American Funds®

BOND FUNDS

®

Share Class

Summary

Quality, income and preservation. With a dollar-weighted average maturity of up to three years, the fund seeks a higher yield than money market funds with less interest rate volatility than longer term bond funds. Its high-quality portfolio includes U.S. government bonds and asset- and mortgage-backed securities.
Price at NAV $10.01
as of 07/02/2015 (updated daily)
Fund Assets (millions) $4,639.8 Portfolio Managers 2 Expense Ratio 0.65% Prospectus (PDF)

Asset Mix

U.S. Equities0%
Non-U.S. Equities0%
U.S. Bonds80.3%
Non-U.S. Bonds12.8%
Cash & Equivalents6.9%

As of 5/31/2015 (updated monthly).
529-A Share data is not available; please click here for a chart based on an investment in Class A shares.

Fund Statistics

2.6 years
Average Life
2.0 years
Average Duration
0.8%
Average Yield
to Maturity
1.8%
Average Coupon
% of net assets as of 3/31/2015 (updated quarterly).

Morningstar Style BoxTM— Fixed-Income

High Quality
Limited Interest-Rate Sensitivity
Morningstar data as of 3/31/15 updated quarterly.

Description

Fund Objective
The fund's investment objective is to provide current income, consistent with its maturity and quality standards described in the prospectus, and preservation of capital.
Distinguishing Characteristics
Offers the potential for yields higher than money market funds with lower volatility than intermediate- and long-term bonds.
Types of Investments
Primarily corporate and government bonds, mortgage- and asset-backed securities and cash.
Maturity
The fund's portfolio will have a dollar-weighted average maturity no greater than three years.
Portfolio Restrictions
The fund will primarily invest in debt securities rated AA- or better or Aa3 or better at the time of purchase (or unrated but determined by the fund’s investment adviser to be of equivalent quality). Up to 10% of assets can be invested in debt securities in the A rating category. The fund will not purchase debt securities rated BBB+ or below and Baa1 or below.

Fund Facts

Fund Inception 10/02/2006
Fund Assets (millions)
As of 5/31/2015 (updated monthly).
$4,639.8
Companies/Issuers
Holdings are as of 8/31/2014 (updated as of most recent fiscal year-end).
150+
Shareholder Accounts
Shareholder accounts are as of 5/31/2015 (updated monthly).
24,894
Regular Dividends Paid Monthly
Minimum Initial Investment $250
Capital Gains Paid --
Portfolio Turnover (2014) 257%
Fiscal Year-End Aug
Prospectus Date 11/01/2014
CUSIP 82524A 83 9
Fund Number 1048

Returns

Returns at NAV | With Sales Charge
CAAFX
Barclays U.S. Government/Credit 1-3 Years ex BBB Index

Volatility & Return


Volatility & Return chart is not available for funds less than 10 years old.

Yield

12-month
Distribution Rates
30-day SEC Yield
Fund at NAV 0.49% N/A
Fund at MOP 0.48% 1.01%
As of 05/31/2015 (updated monthly).

Portfolio Management

LEARN ABOUT THE CAPITAL SYSTEMSM
Years of Experience with Fund
Years of Experience with Capital Group
Years of Experience with Investment Industry
John R. Queen 23 11 3
Ritchie Tuazon 14 4 1
A boldface number indicates that years of experience with Capital Group is equal to years of experience with investment industry.

Ratings & Risk


Overall Morningstar RatingTM
Funds rated (472)
3-yr. Morningstar RatingTM
(472 funds rated)
5-yr. Morningstar RatingTM
(393 funds rated)
10-yr. Morningstar RatingTM
(-- funds rated)
--
Overall Morningstar Risk Low
HIGH
LOW
Category Short-Term Bond
ADVANTAGES AND DISADVANTAGES OF MORNINGSTAR RATINGS
Ratings are based on risk-adjusted returns as of 5/31/2015 (updated monthly).

Risk Measures

For the 5 Years ending 5/31/15 (updated monthly). R-squared, Beta and Capture Ratio calculated using the Barclays US Agg Bond TR USD.

Fund
Standard Deviation 0.74
Sharpe Ratio 0.82
R-squared 70
Beta 0.22
Capture Ratio (Downside/Upside) 25/20
U.S. Treasuries/Agencies
39.4%
AAA/Aaa
33.5%
AA/Aa
12.4%
A
9.5%
CCC & Below
0.0%
Unrated
0.1%
Cash & equivalents
5.1%
% of net assets as of 3/31/2015 (updated quarterly).

