THE FUND PROVIDES SPANISH TRANSLATIONS IN CONNECTION WITH THE PUBLIC OFFERING
AND SALE OF ITS SHARES TO ELIGIBLE RETIREMENT PLANS. THE FOLLOWING IS A
FAIR AND ACCURATE TRANSLATION OF SUCH A SPANISH PROSPECTUS FOR THE FUND.
/S/Howard L. Kitzmiller
Senior Vice President
and Secretary
Prospectus for Eligible Retirement Plans
Washington Mutual Investors Fund(SM)
An opportunity for current income and capital growth through quality
common stocks
[American Funds Logo]
JUNE 22, 1996
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, N.W.
Washington, D.C. 20005
(202) 842-5665
The Fund's investment objective is to produce income and to provide an
opportunity for growth of principal consistent with sound common stock
investing.
This prospectus relates only to shares of the Fund offered without a sales
charge to eligible retirement plans. For a prospectus regarding shares of
the Fund to be acquired otherwise, contact the Secretary of the Fund at the
address indicated above.
This prospectus presents information you should know before investing in
the Fund. It should be retained for future reference.
You may obtain the statement of additional information dated June 22, 1996,
which contains the Fund's financial statements, without charge, by writing
to the Secretary of the Fund at the above address or telephoning
800/421-0180. These requests will be honored within three business days of
receipt.
SHARES OF THE FUND 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. THE
PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
RP 01-010-0696
TABLE OF CONTENTS
Summary of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . . . 4
Investment Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . 7
Fund Organization and Management . . . . . . . . . . . . . . . . . . . . . 7
Purchasing Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Redeeming Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SUMMARY
OF EXPENSES
AVERAGE ANNUAL
EXPENSES PAID OVER A
10-YEAR PERIOD WOULD
BE APPROXIMATELY
$8 PER YEAR,
ASSUMING A $1,000
INVESTMENT AND A 5%
ANNUAL RETURN WITH NO SALES CHARGE.
This table is designed to help you understand costs of investing in the Fund.
These are historical expenses; your actual expenses may vary.
Shareholder Transaction Expenses
Certain retirement plans may purchase shares of the Fund with no sales charge
The Fund also has no sales charge on reinvested dividends, deferred sales
charge 1, redemption fees or exchange fees.
Annual Fund Operating Expenses (for the fiscal year ended April 30,
1996, as a percentage of average net assets)
Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.34%
12b-1 expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.22%2
Other expenses (audit, legal, shareholder services, transfer agent and
custodian) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10%
Total Fund operating expenses . . . . . . . . . . . . . . . . . . . . . 0.66%
1 3 5 10
EXAMPLE YEAR YEARS YEARS YEARS
You would pay the following
cumulative expenses on a
$1,000 investment, $7 $21 $37 $82
assuming a 5% annual return 3.
1 Retirement plans of organizations with $100 million or more in collective
retirement plan assets may purchase shares of the Fund with no sales
charge. In addition, any employer-sponsored, 403(b) plan or defined
contribution plan qualified under Section 401(a) of the Internal Revenue
Code including a "401(k)" plan with 200 or more eligible employees or any
other plan that invests at least $1 million in shares of the Fund (or in
combination with shares of other funds in The American Funds Group other
than the money market funds) may purchase shares at net asset value;
however, a contingent deferred sales charge of 1% applies on certain
redemptions made within 12 months following such purchases. (See "Redeeming
Shares--Contingent Deferred Sales Charge.")
2 These expenses may not exceed 0.25% of the Fund's average net assets
annually. (See "Fund Organization and Management--Plan of Distribution.")
Due to these distribution expenses, long-term shareholders may pay more
than the economic equivalent of the maximum front-end sales charge
permitted by the National Association of Securities Dealers.
3 Use of this assumed 5% return is required by the Securities and Exchange
Commission; it is not an illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
FINANCIAL
HIGHLIGHTS
(FOR A SHARE OUTSTANDING
THROUGHOUT THE
FISCAL YEAR)
The following information has been audited by Price Waterhouse LLP, independent
accountants, whose unqualified report covering each of the most recent five
years is included in the statement of additional information. This information
should be read in conjunction with the financial statements and accompanying
notes which appear in the statement of additional information.
