Washington Mutual Investors Fund
(Photo)
Report to Shareholders For the Quarter Ended July 31, 1996
(Logo)
The American Funds Group(R)
Fellow Shareholders
During the Fund's first fiscal 1997 quarter-the three months ended
July 31-the stock market's long upward march was interrupted by a decline
that, while concentrated in technology issues, affected the market as a
whole. From peak to trough (May 24 through July 24), the decline measured
7.6% on Standard & Poor's 500 Composite Index; the over-the-counter market
(in which the Fund does not invest) fell 16.6%. For the quarter, the
unmanaged S&P 500 was down 1.6%, while Washington Mutual's share value
decreased 1.2%, both including reinvestment.
The downturn was triggered partly by a steep rise in long-term
interest rates. That increase reflected concern that the economy might be
overheating, and that the Federal Reserve could feel compelled to tighten
credit to prevent inflation from turning upward. In late July and August,
there was new economic evidence to suggest that those fears may have been
exaggerated.
During the quarter, the pattern of corporate dividend increases (which
we have mentioned in previous reports) continued. Nineteen companies in
Washington Mutual's portfolio raised their dividend payments during the
period.
Merger and acquisition activity in the quarter affected a number of
the Fund's holdings. This activity included the planned acquisition of Home
Financial by First Union, of Pacific Telesis by SBC Communications, and of
Rockwell International's defense and aerospace business by Boeing. Bell
Atlantic's acquisition of NYNEX is awaiting regulatory and shareholder
approvals.
The portfolio appearing in this report reflects ownership of 134
companies in 27 industries. On July 31, the 10 largest industry positions
as a percentage of net assets were: Banking (15.7%), Health & Personal Care
(11.8%), Energy Sources (10.1%), Telecommunications (9.9%), Electric & Gas
Utilities (7.2%), Insurance (6.0%), Business & Public Services (4.4%),
Merchandising (3.9%), Chemicals (3.8%), and (non-banking) Financial
Services (3.4%).
Four new names appeared in the portfolio during the quarter:
Albertson's, Dresser Industries, Ingersoll-Rand, and Procter & Gamble.
Shares of Kansas City Power & Light, Times Mirror, and Unicom were
eliminated.
This election year has added further uncertainty to the financial
markets. While we would not venture to predict precisely what will happen
to securities prices during the balance of calendar 1996, we remain
confident that, over time, your Fund's proven investment disciplines will
continue to provide shareholders with a rewarding investment experience.
Cordially,
(Signatures)
Stephen Hartwell James H. Lemon, Jr. Harry J. Lister
Chairman Vice Chairman President
September 11, 1996
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS AND WERE CALCULATED WITHOUT
A SALES CHARGE. ALL INVESTMENTS ARE SUBJECT TO CERTAIN RISKS. FOR EXAMPLE,
THOSE WHICH INCLUDECOMMON STOCKS ARE AFFECTED BY FLUCTUATING STOCK PRICES
SO YOU MAY GAIN OR LOSE MONEY BY INVESTING IN THE FUND. INVESTORS SHOILD
MAINTAIN A LONG-TERM INVESTMENT PERSPECTIVE. FUND SHARES ARE NOT DEPOSITS
OR OBLIGATIONS OF, OR INSURED OR QUARANTEED BY, THE U.S. GOVERNMENT, ANY
FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY
OTHER AGENCY, ENTITY OR PERSON.
