UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
Quarterly Schedule of Portfolio Holdings of
Registered Management Investment Company
Investment Company Act File Number: 811-00116
The Investment Company of America
(Exact Name of Registrant as Specified in Charter)
333 South Hope Street
Los Angeles, California 90071
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (213) 486-9200
Date of fiscal year end: December 31
Date of reporting period: September 30, 2017
Laurie D. Neat
The Investment Company of America
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)
ITEM 1 – Schedule of Investments
The
Investment Company of America®
Investment portfolio
September 30, 2017
unaudited
| Common stocks 92.04% Energy 7.92% |
Shares | Value (000) |
| Apache Corp. | 2,850,000 | $130,530 |
| BP PLC1 | 26,748,508 | 171,021 |
| Canadian Natural Resources, Ltd. | 20,086,082 | 672,729 |
| Chesapeake Energy Corp.2 | 20,000,000 | 86,000 |
| Chevron Corp. | 4,800,000 | 564,000 |
| Concho Resources Inc.2 | 3,317,000 | 436,915 |
| ConocoPhillips | 6,403,000 | 320,470 |
| Enbridge Inc. | 1,937,272 | 81,055 |
| Eni SpA1 | 11,785,561 | 195,246 |
| EOG Resources, Inc. | 9,941,200 | 961,712 |
| Exxon Mobil Corp. | 7,000,835 | 573,928 |
| Halliburton Co. | 9,500,000 | 437,285 |
| Kinder Morgan, Inc. | 5,875,000 | 112,682 |
| Noble Energy, Inc. | 13,799,000 | 391,340 |
| Plains GP Holdings, LP, Class A | 7,022,431 | 153,581 |
| Range Resources Corp. | 2,992,000 | 58,553 |
| Royal Dutch Shell PLC, Class B1 | 12,830,686 | 394,568 |
| Schlumberger Ltd. | 7,415,000 | 517,270 |
| Southwestern Energy Co.2 | 6,088,164 | 37,199 |
| Suncor Energy Inc. | 8,121,292 | 284,628 |
| TOTAL SA1 | 9,770,506 | 525,491 |
| 7,106,203 | ||
| Materials 3.88% | ||
| Agrium Inc. | 986,999 | 105,776 |
| Barrick Gold Corp. | 1,725,000 | 27,755 |
| BHP Billiton PLC1 | 8,507,000 | 149,881 |
| DowDuPont Inc. | 11,475,000 | 794,414 |
| Freeport-McMoRan Inc.2 | 45,396,100 | 637,361 |
| Glencore PLC1 | 15,139,000 | 69,400 |
| International Flavors & Fragrances Inc. | 1,358,853 | 194,194 |
| PPG Industries, Inc. | 1,743,000 | 189,395 |
| Praxair, Inc. | 3,753,300 | 524,486 |
| Rio Tinto PLC1 | 2,627,000 | 122,285 |
| Vale SA, ordinary nominative | 14,311,103 | 144,008 |
| Vale SA, ordinary nominative (ADR) | 51,597,599 | 519,588 |
| 3,478,543 | ||
| Industrials 8.75% | ||
| 3M Co. | 625,000 | 131,188 |
| Airbus SE, non-registered shares1 | 1,750,000 | 166,569 |
| BAE Systems PLC1 | 17,347,000 | 146,809 |
| Boeing Co. | 1,700,000 | 432,157 |
| CSX Corp. | 28,058,576 | 1,522,458 |
| Cummins Inc. | 1,391,000 | 233,730 |
| General Dynamics Corp. | 6,361,200 | 1,307,735 |
| General Electric Co. | 46,139,000 | 1,115,641 |