Average Life Breakdown

0-4.9 Years
86.9%
5-9.9 Years
7.5%
10-19.9 Years
--
20-29.9 Years
0.5%
30+ Years
--
% of net assets as of 03/31/2015 (updated quarterly).

Holdings

Bonds Breakdown

Bond Details

Total bond holdings
U.S. Treasury bonds & notes 28.8%
Asset-backed obligations 16.1%
Federal agency bonds & notes 11.6%
Municipal securities 2%

% of net assets as of 3/31/2015 (updated quarterly).

Top Fixed-Income Issuers

U.S. Treasury
27.8%
Fannie Mae
9.7%
Freddie Mac
3.4%
Government National Mortgage Assn.
2.3%
Federal Home Loan Bank
1.8%

% of net assets as of 3/31/2015 (updated quarterly).

Prices & Distributions

FIND HISTORICAL PRICES
2015
2006-2015

2015
Record
Date
Calculated
Date
Pay Date
Income Dividend
Regular
Income Dividend
Special
Cap. Gains
Long-Term
Cap. Gains
Short-Term
Reinvest NAV
Daily 01/30/15 02/02/15 $0.0029559 $0.00 $0.00 $0.00 $10.03
Daily 02/27/15 03/02/15 $0.0030432 $0.00 $0.00 $0.00 $9.99
Daily 03/31/15 04/01/15 $0.0038784 $0.00 $0.00 $0.00 $10.02
Daily 04/30/15 05/01/15 $0.0080838 $0.00 $0.00 $0.00 $10.02
Daily 05/29/15 06/01/15 $0.0108991 $0.00 $0.00 $0.00 $10.02
Daily 06/30/15 07/01/15 $0.0060904 $0.00 $0.00 $0.00 $10.01
2015 Year-to-Date:
Dividends Subtotal: $0.03495081
Cap Gains Subtotal: $0.00
Total Distributions: $0.03495081

Fees & Expenses

Fees

Annual Management Fees 0.29%
Other Expenses 0.23%
Service 12b-1 0.13%
As of each fund's most recent prospectus.

Expense Ratio

Fund 0.65%
Lipper Short U.S. Government Funds Average 0.84%

Resources

Prospectuses & Reports for CAAFX

Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.

Returns shown at net asset value (NAV) have all distributions reinvested. If a sales charge had been deducted, the results would have been lower.

Returns with sales charge for Class 529-A shares reflect payment of the 2.50% maximum sales charge.

View fund expense ratios and returns.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors® and sold through unaffiliated intermediaries.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Depending on your state of residence, there may be an in-state plan that offers tax and other benefits not available through CollegeAmerica. Before investing in any state's 529 plan, investors should consult a tax advisor. CollegeAmerica is sponsored by Virginia529℠.

There may have been periods when the fund has lagged the index or indexes. Certain market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.

Funds are actively managed, so holdings will change.

When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Read details about how waivers and/or reimbursements affect the results for each fund. View results and yields without fee waiver and/or expense reimbursement.