<TABLE>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED APRIL 30
Net Asset Value,
Beginning of
Year . . . . $18.87 $17.11 $17.59 $16.22 $15.02 $13.75 $14.10 $11.89 $13.31 $11.77
Income From
Investment
Operations:
Net investment
income . . . .63 .63 .59 .56 .56 .58 .59 .58 .55 .53
Net realized and
unrealized
gain
(loss) on
investments . . 4.98 2.16 (.12) 1.55 1.50 1.37 .36 2.07 (1.06) 2.18
Total Income
from
Investment
Operations . 5.61 2.79 .47 2.11 2.06 1.95 .95 2.65 (.51) 2.71
Less
Distributions:
Dividends from
net investment
income . . . . (.62) (.62) (.56) (.56) (.56) (.62) (.62) (.44) (.52) (.52)
Distributions
from net
realized gains (1.09) (.41) (.39) (.18) (.30) (.06) (.68) -- (.39) (.65)
Total
Distributions (1.71) (1.03) (.95) (.74) (.86) (.68) (1.30) (.44) (.91) (1.17)
Net Asset Value,
End of Year . $22.77 $18.87 $17.11 $17.59 $16.22 $15.02 $13.75 $14.10 $11.89 $13.31
Total Return 1 30.40% 17.01% 2.55% 13.36% 14.24% 14.69% 6.52% 22.72% (3.77)% 23.76%
Ratios/Supplemen
tal Data:
Net assets, end
of year
(in millions) $20,689 $14,426 $12,405 $11,306 $8,896 $6,596 $4,778 $3,250 $2,623 $2,609
Ratio of
expenses to
average net
assets . . . . .66% .69% .69% .70% .74% .77% .69% .67% .58% .54%
Ratio of net
income to
average net
assets . . . . 2.98% 3.57% 3.29% 3.33% 3.58% 4.24% 4.01% 4.54% 4.25% 4.03%
Portfolio
turnover rate 23.41% 25.45% 23.86% 18.60% 10.36% 10.86% 7.38% 21.27% 11.83% 12.04%
</TABLE>
1 Excludes maximum sales charge of 5.75% of the Fund's offering price.
Total Return figures for 1991, 1992 and 1993 have been revised. Previously
shown for these years were 14.71%, 14.27% and 13.38%, respectively.
INVESTMENT OBJECTIVE
AND POLICIES
THE FUND'S GOAL IS
TO PROVIDE YOU WITH
INCOME AND AN OPPORTUNITY FOR
GROWTH OF PRINCIPAL.
The Fund's investment objective is to produce income and to provide an
opportunity for growth of principal consistent with sound common stock
investing. From time to time capital gains or losses may be realized upon the
sales of securities owned by the Fund but active trading with a view to
realization of capital gains is not a policy of the Fund.
The Fund was founded to provide fiduciaries, organizations, institutions and
individuals with a convenient and prudent medium of investment in high quality
common stocks and securities convertible into such common stocks. It is designed
to serve those individuals who are charged with the responsibility of investing
pension and profit-sharing trusts, other fiduciary-type reserves, or family
funds, but who are reluctant to undertake the selection and supervision of
stocks, although recognizing the importance of affording an opportunity for
growth in income and value over the years.
Prudent Investor Rule and the Fund's Eligible List The Fund's policy is at all
times to maintain for its shareholders a fully invested, widely diversified
portfolio of such securities which an experienced investor charged with
fiduciary responsibility and seeking investment objectives similar to those of
the Fund might select for the common stock portion of a portfolio under the
Prudent Investor Rule patterned after the historic Prudent Man Rule.
The Fund's board of directors has adopted "Investment Standards", based on
criteria applied for many years by the United States District Court for the
District of Columbia. These investment standards are used to prepare an
"Eligible List" of securities designed to conform to the common stock portion of
a prudent investor rule portfolio. Only common stocks and securities convertible
into common stocks meeting these Investment Standards and on the approved
Eligible List may be held by the Fund. Any security deleted from the Eligible
List and held by the Fund must be sold by the Fund as soon as deemed practical
by the Investment Adviser but in no event later than six months following such
deletion.
The Fund's investment restrictions (which are described in the statement of
additional information) and objective cannot be changed without shareholder
approval. All other investment practices may be changed by the board of
directors.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT, OF COURSE, BE ASSURED DUE
TO THE RISK OF CAPITAL LOSS FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT
IN SECURITIES.
INVESTMENT TECHNIQUES
INVESTING IN STOCKS INVOLVES CERTAIN RISKS.
Risks of Investing Because the Fund invests in equity-type securities such as
common stocks and convertible preferred stocks, the Fund's portfolio is subject
to market risks, including, for example, the possibility that stock prices in
general may decline over short or even extended periods.
