=====================================================
SEC File Nos. 2-11051
811-604
=====================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 101
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 29
WASHINGTON MUTUAL INVESTORS FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
1101 VERMONT AVENUE, N.W.
WASHINGTON, D.C. 20005
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(202) 842-5665
STEPHEN HARTWELL
WASHINGTON MANAGEMENT CORPORATION
1101 VERMONT AVENUE, N.W.
WASHINGTON, D.C. 20005
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
JOHN JUDE O'DONNELL, ESQ.
THOMPSON, O'DONNELL, MARKHAM, NORTON & HANNON
805 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
(COUNSEL FOR THE REGISTRANT)
THE REGISTRANT WILL FILE ITS 24F-2 NOTICE FOR FISCAL 1999 ON OR ABOUT JULY
25, 1999.
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
/X/ IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE ON JUNE 22, 1999,
PURSUANT TO PARAGRAPH (B) OF RULE 485.
===============================================
<PAGE>
THE AMERICAN FUNDS GROUP LOGO
- --------------------------------------------------------------------------------
WASHINGTON MUTUAL
INVESTORS FUND -SM-
PROSPECTUS
JUNE 22, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
WASHINGTON MUTUAL INVESTORS FUND, INC.
1101 Vermont Avenue, NW
Washington, DC 20005
TICKER SYMBOL: AWSHX NEWSPAPER ABBREV.: Wsh FUND NO.: 01
- -------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk/Return Summary 2
........................................................................
Fees and Expenses of the Fund 5
........................................................................
Investment Objective, Strategies and Risks 6
........................................................................
Year 2000 9
........................................................................
Management and Organization 10
........................................................................
Shareholder Information 12
........................................................................
Purchase and Exchange of Shares 13
........................................................................
Distribution Arrangements 17
........................................................................
Financial Highlights 18
</TABLE>
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01-010-0699/MC WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 1
<PAGE>
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RISK/RETURN SUMMARY
The fund seeks to produce current income and to provide an opportunity for
growth of principal consistent with sound common stock investing. The fund
invests primarily in common stocks of larger, more established companies that
are listed on the New York Stock Exchange and have a record of increasing
earnings and dividends.
The fund is designed to provide fiduciaries, organizations, institutions and
individuals with a convenient and prudent medium of investment in high quality
common stocks and securities convertible into common stocks. It is especially
designed to serve those individuals who are charged with the responsibility of
investing retirement plan trusts, other fiduciary type reserves, or family
funds, but who are reluctant to undertake the selection and supervision of
individual stocks.
The fund strives to maintain a fully invested, diversified portfolio, primarily
of high-quality stocks and securities convertible into common stocks. The fund
has stringent Investment Standards based upon criteria originally established by
the United States District Court for the District of Columbia for determining
eligibility under the Court's Legal List procedure which was in effect for many
years. Applying these Investment Standards, the fund's Investment Adviser
compiles an "Eligible List" of investments considered appropriate for a prudent
investor seeking opportunities for income and growth of principal consistent
with common stock investing. The Investment Adviser is required to select the
fund's investments exclusively from the Eligible List. The Investment Adviser
monitors the Eligible List and makes recommendations to the Board of Directors
of additions to, or deletions from, the List to comply with the fund's
Investment Standards.
An investment in the fund is subject to risks, including the possibility that
the fund may decline in value in response to economic, social or political
events in the U.S. or abroad. In addition, the prices of equity securities are
also affected by events specifically involving the companies whose securities
are owned by the fund. Accordingly, you may lose money by investing in the fund.
The likelihood of loss is greater if you invest for a shorter period of time.
Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
2 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
INVESTMENT RESULTS
The following information illustrates how the fund's results fluctuate. Past
results are not an indication of future results.
Here are the fund's results calculated without a sales charge on a CALENDAR
YEAR basis. (If a sales charge were included, results would be lower.)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
89 28.96%
90 -3.86%
91 23.49%
92 9.10%
93 13.05%
94 0.49%
95 41.22%
96 20.18%
97 33.29%
98 19.37%
</TABLE>
<M>
The fund's year-to-date return for the three months ending
March 31, 1999 was 0.22%.
The fund's highest/lowest QUARTERLY results during this time period were:
X HIGHEST 14.44% (quarter ended June 30, 1997)
X LOWEST -13.13% (quarter ended September 30, 1990)
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 3
<PAGE>
For periods ended March 31, 1999:
<TABLE>
<CAPTION>
THE FUND WITH
MAXIMUM
AVERAGE ANNUAL SALES CHARGE S&P LIPPER
TOTAL RETURN DEDUCTED(1,2) 500(3) INDEX(4)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------
One Year 0.46% 18.43% 4.12%
................................................................................
Five Years 21.97% 26.19% 19.10%
................................................................................
Ten Years 16.27% 18.92% 15.02%
................................................................................
Lifetime(5) 13.79% 12.84% n/a
</TABLE>
Yield(2): 1.76%
(For current yield information call American
FundsLine-Registered Trademark- at 1-800-325-3590)
(1) THESE RESULTS REFLECT AVERAGE ANNUAL COMPOUNDED RATES OF RETURN.