The Investment Company of America — Page 1 of 8
unaudited
| Common stocks Industrials (continued) |
Shares | Value (000) |
| Illinois Tool Works Inc. | 5,450,000 | $806,382 |
| Johnson Controls International PLC | 407,933 | 16,436 |
| Lockheed Martin Corp. | 1,250,000 | 387,863 |
| Nielsen Holdings PLC | 10,988,480 | 455,472 |
| Union Pacific Corp. | 5,768,593 | 668,984 |
| United Technologies Corp. | 3,951,852 | 458,731 |
| 7,850,155 | ||
| Consumer discretionary 11.24% | ||
| Amazon.com, Inc.2 | 2,055,600 | 1,976,151 |
| Comcast Corp., Class A | 10,493,034 | 403,772 |
| General Motors Co. | 9,714,173 | 392,258 |
| Harley-Davidson, Inc. | 5,721,003 | 275,810 |
| Hasbro, Inc. | 2,000,000 | 195,340 |
| Home Depot, Inc. | 6,620,000 | 1,082,767 |
| Kering SA1 | 297,750 | 118,525 |
| Las Vegas Sands Corp. | 12,887,000 | 826,830 |
| Marriott International, Inc., Class A | 2,236,700 | 246,619 |
| McDonald’s Corp. | 4,200,000 | 658,056 |
| Netflix, Inc.2 | 1,725,800 | 312,974 |
| NIKE, Inc., Class B | 4,922,400 | 255,227 |
| Omnicom Group Inc. | 1,800,000 | 133,326 |
| Priceline Group Inc.2 | 252,904 | 463,022 |
| Sony Corp.1 | 1,283,500 | 47,774 |
| Time Warner Inc. | 4,607,932 | 472,083 |
| TJX Companies, Inc. | 2,000,000 | 147,460 |
| Toyota Motor Corp.1 | 4,000,000 | 238,798 |
| Twenty-First Century Fox, Inc., Class A | 30,237,615 | 797,668 |
| Viacom Inc., Class B | 14,961,292 | 416,522 |
| WPP PLC1 | 4,300,000 | 79,815 |
| Wyndham Worldwide Corp. | 2,423,000 | 255,408 |
| Yum China Holdings, Inc.2 | 2,154,000 | 86,095 |
| YUM! Brands, Inc. | 2,775,672 | 204,317 |
| 10,086,617 | ||
| Consumer staples 10.55% | ||
| Altria Group, Inc. | 16,955,000 | 1,075,286 |
| Avon Products, Inc.2,3 | 25,493,441 | 59,400 |
| British American Tobacco PLC1 | 7,457,400 | 466,242 |
| British American Tobacco PLC (ADR) | 2,033,865 | 127,015 |
| Coca-Cola Co. | 15,163,000 | 682,487 |
| Conagra Brands, Inc. | 5,521,100 | 186,282 |
| Costco Wholesale Corp. | 1,200,000 | 197,148 |
| CVS Health Corp. | 2,100,000 | 170,772 |
| Imperial Brands PLC1 | 16,686,375 | 712,049 |
| Kellogg Co. | 8,884,000 | 554,095 |
| Kimberly-Clark Corp. | 2,390,900 | 281,361 |
| Kraft Heinz Co. | 6,124,722 | 474,972 |
| Kroger Co. | 22,223,573 | 445,805 |
| Lamb Weston Holdings, Inc.3 | 7,590,013 | 355,896 |
| Mondelez International, Inc. | 9,875,000 | 401,517 |
| Nestlé SA1 | 5,750,971 | 481,652 |
| PepsiCo, Inc. | 4,420,000 | 492,521 |
| Pernod Ricard SA1 | 1,897,000 | 262,298 |
The Investment Company of America — Page 2 of 8
unaudited
| Common stocks Consumer staples (continued) |
Shares | Value (000) |
| Philip Morris International Inc. | 16,382,019 | $1,818,568 |