Multiple Portfolio Counselor System The basic investment philosophy of Capital
Research and Management Company is to seek fundamental values at reasonable
prices, using a system of multiple portfolio counselors in managing mutual fund
assets. Under this system the portfolio of the Fund is divided into segments
which are managed by individual counselors. Counselors decide how their
respective segments will be invested (within the limits provided by the Fund's
objective and policies and by Capital Research and Management Company's
investment committee). In addition, Capital Research and Management Company's
research professionals make investment decisions with respect to a portion of
the Fund's portfolio. The primary individual portfolio counselors for the Fund
are listed on the next page.
<TABLE>
PORTFOLIO COUNSELORS PRIMARY TITLE(S) YEARS OF EXPERIENCE AS WITH CAPITAL TOTAL YEARS
FOR WASHINGTON MUTUAL PORTFOLIO COUNSELOR RESEARCH AND
INVESTORS (AND RESEARCH MANAGEMENT COMPANY
FUND PROFESSIONAL, IF OR ITS AFFILIATES
APPLICABLE) FOR
WASHINGTON MUTUAL
INVESTORS FUND
YEARS OF EXPERIENCE AS
INVESTMENT PROFESSIONAL
(APPROXIMATE)
<S> <C> <C> <C> <C>
Timothy D. Armour Executive Vice President 6 years (plus 4 years as a research 13 years 13 years
and Director, Capital professional prior to becoming a portfolio
Research Company* counselor for the Fund)
Stephen E. Bepler Senior Vice President, 15 years (plus 8 years as a research 24 years 30 years
Capital Research Company* professional prior to becoming a portfolio
counselor for the Fund)
James K. Dunton Senior Vice President and 18 years (plus 7 years as a research 34 years 34 years
Director, Capital Research professional prior to becoming a portfolio
and Management Company counselor for the Fund)
Gregg E. Ireland Vice President, Capital 6 years (plus 7 years as a research 23 years 23 years
Research and Management professional prior to becoming a portfolio
Company counselor for the Fund)
James B. Lovelace Vice President, Capital 6 years (plus 2 years as a research 14 years 14 years
Research and Management professional prior to becoming a portfolio
Company counselor for the Fund)
Robert G. O'Donnell Senior Vice President and 3 years (plus 17 years as a research 21 years 24 years
Director, Capital Research professional prior to becoming a portfolio
and Management Company counselor for the Fund)
James F. Rothenberg President and Director, 2 years (plus 9 years as a research 26 years 26 years
Capital Research and professional-1971-1979-prior to becoming a
Management Company portfolio counselor for the Fund)
* Company affiliated with Capital Research and Management Company.
</TABLE>
INVESTMENT RESULTS
THE FUND HAS AVERAGED
A TOTAL RETURN
(AT NO SALES CHARGE)
OF 13.36% A YEAR
OVER ITS LIFETIME
(JULY 31, 1952 THROUGH
MARCH 31, 1996).
The Fund may from time to time compare its investment results to various
unmanaged indices or other mutual funds in reports to shareholders, sales
literature and advertisements. The results may be calculated on a total return,
yield and/or distribution rate basis for various periods, with or without sales
charges. Results calculated without a sales charge will be higher. Total returns
assume the reinvestment of all dividends and capital gain distributions.
The Fund's distribution rate is calculated by dividing the dividends paid by the
Fund over the last 12 months by the sum of the month-end price and the capital
gains paid over the last 12 months. The SEC yield reflects income the Fund
expects to earn based on its current portfolio of securities, while the
distribution rate is based solely on the Fund's past dividends. Accordingly, the
Fund's SEC yield and distribution rate may differ. For the 30-day period ended
March 31, 1996, the Fund's SEC yield was 2.81% and the distribution rate was
2.61% with no sales charge.
The Fund's total return over the past 12 months and average annual total returns
over the past five-year and ten-year periods as of March 31, 1996, were 34.04%,
15.17% and 13.42%, respectively. These results were calculated with no sales
charge in accordance with Securities and Exchange Commission requirements. Of
course, past results are not an indication of future results. Further
information regarding the Fund's investment results is contained in the Fund's
annual report which may be obtained without charge by writing to the Secretary
of the Fund at the address indicated on the cover of this prospectus.
DIVIDENDS, DISTRIBUTIONS AND TAXES
INCOME DISTRIBUTIONS ARE USUALLY MADE QUARTERLY.
Dividends and Distributions Dividends are usually paid in March, June,
September and December. Capital gains, if any, are usually distributed in
December. When a dividend or capital gain is distributed, the net asset value
per share is reduced by the amount of the payment.
