technology 0.38% | ||||||||||||||||||||||||
| CommScope Holding Co., Inc.1 | — | 12,327,945 | — | 12,327,945 | $ | — | $ | (58,401 | ) | $ | — | $ | 407,562 | |||||||||||
| Paycom Software, Inc.1,5 | 1,699,243 | 1,436,273 | — | 3,135,516 | — | 76,434 | — | 233,941 | ||||||||||||||||
| Broadcom Ltd.6 | 22,178,905 | 938,506 | 4,649,983 | 18,467,428 | 505,632 | 1,088,858 | 75,664 | — | ||||||||||||||||
| Flex Ltd.1,6 | 27,812,000 | — | 8,064,000 | 19,748,000 | 34,412 | 47,283 | — | — | ||||||||||||||||
| Juniper Networks, Inc.6 | 19,827,923 | 7,795,000 | 27,622,923 | — | 95,443 | 36,771 | 7,115 | — | ||||||||||||||||
| Akamai Technologies, Inc.1,6 | 8,750,000 | 4,541,389 | 9,204,789 | 4,086,600 | 45,296 | (26,606 | ) | — | — | |||||||||||||||
| 641,503 | ||||||||||||||||||||||||
| Consumer discretionary 4.14% | ||||||||||||||||||||||||
| Netflix, Inc.1 | 23,034,761 | 871,138 | 470,091 | 23,435,808 | 33,359 | 1,782,745 | — | 4,094,470 | ||||||||||||||||
| MGM Resorts International | 30,253,344 | 694,825 | 1,398,169 | 29,550,000 | 5,541 | 267,214 | 6,466 | 973,968 | ||||||||||||||||
| Ulta Beauty, Inc.1 | 2,245,000 | 850,000 | — | 3,095,000 | — | (97,600 | ) | — | 684,026 | |||||||||||||||
| BorgWarner Inc. | 11,207,259 | — | 600,000 | 10,607,259 | (11,010 | ) | 141,838 | 6,024 | 492,283 | |||||||||||||||
| 8 | The Growth Fund of America |
| Beginning shares or principal amount |
Additions | Reductions | Ending shares or principal amount |
Net realized gain (loss) (000) |
Net unrealized (depreciation) appreciation (000) |
Dividend or interest income (000) |
Value of affiliates at 8/31/2017 (000) |
|||||||||||||||||
| ServiceMaster Global Holdings, Inc.1,5 | 6,635,000 | 242,000 | — | 6,877,000 | $ | — | $ | 67,694 | $ | — | $ | 324,044 | ||||||||||||
| AutoNation, Inc.1 | 6,000,000 | — | — | 6,000,000 | — | (11,880 | ) | — | 272,220 | |||||||||||||||
| Sturm, Ruger & Co., Inc. | 145,232 | 799,768 | 12,540 | 932,460 | 230 | (6,532 | ) | 1,151 | 42,707 | |||||||||||||||
| Panera Bread Co., Class A1,6 | 1,164,040 | 240,000 | 1,404,040 | — | 186,177 | (61,931 | ) | — | — | |||||||||||||||
| 6,883,718 | ||||||||||||||||||||||||
| Health care 1.28% | ||||||||||||||||||||||||
| Illumina, Inc.1 | 8,315,957 | 837,676 | 1,152,544 | 8,001,089 | (12,038 | ) | 307,600 | — | 1,635,903 | |||||||||||||||
| WellCare Health Plans, Inc.1 | 1,200,000 | 1,652,000 | — | 2,852,000 | — | 90,653 | — | 498,187 | ||||||||||||||||
| Bluebird Bio, Inc.1,6 | 1,897,076 | 1,086,583 | 730,506 | 2,253,153 | (62,690 | ) | 226,722 | — | — | |||||||||||||||
| 2,134,090 | ||||||||||||||||||||||||
| Financials 0.22% | ||||||||||||||||||||||||
| CIT Group Inc. | 10,079,000 | 24,000 | 2,065,000 | 8,038,000 | (3,613 | ) | 88,187 | 5,842 | 360,504 | |||||||||||||||
| Energy 0.65% | ||||||||||||||||||||||||
| Concho Resources Inc.1 | 9,516,984 | 1,675,668 | 1,388,833 | 9,803,819 | (12,700 | ) | (160,657 | ) | — | 1,087,930 | ||||||||||||||
| Noble Energy, Inc.6 | 26,435,185 | 478,468 | 14,024,050 | 12,889,603 | (68,594 | ) | (125,950 | ) | 9,174 | — | ||||||||||||||
| Weatherford International PLC1,6 | 69,950,382 | 12,750,000 | 35,131,765 | 47,568,617 | (332,390 | ) | 266,246 | — | — | |||||||||||||||
| 1,087,930 | ||||||||||||||||||||||||
| Industrials 0.41% | ||||||||||||||||||||||||
| TransDigm Group Inc. | 1,574,500 | 1,030,500 | — | 2,605,000 | — | 5,012 | 89,052 | 679,019 | ||||||||||||||||
| Oshkosh Corp.6 | 3,685,600 | — | 3,062,617 | 622,983 | 61,716 | (31,432 | ) | 523 | — | |||||||||||||||
| 679,019 | ||||||||||||||||||||||||
| Consumer staples 0.19% | ||||||||||||||||||||||||
| Herbalife Ltd.1 | 4,638,000 | 80,000 | — | 4,718,000 | — | 38,788 | — | 325,589 | ||||||||||||||||
| Kroger Co.6 | 48,872,341 | 1,865,000 | 42,084,341 | 8,653,000 | (376,443 | ) | 123,936 | 13,945 | — | |||||||||||||||
| 325,589 | ||||||||||||||||||||||||
| Materials 0.29% | ||||||||||||||||||||||||
| First Quantum Minerals Ltd. | 34,450,000 | 6,023,886 | 2,700,000 | 37,773,886 | (19,823 | ) | 182,039 | 280 | 455,253 | |||||||||||||||
| Ardagh Group SA, Class A | — | 1,018,438 | — | 1,018,438 | — | (216 | ) | 194 | 21,173 | |||||||||||||||
| 476,426 | ||||||||||||||||||||||||
| Total common stocks | 12,588,779 | |||||||||||||||||||||||
| Bonds, notes & other debt instruments 0.06% | ||||||||||||||||||||||||
| Other 0.06% | ||||||||||||||||||||||||
| Herbalife Ltd., Term Loan, (3-month USD-LIBOR + 5.50%) 6.739% 20237,8,9 | — | $100,000,000 | $1,875,000 | $98,125,000 | (7 | ) | 1,960 | 3,327 | 99,065 | |||||||||||||||
| $ | 68,498 | $ | 4,258,775 | $ | 218,757 | $ | 12,687,844 | |||||||||||||||||
| The Growth Fund of America | 9 |
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.
| 1 | Security did not produce income during the last 12 months. |
| 2 | Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous” and “Other securities,” was $13,190,973,000, which represented 7.93% of the net assets of the fund. This amount includes $12,542,150,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading. |
| 3 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
| 4 | Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $2,744,562,000, which represented 1.65% of the net assets of the fund. |
| 5 | This security was an unaffiliated issuer in its initial period of acquisition at 8/31/2016; it was not publicly disclosed. |
| 6 | Unaffiliated issuer at 8/31/2017. |
| 7 | Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $99,065,000, which represented .06% of the net assets of the fund. |
| 8 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
| 9 | Coupon rate may change periodically. |
Key to abbreviations
ADR = American Depositary Receipts
LIBOR = London Interbank Offered Rate
See Notes to Financial Statements
| 10 | The Growth Fund of America |
Financial statements
| Statement of assets and liabilities at August 31, 2017 |
(dollars in thousands) |
| Assets: | ||||||||
| Investment securities, at value: | ||||||||
| Unaffiliated issuers (cost: $88,898,309) | $ | 153,796,849 | ||||||
| Affiliated issuers (cost: $7,974,547) | 12,687,844 | $ | 166,484,693 | |||||
| Cash | 1,098 | |||||||
| Cash denominated in currencies other than U.S. dollars (cost: $2,338) | 2,338 | |||||||
| Receivables for: | ||||||||
| Sales of investments | 449,075 | |||||||
| Sales of fund’s shares | 153,319 | |||||||
| Dividends and interest | 220,436 | |||||||
| Other | 1,560 | 824,390 | ||||||
| 167,312,519 | ||||||||
| Liabilities: | ||||||||
| Payables for: | ||||||||
| Purchases of investments | 588,545 | |||||||
| Repurchases of fund’s shares | 201,813 | |||||||
| Investment advisory services | 37,806 | |||||||
| Services provided by related parties | 56,675 | |||||||
| Trustees’ deferred compensation | 5,735 | |||||||
| Other | 11,895 | 902,469 | ||||||
| Net assets at August 31, 2017 | $ | 166,410,050 | ||||||
| Net assets consist of: | ||||||||
| Capital paid in on shares of beneficial interest | $ | 87,560,148 | ||||||
| Undistributed net investment income | 761,572 | |||||||
| Undistributed net realized gain | 8,484,964 | |||||||
| Net unrealized appreciation | 69,603,366 | |||||||
| Net assets at August 31, 2017 | $ | 166,410,050 | ||||||
| (dollars and shares in thousands, except per-share amounts) |
| Shares of beneficial interest issued and outstanding (no stated par value) — unlimited shares authorized (3,428,215 total shares outstanding) |
| Net assets | Shares outstanding |
Net asset value per share |
||||||||||
| Class A | $ | 81,220,904 | 1,664,177 | $ | 48.81 | |||||||
| Class C | 4,744,854 | 104,532 | 45.39 | |||||||||
| Class T | 11 | — | * | 48.84 | ||||||||
| Class F-1 | 8,573,704 | 176,872 | 48.47 | |||||||||
| Class F-2 | 16,049,501 | 329,136 | 48.76 | |||||||||
| Class F-3 | 2,687,052 | 54,954 | 48.90 | |||||||||
| Class 529-A | 7,232,663 | 149,649 | 48.33 | |||||||||
| Class 529-C | 1,624,745 | 35,680 | 45.54 | |||||||||
| Class 529-E | 307,230 | 6,426 | 47.81 | |||||||||
| Class 529-T | 11 | — | * | 48.83 | ||||||||
| Class 529-F-1 | 290,941 | 6,026 | 48.28 | |||||||||
| Class R-1 | 419,478 | 9,112 | 46.04 | |||||||||
| Class R-2 | 2,153,060 | 46,328 | 46.47 | |||||||||
| Class R-2E | 108,543 | 2,261 | 48.00 | |||||||||
| Class R-3 | 6,517,730 | 136,190 | 47.86 | |||||||||
| Class R-4 | 8,122,583 | 167,891 | 48.38 | |||||||||
| Class R-5E | 30,867 | 636 | 48.55 | |||||||||
| Class R-5 | 3,665,021 | 75,049 | 48.84 | |||||||||
| Class R-6 | 22,661,152 | 463,296 | 48.91 | |||||||||
| * | Amount less than one thousand. |
See Notes to Financial Statements
| The Growth Fund of America | 11 |
| Statement of operations for the year ended August 31, 2017 |
(dollars in thousands) |
| Investment income: | ||||||||
| Income: | ||||||||
| Dividends (net of non-U.S. taxes of $38,998; also includes $215,430 from affiliates) | $ | 1,887,813 | ||||||
| Interest (includes $3,327 from affiliates) | 84,927 | $ | 1,972,740 | |||||
| Fees and expenses*: | ||||||||
| Investment advisory services | 420,112 | |||||||
| Distribution services | 357,427 | |||||||
| Transfer agent services | 154,428 | |||||||
| Administrative services | 46,167 | |||||||
| Reports to shareholders | 4,813 | |||||||
| Registration statement and prospectus | 3,349 | |||||||
| Trustees’ compensation | 1,358 | |||||||
| Auditing and legal | 290 | |||||||
| Custodian | 3,470 | |||||||
| Other | 6,368 | 997,782 | ||||||
| Net investment income | 974,958 | |||||||
| Net realized gain and unrealized appreciation: | ||||||||
| Net realized gain (loss) on: | ||||||||
| Investments: | ||||||||
| Unaffiliated issuers | 10,209,904 | |||||||
| Affiliated issuers | 68,498 | |||||||
| Forward currency contracts | 6,770 | |||||||
| Currency transactions | (364 | ) | 10,284,808 | |||||
| Net unrealized appreciation (depreciation) on: | ||||||||
| Investments (net of non-U.S. taxes of $9,173): | ||||||||
| Unaffiliated issuers | 12,096,704 | |||||||
| Affiliated issuers | 4,258,775 | |||||||
| Forward currency contracts | (475 | ) | ||||||
| Currency translations | 1,259 | 16,356,263 | ||||||
| Net realized gain and unrealized appreciation | 26,641,071 | |||||||
| Net increase in net assets resulting from operations | $ | 27,616,029 | ||||||
| * | Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements. |
See Notes to Financial Statements
| 12 | The Growth Fund of America |
| Statements of changes in net assets | |
| (dollars in thousands) |
| Year ended August 31 | ||||||||
| 2017 | 2016 | |||||||
| Operations: | ||||||||
| Net investment income | $ | 974,958 | $ | 773,600 | ||||
| Net realized gain | 10,284,808 | 8,307,433 | ||||||
| Net unrealized appreciation | 16,356,263 | 3,580,112 | ||||||
| Net increase in net assets resulting from operations | 27,616,029 | 12,661,145 | ||||||
| Dividends and distributions paid to shareholders: | ||||||||
| Dividends from net investment income | (832,842 | ) | (859,355 | ) | ||||
| Distributions from net realized gain on investments | (8,329,166 | ) | (10,963,179 | ) | ||||
| Total dividends and distributions paid to shareholders | (9,162,008 | ) | (11,822,534 | ) | ||||
| Net capital share transactions | 2,341,237 | 3,977,050 | ||||||
| Total increase in net assets | 20,795,258 | 4,815,661 | ||||||
| Net assets: | ||||||||
| Beginning of year | 145,614,792 | 140,799,131 | ||||||
| End of year (including undistributed net investment income: $761,572 and $445,757, respectively) | $ | 166,410,050 | $ | 145,614,792 | ||||
See Notes to Financial Statements
| The Growth Fund of America | 13 |
Notes to financial statements
1. Organization
The Growth Fund of America (the “fund”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks to provide growth of capital.
