dedicated to helping you manage your nonprofit assets · the multiple portfolio counselor system: a...

The right choice for the long term®

Dedicated to helping you manage your nonprofit assets

Helping those who do good to do well.

We can help you preserve the value of your assets

We are one of the nation’s largest and most experienced investment management firms.American Funds is one of the oldest mutual fund companies, with roots dating back to 1931. We’re also among the nation’s largest, with 30 funds representing more than $900 billion and more than 40 million shareholder accounts.*

We take a conservative, long-term, value-oriented approach to investing.Our investment approach is based on buying securities at reasonable prices and holding them for the long term. We use extensive global research to locate investments that have the potential to provide above-average returns with below-average risks; the resulting low portfolio turnover is well below the industry average for all equity and fixed-income funds.

We have an outstanding long-term investment record.American Funds has a consistent track record and a time-tested management approach. For 75 years — through wars, recessions, prosperity and inflation — we’ve always believed that our shareholders come first.

We believe in attracting and retaining talented investment professionals.More than half of the portfolio counselors who serve American Funds were in the investment industry before the October 1987 market decline.*

We offer distinguished investment management at a reasonable cost.All of the American Funds have operating expenses that are below industry averages, resulting in considerable savings for the long-term investor. Investors who make Class A share purchases of $1 million or more pay no sales charges on assets that remain invested for at least one year.

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

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the funds’ prospectuses, which can be obtained from a financial adviser and should be read carefully before investing.*As of December 31, 2006

An investment presentation

Presented to: [CLIENT NAME]

On behalf of: [ADVISER NAME]

[ADVISER CONTACT INFO]




An investment presentation

Presented to: Sample Nonprofit Company, Inc.

On behalf of: John Q. Adviser 123 Anystreet Hometown, USA

Sample nonprofit presentation

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Presentation overview

nNeedsofnonprofitinvestors

n IntroductiontoAmericanFunds

nWhyAmericanFundsistherightchoicefornonprofits

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The needs of nonprofit investors

Fiduciary obligations

n Two main fiduciary obligations:

• Duty of care

— Requires director to be adequately informed to function effectively

— Discharges duties in good faith using care of a prudent person

— Create an investment policy statement designed to meet current and future financial needs

• Duty of loyalty

— Requires director to act in the best interest of the nonprofit organization, not for personal benefit

— Specifies guidelines to avoid conflicts of interest; ongoing monitoring

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The needs of nonprofit investors

Primary investment goals

nProtect the principal investment

n Establish and adhere to an annual spending rate, as outlined in your investment policy statement

nKeep pace with inflation while balancing the risk of losing principal

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Introduction to American Funds

n American Funds is the country’s largest mutual fund family offered exclusively through financial advisers, who can assist you in your initial investment selection, asset allocation and ongoing monitoring.

n For 75 years, American Funds has been dedicated to earning — and keeping — the trust of shareholders.

n We continue that tradition by offering thoughtful, conservative and ongoing fund manage-ment to individuals, families, retirement plans, nonprofit organizations, foundations and endowments.

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American Funds in the marketplace

n One of the three largest mutual fund firms in the country — with more than $900 billion in assets under management

n American Funds currently has more than �0 million shareholder accounts

n Over $5 billion in assets for more than 8,500 nonprofit organizations

All figures shown are as of December 31, 2006.

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What makes American Funds different?

nA long-term, value-oriented approach

nAn extensive global research effort

nThe multiple portfolio counselor system

nExperienced investment professionals

nA commitment to low operating expenses

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A long-term, value-oriented approach

nLook for unrecognized potential at reasonable prices

n Determine the difference between the fundamental value of a company and its price in the marketplace

n Pay attention to risk and help shareholders participate in the long-term growth of companies

n Invest in companies for the long term — Instead of asking “Where will this stock be in three to six months?” we prefer to ask “Where will this company be in five to 10 years?”

Why American Funds?

It’s … modesty — and

Capital Research’s dem-

onstrated commitment to

excellence — that investors

came to appreciate after the

excesses of the late 1990s …

Since launching its first fund,

[The] Investment Company of

America,® in 1934, [American

Funds] has built a record of

doing right by its investors.

— Kiplinger’s Personal Finance Magazine, July 1, 2005

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American Funds global presence

n Research offices worldwide (dates shown are when offices opened)

n We spend more than $130 million on research visits annually

n We visited thou-sands of companies in more than 65 countries in 2006

Countries visited in 2006

San Francisco(1975)

Los Angeles(1931)

New York (19�3)Washington, D.C.