The terms of your plan will govern how your plan may receive distributions from
the Fund. Generally, periodic distributions from the Fund to your plan are
reinvested in additional Fund shares, although your plan may permit Fund
distributions from net investment income to be received by you in cash while
reinvesting capital gains distributions in additional shares or all Fund
distributions to be received in cash. Unless you select another option, all
distributions will be reinvested in additional Fund shares.
Federal Taxes The Fund intends to operate as a "regulated investment company"
under the Internal Revenue Code. In any fiscal year in which the Fund so
qualifies and distributes to shareholders all of its net investment income and
capital gain net income, the Fund itself is relieved of federal income tax. The
tax treatment of redemptions from a retirement plan may differ from redemptions
from an ordinary shareholder account.
Please see the statement of additional information and your tax adviser for
further information.
FUND
ORGANIZATION AND MANAGEMENT
THE FUND IS A MEMBER OF THE AMERICAN FUNDS GROUP, WHICH IS MANAGED BY ONE OF
THE LARGEST AND
MOST EXPERIENCED
INVESTMENT ADVISERS.
Fund Organization and Voting Rights The Fund, an open-
end, diversified management investment company, was organized as a Delaware
corporation in 1952 and was reincorporated in the State of Maryland in 1990. The
Fund's board supervises Fund operations and performs duties required by
applicable state and federal law. Members of the board and advisory board who
are not affiliated with the Fund's management are paid certain fees for services
rendered to the Fund as described in the statement of additional information.
They may elect to defer all or a portion of these fees through a deferred
compensation plan in effect for the Fund. Shareholders have one vote per share
owned and, at the request of the holders of at least 10% of the shares, the Fund
will hold a meeting at which any member of the board could be removed by a
majority vote. There will not usually be a shareholder meeting in any year
except, for example, when the election of the board is required to be acted upon
by shareholders under the Investment Company Act of 1940.
The Business Manager Washington Management Corporation, 1101 Vermont Avenue
N.W., Washington, D.C. 20005, is the business manager and provides all services
required to carry on the Fund's general administrative and corporate affairs.
These services include all executive personnel, clerical staff, office space and
equipment, arrangements for and supervision of all shareholder services, federal
and state regulatory compliance and responsibility for accounting and
recordkeeping facilities. Washington Management Corporation provides similar
services to other mutual funds. The Business Manager receives a monthly fee,
accrued daily, at the annual rate of 0.175% of the first $3 billion of the
Fund's net assets, 0.15% of net assets in excess of $3 billion but not exceeding
$5 billion, 0.135% of net assets in excess of $5 billion but not exceeding $8
billion, 0.12% of net assets in excess of $8 billion but not exceeding $12
billion, 0.095% of net assets in excess of $12 billion but not exceeding $21
billion and 0.075% of net assets in excess of $21 billion.
The Investment Adviser Capital Research and Management Company, a large and
experienced investment management organization founded in 1931, is the
investment adviser to the Fund and other funds, including those in The American
Funds Group. Capital Research and Management Company is located at 333 South
Hope Street, Los Angeles, CA 90071 and at 135 South State College Boulevard,
Brea, CA 92621. Capital Research and Management Company manages the investment
portfolio of the Fund and receives a monthly fee, accrued daily, at the annual
rate of 0.225% of the first $3 billion of the Fund's net assets, 0.21% of net
assets in excess of $3 billion but not exceeding $8 billion, 0.20% of net assets
in excess of $8 billion but not exceeding $21 billion and 0.195% of net assets
in excess of $21 billion.
Capital Research and Management Company is a wholly owned subsidiary of The
Capital Group Companies, Inc. (formerly "The Capital Group, Inc.") which is
located at 333 South Hope Street, Los Angeles, CA 90071. The research activities
of Capital Research and Management Company are conducted by affiliated companies
which have offices in Los Angeles, San Francisco, New York, Washington, D.C.,
London, Geneva, Singapore, Hong Kong and Tokyo.
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the report dated May 9, 1994 issued by the Investment Company
Institute's Advisory Group on Personal Investing. (See the statement of
additional information.)
Portfolio Transactions Orders for the Fund's portfolio securities transactions
are placed by Capital Research and Management Company, which strives to obtain
the best available prices, taking into account the costs and quality of
executions.
Subject to the above policy, when two or more brokers are in a position to offer
comparable prices and executions, preference may be given to brokers who have
sold shares of the Fund or have provided investment research, statistical, and
other related services for the benefit of the Fund and/or of other funds served
by Capital Research and Management Company.