The fund has 19 share classes consisting of six retail share classes (Classes A, C, T, F-1, F-2 and F-3), five 529 college savings plan share classes (Classes 529-A, 529-C, 529-E, 529-T and 529-F-1) and eight retirement plan share classes (Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education. The retirement plan share classes are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described further in the following table:
| Contingent deferred sales charge upon | ||||||
| Share class | Initial sales charge | redemption | Conversion feature | |||
| Classes A and 529-A | Up to 5.75% | None (except 1% for certain redemptions within one year of purchase without an initial sales charge*) | None | |||
| Class C | None | 1% for redemptions within one year of purchase | Class C converts to Class F-1 after 10 years | |||
| Class 529-C | None | 1% for redemptions within one year of purchase | None | |||
| Class 529-E | None | None | None | |||
| Classes T and 529-T† | Up to 2.50% | None | None | |||
| Classes F-1, F-2, F-3 and 529-F-1 | None | None | None | |||
| Classes R-1, R-2, R-2E, R-3, R-4, R-5E, R-5 and R-6 | None | None | None |
| * | 18 months for shares purchased on or after August 14, 2017. |
| † | Class T and 529-T shares are not available for purchase. |
Holders of all share classes have equal pro rata rights to the assets, dividends and liquidation proceeds of the fund. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution, transfer agent and administrative services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each share class.
2. Significant accounting policies
The fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The fund’s financial statements have been prepared to comply with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles require the fund’s investment adviser to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Subsequent events, if any, have been evaluated through the date of issuance in the preparation of the financial statements. The fund follows the significant accounting policies described in this section, as well as the valuation policies described in the next section on valuation.
Security transactions and related investment income — Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations — Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, transfer agent and administrative services, are charged directly to the respective share class.
Dividends and distributions to shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.
| 14 | The Growth Fund of America |
Currency translation — Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates supplied by one or more pricing vendors on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. The effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments in the fund’s statement of operations. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
3. Valuation
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by U.S. GAAP. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.
Methods and inputs — The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.
Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades.
Fixed-income securities, including short-term securities, are generally valued at prices obtained from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.
| Fixed-income class | Examples of standard inputs | |
| All | Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”) | |
| Corporate bonds & notes; convertible securities | Standard inputs and underlying equity of the issuer | |
| Bonds & notes of governments & government agencies | Standard inputs and interest rate volatilities |
When the fund’s investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or deemed to be not representative), fixed-income securities will be valued in good faith at the mean quoted bid and ask prices that are reasonably and timely available (or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.
Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described for either equity or fixed-income securities, depending on which method is deemed most appropriate by the fund’s investment adviser. Forward currency contracts are valued at the mean of representative quoted bid and ask prices, generally based on prices supplied by one or more pricing vendors.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the fund’s investment adviser are fair valued as determined in good faith under fair valuation guidelines adopted by authority of the fund’s board of trustees as further described. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. In addition, the closing prices of equity securities that trade in markets outside U.S. time zones may be adjusted to reflect significant events that occur after the close of local trading but before the net asset value of each share class of the fund is determined. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.
| The Growth Fund of America | 15 |
Processes and structure — The fund’s board of trustees has delegated authority to the fund’s investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation 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 fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.
The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control self-evaluation program facilitated by the investment adviser’s compliance group.
Classifications — The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Certain securities trading outside the U.S. may transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of August 31, 2017 (dollars in thousands):
| Investment securities | ||||||||||||||||
| Level 1 | Level 2* | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Common stocks: | ||||||||||||||||
| Information technology | $ | 42,352,021 | $ | 5,239,341 | $ | — | $ | 47,591,362 | ||||||||
| Consumer discretionary | 33,189,955 | 1,478,293 | — | 34,668,248 | ||||||||||||
| Health care | 19,845,370 | 159,550 | 27,433 | 20,032,353 | ||||||||||||
| Financials | 11,129,969 | 1,991,135 | — | 13,121,104 | ||||||||||||
| Energy | 10,065,795 | 227,897 | — | 10,293,692 | ||||||||||||
| Industrials | 7,656,195 | 462,026 | — | 8,118,221 | ||||||||||||
| Consumer staples | 5,623,362 | 1,296,834 | — | 6,920,196 | ||||||||||||
| Materials | 3,181,545 | 518,424 | — | 3,699,969 | ||||||||||||
| Other | 2,059,708 | — | — | 2,059,708 | ||||||||||||
| Miscellaneous | 4,624,705 | 1,664,810 | — | 6,289,515 | ||||||||||||
| Preferred securities | 342,390 | — | — | 342,390 | ||||||||||||
| Rights & warrants | 186,633 | — | — | 186,633 | ||||||||||||
| Convertible stocks | — | — | 125,230 | 125,230 | ||||||||||||
| Bonds, notes & other debt instruments | — | 243,336 | — | 243,336 | ||||||||||||
| Short-term securities | — | 12,792,736 | — | 12,792,736 | ||||||||||||
| Total | $ | 140,257,648 | $ | 26,074,382 | $ | 152,663 | $ | 166,484,693 | ||||||||
| * | Securities with a value of $8,985,585,000, which represented 5.40% of the net assets of the fund, transferred from Level 1 to Level 2 since the prior fiscal year-end, primarily due to significant market movements following the close of local trading. |
4. Risk factors
Investing in the fund may involve certain risks including, but not limited to, those described below.
Market conditions — The prices of, and the income generated by, the common stocks and other securities held by the fund may decline — sometimes rapidly or unpredictably — due to various factors, including events or conditions affecting the general economy or particular industries; overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions; and currency exchange rate, interest rate and commodity price fluctuations.
| 16 | The Growth Fund of America |
Issuer risks — The prices of, and the income generated by, securities held by the fund may decline in response to various factors directly related to the issuers of such securities, including reduced demand for an issuer’s goods or services, poor management performance and strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives.
Investing in growth-oriented stocks — Growth-oriented common stocks and other equity-type securities (such as preferred stocks, convertible preferred stocks and convertible bonds) may involve larger price swings and greater potential for loss than other types of investments.
Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations or revenues outside the U.S., may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts, terrorism and war) in the countries or regions in which the issuers operate or generate revenue. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Issuers of these securities may be more susceptible to actions of foreign governments, such as the imposition of price controls or punitive taxes, that could adversely impact the value of these securities. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different accounting practices and different regulatory, legal and reporting standards and practices, and may be more difficult to value, than those in the U.S. In addition, the value of investments outside the U.S. may be reduced by foreign taxes, including foreign withholding taxes on interest and dividends. Further, there may be increased risks of delayed settlement of securities purchased or sold by the fund. The risks of investing outside the U.S. may be heightened in connection with investments in emerging markets.
Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.
5. Certain investment techniques
Forward currency contracts — The fund has entered into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The fund’s investment adviser uses forward currency contracts to manage the fund’s exposure to changes in exchange rates. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates.
On a daily basis, the fund’s investment adviser values forward currency contracts and records unrealized appreciation or depreciation for open forward currency contracts in the fund’s statement of assets and liabilities. Realized gains or losses are recorded at the time the forward currency contract is closed or offset by another contract with the same broker for the same settlement date and currency.
Closed forward currency contracts that have not reached their settlement date are included in the respective receivables or payables for closed forward currency contracts in the fund’s statement of assets and liabilities. Net realized gains or losses from closed forward currency contracts and net unrealized appreciation or depreciation from open forward currency contracts are recorded in the fund’s statement of operations. As of August 31, 2017, the fund did not have any open forward currency contracts. The average month-end notional amount of open forward currency contracts while held was $161,805,000.
The following table presents the financial statement impacts resulting from the fund’s use of forward currency contracts as of, or for the year ended, August 31, 2017 (dollars in thousands):
| Net realized gain | Net unrealized depreciation | |||||||||||||
| Contract | Risk type | Location on statement of operations |
Value | Location on statement of operations |
Value | |||||||||
| Forward currency | Currency | Net realized gain on forward currency contracts | $ | 6,770 | Net unrealized depreciation on forward currency contracts | $ | (475 | ) | ||||||
6. Taxation and distributions
Federal income taxation — The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
| The Growth Fund of America | 17 |
As of and during the period ended August 31, 2017, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2013, by state tax authorities for tax years before 2012 and by tax authorities outside the U.S. for tax years before 2010.
Non-U.S. taxation — Dividend and interest income are recorded net of non-U.S. taxes paid. The fund may file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. As a result of rulings from European courts, the fund filed for additional reclaims related to prior years. These reclaims are recorded when the amount is known and there are no significant uncertainties on collectability. Gains realized by the fund on the sale of securities in certain countries, if any, may be subject to non-U.S. taxes. If applicable, the fund records an estimated deferred tax liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
Distributions — Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to different treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in securities outside the U.S.; cost of investments sold and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
During the year ended August 31, 2017, the fund reclassified $175,000 from undistributed net investment income to capital paid in on shares of beneficial interest, $173,874,000 from undistributed net realized gain to undistributed net investment income and $599,350,000 from undistributed net realized gain to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.
As of August 31, 2017, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investments were as follows (dollars in thousands):
| Undistributed ordinary income | $ | 815,707 | ||
| Undistributed long-term capital gains | 8,586,320 | |||
| Gross unrealized appreciation on investments | 71,608,511 | |||
| Gross unrealized depreciation on investments | (2,146,429 | ) | ||
| Net unrealized appreciation on investments | 69,462,082 | |||
| Cost of investments | 97,022,611 |
| 18 | The Growth Fund of America |
The tax character of distributions paid to shareholders was as follows (dollars in thousands):
| Year ended August 31, 2017 | Year ended August 31, 2016 | |||||||||||||||||||||||
| Total | Total | |||||||||||||||||||||||
| dividends and | dividends and | |||||||||||||||||||||||
| Ordinary | Long-term | distributions | Ordinary | Long-term | distributions | |||||||||||||||||||
| Share class | income | capital gains | paid | income | capital gains | paid | ||||||||||||||||||
| Class A | $ | 417,499 | $ | 4,216,644 | $ | 4,634,143 | $ | 450,948 | $ | 5,611,765 | $ | 6,062,713 | ||||||||||||
| Class B1 | — | 5,716 | 5,716 | — | 32,520 | 32,520 | ||||||||||||||||||
| Class C | — | 288,379 | 288,379 | 1 | 437,938 | 437,939 | ||||||||||||||||||
| Class T2 | — | — | — | |||||||||||||||||||||
| Class F-1 | 43,579 | 482,570 | 526,149 | 47,315 | 648,267 | 695,582 | ||||||||||||||||||
| Class F-2 | 104,611 | 750,183 | 854,794 | 92,798 | 849,837 | 942,635 | ||||||||||||||||||
| Class F-33 | — | — | — | |||||||||||||||||||||
| Class 529-A | 31,754 | 363,317 | 395,071 | 32,055 | 461,533 | 493,588 | ||||||||||||||||||
| Class 529-B1 | — | 1,160 | 1,160 | — | 6,207 | 6,207 | ||||||||||||||||||
| Class 529-C | — | 89,389 | 89,389 | (42 | ) | 117,221 | 117,179 | |||||||||||||||||
| Class 529-E | 761 | 15,850 | 16,611 | 788 | 20,684 | 21,472 | ||||||||||||||||||
| Class 529-T2 | — | — | — | |||||||||||||||||||||
| Class 529-F-1 | 1,749 | 13,817 | 15,566 | 1,630 | 16,544 | 18,174 | ||||||||||||||||||
| Class R-1 | — | 25,190 | 25,190 | — | 37,260 | 37,260 | ||||||||||||||||||
| Class R-2 | — | 124,368 | 124,368 | — | 176,138 | 176,138 | ||||||||||||||||||
| Class R-2E | 170 | 2,473 | 2,643 | 34 | 284 | 318 | ||||||||||||||||||
| Class R-3 | 15,059 | 367,017 | 382,076 | 17,637 | 545,696 | 563,333 | ||||||||||||||||||
| Class R-4 | 42,380 | 436,297 | 478,677 | 41,069 | 546,348 | 587,417 | ||||||||||||||||||
| Class R-5E4 | 151 | 942 | 1,093 | — | 5 | 1 | 1 | |||||||||||||||||
| Class R-5 | 27,991 | 196,269 | 224,260 | 43,844 | 379,661 | 423,505 | ||||||||||||||||||
| Class R-6 | 147,138 | 949,585 | 1,096,723 | 131,278 | 1,075,275 | 1,206,553 | ||||||||||||||||||
| Total | $ | 832,842 | $ | 8,329,166 | $ | 9,162,008 | $ | 859,355 | $ | 10,963,179 | $ | 11,822,534 | ||||||||||||
| 1 | Class B and 529-B shares were fully liquidated on May 5, 2017. |
| 2 | Class T and 529-T shares began investment operations on April 7, 2017. |
| 3 | Class F-3 shares began investment operations on January 27, 2017. |
| 4 | Class R-5E shares began investment operations on November 20, 2015. |
| 5 | Amount less than one thousand. |
7. Fees and transactions with related parties
CRMC, the fund’s investment adviser, is the parent company of American Funds Distributors,® Inc. (“AFD”), the principal underwriter of the fund’s shares, and American Funds Service Company® (“AFS”), the fund’s transfer agent. CRMC, AFD and AFS are considered related parties to the fund.
Investment advisory services — The fund has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. These fees are based on a series of decreasing annual rates beginning with 0.500% on the first $1 billion of daily net assets and decreasing to 0.233% on such assets in excess of $210 billion. For the year ended August 31, 2017, the investment advisory services fee was $420,112,000, which was equivalent to an annualized rate of 0.272% of average daily net assets.