  1. Calculated by Morningstar. Due to differing calculation methods, the figures shown here may differ from those calculated by American Funds.
  2. The months indicated for dividends and capital gains paid represent the anticipated current year ex-dividend date schedule for all share classes.
  3. Expense ratios are as of the most recent prospectus.
  4. Source for Lipper expense ratio comparison: Lipper, based on front-end load funds, excluding funds of funds, for the most recent fiscal year-ends available as of 3/31/2015.
  5. Excludes certain securities in initial period of acquisition.
  6. Lipper ratings for Consistent Return reflect funds’ historical risk-adjusted returns at NAV, adjusted for volatility, relative to peers. Lipper ratings for Expense reflect funds’ expense minimization relative to peers with similar load structures. Lipper ratings for Preservation reflect funds’ historical loss avoidance relative to other funds within the same asset class. Preservation ratings are relative, rather than absolute, measures, and funds named Lipper Leaders for Preservation may still experience losses periodically; those losses may be larger for equity and mixed equity funds than for fixed income funds. Lipper ratings for Tax Efficiency reflect funds’ historical success in postponing taxable distributions relative to peers. Tax Efficiency offers no benefit to investors in tax-sheltered accounts such as 401(k) plans. Lipper ratings for Total Return reflect funds’ historical total return performance relative to peers. The Lipper ratings are subject to change every month and are based on an equal-weighted average of percentile ranks for the Total Return, Consistent Return, Preservation, Tax Efficiency, and Expense metrics. The highest 20% of funds in each classification are named Lipper Leaders for Total Return, the next 20% receive a rating of 4, the middle 20% are rated 3, the next 20% are rated 2, and the lowest 20% are rated 1. Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at www.lipperleaders.com. Lipper Leader © 2015, Thomson Reuters, All Rights Reserved.
  7. Morningstar Rating™ for Funds: For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Ratings metrics. Past results are not guarantee of results in future periods. Morningstar Rating is for Class 529-A only; other classes may have different performance characteristics.
  8. Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness. If agency ratings differ, the security will be considered to have received the highest of those ratings, consistent with the fund's investment policies. Securities in the Unrated category have not been rated by a rating agency; however, the investment adviser performs its own credit analysis and assigns comparable ratings that are used for compliance with fund investment policies.
  9. Read more information about Morningstar Style Box methodology. The model for the fixed-income style box is based on the two pillars of fixed-income performance: interest-rate sensitivity and credit quality. The three interest sensitivity groups are limited, moderate and extensive and the three credit quality groups are high, medium and low. These groupings display a portfolio's effective duration and third party credit ratings to provide an overall representation of the fund's risk orientation given the sensitivity to interest rate and credit rating of bonds in the portfolio.
  10. The portfolio managers shown are as of the fund's most recent prospectus dated  11/01/2014.
  11. Class 529-A shares were first offered on February 15, 2002. Class 529-A share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for estimated additional annual expenses. Results for certain funds with an inception date after February 15, 2002, also include hypothetical returns because those funds' Class 529-A shares sold after the funds' date of first offering. View dates of first sale and specific expense adjustment information.
  12. YTD (year-to-date return): the net change in the value of the fund's shares (in percentage terms) from January 1, 2015, to the current date shown above.
  13. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. 
  14. The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the SEC yield and distribution rate may differ.

If withdrawals from 529 plans are used for purposes other than higher education, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax.

©2015 Morningstar, Inc. All Rights Reserved. Some of the information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar, its content providers nor the American Funds are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Information is calculated by Morningstar. Due to differing calculation methods, the figures shown here may differ from those calculated by American Funds.

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings.

For more information about the risks associated with each fund, go to its detailed fund information page or read the prospectus.

Terms and Definitions

Barclays U.S. Government/Credit 1-3 Years ex BBB: Barclays U.S. Government/Credit 1–3 Years ex BBB Index is a market-value-weighted index that tracks the total return results of fixed-rate, publicly placed, dollar-denominated obligations issued by the U.S. Treasury, U.S. government agencies, quasi-federal corporations, corporate or foreign debt guaranteed by the U.S. government, and U.S. and foreign debentures and secured notes that meet specified maturity, liquidity and quality requirements, with maturities of one to three years, excluding BBB-rated securities.

Beta: Beta relatively measures a fund's sensitivity to market movements over a specified period of time. The beta of the market (represented by the benchmark index) is equal to 1; a beta higher than 1 implies that a fund's return was more volatile than the market. A beta lower than 1 suggests that the fund was less volatile than the market. Generally the higher the R-squared measure, the more reliable the beta measurement will be. Calculated by Morningstar.

Bond Statistic Average Coupon: The average coupon is the weighted average coupon rate of all the bonds in the fund.

Bond Statistic Average Duration in Years: Expressed in years, average duration is a weighted average of the estimated price sensitivity of the bonds in the fund's portfolio to a given change in interest rates. With respect to individual bonds, for example, a duration of 4 years indicates that the price of a bond will rise/fall by approximately 4% if rates in general fall/rise by 1%. Typically, bonds with a longer duration pay higher interest but are more sensitive to interest rate changes.

Bond Statistic Average Life in Years: Expressed in years, average life is time weighting the expected principal payments, taking into consideration the impact of calls and prepayments. In general, it is a better measure than average maturity for bonds that have the ability to prepay principal before they reach maturity (e.g., mortgages, mortgage-backed securities and asset-backed securities). Data shown is a weighted average of the bonds held in the fund's portfolio.

Bond Statistic Average Yield to Maturity: A weighted average of all the fund's bond holding's yield to maturities. Yield to maturity is the return a bond earns if held to maturity, based on its price and coupon. Assumes that coupon payments can be reinvested at the yield to maturity.

Capture Ratio Downside: Capture ratios reflect the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture). Calculated by Morningstar.