Principal Underwriter American Funds Distributors, Inc., a wholly owned
subsidiary of Capital Research and Management Company, is the principal
underwriter of the Fund's shares. American Funds Distributors, Inc. is located
at 333 South Hope Street, Los Angeles, CA 90071, 135 South State College
Boulevard, Brea, CA 92621, 8000 1H-10 West, San Antonio, TX 78230, 5300 Robin
Hood Road, Norfolk, VA 23513 and 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240. Telephone conversations with American Funds Distributors
may be recorded or monitored for verification, recordkeeping and quality
assurance purposes. The Principal Underwriter makes shares available at net
asset value to Washington Investors Plans, Inc.
Plan of Distribution The Fund has a plan of distribution or "12b-1 Plan" under
which it may finance activities primarily intended to sell shares, provided the
categories of expenses are approved in advance by the Board and the expenses
paid under the plan were incurred within the last 12 months and accrued while
the plan is in effect. Expenditures by the Fund under the plan may not exceed
0.25% of its average net assets annually (all of which may be for service fees).
Transfer Agent American Funds Service Company, 800/421-0180, a wholly owned
subsidiary of Capital Research and Management Company, is the transfer agent and
performs shareholder service functions. American Funds Service Company is
located at 333 South Hope Street, Los Angeles CA 90071, 135 South State College
Boulevard, Brea, CA 92621, 8000 IH-10 West, San Antonio, TX 78230, 5300 Robin
Hood Road, Norfolk, VA 23513 and 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240. It was paid a fee of $13,950,000 for the fiscal year
ended April 30, 1996. Telephone conversations with American Funds Service
Company may be recorded or monitored for verification, recordkeeping and quality
assurance purposes.
PURCHASING SHARES
ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR RETIREMENT PLAN. FOR
MORE INFORMATION ABOUT HOW TO PURCHASE SHARES OF THE FUND THROUGH YOUR PLAN OR
LIMITATIONS ON THE AMOUNT THAT MAY BE PURCHASED, PLEASE CONSULT WITH YOUR
EMPLOYER. Shares are sold to eligible retirement plans at the net asset value
per share next determined after receipt of an order by the Fund or American
Funds Service Company. Orders must be received before the close of regular
trading on the New York Stock Exchange in order to receive that day's net asset
value. Plans of organizations with collective retirement plan assets of $100
million or more may purchase shares at net asset value. In addition, any
employer-sponsored 403(b) plan or defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200
or more eligible employees or any other plan that invests at least $1 million in
shares of the Fund (or in combination with shares of other funds in The American
Funds Group other than the money market funds) may purchase shares at net asset
value; however, a contingent deferred sales charge of 1% is imposed on certain
redemptions made within twelve months of such purchase. (See "Redeeming Shares--
Contingent Deferred Sales Charge.") Plans may also qualify to purchase shares at
net asset value by completing a statement of intention to purchase $1 million in
Fund shares subject to a commission over a maximum of 13 consecutive months.
Certain redemptions of such shares may also be subject to a contingent deferred
sales charge as described above. (See the statement of additional information.)
The minimum initial investment is $250, except that the money market funds have
a minimum of $1,000 for individual retirement accounts (IRAs). Minimums are
reduced to $50 for purchases through "Automatic Investment Plans" (except for
the money market funds) or to $25 for purchases by retirement plans through
payroll deductions and may be reduced or waived for shareholders of other funds
in The American Funds Group.
Commissions of up to 1% will be paid to dealers who initiate and are responsible
for purchases of $1 million or more, for purchases by any employer-sponsored
403(b) plan or defined contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with 200 or more eligible
employees (paid pursuant to the Fund's plan of distribution), and for purchases
made at net asset value by certain retirement plans of organizations with
collective retirement plan assets of $100 million or more as set forth in the
statement of additional information (paid by American Funds Distributors).
American Funds Distributors, at its expense (from a designated percentage of its
income), will, during calendar year 1996, provide additional compensation to
dealers. Currently these payments are limited to the top one hundred dealers who
have sold shares of the Fund or other funds in The American Funds Group. These
payments will be based on a pro rata share of a qualifying dealer's sales.
American Funds Distributors will, on an annual basis, determine the advisability
of continuing these payments.
Qualified dealers currently are paid a continuing service fee not to exceed
0.25% of average net assets annually in order to promote selling efforts and to
compensate them for providing certain services. (See "Fund Organization and
Management--Plan of Distribution.") These services include processing purchase
and redemption transactions, establishing shareholder accounts and providing
certain information and assistance with respect to the Fund.