Class-specific fees and expenses — Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are further described below:
Distribution services — The fund has plans of distribution for all share classes, except Class F-2, F-3, R-5E, R-5 and R-6 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted in this section. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide
| The Growth Fund of America | 19 |
certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
| Share class | Currently approved limits | Plan limits | ||||||
| Class A | 0.25 | % | 0.25 | % | ||||
| Class 529-A | 0.25 | 0.50 | ||||||
| Classes C, 529-C and R-1 | 1.00 | 1.00 | ||||||
| Class R-2 | 0.75 | 1.00 | ||||||
| Class R-2E | 0.60 | 0.85 | ||||||
| Classes 529-E and R-3 | 0.50 | 0.75 | ||||||
| Classes T, F-1, 529-T, 529-F-1 and R-4 | 0.25 | 0.50 | ||||||
For Class A and 529-A shares, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These share classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limits are not exceeded. As of August 31, 2017, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A shares.
Transfer agent services — The fund has a shareholder services agreement with AFS under which the fund compensates AFS for providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.
Administrative services — The fund has an administrative services agreement with CRMC under which the fund compensates CRMC for providing administrative services to Class A, C, T, F, 529 and R shares. These services include, but are not limited to, coordinating, monitoring, assisting and overseeing third parties that provide services to fund shareholders. Under the agreement, Class A shares pay an annual fee of 0.01% and Class C, T, F, 529 and R shares pay an annual fee of 0.05% of their respective average daily net assets.
529 plan services — Each 529 share class is subject to service fees to compensate the Virginia College Savings Plan (“Virginia529”) for its oversight and administration of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $20 billion of the net assets invested in the Class 529 shares of the American Funds and decreasing to 0.03% on such assets in excess of $100 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. The fee is included in other expenses in the fund’s statement of operations. Virginia529 is not considered a related party to the fund.
| 20 | The Growth Fund of America |
For the year ended August 31, 2017, class-specific expenses under the agreements were as follows (dollars in thousands):
| Distribution | Transfer agent | Administrative | 529 plan | ||||||||||||||
| Share class | services | services | services | services | |||||||||||||
| Class A | $182,959 | $87,611 | $7,765 | Not applicable | |||||||||||||
| Class B1 | 615 | 100 | Not applicable | Not applicable | |||||||||||||
| Class C | 48,131 | 5,506 | 2,419 | Not applicable | |||||||||||||
| Class T2 | — | — | 3 | — | 3 | Not applicable | |||||||||||
| Class F-1 | 21,585 | 10,752 | 4,329 | Not applicable | |||||||||||||
| Class F-2 | Not applicable | 14,671 | 7,145 | Not applicable | |||||||||||||
| Class F-34 | Not applicable | 37 | 389 | Not applicable | |||||||||||||
| Class 529-A | 14,770 | 6,286 | 3,373 | $4,629 | |||||||||||||
| Class 529-B1 | 120 | 21 | 6 | 8 | |||||||||||||
| Class 529-C | 15,314 | 1,520 | 776 | 1,065 | |||||||||||||
| Class 529-E | 1,434 | 166 | 145 | 199 | |||||||||||||
| Class 529-T2 | — | — | 3 | — | 3 | — | 3 | ||||||||||
| Class 529-F-1 | — | 241 | 130 | 179 | |||||||||||||
| Class R-1 | 4,245 | 454 | 213 | Not applicable | |||||||||||||
| Class R-2 | 15,934 | 7,501 | 1,071 | Not applicable | |||||||||||||
| Class R-2E | 413 | 129 | 34 | Not applicable | |||||||||||||
| Class R-3 | 32,131 | 9,662 | 3,232 | Not applicable | |||||||||||||
| Class R-4 | 19,776 | 7,899 | 3,962 | Not applicable | |||||||||||||
| Class R-5E | Not applicable | 29 | 11 | Not applicable | |||||||||||||
| Class R-5 | Not applicable | 1,777 | 1,787 | Not applicable | |||||||||||||
| Class R-6 | Not applicable | 66 | 9,380 | Not applicable | |||||||||||||
| Total class-specific expenses | $357,427 | $154,428 | $46,167 | $6,080 | |||||||||||||
| 1 | Class B and 529-B shares were fully liquidated on May 5, 2017. | |
| 2 | Class T and 529-T shares began investment operations on April 7, 2017. | |
| 3 | Amount less than one thousand. | |
| 4 | Class F-3 shares began investment operations on January 27, 2017. |
Trustees’ deferred compensation — Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation of $1,358,000 in the fund’s statement of operations reflects $493,000 in current fees (either paid in cash or deferred) and a net increase of $865,000 in the value of the deferred amounts.
Affiliated officers and trustees — Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFD and AFS. No affiliated officers or trustees received any compensation directly from the fund.
Security transactions with related funds — The fund may purchase from, or sell securities to, other funds managed by CRMC (or funds managed by certain affiliates of CRMC) under procedures adopted by the fund’s board of trustees. The funds involved in such transactions are considered related by virtue of having a common investment adviser (or affiliated investment advisers), common trustees and/or common officers. When such transactions occur, each transaction is executed at the current market price of the security and no brokerage commissions or fees are paid in accordance with Rule 17a-7 of the 1940 Act.
Interfund lending — Pursuant to an exemptive order issued by the SEC, the fund, along with other CRMC-managed funds (or funds managed by certain affiliates of CRMC), may participate in an interfund lending program. The program provides an alternate credit facility that permits the funds to lend or borrow cash for temporary purposes directly to or from one another, subject to the conditions of the exemptive order. The fund did not lend or borrow cash through the interfund lending program at any time during the year ended August 31, 2017.
| The Growth Fund of America | 21 |
8. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
| Reinvestments of | Net (decrease) | |||||||||||||||||||||||||||||||
| Sales1 | dividends and distributions | Repurchases1 | increase | |||||||||||||||||||||||||||||
| Share class | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||||||||
| Year ended August 31, 2017 | ||||||||||||||||||||||||||||||||
| Class A | $ | 5,300,813 | 117,059 | $ | 4,560,109 | 106,970 | $ | (12,747,405 | ) | (281,511 | ) | $ | (2,886,483 | ) | (57,482 | ) | ||||||||||||||||
| Class B2 | 416 | 10 | 5,673 | 140 | (206,330 | ) | (4,910 | ) | (200,241 | ) | (4,760 | ) | ||||||||||||||||||||
| Class C | 612,781 | 14,479 | 283,426 | 7,109 | (1,696,584 | ) | (40,157 | ) | (800,377 | ) | (18,569 | ) | ||||||||||||||||||||
| Class T3 | 10 | — | 4 | — | — | — | — | 10 | — | 4 | ||||||||||||||||||||||
| Class F-1 | 1,272,487 | 28,302 | 514,201 | 12,139 | (2,731,925 | ) | (60,173 | ) | (945,237 | ) | (19,732 | ) | ||||||||||||||||||||
| Class F-2 | 6,732,244 | 148,618 | 819,188 | 19,261 | (5,336,520 | ) | (117,222 | ) | 2,214,912 | 50,657 | ||||||||||||||||||||||
| Class F-35 | 2,716,887 | 58,395 | — | — | (163,764 | ) | (3,441 | ) | 2,553,123 | 54,954 | ||||||||||||||||||||||
| Class 529-A | 628,057 | 14,015 | 394,994 | 9,353 | (828,768 | ) | (18,316 | ) | 194,283 | 5,052 | ||||||||||||||||||||||
| Class 529-B2 | 182 | 4 | 1,160 | 29 | (42,302 | ) | (1,014 | ) | (40,960 | ) | (981 | ) | ||||||||||||||||||||
| Class 529-C | 133,152 | 3,139 | 89,321 | 2,233 | (241,792 | ) | (5,661 | ) | (19,319 | ) | (289 | ) | ||||||||||||||||||||
| Class 529-E | 25,855 | 582 | 16,611 | 397 | (41,544 | ) | (929 | ) | 922 | 50 | ||||||||||||||||||||||
| Class 529-T3 | 10 | — | 4 | — | — | — | — | 10 | — | 4 | ||||||||||||||||||||||
| Class 529-F-1 | 58,213 | 1,295 | 15,561 | 369 | (45,624 | ) | (1,011 | ) | 28,150 | 653 | ||||||||||||||||||||||
| Class R-1 | 34,589 | 808 | 25,164 | 623 | (125,456 | ) | (2,934 | ) | (65,703 | ) | (1,503 | ) | ||||||||||||||||||||
| Class R-2 | 411,918 | 9,514 | 124,234 | 3,044 | (760,860 | ) | (17,596 | ) | (224,708 | ) | (5,038 | ) | ||||||||||||||||||||
| Class R-2E | 71,043 | 1,603 | 2,643 | 62 | (9,245 | ) | (205 | ) | 64,441 | 1,460 | ||||||||||||||||||||||
| Class R-3 | 1,022,182 | 22,937 | 380,953 | 9,092 | (2,140,299 | ) | (48,294 | ) | (737,164 | ) | (16,265 | ) | ||||||||||||||||||||
| Class R-4 | 1,322,873 | 29,387 | 478,459 | 11,319 | (2,374,586 | ) | (52,777 | ) | (573,254 | ) | (12,071 | ) | ||||||||||||||||||||
| Class R-5E | 37,127 | 824 | 1,092 | 26 | (10,321 | ) | (214 | ) | 27,898 | 636 | ||||||||||||||||||||||
| Class R-5 | 624,661 | 13,779 | 223,576 | 5,251 | (1,158,325 | ) | (25,626 | ) | (310,088 | ) | (6,596 | ) | ||||||||||||||||||||
| Class R-6 | 5,996,512 | 130,497 | 1,095,526 | 25,698 | (3,031,016 | ) | (66,985 | ) | 4,061,022 | 89,210 | ||||||||||||||||||||||
| Total net increase (decrease) | $ | 27,002,012 | 595,247 | $ | 9,031,891 | 213,115 | $ | (33,692,666 | ) | (748,976 | ) | $ | 2,341,237 | 59,386 | ||||||||||||||||||
| Year ended August 31, 2016 | ||||||||||||||||||||||||||||||||
| Class A | $ | 4,924,929 | 118,808 | $ | 5,967,182 | 145,116 | $ | (8,823,043 | ) | (212,227 | ) | $ | 2,069,068 | 51,697 | ||||||||||||||||||
| Class B | 2,900 | 73 | 32,239 | 823 | (311,833 | ) | (7,948 | ) | (276,694 | ) | (7,052 | ) | ||||||||||||||||||||
| Class C | 613,767 | 15,737 | 429,366 | 11,095 | (1,477,000 | ) | (38,034 | ) | (433,867 | ) | (11,202 | ) | ||||||||||||||||||||
| Class F-1 | 1,280,513 | 31,126 | 681,004 | 16,662 | (1,787,811 | ) | (43,329 | ) | 173,706 | 4,459 | ||||||||||||||||||||||
| Class F-2 | 2,744,672 | 66,007 | 900,960 | 21,959 | (2,359,964 | ) | (57,176 | ) | 1,285,668 | 30,790 | ||||||||||||||||||||||
| Class 529-A | 545,610 | 13,265 | 493,503 | 12,105 | (703,145 | ) | (16,965 | ) | 335,968 | 8,405 | ||||||||||||||||||||||
| Class 529-B | 869 | 22 | 6,205 | 159 | (58,490 | ) | (1,491 | ) | (51,416 | ) | (1,310 | ) | ||||||||||||||||||||
| Class 529-C | 134,779 | 3,439 | 117,144 | 3,016 | (204,040 | ) | (5,183 | ) | 47,883 | 1,272 | ||||||||||||||||||||||
| Class 529-E | 24,266 | 593 | 21,469 | 531 | (34,866 | ) | (849 | ) | 10,869 | 275 | ||||||||||||||||||||||
| Class 529-F-1 | 40,707 | 985 | 18,175 | 447 | (40,465 | ) | (973 | ) | 18,417 | 459 | ||||||||||||||||||||||
| Class R-1 | 39,701 | 1,000 | 37,230 | 950 | (121,308 | ) | (3,036 | ) | (44,377 | ) | (1,086 | ) | ||||||||||||||||||||
| Class R-2 | 382,669 | 9,637 | 175,984 | 4,451 | (666,231 | ) | (16,699 | ) | (107,578 | ) | (2,611 | ) | ||||||||||||||||||||
| Class R-2E | 34,224 | 848 | 317 | 8 | (2,323 | ) | (57 | ) | 32,218 | 799 | ||||||||||||||||||||||
| Class R-3 | 855,016 | 20,987 | 561,836 | 13,890 | (2,131,593 | ) | (52,228 | ) | (714,741 | ) | (17,351 | ) | ||||||||||||||||||||
| Class R-4 | 1,965,510 | 47,586 | 587,103 | 14,390 | (1,995,615 | ) | (48,313 | ) | 556,998 | 13,663 | ||||||||||||||||||||||
| Class R-5E6 | 10 | — | 4 | — | — | — | — | 10 | — | 4 | ||||||||||||||||||||||
| Class R-5 | 621,642 | 15,092 | 422,476 | 10,289 | (2,420,640 | ) | (58,716 | ) | (1,376,522 | ) | (33,335 | ) | ||||||||||||||||||||
| Class R-6 | 3,563,488 | 86,963 | 1,204,830 | 29,300 | (2,316,878 | ) | (55,403 | ) | 2,451,440 | 60,860 | ||||||||||||||||||||||
| Total net increase (decrease) | $ | 17,775,272 | 432,168 | $ | 11,657,023 | 285,191 | $ | (25,455,245 | ) | (618,627 | ) | $ | 3,977,050 | 98,732 | ||||||||||||||||||
| 1 | Includes exchanges between share classes of the fund. |
| 2 | Class B and 529-B shares were fully liquidated on May 5, 2017. |
| 3 | Class T and 529-T shares began investment operations on April 7, 2017. |
| 4 | Amount less than one thousand. |
| 5 | Class F-3 shares began investment operations on January 27, 2017. |
| 6 | Class R-5E shares began investment operations on November 20, 2015. |
| 22 | The Growth Fund of America |
9. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $36,532,688,000 and $44,493,872,000, respectively, during the year ended August 31, 2017.