| Procter & Gamble Co. | 2,513,000 | 228,633 |
| 9,473,999 | ||
| Health care 15.48% | ||
| Abbott Laboratories | 14,263,400 | 761,095 |
| AbbVie Inc. | 57,880,449 | 5,143,257 |
| Amgen Inc. | 12,231,463 | 2,280,556 |
| Danaher Corp. | 1,500,000 | 128,670 |
| Express Scripts Holding Co.2 | 2,317,357 | 146,735 |
| Gilead Sciences, Inc. | 5,911,791 | 478,973 |
| Humana Inc. | 1,125,000 | 274,084 |
| Illumina, Inc.2 | 1,363,215 | 271,552 |
| Johnson & Johnson | 600,000 | 78,006 |
| Medtronic PLC | 9,143,900 | 711,121 |
| Merck & Co., Inc. | 2,800,000 | 179,284 |
| Novartis AG1 | 2,000,000 | 171,623 |
| Perrigo Co. PLC | 3,056,000 | 258,690 |
| Stryker Corp. | 6,280,865 | 892,008 |
| Takeda Pharmaceutical Co. Ltd.1 | 7,690,000 | 425,894 |
| Teva Pharmaceutical Industries Ltd. (ADR) | 18,426,000 | 324,298 |
| Thermo Fisher Scientific Inc. | 2,026,000 | 383,319 |
| UnitedHealth Group Inc. | 5,045,997 | 988,259 |
| 13,897,424 | ||
| Financials 10.43% | ||
| AIA Group Ltd.1 | 9,900,000 | 73,421 |
| American International Group, Inc. | 16,198,200 | 994,408 |
| Bank of Montreal | 2,343,478 | 177,355 |
| Barclays PLC1 | 74,544,411 | 193,443 |
| BB&T Corp. | 2,416,000 | 113,407 |
| Berkshire Hathaway Inc., Class B2 | 5,050,000 | 925,766 |
| BNP Paribas SA1 | 3,483,289 | 281,078 |
| Charles Schwab Corp. | 12,518,189 | 547,546 |
| Citigroup Inc. | 3,500,000 | 254,590 |
| HSBC Holdings PLC (ADR) | 1,549,479 | 76,560 |
| HSBC Holdings PLC (GBP denominated)1 | 4,933,118 | 48,697 |
| JPMorgan Chase & Co. | 11,362,000 | 1,085,185 |
| KeyCorp | 6,157,000 | 115,875 |
| M&T Bank Corp. | 1,212,600 | 195,277 |
| Marsh & McLennan Companies, Inc. | 2,500,000 | 209,525 |
| PNC Financial Services Group, Inc. | 4,943,000 | 666,168 |
| Progressive Corp. | 6,000,000 | 290,520 |
| Prudential Financial, Inc. | 6,348,178 | 674,938 |
| Prudential PLC1 | 2,000,000 | 47,889 |
| Société Générale1 | 3,915,000 | 229,028 |
| U.S. Bancorp | 3,500,000 | 187,565 |
| UBS Group AG1 | 9,165,000 | 156,640 |
| Wells Fargo & Co. | 24,903,300 | 1,373,417 |
| Willis Towers Watson PLC | 2,875,000 | 443,411 |
| 9,361,709 |
The Investment Company of America — Page 3 of 8
unaudited
| Common stocks Information technology 17.20% |
Shares | Value (000) |
| Accenture PLC, Class A | 9,595,000 | $1,295,997 |
| Alphabet Inc., Class A2 | 951,030 | 926,037 |
| Alphabet Inc., Class C2 | 1,041,859 | 999,257 |
| Amphenol Corp., Class A | 935,000 | 79,138 |
| Apple Inc. | 9,271,561 | 1,428,933 |
| ASML Holding NV1 | 2,718,773 | 463,799 |
| Broadcom Ltd. | 2,976,000 | 721,799 |
| Cisco Systems, Inc. | 5,400,000 | 181,602 |
| Intel Corp. | 41,573,000 | 1,583,100 |
| International Business Machines Corp. | 1,100,000 | 159,588 |