Shares of the Fund are offered to other shareholders pursuant to another
prospectus at public offering prices that may include an initial sales charge.
Share Price Shares are offered to eligible retirement plans at the net asset
value next determined after the order is received by the Fund or American Funds
Service Company. In the case of orders sent directly to the Fund or American
Funds Service Company, an investment dealer must be indicated. Dealers are
responsible for promptly transmitting orders. (See the statement of additional
information under "Purchase of Shares--Price of Shares.")
The Fund's net asset value per share is determined as of the close of trading
(currently 4:00 p.m., New York time) on each day the New York Stock Exchange is
open. The current value of the Fund's total assets, less all liabilities, is
divided by the total number of shares outstanding and the result, rounded to the
nearer cent, is the net asset value per share.
SHAREHOLDER
SERVICES
Subject to any restrictions contained in your plan, you can exchange your shares
for shares of other funds in The American Funds Group at net asset value. In
addition, again depending on your plan, you may be able to exchange shares
automatically or cross-reinvest dividends in shares of other funds. Contact your
plan administrator/trustee regarding how to use these services. Also, see the
Fund's statement of additional information for a description of these and other
services that may be available through your plan. These services are available
only in states where the Fund to be purchased may be legally offered and may be
terminated or modified at any time upon 60 days' written notice.
REDEEMING
SHARES
Subject to any restrictions imposed by your employer's plan, you can sell your
shares through the plan to the Fund any day the New York Stock Exchange is open.
For more information about how to sell shares of the Fund through your
retirement plan, including any charges that may be imposed by the plan, please
consult with your employer.
By contacting your plan Your plan administrator/trustee must send a letter of
administrator/trustee instruction specifying the name of the fund, the
number of shares or dollar amount to be sold, and, if
applicable, your name and account number. You should
also enclose any certificate you wish to redeem. For
your protection, if you redeem more than $50,000, the
signatures of the registered owners (i.e., trustees
or their legal representatives) must be guaranteed by
a bank, savings association, credit union, or member
firm of a domestic stock exchange or the National
Association of Securities Dealers, Inc., that is an
eligible guarantor institution. Your plan
administrator/trustee should verify with the
institution that it is an eligible guarantor prior to
signing. Additional documentation may be required to
redeem shares from certain accounts. Notarization by
a Notary Public is not an acceptable signature
guarantee.
By contacting an Shares may also be redeemed through an investment
investment dealer dealer; however you or your plan may be charged for
this service. Shares held for you in an investment
dealer's street name must be redeemed through the
dealer.
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE NET ASSET VALUE NEXT
DETERMINED AFTER YOUR ORDER AND ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE
FUND OR AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING SHARES--SHARE PRICE.")
Contingent Deferred Sales Charge A contingent deferred sales charge of 1%
applies to certain redemptions made within twelve months of purchase on
investments of $1 million or more and on any investment made with no initial
sales charge by any employer-sponsored 403(b) plan or defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code including a "401(k)"
plan with 200 or more eligible employees. The charge is 1% of the lesser of the
value of the shares redeemed (exclusive of reinvested dividends and capital gain
distributions) or the total cost of such shares. Shares held for the longest
period are assumed to be redeemed first for purposes of calculating this charge.
The charge is waived for exchanges (except if shares acquired by exchange were
then redeemed within 12 months of the initial purchase); for distributions from
qualified retirement plans and other employee benefit plans; for redemptions
resulting from participant-directed switches among investment options within a
participant-directed employer-sponsored retirement plan; and for redemptions in
connection with loans made by qualified retirement plans.
Other Important Things to Remember The net asset value for
redemptions is determined as indicated under "Purchasing Shares--Share
Price." Because the Fund's net asset value fluctuates, reflecting the market
value of the portfolio, the amount you receive for shares redeemed may be more
or less than the amount paid for them.
Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the Investment Company Act of 1940), redemption proceeds will
be paid on or before the seventh day following receipt of a proper redemption
request.
THIS PROSPECTUS HAS BEEN PRINTED ON RECYCLED
PAPER THAT MEETS THE GUIDELINES OF THE
Y UNITED STATES ENVIRONMENTAL PROTECTION AGENCY.
This prospectus relates only to shares of the Fund offered
without a sales charge to eligible retirement plans. For a
prospectus regarding shares of the Fund to be acquired
otherwise, contact the Secretary of the Fund at the address
indicated on the front.