| The Growth Fund of America | 23 |
Financial highlights
| Income from investment operations1 |
Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
Net investment income (loss) |
Net gains on securities (both realized and unrealized) |
Total from investment operations |
Dividends (from net investment income) |
Distributions (from capital gains) |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Net assets, end of period (in millions) |
Ratio of expenses to average net assets |
Ratio of net income (loss) to average net assets | |||||||||||||||||||||||||||||||||||||
| Class A: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | $ | 43.47 | $ | .29 | $ | 7.83 | $ | 8.12 | $ | (.25 | ) | $ | (2.53 | ) | $ | (2.78 | ) | $ | 48.81 | 19.60 | % | $ | 81,221 | .64 | % | .64 | % | |||||||||||||||||||||
| Year ended 8/31/2016 | 43.31 | .24 | 3.58 | 3.82 | (.27 | ) | (3.39 | ) | (3.66 | ) | 43.47 | 9.31 | 74,847 | .66 | .57 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.70 | .23 | .61 | .84 | (.17 | ) | (4.06 | ) | (4.23 | ) | 43.31 | 2.12 | 72,321 | .65 | .51 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.93 | .17 | 9.49 | 9.66 | (.14 | ) | (2.75 | ) | (2.89 | ) | 46.70 | 25.00 | 73,975 | .66 | .39 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.80 | .22 | 7.19 | 7.41 | (.28 | ) | — | (.28 | ) | 39.93 | 22.74 | 62,602 | .70 | .60 | ||||||||||||||||||||||||||||||||||
| Class C: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 40.69 | (.07 | ) | 7.30 | 7.23 | — | (2.53 | ) | (2.53 | ) | 45.39 | 18.63 | 4,745 | 1.44 | (.17 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 40.80 | (.09 | ) | 3.37 | 3.28 | — | (3.39 | ) | (3.39 | ) | 40.69 | 8.47 | 5,009 | 1.46 | (.23 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 44.41 | (.12 | ) | .57 | .45 | — | (4.06 | ) | (4.06 | ) | 40.80 | 1.29 | 5,480 | 1.45 | (.29 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 38.27 | (.17 | ) | 9.06 | 8.89 | — | (2.75 | ) | (2.75 | ) | 44.41 | 23.99 | 6,232 | 1.45 | (.41 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 31.44 | (.07 | ) | 6.91 | 6.84 | (.01 | ) | — | (.01 | ) | 38.27 | 21.76 | 5,986 | 1.50 | (.20 | ) | ||||||||||||||||||||||||||||||||
| Class T: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Period from 04/07/2017 to 8/31/20173,4 | 45.38 | .18 | 3.28 | 3.46 | — | — | — | 48.84 | 7.62 | 5,6 | — | 7 | .18 | 5,6 | .38 | 5,6 | ||||||||||||||||||||||||||||||||
| Class F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.20 | .26 | 7.77 | 8.03 | (.23 | ) | (2.53 | ) | (2.76 | ) | 48.47 | 19.50 | 8,574 | .70 | .57 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 43.05 | .22 | 3.57 | 3.79 | (.25 | ) | (3.39 | ) | (3.64 | ) | 43.20 | 9.28 | 8,494 | .71 | .52 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.40 | .20 | .61 | .81 | (.10 | ) | (4.06 | ) | (4.16 | ) | 43.05 | 2.07 | 8,273 | .70 | .46 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.69 | .15 | 9.43 | 9.58 | (.12 | ) | (2.75 | ) | (2.87 | ) | 46.40 | 24.93 | 10,569 | .69 | .36 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.61 | .21 | 7.15 | 7.36 | (.28 | ) | — | (.28 | ) | 39.69 | 22.71 | 11,180 | .71 | .59 | ||||||||||||||||||||||||||||||||||
| Class F-2: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.45 | .38 | 7.81 | 8.19 | (.35 | ) | (2.53 | ) | (2.88 | ) | 48.76 | 19.83 | 16,049 | .43 | .84 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 43.29 | .33 | 3.59 | 3.92 | (.37 | ) | (3.39 | ) | (3.76 | ) | 43.45 | 9.57 | 12,100 | .44 | .79 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.71 | .33 | .60 | .93 | (.29 | ) | (4.06 | ) | (4.35 | ) | 43.29 | 2.35 | 10,723 | .43 | .73 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.95 | .27 | 9.48 | 9.75 | (.24 | ) | (2.75 | ) | (2.99 | ) | 46.71 | 25.27 | 8,637 | .43 | .62 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.83 | .32 | 7.19 | 7.51 | (.39 | ) | — | (.39 | ) | 39.95 | 23.05 | 4,358 | .44 | .86 | ||||||||||||||||||||||||||||||||||
| Class F-3: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Period from 1/27/2017 to 8/31/20173,8 | 44.36 | .30 | 4.24 | 4.54 | — | — | — | 48.90 | 10.24 | 5 | 2,687 | .34 | 9 | 1.08 | 9 | |||||||||||||||||||||||||||||||||
| Class 529-A: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.08 | .25 | 7.75 | 8.00 | (.22 | ) | (2.53 | ) | (2.75 | ) | 48.33 | 19.50 | 7,233 | .71 | .57 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 42.95 | .20 | 3.56 | 3.76 | (.24 | ) | (3.39 | ) | (3.63 | ) | 43.08 | 9.23 | 6,229 | .74 | .48 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.35 | .19 | .61 | .80 | (.14 | ) | (4.06 | ) | (4.20 | ) | 42.95 | 2.04 | 5,849 | .73 | .43 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.66 | .13 | 9.42 | 9.55 | (.11 | ) | (2.75 | ) | (2.86 | ) | 46.35 | 24.89 | 5,799 | .74 | .31 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.59 | .19 | 7.15 | 7.34 | (.27 | ) | — | (.27 | ) | 39.66 | 22.65 | 4,663 | .77 | .52 | ||||||||||||||||||||||||||||||||||
| 24 | The Growth Fund of America |
| Income from investment operations1 |
Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
Net investment income (loss) |
Net gains on securities (both realized and unrealized) |
Total from investment operations |
Dividends (from net investment income) |
Distributions (from capital gains) |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Net assets, end of period (in millions) |
Ratio of expenses to average net assets |
Ratio of net income (loss) to average net assets | |||||||||||||||||||||||||||||||||||||
| Class 529-C: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | $ | 40.83 | $ | (.09 | ) | $ | 7.33 | $ | 7.24 | $ | — | $ | (2.53 | ) | $ | (2.53 | ) | $ | 45.54 | 18.59 | % | $ | 1,625 | 1.48 | % | (.21 | )% | |||||||||||||||||||||
| Year ended 8/31/2016 | 40.96 | (.11 | ) | 3.37 | 3.26 | — | (3.39 | ) | (3.39 | ) | 40.83 | 8.39 | 1,469 | 1.52 | (.29 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 44.58 | (.15 | ) | .59 | .44 | — | (4.06 | ) | (4.06 | ) | 40.96 | 1.27 | 1,421 | 1.51 | (.35 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 38.43 | (.20 | ) | 9.10 | 8.90 | — | (2.75 | ) | (2.75 | ) | 44.58 | 23.91 | 1,440 | 1.52 | (.47 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 31.60 | (.09 | ) | 6.94 | 6.85 | (.02 | ) | — | (.02 | ) | 38.43 | 21.69 | 1,188 | 1.56 | (.26 | ) | ||||||||||||||||||||||||||||||||
| Class 529-E: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 42.65 | .14 | 7.67 | 7.81 | (.12 | ) | (2.53 | ) | (2.65 | ) | 47.81 | 19.20 | 307 | .95 | .32 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 42.54 | .10 | 3.53 | 3.63 | (.13 | ) | (3.39 | ) | (3.52 | ) | 42.65 | 8.99 | 272 | .98 | .25 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 45.94 | .08 | .60 | .68 | (.02 | ) | (4.06 | ) | (4.08 | ) | 42.54 | 1.79 | 260 | .98 | .18 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.34 | .03 | 9.33 | 9.36 | (.01 | ) | (2.75 | ) | (2.76 | ) | 45.94 | 24.57 | 263 | .99 | .06 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.33 | .10 | 7.10 | 7.20 | (.19 | ) | — | (.19 | ) | 39.34 | 22.36 | 217 | 1.02 | .28 | ||||||||||||||||||||||||||||||||||
| Class 529-T: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Period from 04/07/2017 to 8/31/20173,4 | 45.38 | .17 | 3.28 | 3.45 | — | — | — | 48.83 | 7.60 | 5,6 | — | 7 | .20 | 5,6 | .37 | 5,6 | ||||||||||||||||||||||||||||||||
| Class 529-F-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.04 | .35 | 7.74 | 8.09 | (.32 | ) | (2.53 | ) | (2.85 | ) | 48.28 | 19.76 | 291 | .49 | .79 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 42.92 | .29 | 3.55 | 3.84 | (.33 | ) | (3.39 | ) | (3.72 | ) | 43.04 | 9.46 | 231 | .52 | .70 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.33 | .29 | .59 | .88 | (.23 | ) | (4.06 | ) | (4.29 | ) | 42.92 | 2.26 | 211 | .51 | .65 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.64 | .23 | 9.41 | 9.64 | (.20 | ) | (2.75 | ) | (2.95 | ) | 46.33 | 25.16 | 200 | .52 | .53 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.57 | .27 | 7.14 | 7.41 | (.34 | ) | — | (.34 | ) | 39.64 | 22.92 | 157 | .56 | .74 | ||||||||||||||||||||||||||||||||||
| Class R-1: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 41.23 | (.07 | ) | 7.41 | 7.34 | — | (2.53 | ) | (2.53 | ) | 46.04 | 18.65 | 419 | 1.43 | (.16 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 41.29 | (.08 | ) | 3.41 | 3.33 | — | (3.39 | ) | (3.39 | ) | 41.23 | 8.49 | 438 | 1.43 | (.20 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 44.88 | (.11 | ) | .58 | .47 | — | (4.06 | ) | (4.06 | ) | 41.29 | 1.33 | 483 | 1.42 | (.27 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 38.64 | (.16 | ) | 9.15 | 8.99 | — | (2.75 | ) | (2.75 | ) | 44.88 | 24.02 | 542 | 1.43 | (.38 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 31.72 | (.05 | ) | 6.98 | 6.93 | (.01 | ) | — | (.01 | ) | 38.64 | 21.86 | 483 | 1.44 | (.13 | ) | ||||||||||||||||||||||||||||||||
| Class R-2: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 41.60 | (.07 | ) | 7.47 | 7.40 | — | (2.53 | ) | (2.53 | ) | 46.47 | 18.63 | 2,153 | 1.42 | (.15 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 41.62 | (.07 | ) | 3.44 | 3.37 | — | (3.39 | ) | (3.39 | ) | 41.60 | 8.53 | 2,137 | 1.40 | (.18 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 45.17 | (.08 | ) | .59 | .51 | — | (4.06 | ) | (4.06 | ) | 41.62 | 1.42 | 2,246 | 1.35 | (.19 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 38.85 | (.14 | ) | 9.21 | 9.07 | — | (2.75 | ) | (2.75 | ) | 45.17 | 24.10 | 2,496 | 1.38 | (.33 | ) | ||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 31.91 | (.02 | ) | 7.01 | 6.99 | (.05 | ) | — | (.05 | ) | 38.85 | 21.92 | 2,277 | 1.37 | (.07 | ) | ||||||||||||||||||||||||||||||||
| Class R-2E: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 42.92 | .08 | 7.70 | 7.78 | (.17 | ) | (2.53 | ) | (2.70 | ) | 48.00 | 19.02 | 108 | 1.12 | .18 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 43.09 | .07 | 3.55 | 3.62 | (.40 | ) | (3.39 | ) | (3.79 | ) | 42.92 | 8.89 | 34 | 1.11 | .17 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.70 | .10 | .65 | .75 | (.30 | ) | (4.06 | ) | (4.36 | ) | 43.09 | 1.92 | 6 | — | 7 | .96 | 6 | .22 | 6 | |||||||||||||||||||||||||||||
| Period from 8/29/2014 to 8/31/20143,10 | 46.70 | — | — | — | — | — | — | 46.70 | — | — | 7 | — | — | |||||||||||||||||||||||||||||||||||
See page 26 for footnotes.