| MasterCard Inc., Class A | 1,000,000 | 141,200 |
| Microsoft Corp. | 26,348,472 | 1,962,698 |
| Motorola Solutions, Inc. | 858,430 | 72,855 |
| Oracle Corp. | 22,512,116 | 1,088,461 |
| salesforce.com, inc.2 | 1,161,000 | 108,460 |
| Samsung Electronics Co., Ltd.1 | 450,233 | 1,011,992 |
| Skyworks Solutions, Inc. | 3,798,000 | 387,016 |
| Symantec Corp. | 6,473,000 | 212,379 |
| Taiwan Semiconductor Manufacturing Co., Ltd.1 | 10,400,000 | 74,798 |
| Texas Instruments Inc. | 15,810,773 | 1,417,278 |
| Visa Inc., Class A | 1,500,000 | 157,860 |
| Western Union Co.3 | 35,700,000 | 685,440 |
| Xilinx, Inc. | 4,000,000 | 283,320 |
| 15,443,007 | ||
| Telecommunication services 4.06% | ||
| AT&T Inc. | 12,432,734 | 486,990 |
| BT Group PLC1 | 25,895,000 | 98,520 |
| CenturyLink, Inc. | 13,320,505 | 251,758 |
| SoftBank Group Corp.1 | 1,017,000 | 82,204 |
| Verizon Communications Inc. | 52,471,795 | 2,596,829 |
| Vodafone Group PLC1 | 45,300,000 | 126,889 |
| 3,643,190 | ||
| Utilities 1.90% | ||
| American Electric Power Co., Inc. | 4,014,088 | 281,950 |
| Dominion Energy, Inc. | 7,723,824 | 594,194 |
| Duke Energy Corp. | 1,238,000 | 103,893 |
| Exelon Corp. | 11,060,000 | 416,630 |
| NextEra Energy, Inc. | 300,000 | 43,965 |
| Power Assets Holdings Ltd.1 | 14,000,000 | 121,574 |
| Southern Co. | 3,000,000 | 147,420 |
| 1,709,626 | ||
| Real estate 0.13% | ||
| Crown Castle International Corp. REIT | 1,136,200 | 113,597 |
| Miscellaneous 0.50% | ||
| Other common stocks in initial period of acquisition | 451,404 | |
| Total common stocks (cost: $53,495,796,000) | 82,615,474 |
The Investment Company of America — Page 4 of 8
unaudited
| Convertible stocks 0.08% Energy 0.08% |
Shares | Value (000) |
| Kinder Morgan Inc., Series A, depository share, convertible preferred 2018 | 597,000 | $25,402 |
| Southwestern Energy Co., Series B, 6.25% convertible preferred 2018 | 3,450,000 | 49,197 |
| Total convertible stocks (cost: $120,870,000) | 74,599 | |
| Bonds, notes & other debt instruments 0.16% U.S. Treasury bonds & notes 0.16% U.S. Treasury 0.16% |
Principal?amount (000) |
|
| U.S. Treasury 1.625% 2026 | $149,700 | 141,888 |
| Total bonds, notes & other debt instruments (cost: $150,473,000) | 141,888 | |
| Short-term securities 7.24% | ||
| 3M Co. 1.09% due 10/24/20174 | 50,000 | 49,962 |
| Apple Inc. 1.10%–1.27% due 10/18/2017–1/2/20184 | 222,150 | 221,738 |
| Army and Air Force Exchange Service 1.10% due 10/30/20174 | 30,000 | 29,972 |
| Bank of New York Mellon Corp. 1.17%–1.18% due 11/15/2017–12/5/2017 | 120,000 | 119,786 |
| CAFCO, LLC 1.25%–1.30% due 10/2/2017–11/16/20174 | 175,300 | 175,136 |
| Chariot Funding, LLC 1.22%–1.40% due 10/10/2017–1/3/20184 | 97,000 | 96,812 |