(197�)

Tokyo (1982)

Hong Kong (1983)

London(1979)

Geneva(1962)

Singapore(1989)

American Funds offices

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The multiple portfolio counselor system: A unique method of portfolio management

n Assets of each fund are divided into smaller, more manageable portions

n Portfolio counselors make independent investment decisions according to their strongest convictions

n Investment analysts typically manage a portion — as much as 25% of assets — demonstrating their conviction through the research portfolio

n Investments are subject to fund objectives and overall guidelines

Investment analysts

Portfolio counselors

Diversity Continuity

Manageability Consistency

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Experienced investment professionals

nWe believe in attracting — and keeping — talented associates

n Foster creativity and encourage independent thinking

n Base current year compensation primarily on results over a rolling four-year period

Investment analysts• Specialists

• Career position at Capital

• Average 11 years of experience (six with our organization)

• Demonstrate conviction through research portfolio

Portfolio counselors• Generalists

• More than half of our portfolio counselors have been in the investment business for over 20 years

• One in five portfolio counselors experienced the 1973–197� bear market

• Average 2� years of experience (21 with our organization)

All figures shown are as of December 31, 2006.

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Our commitment to low operating expenses

n Economies of scale due to large asset base and fewer funds

n Provide exceptional service at a reasonable cost

n Low portfolio turnover rates

n Low expenses directly affect the bottom line

Lower is better: American Funds annual operating expenses (%)

Balanced Taxable bond Money market

Growth Growth-and-income International/Global equity

Equity-income

American Funds (net) Industry average

0.69

1.23

0.56

1.26

0.83

1.58

0.54 0.70

0.580.96

0.721.03

0.51 0.65

Expenses are for Class A shares and are as of the most recent fiscal year-ends available as of December 31, 2006. Expense ratios do not reflect sales charges.

Sources for industry averages: Lipper front-end load funds, except money markets are compared against no–load funds.

The funds’ investment adviser is waiving a portion of its management fees. The net expense ratio reflects the waiver; the gross expense ratio does not. The waiver may be discontinued at any time in consultation with each fund’s board, but is expected to continue at the current level until further review. The funds’ investment adviser and boards intend to review the waiver as circumstances warrant. Please see each fund’s most recent share-holder report for details.

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How American Funds can meet the needs of nonprofit investors

nConservative investment philosophy; 75 years of consistent investment results

n A long-term focus based on thorough analysis and attention to risk

n To help protect investors’ money, we try to sidestep short-term market trends and investment fads

nAmerican Funds strives to keep fund investment management fees as low as possible

nWe offer a wide array of funds with a variety of investment objectives

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Why American Funds?

American Funds investments

The American Funds depicted here are positioned according to their primary investment categories. However, due to market fluctuations, SMALLCAP World Fund may have significant exposure to stocks of mid-sized companies. Fundamental Investors and The New Economy Fund have the potential for significant exposure to non-U.S. equities. In addition, The Income Fund of America has a combined equity/fixed-income limit of up to 30% of its assets outside the United States. The Bond Fund of America and Capital World Bond Fund may have up to 10% and 25% exposure, respectively, to below-investment-grade bonds.

Most investments carry some degree of risk. For example, the return of principal in bond funds and in a fund’s bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks that are associated with the underlying bonds owned by the funds. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing outside the United States (especially in developing countries) involves additional risks, such as currency fluctuations, as does invest-ing in smaller companies, as more fully described in the funds’ prospectuses. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds.

Lower volatility

Cash-equivalent funds

Bond funds Equity-income and balanced funds

Growth-and-income funds

Growth funds

The Cash Management Trust of America®

The U.S. Treasury Money Fund of AmericaSM

The Bond Fund of AmericaSM

Capital World Bond Fund®

Intermediate Bond Fund of America®

Short-Term Bond Fund of AmericaSM

U.S. Government Securities FundSM

The Income Fund of America®

American Balanced Fund®

American Mutual Fund®

Fundamental InvestorsSM

The Investment Company of America®

Washington Mutual Investors FundSM

AMCAP Fund®

The Growth Fund of America®

The New Economy Fund® SMALLCAP World Fund® New World FundSM

Money market investments

Investment- grade bonds

Domestic equities and bonds

Large domestic companies

Large domestic companies

Smaller companies Developing-

country exposureNon-investment-

grade bondsGlobal

equities and bondsLarge

global companiesLarge

global companiesMid-sized companies

American High-Income TrustSM

Capital Income Builder® Capital World Growth and Income FundSM

EuroPacific Growth Fund®

New Perspective Fund®

Higher volatility

1�

Why American Funds?