| The Growth Fund of America | 25 |
Financial highlights (continued)
| Income from investment operations1 |
Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||||||
| Net asset value, beginning of period |
Net investment income (loss) |
Net gains on securities (both realized and unrealized) |
Total from investment operations |
Dividends (from net investment income) |
Distributions (from capital gains) |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Net assets, end of period (in millions) |
Ratio of expenses to average net assets |
Ratio of net income (loss) to average net assets | |||||||||||||||||||||||||||||||||||||
| Class R-3: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | $ | 42.68 | $ | .13 | $ | 7.68 | $ | 7.81 | $ | (.10 | ) | $ | (2.53 | ) | $ | (2.63 | ) | $ | 47.86 | 19.18 | % | $ | 6,518 | .98 | % | .30 | % | |||||||||||||||||||||
| Year ended 8/31/2016 | 42.55 | .10 | 3.53 | 3.63 | (.11 | ) | (3.39 | ) | (3.50 | ) | 42.68 | 8.99 | 6,507 | .98 | .24 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 45.94 | .08 | .60 | .68 | (.01 | ) | (4.06 | ) | (4.07 | ) | 42.55 | 1.79 | 7,226 | .97 | .19 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.33 | .03 | 9.34 | 9.37 | (.01 | ) | (2.75 | ) | (2.76 | ) | 45.94 | 24.60 | 8,325 | .98 | .07 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.29 | .12 | 7.08 | 7.20 | (.16 | ) | — | (.16 | ) | 39.33 | 22.38 | 7,769 | .98 | .33 | ||||||||||||||||||||||||||||||||||
| Class R-4: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.13 | .27 | 7.76 | 8.03 | (.25 | ) | (2.53 | ) | (2.78 | ) | 48.38 | 19.54 | 8,123 | .68 | .59 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 42.99 | .22 | 3.56 | 3.78 | (.25 | ) | (3.39 | ) | (3.64 | ) | 43.13 | 9.29 | 7,762 | .68 | .54 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.38 | .22 | .60 | .82 | (.15 | ) | (4.06 | ) | (4.21 | ) | 42.99 | 2.11 | 7,149 | .67 | .48 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.68 | .16 | 9.42 | 9.58 | (.13 | ) | (2.75 | ) | (2.88 | ) | 46.38 | 24.97 | 7,835 | .68 | .37 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.56 | .23 | 7.14 | 7.37 | (.25 | ) | — | (.25 | ) | 39.68 | 22.77 | 7,169 | .68 | .63 | ||||||||||||||||||||||||||||||||||
| Class R-5E: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.34 | .38 | 7.77 | 8.15 | (.41 | ) | (2.53 | ) | (2.94 | ) | 48.55 | 19.78 | 31 | .47 | .83 | |||||||||||||||||||||||||||||||||
| Period from 11/20/2015 to 8/31/20163,11 | 45.73 | .22 | 1.21 | 1.43 | (.43 | ) | (3.39 | ) | (3.82 | ) | 43.34 | 3.60 | 5 | — | 7 | .56 | 9 | .70 | 9 | |||||||||||||||||||||||||||||
| Class R-5: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.50 | .41 | 7.82 | 8.23 | (.36 | ) | (2.53 | ) | (2.89 | ) | 48.84 | 19.90 | 3,665 | .38 | .90 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 43.33 | .35 | 3.60 | 3.95 | (.39 | ) | (3.39 | ) | (3.78 | ) | 43.50 | 9.64 | 3,551 | .39 | .84 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.73 | .35 | .60 | .95 | (.29 | ) | (4.06 | ) | (4.35 | ) | 43.33 | 2.40 | 4,982 | .38 | .78 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 39.96 | .29 | 9.49 | 9.78 | (.26 | ) | (2.75 | ) | (3.01 | ) | 46.73 | 25.33 | 5,450 | .38 | .67 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.82 | .34 | 7.18 | 7.52 | (.38 | ) | — | (.38 | ) | 39.96 | 23.11 | 5,273 | .39 | .92 | ||||||||||||||||||||||||||||||||||
| Class R-6: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended 8/31/2017 | 43.57 | .43 | 7.83 | 8.26 | (.39 | ) | (2.53 | ) | (2.92 | ) | 48.91 | 19.95 | 22,661 | .33 | .95 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2016 | 43.40 | .37 | 3.60 | 3.97 | (.41 | ) | (3.39 | ) | (3.80 | ) | 43.57 | 9.68 | 16,299 | .33 | .89 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2015 | 46.80 | .37 | .61 | .98 | (.32 | ) | (4.06 | ) | (4.38 | ) | 43.40 | 2.45 | 13,594 | .33 | .83 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2014 | 40.02 | .31 | 9.50 | 9.81 | (.28 | ) | (2.75 | ) | (3.03 | ) | 46.80 | 25.39 | 12,407 | .33 | .72 | |||||||||||||||||||||||||||||||||
| Year ended 8/31/2013 | 32.87 | .35 | 7.21 | 7.56 | (.41 | ) | — | (.41 | ) | 40.02 | 23.19 | 8,806 | .34 | .96 | ||||||||||||||||||||||||||||||||||
| Year ended August 31 | ||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
| Portfolio turnover rate for all share classes | 25 | % | 31 | % | 29 | % | 26 | % | 27 | % | ||||||||||
| 1 | Based on average shares outstanding. |
| 2 | Total returns exclude any applicable sales charges, including contingent deferred sales charges. |
| 3 | Based on operations for the period shown and, accordingly, is not representative of a full year. |
| 4 | Class T and 529-T shares began investment operations on April 7, 2017. |
| 5 | Not annualized. |
| 6 | All or a significant portion of assets in this class consisted of seed capital invested by CRMC and/or its affiliates. Fees for distribution services are not charged or accrued on these seed capital assets. If such fees were paid by the fund on seed capital assets, fund expenses would have been higher and net income and total return would have been lower. |
| 7 | Amount less than $1 million. |
| 8 | Class F-3 shares began investment operations on January 27, 2017. |
| 9 | Annualized. |
| 10 | Class R-2E shares began investment operations on August 29, 2014. |
| 11 | Class R-5E shares began investment operations on November 20, 2015. |
See Notes to Financial Statements
| 26 | The Growth Fund of America |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of The Growth Fund of America:
We have audited the accompanying statement of assets and liabilities of The Growth Fund of America (the “Fund”), including the summary investment portfolio, as of August 31, 2017, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2017, by correspondence with the custodian, brokers, and agent banks; where replies were not received from brokers and agent banks, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Growth Fund of America as of August 31, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Costa Mesa, California
October 9, 2017
| The Growth Fund of America | 27 |
| Expense example | unaudited |
As a fund shareholder, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period (March 1, 2017, through August 31, 2017).
Actual expenses:
The first line of each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled “Expenses paid during period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Notes:
Retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2, F-3 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.
Note that the expenses shown in the table on the following page are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| 28 | The Growth Fund of America |
| Beginning account value 3/1/2017 |
Ending account value 8/31/2017 |
Expenses paid during period* |
Annualized expense ratio |
|||||||||||||
| Class A - actual return | $ | 1,000.00 | $ | 1,084.90 | $ | 3.31 | .63 | % | ||||||||
| Class A - assumed 5% return | 1,000.00 | 1,022.03 | 3.21 | .63 | ||||||||||||
| Class C - actual return | 1,000.00 | 1,080.19 | 7.50 | 1.43 | ||||||||||||
| Class C - assumed 5% return | 1,000.00 | 1,018.00 | 7.27 | 1.43 | ||||||||||||
| Class T - actual return† | 1,000.00 | 1,076.24 | 1.91 | .46 | ||||||||||||
| Class T - assumed 5% return† | 1,000.00 | 1,022.89 | 2.35 | .46 | ||||||||||||
| Class F-1 - actual return | 1,000.00 | 1,084.32 | 3.68 | .70 | ||||||||||||
| Class F-1 - assumed 5% return | 1,000.00 | 1,021.68 | 3.57 | .70 | ||||||||||||
| Class F-2 - actual return | 1,000.00 | 1,085.74 | 2.26 | .43 | ||||||||||||
| Class F-2 - assumed 5% return | 1,000.00 | 1,023.04 | 2.19 | .43 | ||||||||||||
| Class F-3 - actual return | 1,000.00 | 1,086.41 | 1.79 | .34 | ||||||||||||
| Class F-3 - assumed 5% return | 1,000.00 | 1,023.49 | 1.73 | .34 | ||||||||||||
| Class 529-A - actual return | 1,000.00 | 1,084.38 | 3.68 | .70 | ||||||||||||
| Class 529-A - assumed 5% return | 1,000.00 | 1,021.68 | 3.57 | .70 | ||||||||||||
| Class 529-C - actual return | 1,000.00 | 1,080.16 | 7.76 | 1.48 | ||||||||||||
| Class 529-C - assumed 5% return | 1,000.00 | 1,017.74 | 7.53 | 1.48 | ||||||||||||
| Class 529-E - actual return | 1,000.00 | 1,082.90 | 4.99 | .95 | ||||||||||||
| Class 529-E - assumed 5% return | 1,000.00 | 1,020.42 | 4.84 | .95 | ||||||||||||
| Class 529-T - actual return† | 1,000.00 | 1,076.02 | 2.03 | .49 | ||||||||||||
| Class 529-T - assumed 5% return† | 1,000.00 | 1,022.74 | 2.50 | .49 | ||||||||||||
| Class 529-F-1 - actual return | 1,000.00 | 1,085.43 | 2.52 | .48 | ||||||||||||
| Class 529-F-1 - assumed 5% return | 1,000.00 | 1,022.79 | 2.45 | .48 | ||||||||||||
| Class R-1 - actual return | 1,000.00 | 1,080.51 | 7.45 | 1.42 | ||||||||||||
| Class R-1 - assumed 5% return | 1,000.00 | 1,018.05 | 7.22 | 1.42 | ||||||||||||
| Class R-2 - actual return | 1,000.00 | 1,080.43 | 7.45 | 1.42 | ||||||||||||
| Class R-2 - assumed 5% return | 1,000.00 | 1,018.05 | 7.22 | 1.42 | ||||||||||||
| Class R-2E - actual return | 1,000.00 | 1,082.06 | 5.88 | 1.12 | ||||||||||||
| Class R-2E - assumed 5% return | 1,000.00 | 1,019.56 | 5.70 | 1.12 | ||||||||||||
| Class R-3 - actual return | 1,000.00 | 1,082.78 | 5.09 | .97 | ||||||||||||
| Class R-3 - assumed 5% return | 1,000.00 | 1,020.32 | 4.94 | .97 | ||||||||||||
| Class R-4 - actual return | 1,000.00 | 1,084.49 | 3.57 | .68 | ||||||||||||
| Class R-4 - assumed 5% return | 1,000.00 | 1,021.78 | 3.47 | .68 | ||||||||||||
| Class R-5E - actual return | 1,000.00 | 1,085.63 | 2.52 | .48 | ||||||||||||
| Class R-5E - assumed 5% return | 1,000.00 | 1,022.79 | 2.45 | .48 | ||||||||||||
| Class R-5 - actual return | 1,000.00 | 1,086.30 | 2.00 | .38 | ||||||||||||
| Class R-5 - assumed 5% return | 1,000.00 | 1,023.29 | 1.94 | .38 | ||||||||||||
| Class R-6 - actual return | 1,000.00 | 1,086.39 | 1.74 | .33 | ||||||||||||
| Class R-6 - assumed 5% return | 1,000.00 | 1,023.54 | 1.68 | .33 | ||||||||||||
| * | The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period). |
| † | The period for the “annualized expense ratio” and “actual return” line is based on the number of days since the share class began investment operations on April 7, 2017. The “assumed 5% return” line is based on 184 days. |
| Tax information | unaudited |
We are required to advise you of the federal tax status of certain distributions received by shareholders during the fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended August 31, 2017:
| Long-term capital gains | $8,895,043,000 |
| Qualified dividend income | 100% |
| Corporate dividends received deduction | 100% |
| U.S. government income that may be exempt from state taxation | $30,866,000 |
Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2018, to determine the calendar year amounts to be included on their 2017 tax returns. Shareholders should consult their tax advisors.
| The Growth Fund of America | 29 |
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| 30 | The Growth Fund of America |
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| The Growth Fund of America | 31 |
Approval of Investment Advisory and Service Agreement
The Growth Fund of America board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through November 30, 2018. The board approved the agreement following the recommendation of the fund’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided, and that approving the agreement was in the best interests of the fund and its shareholders.
In reaching this decision, the board and the committee took into account information furnished to them throughout the year and otherwise provided to them, as well as information prepared specifically in connection with their review of the agreement, and were advised by their independent counsel. They considered the following factors, among others, but did not identify any single issue or particular piece of information that, in isolation, was the controlling factor, and each board and committee member did not necessarily attribute the same weight to each factor.
1. Nature, extent and quality of services
The board and the committee considered the depth and quality of CRMC’s investment management process, including its global research capabilities; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of CRMC and the Capital Group organization; and the ongoing evolution of CRMC’s organizational structure designed to maintain and strengthen these qualities. The board and the committee also considered the nature, extent and quality of administrative, compliance and shareholder services provided by CRMC to the fund under the agreement and other agreements, as well as the benefits to fund shareholders from investing in a fund that is part of a large family of funds. The board and the committee concluded that the nature, extent and quality of the services provided by CRMC have benefited and should continue to benefit the fund and its shareholders.
2. Investment results
The board and the committee considered the investment results of the fund in light of its objective to provide growth of capital. They compared the fund’s investment results with those of other funds (including funds that currently form the basis of the Lipper index for the category in which the fund is included), and data such as relevant market and fund indexes, over various periods through February 28, 2017. This report, including the letter to shareholders and related disclosures, contains certain information about the fund’s investment results. The board and the committee reviewed the fund’s investment results measured against various indexes, including the Lipper Growth Funds Index, the Lipper Large-Cap Core Funds Index, the Lipper Large-Cap Growth Funds Index and the Standard & Poor’s 500 Composite Index. They noted that the investment results of the fund generally compared favorably to or were in line with the results of these indexes for the lifetime period, 20-year period, 10-year period and five-year period. The board and the committee concluded that the fund’s investment results have been satisfactory for renewal of the agreement, and that CRMC’s record in managing the fund indicated that its continued management should benefit the fund and its shareholders.
3. Advisory fees and total expenses
The board and the committee compared the advisory fees and total expense levels of the fund to those of other relevant funds. They observed that the fund’s advisory fees and expenses generally compared favorably to those of other similar funds included in the Lipper Growth Funds category. The board and the committee also considered the breakpoint discounts in the fund’s advisory fee structure that reduce the level of fees charged by CRMC to the fund as fund assets increase. In addition, they reviewed information regarding the effective advisory fees charged to non-mutual fund clients by CRMC and its affiliates. They noted that, to the extent there were differences between the advisory fees paid by the fund and the advisory fees paid by those clients, the differences appropriately reflected the investment, operational, regulatory and market differences between advising the fund and the other clients. The board and the committee concluded that the fund’s cost structure was fair and reasonable in relation to the services provided, and that the fund’s shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund.
| 32 | The Growth Fund of America |
4. Ancillary benefits
The board and the committee considered a variety of other benefits that CRMC and its affiliates receive as a result of CRMC’s relationship with the fund and the other American Funds, including fees for administrative services provided to certain share classes; fees paid to CRMC’s affiliated transfer agent; sales charges and distribution fees received and retained by the fund’s principal underwriter, an affiliate of CRMC; and possible ancillary benefits to CRMC and its institutional management affiliates in managing other investment vehicles. The board and the committee reviewed CRMC’s portfolio trading practices, noting the benefits CRMC receives from the research obtained with commissions from portfolio transactions made on behalf of the fund. The board and the committee took these ancillary benefits into account in evaluating the reasonableness of the advisory fees and other amounts paid to CRMC by the fund.
