WASHINGTON MUTUAL INVESTORS FUND
(photograph)
Report to Shareholders
FOR THE QUARTER ENDED JULY 31, 1995
[Logo]
The American Funds Group (R)
FELLOW SHAREHOLDERS
During Washington Mutual's May-July quarter, the stock market
continued to record new highs. Standard & Poor's 500 Composite Stock
Index, a broad unmanaged measure of the U.S. market, posted another sizable
increase: 9.9% including reinvestment. The value of Washington Mutual's
shares also recorded a strong gain: 7.9% on a reinvested basis.
While these two figures are not too far apart, there are some
noteworthy differences between the S&P 500 and the composition of the
Fund's investment portfolio. One major difference is that the portfolio,
which is actively managed, places considerable emphasis on income-oriented
stocks. As a result, the portfolio's average yield of 3.7% on July 31 was
approximately one-and-a-quarter percentage points, or 51%, higher than the
yield on the S&P 500.
Additionally, Washington Mutual's portfolio is managed according to
strict investment criteria, which minimizes the Fund's exposure to very
low-yielding, volatile stocks, including most technology issues. In the
May-July quarter, shares of many technology companies experienced a
frenzied run-up not unlike the speculative rises that have often
characterized the later stages of other bull markets in the past. This
run-up accounted for nearly all of the differential between the Fund and
the S&P 500.
During the May-July quarter, there was a shift in the nation's
monetary policy. After initiating seven consecutive increases in
short-term interest rates, in July the Federal Reserve lowered the target
level for federal funds by one-quarter of a percent. This modest change
led to identical reductions in the prime rate at most banks. The Fed now
appears to believe that inflationary dangers have subsided, and that some
stimulative action may be needed to ward off a recession.
The companies represented in Washington Mutual's portfolio have
demonstrated a pattern of raising dividends. That trend continued this
quarter with 18 companies (or 14% of all companies in which the Fund is
invested) declaring increases.
The portfolio appearing in this report reflects ownership in 129
companies in 25 industries. The largest industry positions by percent of
net assets on July 31 were: Banking (16.5%), Health & Personal Care
(12.9%), Telecommunications (12.7%), Energy Sources (7.6%), Electric & Gas
Utilities (6.4%), Insurance (5.1%) and Business & Public Services (4.9%).
Ten new names appeared in the portfolio during the quarter: Ashland, Chase
Manhattan<F1>, Conrail, Dow Jones, First Fidelity Bancorporation<F2>
Pfizer, Public Service Enterprise Group, SBC Communications, Signet Banking
and Wal-Mart Stores. Shares of Cox Communications were eliminated.
Washington Mutual's investment discipline has remained unchanged over
the years and is focused on identifying companies which meet strict
standards for quality and value. This discipline has achieved excellent
long-term results for our shareholders in the past, and we believe it
should continue to do so in the future.
Cordially,
[Signature] [Signature] [Signature]
Stephen Hartwell James H. Lemon, Jr. Harry J. Lister
Chairman Vice Chairman President
September 11, 1995
[FN]
<F1> Chase Manhattan is in the process of being acquired by Chemical
Banking (also a Washington Mutual investment) through an exchange of
shares.
<F2> First Fidelity is in the process of being acquired by First Union
Corp. (also a Washington Mutual investment) through an exchange of shares.
[/FN]
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS AND WERE COMPUTED WITHOUT A
SALES CHARGE. SHARE PRICE AND RETURN WILL VARY, SO YOU MAY HAVE A GAIN OR
LOSS OF PRINCIPAL WHEN YOU SELL YOUR SHARES. FUND SHARES ARE NOT DEPOSITS
OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S. GOVERNMENT, ANY
FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY
OTHER AGENCY, ENTITY OR PERSON. All investmens are subject to certain
risks. For example, those which include common stocks are affected by
fluctuating stock prices. Accordingly, investors should maintain a
long-term perspective.