| Chevron Corp. 1.10%–1.11% due 10/5/2017–10/24/20174 | 194,100 | 194,016 |
| Ciesco LLC 1.28%–1.32% due 11/1/2017–11/15/20174 | 50,000 | 49,929 |
| Cisco Systems, Inc. 1.17%–1.18% due 10/4/2017–10/18/20174 | 115,000 | 114,961 |
| Coca-Cola Co. 1.19%–1.30% due 10/17/2017–2/20/20184 | 226,100 | 225,559 |
| Eli Lilly and Co. 1.11% due 10/6/20174 | 135,500 | 135,471 |
| Emerson Electric Co. 1.07% due 10/2/20174 | 100,000 | 99,991 |
| ExxonMobil Corp. 1.08%–1.16% due 10/2/2017–11/2/2017 | 230,100 | 229,981 |
| Federal Farm Credit Banks 1.04%–1.22% due 12/28/2017–4/13/2018 | 128,200 | 127,552 |
| Federal Home Loan Bank 1.00%–1.14% due 10/2/2017–2/21/2018 | 1,775,839 | 1,772,661 |
| Freddie Mac 0.99%–1.08% due 10/10/2017–12/4/2017 | 250,000 | 249,870 |
| Hershey Co. 1.13% due 10/5/20174 | 20,800 | 20,796 |
| John Deere Capital Corp. 1.17%–1.20% due 10/23/2017–11/28/20174 | 71,900 | 71,820 |
| John Deere Financial Inc. 1.18%–1.21% due 10/19/2017–10/24/20174 | 91,500 | 91,435 |
| Johnson & Johnson 1.10%–1.12% due 10/16/2017–10/23/20174 | 195,000 | 194,881 |
| Kaiser Foundation Hospitals 1.16% due 10/3/2017 | 40,000 | 39,994 |
| Merck & Co. Inc. 1.14% due 11/15/20174 | 66,800 | 66,703 |
| Microsoft Corp. 1.09%–1.20% due 10/3/2017–11/8/20174 | 155,000 | 154,890 |
| Paccar Financial Corp. 1.13% due 10/11/2017 | 30,000 | 29,988 |
| PepsiCo Inc. 1.05%–1.10% due 10/3/2017–10/6/20174 | 70,200 | 70,191 |
| Pfizer Inc. 1.14%–1.30% due 10/23/2017–1/17/20184 | 240,000 | 239,342 |
| Private Export Funding Corp. 1.17%–1.34% due 11/1/2017–2/12/20184 | 190,000 | 189,490 |
| Procter & Gamble Co. 1.15%–1.22% due 11/22/2017–1/31/20184 | 115,900 | 115,569 |
| Prudential Funding, LLC 1.13% due 10/13/2017 | 40,000 | 39,982 |
| Qualcomm Inc. 1.15%–1.17% due 10/18/2017–10/25/20174 | 63,500 | 63,453 |
| Simon Property Group, L.P. 1.10% due 10/16/20174 | 14,800 | 14,792 |
| U.S. Bank, N.A. 1.20%–1.32% due 10/16/2017–1/22/2018 | 195,000 | 195,049 |
| U.S. Treasury Bills 1.03%–1.12% due 11/16/2017–2/8/2018 | 505,000 | 503,778 |
| Wal-Mart Stores, Inc. 1.08%–1.10% due 10/2/2017–10/30/20174 | 282,000 | 281,869 |
The Investment Company of America — Page 5 of 8
unaudited
| Short-term securities | Principal?amount (000) |
Value (000) |
| Walt Disney Co. 1.12%–1.23% due 10/16/2017–12/13/20174 | $175,000 | $174,806 |
| Wells Fargo Bank, N.A. 1.42% due 2/1/2018 | 50,000 | 50,025 |
| Total short-term securities (cost: $6,502,081,000) | 6,502,250 | |
| Total investment securities 99.52% (cost: $60,269,220,000) | 89,334,211 | |
| Other assets less liabilities 0.48% | 429,028 | |
| Net assets 100.00% | $89,763,239 |
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.