5. Adviser financial information
The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, including personnel, systems and resources of investment, compliance, trading, accounting and other administrative operations. They considered CRMC’s costs and related cost allocation methodology as well as its willingness to invest in technology, infrastructure and staff to maintain and expand services and capabilities, respond to industry and regulatory developments, and attract and retain qualified personnel. They noted information regarding the compensation structure for CRMC’s investment professionals. The board and the committee also compared CRMC’s profitability and compensation data to the reported results and data of several large, publicly held investment management companies. The board and the committee noted the competitiveness and cyclicality of both the mutual fund industry and the capital markets, and the importance in that environment of CRMC’s long-term profitability for maintaining its independence, company culture and management continuity. They further considered the breakpoint discounts in the fund’s advisory fee structure. The board and the committee concluded that the fund’s advisory fee structure reflected a reasonable sharing of benefits between CRMC and the fund’s shareholders.
| The Growth Fund of America | 33 |
Board of trustees and other officers
Independent trustees1
| Name and year of birth | Year first elected a trustee of the fund2 |
Principal occupation(s) during past five years | Number of portfolios in fund complex overseen by trustee3 |
Other directorships4 held by trustee | ||||
| Ronald P. Badie, 1942 | 2008 | Retired; former Vice Chairman, Deutsche Bank Alex. Brown (retired 2002) | 3 |
Amphenol Corporation; Nautilus, Inc. | ||||
| Joseph C. Berenato, 1946 | 2003 | Former Chairman and CEO, Ducommun Incorporated (aerospace components manufacturer) | 16 | Ducommun Incorporated | ||||
| Louise H. Bryson, 1944 | 2008 | Chair Emerita of the Board of Trustees, J. Paul Getty Trust; former President, Distribution, Lifetime Entertainment Network (retired 2008); former Executive Vice President and General Manager, Lifetime Movie Network (retired 2008) | 7 | None | ||||
| Mary Anne Dolan, 1947 Chairman of the Board (Independent and Non-Executive) |
2010 | Founder and President, MAD Ink (communications company); former Editor-in-Chief, The Los Angeles Herald Examiner (retired 1989) | 10 | None | ||||
| John G. Freund, 1953 | 2010 | Founder and Managing Director, Skyline Ventures (a venture capital investor in health care companies) | 6 | Collegium Pharmaceutical, Inc.; Proteon Therapeutics, Inc.; Tetraphase Pharmaceuticals, Inc. | ||||
| Linda Griego, 1947 | 2015 | President and CEO, Griego Enterprises, Inc. (business management company) | 7 | AECOM Technology Corporation; CBS Corporation | ||||
| Leonade D. Jones, 1947 | 1993 | Retired; former Treasurer, The Washington Post Company (retired 1996) | 10 | None | ||||
| William H. Kling, 1942 | 2010 | President Emeritus and former CEO, American Public Media | 10 | None | ||||
| Sharon I. Meers, 1965 | 2017 | Former Senior Director, Head of Strategic Partnerships, eBay Enterprise | 3 | None | ||||
| Kenneth M. Simril, 1965 | 2016 | President and CEO, SCI Ingredients Holdings, Inc. (food manufacturing) | 3 | None | ||||
| Christopher E. Stone, 1956 | 2010 | President, Open Society Foundations; former Professor of the Practice of Criminal Justice, John F. Kennedy School of Government, Harvard University | 6 | None |
Robert J. Denison retired from the fund on December 31, 2016. The trustees thank Mr. Denison for his wise counsel, outstanding service and dedication to the fund.
Interested trustees5,6
| Name, year of birth and position with fund |
Year first elected a trustee or officer of the fund2 |
Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund |
Number of portfolios in fund complex overseen by trustee3 |
Other directorships4 held by trustee | ||||
| Donald D. O’Neal, 1960 Vice Chairman of the Board |
1995 | Partner — Capital Research Global Investors, Capital Research and Management Company; Director, Capital Research and Management Company | 31 | None | ||||
| Michael T. Kerr, 1959 President |
1998 | Partner — Capital World Investors, Capital Research and Management Company | 1 | None |
The fund’s statement of additional information includes further details about fund trustees and is available without charge upon request by calling American Funds Service Company at (800) 421-4225 or by visiting the American Funds website at americanfunds.com. The address for all trustees and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Secretary.
| 34 | The Growth Fund of America |
Other officers6
| Name, year of birth and position with fund |
Year first elected an officer of the fund2 |
Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund | ||
| Paul F. Roye, 1953 Executive Vice President |
2012 | Director, Capital Research and Management Company; Senior Vice President and Senior Counsel — Fund Business Management Group, Capital Research and Management Company | ||
| Brad A. Barrett, 1977 Senior Vice President |
2010 | Partner — Capital Research Global Investors, Capital Research and Management Company | ||
| Christopher D. Buchbinder, 1971 Senior Vice President |
2015 | Partner — Capital Research Global Investors, Capital Research and Management Company | ||
| Martin Romo, 1967 Senior Vice President |
2010 | Partner — Capital World Investors, Capital Research and Management Company; President and Director, Capital Research Company;7 Director, The Capital Group Companies, Inc.7 | ||
| Walter R. Burkley, 1966 Vice President |
2010 | Senior Vice President and Senior Counsel — Fund Business Management Group, Capital Research and Management Company; Director, Capital Research Company7 | ||
| Mark L. Casey, 1970 Vice President |
2016 | Partner — Capital World Investors, Capital Research and Management Company | ||
| Barry S. Crosthwaite, 1958 Vice President |
2010 | Partner — Capital Research Global Investors, Capital Research and Management Company | ||
| Jacinto J. Hernandez, 1978 Vice President |
2015 | Partner — Capital World Investors, Capital Research and Management Company | ||
| Anne-Marie Peterson, 1972 Vice President |
2016 | Partner — Capital World Investors, Capital Research and Management Company | ||
| Lawrence R. Solomon, 1962 Vice President |
2014 | Partner — Capital Research Global Investors, Capital Research and Management Company; Chairman of the Board and President, Capital Management Services, Inc.7 | ||
| Michael W. Stockton, 1967 Secretary |
2014 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
| Brian D. Bullard, 1969 Treasurer |
2016 | Senior Vice President — Investment Operations, Capital Research and Management Company | ||
| Julie E. Lawton, 1973 Assistant Secretary |
2010 | Assistant Vice President — Fund Business Management Group, Capital Research and Management Company; Secretary, Capital Research Company7 | ||
| Brian C. Janssen, 1972 Assistant Treasurer |
2016 | Vice President — Investment Operations, Capital Research and Management Company | ||
| Dori Laskin, 1951 Assistant Treasurer |
2011 | Vice President — Investment Operations, Capital Research and Management Company |
| 1 | The term independent trustee refers to a trustee who is not an “interested person” of the fund within the meaning of the Investment Company Act of 1940. |
| 2 | Trustees and officers of the fund serve until their resignation, removal or retirement. |
| 3 | Funds managed by Capital Research and Management Company or its affiliates. |
| 4 | This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research and Management Company or its affiliates) that are held by each trustee as a trustee or director of a public company or a registered investment company. |
| 5 | The term interested trustee refers to a trustee who is an “interested person” within the meaning of the Investment Company Act of 1940, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter). |
| 6 | All of the trustees and/or officers listed, with the exception of Brad A. Barrett, Jacinto J. Hernandez and Anne-Marie Peterson, are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser. |
| 7 | Company affiliated with Capital Research and Management Company. |
| The Growth Fund of America | 35 |
Office of the fund
6455 Irvine Center Drive
Irvine, CA 92618-4518
Investment adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
6455 Irvine Center Drive
Irvine, CA 92618-4518
Transfer agent for shareholder accounts
American Funds Service Company
(Write to the address near you.)
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of assets
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Counsel
Dechert LLP
One Bush Street, Suite 1600
San Francisco, CA 94104-4446
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
| 36 | The Growth Fund of America |
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 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. Fund shares offered through American Funds Distributors, Inc.
“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.
A complete August 31, 2017, portfolio of The Growth Fund of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
The Growth Fund of America files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at (800) SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.
This report is for the information of shareholders of The Growth Fund of America, but it also may be used as sales literature when preceded or accompanied by the current prospectus or summary prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after December 31, 2017, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
The Standard & Poor’s 500 Composite Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2017 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC.
American Funds from Capital Group
The Capital AdvantageSM
Since 1931, American Funds, part of Capital Group, has helped investors pursue long-term investment success. Our consistent approach — in combination with The Capital SystemSM — has resulted in a superior long-term track record.
Aligned with investor success
We base our decisions on a long-term perspective, which we believe aligns our goals with the interests of our clients. Our portfolio managers average 27 years of investment experience, including 21 years at our company, reflecting a career commitment to our long-term approach.1
The Capital System
The Capital System combines individual accountability with teamwork. Funds using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. An extensive global research effort is the backbone of our system.
American Funds’ superior long-term track record
Equity funds have beaten their Lipper peer indexes in 93% of 10-year periods and 98% of 20-year periods. Fixed income funds have beaten their Lipper indexes in 80% of 10-year periods and 80% of 20-year periods.2 Fund management fees have been among the lowest in the industry.3
| 1 | Portfolio manager experience as of December 31, 2016. |
| 2 | Based on Class F-2 share results for rolling periods through December 31, 2016. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except Capital Income Builder and SMALLCAP World Fund, for which the Lipper average was used). Expenses differ for each share class, so results will vary. Class F-2 shares were first offered on August 1, 2008. Class F-2 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Results for certain funds with an inception date after August 1, 2008, also include hypothetical returns because those funds’ Class F-2 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. |
| 3 | On average, our management fees were in the lowest quintile 73% of the time, based on the 20-year period ended December 31, 2016, versus comparable Lipper categories, excluding funds of funds. |
ITEM 2 – Code of Ethics
The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made to American Funds Service Company at 800/421-9225 or to the Secretary of the Registrant, 6455 Irvine Center Drive, Irvine, California 92618.
ITEM 3 – Audit Committee Financial Expert
The Registrant’s board has determined that Ronald P. Badie, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.
ITEM 4 – Principal Accountant Fees and Services
| Registrant: | ||
| a) Audit Fees: | ||
| 2016 | $103,000 | |
| 2017 | $127,000 | |
| b) Audit-Related Fees: | ||
| 2016 | $24,000 | |
| 2017 | $54,000 | |
| c) Tax Fees: | ||
| 2016 | $12,000 | |
| 2017 | $9,000 | |
| The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns. | ||
| d) All Other Fees: | ||
| 2016 | None | |
| 2017 | None | |
| Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below): | ||
| a) Audit Fees: | ||
| Not Applicable | ||
| b) Audit-Related Fees: | ||
| 2016 | $1,073,000 | |
| 2017 | $1,324,000 | |
| The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Standards for Attestation Engagements Number 16 issued by the American Institute of Certified Public Accountants. | ||
| c) Tax Fees: | ||
| 2016 | None | |
| 2017 | None | |
| The tax fees consist of consulting services relating to the Registrant’s investments. | ||
| d) All Other Fees: | ||
| 2016 | $3,000 | |
| 2017 | None | |
| The other fees consist of subscription services related to an accounting research tool. | ||
| All audit and permissible non-audit services that the Registrant’s audit committee considers compatible with maintaining the independent registered public accounting firm’s independence are required to be pre-approved by the committee. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser and affiliates. | ||
| Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant, adviser and affiliates that provide ongoing services to the Registrant, were $1,239,000 for fiscal year 2016 and $1,528,000 for fiscal year 2017. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence. | ||
All audit and permissible non-audit services that the Registrant’s audit committee considers compatible with maintaining the independent registered public accounting firm’s independence are required to be pre-approved by the committee. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates
directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser and affiliates.
Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant, adviser and affiliates that provide ongoing services to the Registrant, were ------------------------------. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence.