Your Investment Account As of July 31, 1996
Which
This Has Paid
Amount Dividends
Invested In This Company Since
$ 8.59 Aetna Inc. (Formerly Aetna Life and Casualty Co.) 1934
1.96 Albertson's, Inc. 1964
3.02 AlliedSignal Inc. 1920
11.75 Allstate Corp. 1993
3.27 ALLTEL Corp. 1960
5.35 American Electric Power Company, Inc. 1910
6.48 American Express Co. 1870
11.29 American General Corp. 1929
23.20 American Home Products Corp. 1919
16.77 Ameritech Corp. 1984
17.10 Amoco Corp. 1894
4.90 Ashland Inc. 1935
1.34 Atlantic Energy, Inc. 1937
13.91 Atlantic Richfield Co. 1927
25.33 AT&T Corp. 1881
2.46 Baltimore Gas and Electric Co. 1910
10.73 Banc One Corp. 1968
16.97 Bank of New York Co., Inc. 1785
8.66 BankAmerica Corp. 1968
5.58 Bankers Trust New York Corp. 1904
2.68 Barnett Banks, Inc. 1945
5.39 Bell Atlantic Corp. 1984
5.42 Beneficial Corp. 1929
4.86 Boeing Co. 1942
12.24 Bristol-Myers Squibb Co. 1900
1.07 Brooklyn Union Gas Co. 1949
2.35 Browning-Ferris Industries, Inc. 1965
.86 Carolina Power & Light Co. 1937
2.43 Central and South West Corp. 1947
13.77 Chase Manhattan Corp. 1969
20.04 Chevron Corp. 1912
5.85 CIGNA Corp. 1981
.99 CINergy Corp. 1940
7.12 Colgate-Palmolive Co. 1895
1.99 Comerica Inc. 1972
3.62 Conrail, Inc. 1987
6.45 Consolidated Edison Co. of New York, Inc. 1885
3.61 Consolidated Natural Gas Co. 1944
7.97 CoreStates Financial Corp 1970
6.36 CPC International Inc. 1920
3.66 Dana Corp. 1936
1.06 Deluxe Corp. 1967
1.07 Dominion Resources, Inc. 1925
1.87 Dow Jones & Co., Inc. 1962
1.55 Dresser Industries, Inc. 1943
2.69 DTE Energy Co. 1909
3.66 Duke Power Co. 1926
19.43 Dun & Bradstreet Corp. 1934
27.74 E.I. du Pont de Nemours and Co. 1904
1.78 Eastman Kodak Co. 1902
5.59 Eaton Corp. 1923
4.20 Edison International 1910
3.12 Emerson Electric Co. 1940
13.55 Exxon Corp. 1882
11.37 Federal National Mortgage Assn. 1955
8.24 First Chicago NBD Corp. 1936
9.02 First Union Corp. 1989
11.01 Fleet Financial Group, Inc. 1968
3.51 Florida Progress Corp. 1982
2.82 Gannett Co., Inc. 1929
7.28 General Electric Co. 1899
11.31 General Mills, Inc. 1928
8.27 General Re Corp. 1980
3.17 Goodyear Tire & Rubber Co. 1899
5.61 GTE Corp. 1936
9.43 Household International, Inc. 1926
5.38 Houston Industries Inc. 1922
1.02 Ingersoll-Rand Co. 1905
17.23 International Paper Co. 1946
2.28 Johnson & Johnson 1934
4.56 Johnson Controls, Inc. 1901
4.90 Kerr-McGee Corp. 1937
4.06 KeyCorp 1961
7.08 Kimberly-Clark Corp. 1923
15.41 Eli Lilly and Co. 1885
5.29 Lincoln National Corp. 1920
4.18 Marsh & McLennan Companies, Inc. 1923
1.66 Masco Corp. 1936
1.72 Maytag Corp. 1946
1.36 McKesson Corp. 1962
16.11 Merck & Co., Inc. 1935
13.71 Minnesota Mining and Manufacturing Co. 1916
2.77 Mobil Corp. 1902
7.08 Monsanto Co. 1925
11.62 J.P. Morgan & Co. Inc. 1892
5.54 National City Corp. 1972
12.71 NationsBank Corp. 1968
14.63 Norfolk Southern Corp. 1901
3.13 Northeast Utilities 1927
4.92 Norwest Corp. 1939
2.57 NYNEX Corp. 1984
.75 Oklahoma Gas and Electric Co. 1943
3.82 Pacific Gas and Electric Co. 1912
15.58 Pacific Telesis Group 1984
2.00 Parker Hannifin Corp. 1940
1.52 PECO Energy Co. 1928
20.40 J.C. Penney Co., Inc. 1926
4.83 PepsiCo, Inc. 1921
4.04 Pfizer Inc 1925
11.37 Pharmacia & Upjohn, Inc. 1959
12.45 Pitney Bowes Inc. 1934