Your Investment Account
As of July 31, 1995
EACH $1,000 OF NET ASSETS REPRESENTED:
This Which Has Paid
Amount Dividends
Invested In This Company Since
$ 9.12 Aetna Life and Casualty Co. 1934
.77 Allegheny Power System, Inc. 1935
2.38 AlliedSignal Inc. 1920
14.45 Allstate Corp. 1993
3.69 ALLTEL Corp. 1960
1.53 American Electric Power Company, Inc. 1910
8.87 American Express Co. 1870
9.42 American General Corp. 1929
21.49 American Home Products Corp. 1919
15.64 Ameritech Corp. 1984
16.76 Amoco Corp. 1894
5.38 Ashland Inc. 1935
2.26 Atlantic Energy, Inc. 1937
4.76 Atlantic Richfield Co. 1927
16.91 AT&T Corp. 1881
11.91 Banc One Corp. 1968
17.60 Bank of New York Co., Inc. 1785
8.64 BankAmerica Corp. 1968
10.82 Bankers Trust New York Corp. 1904
2.42 Barnett Banks, Inc. 1945
11.50 Bell Atlantic Corp. 1984
2.58 BellSouth Corp. 1984
6.02 Beneficial Corp. 1929
7.67 Boeing Co. 1942
20.14 Bristol-Myers Squibb Co. 1900
1.08 Brooklyn Union Gas Co. 1949
3.10 Browning-Ferris Industries, Inc. 1965
6.19 Carolina Power & Light Co. 1937
2.25 CBS Inc. 1931
6.24 Central and South West Corp. 1947
5.45 Chase Manhattan Corp. 1969
15.09 Chemical Banking Corp. 1968
12.00 Chevron Corp. 1912
5.89 CIGNA Corp. 1981
1.16 CINergy Corp. 1940
4.67 Clorox Co. 1967
2.00 Comerica Inc. 1972
4.15 Conrail, Inc. 1987
8.97 Consolidated Edison Co. of New York, Inc. 1885
2.16 Consolidated Natural Gas Co. 1944
7.22 CPC International Inc. 1920
3.82 Dana Corp. 1936
5.13 Deluxe Corp. 1967
4.40 Detroit Edison Co. 1909
1.35 Dominion Resources, Inc. 1925
1.69 Dow Jones & Co., Inc. 1962
17.57 E.I. du Pont de Nemours and Co. 1904
3.69 Duke Power Co. 1926
20.87 Dun & Bradstreet Corp. 1934
1.83 Eastman Kodak Co. 1902
4.44 Eaton Corp. 1923
9.33 Exxon Corp. 1882
8.33 Federal National Mortgage Assn. 1955
7.05 First Chicago Corp. 1936
.40 First Fidelity Bancorporation 1969
9.71 First Union Corp. 1989
10.64 Fleet Financial Group, Inc. 1968
5.70 Gannett Co., Inc. 1929
16.13 General Electric Co. 1899
10.85 General Mills, Inc. 1928
12.24 GTE Corp. 1936
8.84 Household International, Inc. 1926
7.20 Houston Industries Inc. 1922
12.89 International Paper Co. 1946
4.56 Johnson & Johnson 1934
3.99 Johnson Controls, Inc. 1901
1.96 Kansas City Power & Light Co. 1950
5.06 Kerr-McGee Corp. 1937
4.90 Kimberly-Clark Corp. 1923
17.53 Eli Lilly and Co. 1885
6.80 Lincoln National Corp. 1920
1.43 Marsh & McLennan Companies, Inc. 1923
2.15 Masco Corp. 1936
2.86 Maytag Corp. 1946
.85 McGraw-Hill Companies, Inc. 1937
2.10 McKesson Corp. 1962
5.38 Melville Corp. 1916
19.85 Merck & Co., Inc. 1935
12.85 Minnesota Mining and Manufacturing Co. 1916
9.94 Mobil Corp. 1902
15.57 Monsanto Co. 1925
14.01 J.P. Morgan & Co. Inc. 1892
11.85 National City Corp. 1972
2.50 NationsBank Corp. 1968
17.93 Norfolk Southern Corp. 1901
2.29 Northeast Utilities 1927
4.49 Norwest Corp. 1939
3.15 NYNEX Corp. 1984
2.25 Pacific Gas and Electric Co. 1912
25.17 Pacific Telesis Group 1984
2.46 PECO Energy Co. 1928
5.23 J.C. Penney Co., Inc. 1926
2.98 PepsiCo, Inc. 1921
1.16 Pfizer Inc 1925
13.71 Pitney Bowes Inc. 1934
7.98 PNC Bank Corp. 1865
.87 PPG Industries, Inc. 1899
2.29 Public Service Enterprise Group Inc. 1948
1.11 Puget Sound Power & Light Co. 1943
8.50 Raytheon Co. 1964
4.31 SBC Communications Inc.
(formerly Southwestern Bell Corp.) 1984
3.40 SCEcorp. 1910
3.25 Schering-Plough Corp. 1952
1.71 Signet Banking Corp. 1962
8.08 Sprint Corp. 1939
3.75 St. Paul Companies, Inc. 1968
3.08 Student Loan Marketing Assn. 1976
9.04 SunTrust Banks, Inc. 1985
3.44 Tambrands Inc. 1941
11.37 Texaco Inc. 1903
2.19 Thomas & Betts Corp. 1934
4.04 Times Mirror Co. 1892