ITEM 5 – Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 – Schedule of Investments
The
Growth Fund of America®
Investment portfolio
August 31, 2017
| Common stocks 91.82% Information technology 28.60% |
Shares | Value (000) |
| Alphabet Inc., Class C1 | 4,155,253 | $3,903,154 |
| Alphabet Inc., Class A1 | 2,730,470 | 2,608,254 |
| Broadcom Ltd. | 18,467,428 | 4,655,085 |
| Microsoft Corp. | 58,385,100 | 4,365,454 |
| Facebook, Inc., Class A1 | 22,167,000 | 3,812,059 |
| ASML Holding NV (New York registered) | 8,518,000 | 1,331,449 |
| ASML Holding NV2 | 6,729,442 | 1,048,415 |
| Oracle Corp. | 45,531,396 | 2,291,595 |
| Apple Inc. | 13,894,700 | 2,278,731 |
| Alibaba Group Holding Ltd. (ADR)1 | 11,594,100 | 1,991,171 |
| Visa Inc., Class A | 17,786,000 | 1,841,207 |
| Samsung Electronics Co., Ltd.2 | 779,310 | 1,609,241 |
| Samsung Electronics Co., Ltd., nonvoting preferred2 | 98,800 | 165,878 |
| Taiwan Semiconductor Manufacturing Co., Ltd.2 | 167,560,000 | 1,206,233 |
| Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) | 8,743,800 | 323,258 |
| MasterCard Inc., Class A | 9,034,000 | 1,204,232 |
| Intel Corp. | 24,152,000 | 847,011 |
| Activision Blizzard, Inc. | 11,615,900 | 761,538 |
| Skyworks Solutions, Inc. | 7,012,000 | 738,784 |
| Applied Materials, Inc. | 15,240,000 | 687,629 |
| FleetCor Technologies, Inc.1 | 4,522,700 | 650,229 |
| Arista Networks, Inc.1 | 3,600,393 | 634,209 |
| Intuit Inc. | 3,407,335 | 481,967 |
| Accenture PLC, Class A | 3,650,000 | 477,274 |
| Vantiv, Inc., Class A1 | 6,695,787 | 473,325 |
| TE Connectivity Ltd. | 5,618,000 | 447,193 |
| Symantec Corp. | 14,361,000 | 430,543 |
| ServiceNow, Inc.1 | 3,700,000 | 429,903 |
| Texas Instruments Inc. | 5,020,100 | 415,765 |
| CommScope Holding Co., Inc.1,3 | 12,327,945 | 407,562 |
| Nintendo Co., Ltd.2 | 1,205,200 | 405,115 |
| salesforce.com, inc.1 | 4,115,000 | 392,941 |
| Qorvo, Inc.1 | 5,336,243 | 390,720 |
| Amphenol Corp., Class A | 4,517,279 | 365,629 |
| Hexagon AB, Class B2 | 7,412,135 | 363,979 |
| Murata Manufacturing Co., Ltd.2 | 2,226,100 | 341,960 |
| Flex Ltd.1 | 19,748,000 | 321,300 |
| Xilinx, Inc. | 4,750,000 | 313,785 |
| Adobe Systems Inc.1 | 2,000,000 | 310,320 |
| Fiserv, Inc.1 | 2,475,000 | 306,182 |
| Paycom Software, Inc.1,3 | 3,135,516 | 233,941 |
| Jack Henry & Associates, Inc. | 2,030,000 | 209,232 |
| NVIDIA Corp. | 1,215,500 | 205,954 |
| Akamai Technologies, Inc.1 | 4,086,600 | 192,683 |
| VeriSign, Inc.1 | 1,445,000 | 149,919 |
| Cloudera, Inc. (physical shares)1,2,4,5 | 5,402,537 | 98,520 |
| Cloudera, Inc.1,4 | 285,094 | 5,531 |
The Growth Fund of America — Page 1 of 8
| Common stocks Information technology (continued) |
Shares | Value (000) |
| FLIR Systems, Inc. | 2,700,000 | $102,600 |
| First Data Corp., Class A1 | 5,448,227 | 100,302 |
| Sabre Corp. | 4,318,245 | 79,628 |
| Finisar Corp.1 | 2,603,000 | 62,862 |
| Viavi Solutions Inc.1 | 4,496,600 | 45,146 |
| Motorola Solutions, Inc. | 426,800 | 37,610 |
| Autodesk, Inc.1 | 320,400 | 36,673 |
| Dolby Laboratories, Inc., Class A | 9,556 | 482 |
| 47,591,362 | ||
| Consumer discretionary 20.83% | ||
| Amazon.com, Inc.1 | 10,402,836 | 10,201,021 |
| Netflix, Inc.1,3 | 23,435,808 | 4,094,470 |
| Home Depot, Inc. | 20,953,100 | 3,140,241 |
| Priceline Group Inc.1 | 1,288,709 | 2,386,792 |
| Comcast Corp., Class A | 48,014,000 | 1,949,849 |
| Charter Communications, Inc., Class A1 | 4,570,200 | 1,821,407 |
| Twenty-First Century Fox, Inc., Class A | 38,278,400 | 1,056,101 |
| MGM Resorts International3 | 29,550,000 | 973,968 |
| Starbucks Corp. | 15,449,200 | 847,543 |
| NIKE, Inc., Class B | 14,614,800 | 771,808 |
| Ulta Beauty, Inc.1,3 | 3,095,000 | 684,026 |
| Marriott International, Inc., Class A | 5,859,476 | 606,924 |
| CBS Corp., Class B | 9,060,000 | 580,384 |
| Altice NV, Class A1,2 | 24,421,000 | 563,727 |
| BorgWarner Inc.3 | 10,607,259 | 492,283 |
| Aramark | 11,995,000 | 488,077 |
| Viacom Inc., Class B | 15,642,819 | 447,385 |
| Time Warner Inc. | 4,000,000 | 404,400 |
| Sony Corp.2 | 9,400,000 | 371,849 |
| ServiceMaster Global Holdings, Inc.1,3 | 6,877,000 | 324,044 |
| Norwegian Cruise Line Holdings Ltd.1 | 5,155,000 | 306,516 |
| Grupo Televisa, SAB, ordinary participation certificates (ADR) | 10,692,000 | 276,174 |
| AutoNation, Inc.1,3 | 6,000,000 | 272,220 |
| Naspers Ltd., Class N2 | 1,171,000 | 264,006 |
| Tesla, Inc.1 | 580,100 | 206,458 |
| Walt Disney Co. | 1,915,000 | 193,798 |
| D.R. Horton, Inc. | 4,000,000 | 144,600 |
| Hermès International2 | 214,000 | 113,286 |
| Wyndham Worldwide Corp. | 1,010,000 | 100,677 |
| Newell Brands Inc. | 1,951,650 | 94,226 |
| Luxottica Group SpA2 | 1,630,000 | 93,946 |
| Cable One, Inc. | 121,600 | 92,263 |
| Domino’s Pizza, Inc. | 491,000 | 89,490 |
| Publicis Groupe SA2 | 1,058,107 | 71,479 |
| Toll Brothers, Inc. | 1,700,000 | 66,232 |
| Sturm, Ruger & Co., Inc.3 | 932,460 | 42,707 |
| Graham Holdings Co., Class B | 48,868 | 28,695 |
| Lennar Corp., Class A | 100,000 | 5,176 |
| 34,668,248 | ||
| Health care 12.04% | ||
| UnitedHealth Group Inc. | 18,912,405 | 3,761,677 |
| Illumina, Inc.1,3 | 8,001,089 | 1,635,903 |
| Thermo Fisher Scientific Inc. | 8,420,000 | 1,575,719 |
The Growth Fund of America — Page 2 of 8
| Common stocks Health care (continued) |
Shares | Value (000) |
| AbbVie Inc. | 17,266,657 | $1,300,179 |
| Amgen Inc. | 6,945,940 | 1,234,780 |
| Stryker Corp. | 7,256,499 | 1,025,851 |
| Boston Scientific Corp.1 | 35,265,000 | 971,551 |
| Humana Inc. | 3,498,000 | 901,155 |
| Express Scripts Holding Co.1 | 13,587,800 | 853,586 |
| Regeneron Pharmaceuticals, Inc.1 | 1,625,000 | 807,462 |
| Aetna Inc. | 5,001,000 | 788,658 |
| BioMarin Pharmaceutical Inc.1 | 8,133,515 | 733,562 |
| Vertex Pharmaceuticals Inc.1 | 4,295,000 | 689,519 |
| Abbott Laboratories | 13,358,974 | 680,506 |
| WellCare Health Plans, Inc.1,3 | 2,852,000 | 498,187 |
| Gilead Sciences, Inc. | 4,602,067 | 385,239 |
| Hologic, Inc.1 | 8,920,000 | 344,312 |
| Bluebird Bio, Inc.1 | 2,253,153 | 281,306 |
| Kite Pharma, Inc.1 | 1,117,820 | 198,961 |
| Mettler-Toledo International Inc.1 | 300,000 | 181,527 |
| Grifols, SA, Class B, preferred nonvoting, non-registered shares2 | 7,740,000 | 159,550 |
| Teva Pharmaceutical Industries Ltd. (ADR) | 9,647,825 | 153,014 |
| ResMed Inc. | 1,780,000 | 138,092 |
| athenahealth, Inc.1 | 954,500 | 134,518 |
| PerkinElmer, Inc. | 1,935,000 | 129,626 |
| Incyte Corp.1 | 916,000 | 125,867 |
| Ultragenyx Pharmaceutical Inc.1 | 2,004,353 | 114,368 |
| Intercept Pharmaceuticals, Inc.1 | 690,200 | 80,484 |
| Juno Therapeutics, Inc.1 | 1,110,000 | 45,810 |
| ACADIA Pharmaceuticals Inc.1 | 1,260,000 | 44,869 |
| Acerta Pharma BV1,2,4,6 | 273,779,325 | 27,433 |
| McKesson Corp. | 158,100 | 23,606 |
| Endo International PLC1 | 623,000 | 5,476 |
| 20,032,353 | ||
| Financials 7.88% | ||
| Berkshire Hathaway Inc., Class A1 | 4,865 | 1,320,604 |
| Berkshire Hathaway Inc., Class B1 | 5,704,508 | 1,033,429 |
| American International Group, Inc. | 25,242,273 | 1,526,653 |
| Goldman Sachs Group, Inc. | 5,524,490 | 1,236,049 |
| Wells Fargo & Co. | 13,850,100 | 707,325 |
| Charles Schwab Corp. | 15,763,500 | 628,964 |
| Capital One Financial Corp. | 7,507,000 | 597,632 |
| HDFC Bank Ltd.2 | 14,293,408 | 397,640 |
| HDFC Bank Ltd. (ADR) | 1,612,000 | 157,057 |
| AIA Group Ltd.2 | 71,400,000 | 548,305 |
| JPMorgan Chase & Co. | 5,722,000 | 520,073 |
| Chubb Ltd. | 3,086,100 | 436,436 |
| CME Group Inc., Class A | 3,407,000 | 428,601 |
| Legal & General Group PLC2 | 111,984,892 | 376,651 |
| First Republic Bank | 3,737,200 | 362,695 |
| CIT Group Inc.3 | 8,038,000 | 360,504 |
| KKR & Co. LP | 16,635,660 | 316,244 |
| Onex Corp. | 3,700,000 | 295,852 |
| Credit Suisse Group AG2 | 17,317,837 | 254,841 |
| BlackRock, Inc. | 547,000 | 229,198 |
| Progressive Corp. | 4,925,000 | 228,914 |
| SVB Financial Group1 | 1,122,699 | 190,118 |
The Growth Fund of America — Page 3 of 8
| Common stocks Financials (continued) |
Shares | Value (000) |
| Barclays PLC2 | 75,000,000 | $185,461 |
| Signature Bank1 | 1,182,683 | 151,786 |
| Citigroup Inc. | 1,841,000 | 125,243 |
| Bank of Ireland Group PLC1,2 | 14,006,666 | 116,636 |
| UBS Group AG2 | 6,765,666 | 111,601 |
| Royal Bank of Canada | 1,500,000 | 111,327 |
| Financial Engines, Inc. | 2,526,212 | 83,491 |
| Leucadia National Corp. | 3,453,292 | 81,774 |
| 13,121,104 | ||
| Energy 6.19% | ||
| EOG Resources, Inc. | 24,563,508 | 2,087,653 |
| Schlumberger Ltd. | 22,675,484 | 1,440,120 |
| Concho Resources Inc.1,3 | 9,803,819 | 1,087,930 |
| Canadian Natural Resources, Ltd. | 25,116,565 | 773,761 |
| Halliburton Co. | 19,243,000 | 749,900 |
| Pioneer Natural Resources Co. | 4,321,291 | 560,255 |
| Apache Corp. | 9,000,000 | 349,560 |
| Chevron Corp. | 3,200,000 | 344,384 |
| Enbridge Inc. (CAD denominated) | 8,579,759 | 342,984 |
| Noble Energy, Inc. | 12,889,603 | 306,386 |
| Suncor Energy Inc. | 9,729,295 | 304,871 |
| Seven Generations Energy Ltd., Class A1 | 16,466,834 | 250,678 |
| Tourmaline Oil Corp.1 | 11,085,000 | 216,241 |
| Cimarex Energy Co. | 2,157,056 | 215,037 |
| Weatherford International PLC1 | 47,568,617 | 182,188 |
| Royal Dutch Shell PLC, Class B2 | 2,535,910 | 70,873 |
| Royal Dutch Shell PLC, Class B (ADR) | 928,800 | 52,598 |
| Royal Dutch Shell PLC, Class A2 | 1,533,597 | 42,210 |
| Royal Dutch Shell PLC, Class A (ADR) | 131,812 | 7,274 |
| Centennial Resource Development, Inc., Class A1,5 | 7,763,967 | 134,239 |
| Centennial Resource Development, Inc., Class A1 | 456,777 | 7,898 |
| Cabot Oil & Gas Corp. | 4,077,200 | 104,172 |
| Murphy Oil Corp. | 4,474,500 | 101,392 |
| Plains GP Holdings, LP, Class A | 4,423,974 | 99,451 |
| Golar LNG Ltd. | 4,534,237 | 98,302 |
| CONSOL Energy Inc.1 | 6,235,000 | 90,719 |
| TOTAL SA2 | 1,315,844 | 68,083 |
| BP PLC2 | 8,091,584 | 46,731 |
| BP PLC (ADR) | 299,765 | 10,411 |
| Hess Corp. | 1,350,696 | 52,542 |
| Range Resources Corp. | 2,000,000 | 34,720 |
| Core Laboratories NV | 360,000 | 31,745 |
| Southwestern Energy Co.1 | 5,114,548 | 27,874 |
| Chesapeake Energy Corp.1 | 140,000 | 510 |
| 10,293,692 | ||
| Industrials 4.88% | ||
| CSX Corp. | 27,469,166 | 1,378,952 |
| TransDigm Group Inc.3 | 2,605,000 | 679,019 |
| Rockwell Collins, Inc. | 4,645,000 | 608,727 |
| Ryanair Holdings PLC (ADR)1 | 4,924,758 | 559,945 |
| General Dynamics Corp. | 2,314,000 | 465,924 |
| Union Pacific Corp. | 3,477,982 | 366,232 |
| Lockheed Martin Corp. | 1,192,000 | 364,025 |
The Growth Fund of America — Page 4 of 8
| Common stocks Industrials (continued) |
Shares | Value (000) |
| Fortive Corp. | 5,598,650 | $363,744 |
| Boeing Co. | 1,438,100 | 344,655 |
| Delta Air Lines, Inc. | 6,749,000 | 318,485 |
| MTU Aero Engines AG2 | 1,819,559 | 254,832 |
| Nielsen Holdings PLC | 6,509,500 | 252,894 |
| Old Dominion Freight Line, Inc. | 2,418,123 | 241,571 |
| Caterpillar Inc. | 1,690,000 | 198,558 |
| Textron Inc. | 3,925,000 | 192,678 |
| United Continental Holdings, Inc.1 | 3,002,944 | 186,063 |
| Johnson Controls International PLC | 4,605,700 | 182,340 |
| Norfolk Southern Corp. | 1,370,000 | 165,112 |
| IDEX Corp. | 1,400,000 | 164,612 |
| Raytheon Co. | 720,000 | 131,047 |
| Roper Technologies, Inc. | 490,000 | 113,023 |
| Rolls-Royce Holdings PLC1,2 | 9,316,669 | 110,030 |
| J.B. Hunt Transport Services, Inc. | 1,034,125 | 102,265 |
| Meggitt PLC2 | 14,486,455 | 97,164 |
| United Technologies Corp. | 775,000 | 92,783 |
| Northrop Grumman Corp. | 315,000 | 85,746 |
| Cummins Inc. | 322,000 | 51,320 |