6.82 PNC Bank Corp. 1865
5.02 PP & L Resources, Inc. 1994
4.05 Procter & Gamble Co. 1905
4.77 Public Service Enterprise Group Inc. 1948
.88 Puget Sound Power & Light Co. 1943
5.30 Raytheon Co. 1964
3.29 SBC Communications Inc. 1984
6.71 Schering-Plough Corp. 1952
3.24 Sherwin-Williams Co. 1885
1.45 Signet Banking Corp. 1962
2.70 Southern Co. 1947
1.26 Sprint Corp. 1939
4.76 St. Paul Companies, Inc. 1968
1.22 Student Loan Marketing Assn. 1976
6.51 SunTrust Banks, Inc. 1985
1.63 Tambrands Inc. 1941
18.37 Texaco Inc. 1903
1.78 Thomas & Betts Corp. 1934
6.04 TRW Inc. 1936
4.31 Union Electric Co. 1953
13.74 Union Pacific Corp. 1968
2.96 United Technologies Corp. 1936
5.45 Unocal Corp. 1916
20.19 U S WEST Communications Group 1984
1.60 VF Corp. 1941
6.28 Wachovia Corp. 1936
3.34 Walgreen Co. 1899
13.18 Wal-Mart Stores, Inc. 1971
16.83 Warner-Lambert Co. 1926
6.78 Westvaco Corp. 1899
1.74 Whitman Corp. 1963
8.49 WMX Technologies, Inc. 1975
10.65 Xerox Corp. 1930
Stocks in initial period of acquisition - $18.12 Excess of United States
Treasury bills, cash, and receivables over payables - $37.12
On July 31, 1996 the Fund's net asset value per share was $22.36, and net
assets were $20,938,459,316
Each $1,000 of Net Assets Was Invested In These Industries:
Energy
Energy Sources $101.00
Utilities: Electric & Gas 71.97
Materials
Building Materials & Components 1.66
Chemicals 38.06
Forest Products & Paper 24.01
Capital Equipment
Aerospace & Military Technology 13.12
Data Processing & Reproduction 10.65
Electrical & Electronics 10.40
Electronic Components 1.78
Energy Equipment 1.55
Industrial Components 23.03
Machinery & Engineering 3.02
Consumer Goods
Appliances & Household Durables 1.72
Beverages 4.83
Food & Household Products 28.85
Health & Personal Care 118.26
Recreation & Other Consumer Products 1.78
Textiles & Apparel 1.60
Services
Broadcasting & Publishing 4.69
Business & Public Services 43.78
Merchandising 38.87
Telecommunications 99.27
Transportation: Rail 31.98
Finance
Banking 156.52
Financial Services 33.92
Insurance 59.98
Multi-Industry
Multi-Industry 18.46
Stocks in initial period of acquisition 18.12
Excess of United States Treasury bills, cash,
and receivables over payables 37.12
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.
Washington Mutual Investors Fund
Directors
Stephen Hartwell (Chairman)
James H. Lemon, Jr. (Vice Chairman)
Harry J. Lister (President)
Cyrus A. Ansary
John A. Beck
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
20005-3585
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 92821-5804
Counsel
Thompson, O'Donnell, Markham, Norton & Hannon
805 Fifteenth Street, NW
Washington, DC 20005-2216
Custodian
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, NY 10081-0001
Transfer Agent
American Funds Service Company
(Please write to the address nearest to you.)
P.O. Box 2205
Brea, CA 92822-2205
P.O. Box 659522
San Antonio, TX 78265-9522
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Principal Underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1462
For information about your account or any of the Fund's services, please
contact your financial adviser or call American Funds Service Company,
toll-free, at 800/421-0180.
WMIF-012-0996