Ongoing services and support

nAssist you and your financial advisers with service, account management and education

• Periodic conference calls and other events on a wide variety of relevant topics

• Ability to customize the services clients and financial advisers receive from us

nSupport you and your financial advisers with analytical and other investment services

• Portfolio reviews; investment monitoring

• Assistance with your fiduciary responsibilities managing a nonprofit organization

• Access to a variety of resources regarding your funds

nOnline support at americanfunds.com

• Fund prices and information

• Specific information on your investments/accounts

• Additional resources

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Nonprofit client list

American Savings Foundation

Arkansas Community Foundation

The Arizona Community Foundation

Battle Creek Community Foundation

Bentley College

Berklee College of Music

California Community Foundation

California Pacific Medical Center

Central Minnesota Community Foundation

Central New York Community Foundation

Children’s Hospital & Regional Medical Center

Christian Church Foundation, Inc.

Clark University

The Cleveland Foundation

Coastal Community Foundation of South Carolina

The Columbus Foundation & Affiliated Organizations

The Community Foundation for Greater Atlanta, Inc.

Community Foundation for Greater Buffalo

Community Foundation for Monterey County

Community Foundation for Muskegon County, Inc.

Community Foundation for Northeast Georgia

Community Foundation for the Capital Region (Albany)

Community Foundation of Central Florida

Community Foundation of Central Georgia

The Community Foundation of Greater Birmingham

Community Foundation of Greater Fort Wayne

The Community Foundation of Herkimer & Oneida Counties

Community Foundation of Howard County, Inc.

The Community Foundation of Middle Tennessee

The Community Foundation of New Jersey

Community Foundation of the Rappahannock River Region

Community Foundation of Western North Carolina

The Community Foundation Serving Richmond & Central Virginia

The Community Foundation Serving Riverside and San Bernardino Counties

Community Foundation Sonoma County

Connecticut Community Foundation

Cooper Foundation

Cumberland Community Foundation

The Dallas Foundation

El Pomar Foundation

Fairview Health Services

Foundation for Roanoke Valley, Inc.

Gettysburg College

Glendale Community Foundation

Grand Rapids Community Foundation

The Greater Cincinnati Foundation

The Greater Kansas City Community Foundation

The Greater New Orleans Foundation

Greater Saint Louis Community Foundation

Greater Tacoma Community Foundation

Greater Worcester Community Foundation

Guide Dogs for the Blind, Inc.

Indianapolis Symphony Orchestra Foundation

Johnson & Wales University

Kalamazoo Community Foundation

Kansas State University Foundation

Marin Community Foundation

The Minneapolis Foundation

Minnesota Orchestral Association

New Hampshire Charitable Foundation

The Norfolk Foundation

North Georgia Community Foundation

North Memorial Medical Center

Oklahoma Medical Research Foundation

Orange County Community Foundation

The Philadelphia Foundation

The Pittsburgh Foundation

Presbyterian Health Foundation

Randolph-Macon Woman’s College

Regents of the University of Michigan

Richland County Foundation

Rochester Area Foundation

Rowan University Foundation

The Saint Paul Foundation

The San Diego Foundation

The San Francisco Foundation

Santa Barbara Foundation

Sioux Falls Area Foundation, Inc.

University of North Dakota Foundation

University of the Sciences in Philadelphia

University of Vermont

Wabash College

Worcester Polytechnic Institute

The following is a partial list of nonprofit organizations with investments in the American Funds.

Permission granted by entity or listed in Money Market Directory. Updated January 2007

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Summary

AmericanFunds:

nRecognizestheneedsofnonprofitorganizations

nHasalong-termhistoryofconsistentresultswithlowexpenses

nHasaconservativeinvestmentphilosophythatisappropriatefornonprofitclients

nOffersclientservicesandsupport

The right choice for the long term®

Visit us at americanfunds.com.

The Capital Group CompaniesAmerican Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust

dedicated to helping you manage your nonprofit assets · the multiple portfolio counselor system: a...

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