| Oshkosh Corp. | 622,983 | 46,475 |
| 8,118,221 | ||
| Consumer staples 4.16% | ||
| Philip Morris International Inc. | 15,717,367 | 1,837,832 |
| Costco Wholesale Corp. | 5,929,817 | 929,440 |
| Coca-Cola Co. | 15,920,000 | 725,156 |
| Constellation Brands, Inc., Class A | 2,460,000 | 492,246 |
| Kraft Heinz Co. | 5,666,000 | 457,529 |
| Kerry Group PLC, Class A2 | 4,265,824 | 397,157 |
| Herbalife Ltd.1,3 | 4,718,000 | 325,589 |
| Associated British Foods PLC2 | 5,990,700 | 257,427 |
| Glanbia PLC2 | 13,168,044 | 246,280 |
| Walgreens Boots Alliance, Inc. | 2,950,000 | 240,425 |
| Pinnacle Foods Inc. | 3,995,000 | 236,943 |
| Nestlé SA2 | 2,387,600 | 202,622 |
| Pernod Ricard SA2 | 1,414,000 | 193,348 |
| Kroger Co. | 8,653,000 | 189,241 |
| Coca-Cola European Partners PLC | 3,136,700 | 134,878 |
| Avon Products, Inc.1 | 21,720,000 | 54,083 |
| 6,920,196 | ||
| Materials 2.22% | ||
| E.I. du Pont de Nemours and Co. | 10,017,500 | 840,769 |
| Vale SA, ordinary nominative | 29,809,294 | 332,198 |
| Vale SA, ordinary nominative (ADR) | 16,258,319 | 179,980 |
| Freeport-McMoRan Inc.1 | 32,863,781 | 485,727 |
| First Quantum Minerals Ltd.3 | 37,773,886 | 455,253 |
| Celanese Corp., Series A | 3,042,423 | 295,176 |
| Sherwin-Williams Co. | 739,000 | 250,721 |
| Rio Tinto PLC2 | 4,682,000 | 226,620 |
| Praxair, Inc. | 1,689,161 | 222,192 |
| Nitto Denko Corp.2 | 1,686,225 | 149,110 |
| BHP Billiton PLC2 | 7,481,000 | 142,694 |
The Growth Fund of America — Page 5 of 8
| Common stocks Materials (continued) |
Shares | Value (000) |
| Teck Resources Ltd., Class B | 3,951,800 | $98,356 |
| Ardagh Group SA, Class A3 | 1,018,438 | 21,173 |
| 3,699,969 | ||
| Real estate 0.73% | ||
| American Tower Corp. REIT | 4,330,000 | 641,056 |
| Equinix, Inc. REIT | 658,139 | 308,279 |
| Iron Mountain Inc. REIT | 5,000,000 | 197,100 |
| Howard Hughes Corp.1 | 502,450 | 58,963 |
| Weyerhaeuser Co. REIT1 | 422,321 | 13,772 |
| 1,219,170 | ||
| Telecommunication services 0.51% | ||
| T-Mobile US, Inc.1 | 8,393,705 | 543,157 |
| Zayo Group Holdings, Inc.1 | 8,703,000 | 297,381 |
| 840,538 | ||
| Miscellaneous 3.78% | ||
| Other common stocks in initial period of acquisition | 6,289,515 | |
| Total common stocks (cost: $83,209,626,000) | 152,794,368 | |
| Preferred securities 0.20% Financials 0.04% |
||
| Fannie Mae, Series O, 7.00% noncumulative1 | 6,387,546 | 64,834 |
| Miscellaneous 0.16% | ||
| Other preferred securities in initial period of acquisition | 277,556 | |
| Total preferred securities (cost: $391,578,000) | 342,390 | |
| Rights & warrants 0.11% Financials 0.11% |
||
| JP Morgan Chase & Co., warrants, expire 20181 | 3,716,000 | 183,570 |
| Citigroup Inc., Class A, warrants, expire 20191 | 25,500,000 | 3,063 |
| Total rights & warrants (cost: $117,996,000) | 186,633 | |
| Convertible stocks 0.07% Consumer discretionary 0.07% |
||
| Uber Technologies, Inc., Series F, convertible preferred2,4,6 | 2,884,815 | 125,230 |
| Total convertible stocks (cost: $114,350,000) | 125,230 | |
| Bonds, notes & other debt instruments 0.15% U.S. Treasury bonds & notes 0.09% U.S. Treasury 0.09% |
Principal?amount (000) |
|
| U.S. Treasury 1.625% 2026 | $ 149,700 | 144,271 |
| Total U.S. Treasury bonds & notes | 144,271 |
The Growth Fund of America — Page 6 of 8
| Bonds, notes & other debt instruments Corporate bonds & notes 0.06% Consumer staples 0.06% |
Principal?amount (000) |
Value (000) |
| Herbalife Ltd., Term Loan, (3-month USD-LIBOR + 5.50%) 6.739% 20233,7,8,9 | $98,125 | $99,065 |
| Total corporate bonds & notes | 99,065 | |
| Total bonds, notes & other debt instruments (cost: $247,586,000) | 243,336 | |
| Short-term securities 7.69% | ||
| Apple Inc. 1.17%–1.27% due 9/27/2017–1/2/20185 | 263,500 | 262,831 |
| Army and Air Force Exchange Service 1.12% due 9/5/20175 | 34,000 | 33,995 |
| Bank of New York Mellon Corp. 1.17%–1.19% due 10/19/2017–11/27/2017 | 250,000 | 249,411 |
| CAFCO, LLC 1.32% due 12/11/20175 | 50,000 | 49,816 |
| Chariot Funding, LLC 1.40% due 12/20/20175 | 54,300 | 54,071 |
| Chevron Corp. 1.10% due 9/12/20175 | 47,900 | 47,883 |
| Ciesco LLC 1.18%–1.30% due 9/7/2017–11/28/20175 | 140,000 | 139,684 |
| Cisco Systems, Inc. 1.17% due 10/4/20175 | 109,700 | 109,585 |
| Citibank, N.A. 1.32% due 11/28/2017 | 50,000 | 50,000 |
| Coca-Cola Co. 1.19%–1.29% due 10/30/2017–1/8/20185 | 146,750 | 146,175 |
| Eli Lilly and Co. 1.11%–1.14% due 9/7/2017–10/16/20175 | 111,300 | 111,156 |
| Emerson Electric Co. 1.09% due 9/12/20175 | 7,500 | 7,497 |
| Estée Lauder Companies Inc. 1.13%–1.15% due 9/25/2017–9/26/20175 | 53,000 | 52,956 |
| ExxonMobil Corp. 1.10%–1.13% due 9/19/2017–10/23/2017 | 175,000 | 174,819 |
| Fannie Mae 1.05% due 10/18/2017 | 50,000 | 49,936 |
| Federal Farm Credit Banks 1.21%–1.25% due 3/28/2018–7/2/2018 | 168,000 | 166,609 |
| Federal Home Loan Bank 0.95%–1.13% due 9/1/2017–2/23/2018 | 5,313,793 | 5,305,444 |
| Freddie Mac 0.86%–1.00% due 9/18/2017–10/23/2017 | 324,800 | 324,455 |
| GE Capital Treasury Services (U.S.) LLC 1.10% due 11/6/2017 | 50,000 | 49,872 |
| General Electric Co. 1.14% due 9/26/2017 | 75,000 | 74,940 |
| IBM Corp. 1.15% due 9/28/20175 | 24,300 | 24,279 |
| John Deere Capital Corp. 1.19% due 11/13/20175 | 36,500 | 36,411 |
| John Deere Financial Inc. 1.18% due 9/6/20175 | 2,000 | 2,000 |
| Johnson & Johnson 1.10%–1.17% due 10/10/2017–10/24/20175 | 284,500 | 284,077 |
| Jupiter Securitization Co., LLC 1.32% due 11/6/20175 | 22,600 | 22,545 |
| Kimberly-Clark Corp. 1.10%–1.11% due 9/7/2017–9/18/20175 | 51,300 | 51,282 |
| Microsoft Corp. 1.19% due 10/17/20175 | 100,000 | 99,851 |
| Paccar Financial Corp. 1.12% due 9/6/2017–9/11/2017 | 33,000 | 32,989 |
| PepsiCo Inc. 1.09%–1.12% due 9/20/2017–10/17/20175 | 218,800 | 218,576 |
| Pfizer Inc. 1.17%–1.30% due 9/18/2017–1/17/20185 | 295,100 | 294,469 |
| Procter & Gamble Co. 1.09%–1.17% due 9/11/2017–11/21/20175 | 200,000 | 199,808 |
| Qualcomm Inc. 1.16% due 10/18/20175 | 50,000 | 49,921 |
| Simon Property Group, L.P. 1.20% due 9/18/20175 | 16,500 | 16,490 |
| U.S. Bank, N.A. 1.21%–1.31% due 10/25/2017–2/2/2018 | 195,200 | 195,256 |
| U.S. Treasury Bills 0.87%–1.11% due 9/7/2017–3/1/2018 | 3,519,800 | 3,509,096 |
| Wal-Mart Stores, Inc. 1.10%–1.13% due 9/5/2017–10/31/20175 | 196,600 | 196,445 |
| Wells Fargo Bank, N.A. 1.27% due 10/3/2017 | 98,100 | 98,106 |
| Total short-term securities (cost: $12,791,720,000) | 12,792,736 | |
| Total investment securities 100.04% (cost: $96,872,856,000) | 166,484,693 | |
| Other assets less liabilities (0.04)% | (74,643) | |
| Net assets 100.00% | $166,410,050 |
As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.
The Growth Fund of America — Page 7 of 8
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.
| 1 | Security did not produce income during the last 12 months. |
| 2 | Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous,“ was $13,190,973,000, which represented 7.93% of the net assets of the fund. This amount includes $12,542,150,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading. |
| 3 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
| 4 | Acquired through a private placement transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale. Further details on these holdings appear below. |
| 5 | Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $2,744,562,000, which represented 1.65% of the net assets of the fund. |
| 6 | Value determined using significant unobservable inputs. |
| 7 | Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $99,065,000, which represented .06% of the net assets of the fund. |
| 8 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
| 9 | Coupon rate may change periodically. |
| Private placement securities | Acquisition date(s) |
Cost (000) |
Value (000) |
Percent of net assets |
| Uber Technologies, Inc., Series F, convertible preferred | 5/22/2015 | $114,350 | $125,230 | .08% |
| Cloudera, Inc. (physical shares) | 6/29/2015-8/27/2015 | 174,989 | 98,520 | .06 |
| Cloudera, Inc. | 4/28/2017 | 4,276 | 5,531 | .00 |
| Acerta Pharma BV | 5/7/2015 | 15,750 | 27,433 | .02 |
| Total private placement securities | $ 309,365 | $256,714 | .16% |
| Key to abbreviations |
| ADR = American Depositary Receipts |
| CAD = Canadian dollars |
| LIBOR = London Interbank Offered Rate |
Additional financial disclosures are included in the fund’s current shareholder report and should be read in conjunction with this report.
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 fund prospectus and summary prospectus, 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. Fund shares offered through American Funds Distributors, Inc.
| MFGEFPX-005-1017O-S60705 | The Growth Fund of America — Page 8 of 8 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of
The Growth Fund of America:
We have audited the accompanying statement of assets and liabilities of The Growth Fund of America (the “Fund”), including the summary investment portfolio, as of August 31, 2017, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended (collectively, the “financial statements”), the financial highlights for each of the periods presented (the financial statements and financial highlights are included in Item 1 of this Form N-CSR), and the investment portfolio as of August 31, 2017 (included in Item 6 of this Form N-CSR). These financial statements, financial highlights, and investment portfolio are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements, financial highlights, and investment portfolio based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements, financial highlights, and investment portfolio are free of material misstatement. Our audit included consideration of internal control over financial reporting as it relates to the schedule as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting as it relates to the schedule. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and investment portfolio, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2017, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, financial highlights, and investment portfolio in securities referred to above present fairly, in all material respects, the financial position of The Growth Fund of America as of August 31, 2017, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Costa Mesa, California
October 9, 2017
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 10 – Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of trustees since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating and governance committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing
to the nominating and governance committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating and governance committee.
ITEM 11 – Controls and Procedures
| (a) | 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. |
| (b) | There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
ITEM 12 – Exhibits
| (a)(1) | The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto. |
| (a)(2) | The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 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.
| THE GROWTH FUND OF AMERICA | |
| By /s/ Paul F. Roye | |
|
Paul F. Roye, Executive Vice President and Principal Executive Officer | |
| Date: October 31, 2017 |
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/ Paul F. Roye |
|
Paul F. Roye, Executive Vice President and Principal Executive Officer |
| Date: October 31, 2017 |
| By /s/ Brian D. Bullard |
|
Brian D. Bullard, Treasurer and Principal Financial Officer |
| Date: October 31, 2017 |