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. Further details on these holdings and related transactions during the nine months ended September 30, 2017, appear below.
| Beginning shares |
Additions | Reductions | Ending shares |
Net realized loss (000) |
Net unrealized appreciation (depreciation) (000) |
Dividend income (000) |
Value of affiliates at 9/30/2017 (000) | |
| Common stocks 1.23% | ||||||||
| Materials 0.00% | ||||||||
| Freeport-McMoRan Inc.2,5 | 71,019,145 | — | 25,623,045 | 45,396,100 | $(68,636) | $122,287 | $— | $— |
| Consumer staples 0.46% | ||||||||
| Lamb Weston Holdings, Inc. | 3,636,699 | 3,953,314 | — | 7,590,013 | — | 40,787 | 2,159 | 355,896 |
| Avon Products, Inc.2 | 25,493,441 | — | — | 25,493,441 | — | (69,087) | — | 59,400 |
| 415,296 | ||||||||
| Information technology 0.77% | ||||||||
| Western Union Co. | 35,700,000 | — | — | 35,700,000 | — | (89,964) | 18,743 | 685,440 |
| Total common stocks | 1,100,736 | |||||||
| Total 1.23% | $(68,636) | $4,023 | $20,902 | $1,100,736 | ||||
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 | 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 $8,035,680,000, which represented 8.95% of the net assets of the fund. This entire amount relates 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. |
| 2 | Security did not produce income during the last 12 months. |
| 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 was $3,143,584,000, which represented 3.50% of the net assets of the fund. |
| 5 | Unaffiliated issuer at 9/30/2017. |
Valuation disclosures
Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by accounting principles generally accepted in the United States of America. 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. Security transactions are recorded by the fund as of the date the trades are executed with brokers. 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.
The Investment Company of America — Page 6 of 8
unaudited
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 |
| Mortgage-backed; asset-backed obligations | Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information |
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. The average month-end notional amount of open forward currency contracts while held was $91,552,000.
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.
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 Investment Company of America — Page 7 of 8
unaudited
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 September 30, 2017 (dollars in thousands):
| Investment securities | ||||
| Level 1 | Level 2* | Level 3 | Total | |
| Assets: | ||||
| Common stocks: | ||||
| Energy | $5,819,877 | $1,286,326 | $— | $7,106,203 |
| Materials | 3,136,977 | 341,566 | — | 3,478,543 |
| Industrials | 7,536,777 | 313,378 | — | 7,850,155 |
| Consumer discretionary | 9,601,705 | 484,912 | — | 10,086,617 |
| Consumer staples | 7,551,758 | 1,922,241 | — | 9,473,999 |
| Health care | 13,299,907 | 597,517 | — | 13,897,424 |
| Financials | 8,331,513 | 1,030,196 | — | 9,361,709 |
| Information technology | 13,892,418 | 1,550,589 | — | 15,443,007 |
| Telecommunication services | 3,335,577 | 307,613 | — | 3,643,190 |
| Utilities | 1,588,052 | 121,574 | — | 1,709,626 |
| Real estate | 113,597 | — | — | 113,597 |
| Miscellaneous | 371,636 | 79,768 | — | 451,404 |
| Convertible stocks | 74,599 | — | — | 74,599 |
| Bonds, notes & other debt instruments | — | 141,888 | — | 141,888 |
| Short-term securities | — | 6,502,250 | — | 6,502,250 |
| Total | $74,654,393 | $14,679,818 | $— | $89,334,211 |
| * | Securities with a value of $8,035,680,000, which represented 8.95% of the net assets of the fund, were classified as Level 2 due to significant market movements following the close of local trading. |
| Key to abbreviations |
| ADR = American Depositary Receipts |
| GBP = British pounds |
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-004-1117O-S60693 | The Investment Company of America — Page 8 of 8 |
ITEM 2 – Controls and Procedures
The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.
There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 3 – Exhibits
The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| THE INVESTMENT COMPANY OF AMERICA | |
| By /s/ James B. Lovelace | |
|
James B. Lovelace, Vice Chairman and Principal Executive Officer | |
| Date: November 28, 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/ James B. Lovelace |
|
James B. Lovelace, Vice Chairman and Principal Executive Officer |
| Date: November 28, 2017 |
| By /s/ Brian D. Bullard |
|
Brian D. Bullard, Treasurer and Principal Financial Officer |
| Date: November 28, 2017 |