Capture Ratio Upside: Capture ratios reflect the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture). Calculated by Morningstar.

Historical Long-Term Capital Gains: When a capital gain distribution is paid, the net asset value per share is reduced by the amount of the payment plus or minus any change in the value of the fund's holdings. Read our explanation of the effect of a capital gain on a fund's price for details. Two types of capital gains are realized by our funds — short-term and long-term. Net short-term capital gains are distributed to shareholders as income dividends and are taxed at ordinary income tax rates. Long-term capital gain distributions are taxed at a maximum 15% rate.

Historical Regular Dividend: The share prices of all of our equity funds decrease when a dividend is paid. The share price of only one of our fixed-income funds, Capital World Bond Fund, also decreases when a dividend is paid. A fund pays a special dividend when the investment income generated by the fund exceeds the income the fund has paid in the form of dividends throughout the year. Special dividends are distributed with the last dividend payment at the end of the calendar year. Prior to January 1, 2003, short-term capital gains distributed to shareholders as income dividends and special dividends paid to shareholders were included in the aggregate income dividend dollar amount.

Historical Short-Term Capital Gains: When a capital gain distribution is paid, the net asset value per share is reduced by the amount of the payment plus or minus any change in the value of the fund's holdings. Read our explanation of the effect of a capital gain on a fund's price for details. Two types of capital gains are realized by our funds — short-term and long-term. Net short-term capital gains are distributed to shareholders as income dividends and are taxed at ordinary income tax rates. Long-term capital gain distributions are taxed at a maximum 15% rate.

Historical Special Dividend: The share prices of all of our equity funds decrease when a dividend is paid. The share price of only one of our fixed-income funds, Capital World Bond Fund, also decreases when a dividend is paid. A fund pays a special dividend when the investment income generated by the fund exceeds the income the fund has paid in the form of dividends throughout the year. Special dividends are distributed with the last dividend payment at the end of the calendar year. Prior to January 1, 2003, short-term capital gains distributed to shareholders as income dividends and special dividends paid to shareholders were included in the aggregate income dividend dollar amount.

Lipper Consistent Return Rating: The Consistent Return takes into account both short and long-term risk-adjusted performance relative to fund classification. The measure is based on the Effective Return computation. Effective Return is a risk-adjusted return measure that looks back over a variety of holding periods (measured in days, weeks, months, and/or years) and reflects funds’ historical risk-adjusted returns, relative to peers.

Lipper Expense Rating: Lipper Ratings for Expense reflect funds’ expense minimization relative to peers with similar load structures. Lipper Ratings for Expense differentiate funds that have minimized expenses compared to competing funds. These costs are subtracted directly from a fund’s return, so if two funds have equal returns before expenses, the lower cost fund will deliver higher net returns to an investor. To rate an individual fund, Lipper first looks at the classification the fund is in and then at the load structure (funds within a classification are grouped into one of three load classifications– no-load/front-end load, back-end load/level load, and institutional load). The fund is then ranked against its peers (similar classification, similar load structure) so a fund that has the lowest expense levels within a given classification and time period is designated as a Lipper Leader for Expense.

Lipper Preservation Rating: Lipper Ratings for Preservation reflect funds’ historical loss avoidance relative to other funds within the same asset class. The Preservation model is defined as the sum of negative monthly returns over three-, five-, and ten-year performance periods. Unlike the other Lipper measures, the Preservation measure is calculated from three broad asset classes (equity funds, mixed asset funds, and bond funds) instead of from the investment classification level.

Morningstar rating: In an effort to classify funds by what they own, as well as by their prospectus objectives and styles, Morningstar developed Morningstar Categories. While the prospectus objective identifies a fund's investment goals based on the wording in the fund prospectus, the Morningstar Category identifies funds based on their actual investment styles as measured by their underlying portfolio holdings (portfolio and other statistics over the past three years).

R-Squared: R-squared is a measure of the correlation between a particular fund's return and that of its benchmark index. A measure of 100 indicates that all of the fund's return can be explained by movements in its benchmark. Generally the higher the R-squared measure, the more reliable the beta measurement will be. Calculated by Morningstar.

Sharpe Ratio: Sharpe ratios use standard deviation and excess return to determine reward per unit of risk. The higher the number, the better the portfolio's historical risk-adjusted performance. Calculated by Morningstar.

Standard Deviation: Annualized standard deviation (based on monthly returns) is a common measure of absolute volatility that tells how returns over time have varied from the mean. A lower number signifies lower volatility. Calculated by Morningstar.