3.63 TRW Inc. 1936
.98 Unicom Corp. 1890
11.53 Union Pacific Corp. 1968
20.77 United Technologies Corp. 1936
1.72 Unocal Corp. 1916
11.38 Upjohn Co. 1959
24.08 U S WEST, Inc. 1984
2.11 VF Corp. 1941
7.20 Wachovia Corp. 1936
1.97 Walgreen Co. 1899
4.10 Wal-Mart Stores, Inc. 1971
19.46 Warner-Lambert Co. 1926
4.06 Wells Fargo & Co. 1936
3.45 Westvaco Corp. 1899
1.92 Winn-Dixie Stores, Inc. 1944
5.96 WMX Technologies, Inc. 1975
19.12 Xerox Corp. 1930
STOCKS IN INITIAL PERIOD OF ACQUISITION - $5.25
EXCESS OF UNITED STATES TREASURY BILLS,
CASH, AND RECEIVABLES OVER PAYABLES - $41.49
ON JULY 31, 1995 THE FUND'S NET ASSETS VALUE PER SHARE
WAS $20.21, AND NET ASSETS WERE $15,732,933,634
EACH $1,000 OF NET ASSETS WAS INVESTED IN THESE INDUSTRIES:
ENERGY
Energy Sources $ 76.33
Utilities: Electric & Gas 63.74
MATERIALS
Building Materials & Components 2.15
Chemicals 34.01
Forest Products & Paper 16.34
CAPITAL EQUIPMENT
Aerospace & Military Technology 36.94
Data Processing & Reproduction 19.12
Electrical & Electronics 16.12
Electronic Components 2.19
Industrial Components 15.88
CONSUMER GOODS
Appliances & Household Durables $ 2.86
Beverages 2.98
Food & Household Products 22.74
Health & Personal Care 129.26
Recreation & Other Consumer Products 1.83
Textiles & Apparel 2.11
SERVICES
Broadcasting & Publishing 14.53
Business & Public Services 48.77
Merchandising 18.60
Telecommunications 127.34
Transportation: Rail 33.61
FINANCE
Banking $164.57
Financial Services 35.15
Insurance 50.86
MULTI-INDUSTRY
Multi-Industry 15.23
Stocks in initial period of acquisition 5.25
Excess of United States Treasury bills, cash, and
receivables over payables 41.49
This report is for the information of shareholders of Washington Mutual
Investors Fund, but it may also be used as sales literature when preceded
or accompanied by the current prospectus, which gives details about
charges, expenses, investment objectives and operating policies of the
Fund. If used as sales material after September 30, 1995, this report must
be accompanied by an American Funds Group Statistical Update for the most
recently completed calendar quarter.
Washington Mutual Investors Fund
DIRECTORS
Stephen Hartwell
(Chairman)
James H. Lemon, Jr.
(Vice Chairman)
Cyrus A. Ansary
John A. Beck
Harry J. Lister
James C. Miller III
Thomas J. Owen
Jean Head Sisco
T. Eugene Smith
Margita E. White
Stephen G. Yeonas
ADVISORY BOARD
Mary K. Bush
Daniel J. Callahan III
Vernon W. Holleman, Jr.
William B. Snyder
Leonard P. Steuart II
Robert F. Tardio
W. Reid Thompson
DIRECTORS EMERITUS
Bernard J. Nees
(Chairman Emeritus)
Charles T. Akre
Nathan A. Baily
Frank M. Ewing
OFFICE OF THE FUND AND THE BUSINESS MANAGER
Washington Management Corporation
1101 Vermont Avenue, NW
Washington, DC 20005
202/842-5665
INVESTMENT MANAGER
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1443
135 South State College Blvd.
Brea, CA 92621-5804
COUNSEL
Thompson, O'Donnell, Markham, Norton & Hannon
805 Fifteenth Street, NW
Washington, DC 20005
CUSTODIAN
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, NY 10081-0001
TRANSFER AGENT
American Funds Service Company
P.O. Box 2205
Brea, CA 92622-2205
P.O. Box 659522
San Antonio, TX 78265-9522
P.O. Box 2280
Norfolk, VA 23501-2280
P.O. Box 6007
Indianapolis, IN 46206-6007
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1462
We are sad to report that Henry W. Herzog passed away on August 6, 1995.
Mr. Herzog was a Director of the Fund from February 1969 until August 15,
1983 when he was elected Director Emeritus. His wise counsel and
friendship will be greatly missed.
WMIF-012-0995