(2) THESE FUND RESULTS WERE CALCULATED ACCORDING TO A FORMULA WHICH REQUIRES
THAT THE MAXIMUM SALES CHARGE OF 5.75% BE DEDUCTED AND INCLUDE THE
REINVESTMENT OF DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS. RESULTS WOULD BE
HIGHER IF THEY WERE CALCULATED AT NET ASSET VALUE.
(3) THE STANDARD & POOR'S 500 COMPOSITE INDEX REPRESENTS PRIMARILY U.S. STOCKS.
THIS INDEX IS UNMANAGED AND DOES NOT REFLECT SALES CHARGES, COMMISSIONS OR
EXPENSES.
(4) THE LIPPER GROWTH AND INCOME FUNDS INDEX IS AN EQUALLY WEIGHTED PERFORMANCE
INDEX THAT REPRESENTS FUNDS THAT COMBINE A GROWTH-OF-EARNINGS ORIENTATION
AND AN INCOME REQUIREMENT FOR LEVEL AND/OR RISING DIVIDENDS. THE RESULTS OF
THE UNDERLYING FUNDS IN THE INDEX INCLUDE THE REINVESTMENT OF DIVIDEND AND
CAPITAL GAIN DISTRIBUTIONS BUT DO NOT REFLECT SALES CHARGES, COMMISSIONS OR
EXPENSES.
(5) THE FUND BEGAN ITS INVESTMENT OPERATIONS ON JULY 31, 1952.
4 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
THE FOLLOWING DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.
SHAREHOLDERS FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<S> <C>
- -----------------------------------------------
Maximum sales charge imposed on
purchases
(AS A PERCENTAGE OF OFFERING PRICE) 5.75%(1)
..............................................
Maximum sales charge imposed on
reinvested dividends 0%
..............................................
Maximum deferred sales charge 0%(2)
..............................................
Redemption or exchange fees 0%
</TABLE>
(1) SALES CHARGES ARE REDUCED OR ELIMINATED FOR LARGER PURCHASES.
(2) A CONTINGENT DEFERRED SALES CHARGE OF 1% APPLIES ON CERTAIN REDEMPTIONS MADE
WITHIN 12 MONTHS FOLLOWING ANY PURCHASES YOU MADE WITHOUT A SALES CHARGE.
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<S> <C>
- ---------------------------------------------
Management Fees 0.29%
............................................
Service (12b-1) Fees 0.23%*
............................................
Other Expenses 0.09%
............................................
Total Annual Fund Operating Expenses 0.61%
</TABLE>
*12b-1 EXPENSES MAY NOT EXCEED 0.25% OF THE FUND'S AVERAGE NET ASSETS ANNUALLY.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<S> <C>
- -----------------------------------------------
One Year $ 634
..............................................
Three Years $ 759
..............................................
Five Years $ 896
..............................................
Ten Years $1,293
</TABLE>
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 5
<PAGE>
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INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to produce income and to provide an
opportunity for growth of principal consistent with sound common stock
investing. The fund strives to accomplish this objective through fundamental
research, careful selection, and broad diversification. In the selection of
securities for investment, current and potential yield as well as the potential
for long-term capital appreciation are considered. The fund strives in its
overall portfolio to achieve an above average yield and a below average price-
to-earnings ratio in relation to the Standard & Poor's 500 Composite Index (a
broad, unmanaged index). The fund's portfolio is limited to securities included
on its Eligible List, which is compiled to conform to the fund's Investment
Standards based on criteria that were applied by the United States District
Court for the District of Columbia. The Investment Adviser monitors the Eligible
List and makes recommendations to the Board of Directors of changes necessary
for continued compliance with the fund's Investment Standards.
The prices of equity securities may decline in response to certain events,
including those directly involving the companies whose securities are owned in
the fund, adverse conditions affecting the general economy or overall market
declines.
The fund's policy is to maintain at all times for its shareholders a fully
invested and widely diversified portfolio of securities; however, the fund may
hold to a limited extent, short-term U.S. government securities, cash and cash
equivalents.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic philosophy of Capital Research and Management Company is
to seek undervalued securities that represent good long-term investment
opportunities. Securities may be sold when they are judged to no longer
represent good long-term value.
OTHER IMPORTANT INVESTMENT PRACTICES
In addition to the principal investment strategies described above, the fund has
other investment practices that are described in the Statement of Additional
Information.
6 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
ADDITIONAL INVESTMENT RESULTS
(For periods ended March 31, 1999)
<TABLE>
<CAPTION>
AVERAGE ANNUAL THE FUND WITH NO LIPPER
TOTAL RETURN(1) SALES CHARGE(2) INDEX(3)
<S> <C> <C>
- -----------------------------------------------------------------------
One Year 6.59% 4.12%
......................................................................
Five Years 23.42% 19.10%
......................................................................
Ten Years 16.96% 15.02%
......................................................................
Lifetime(4) 13.93% n/a
</TABLE>
THESE RESULTS DO NOT REFLECT SALES CHARGES. SALES CHARGES ARE REDUCED OR
ELIMINATED FOR LARGER PURCHASES AND PURCHASES BY CERTAIN RETIREMENT PLANS.
(1) THESE RESULTS REFLECT AVERAGE ANNUAL COMPOUNDED RATES OF RETURN.
(2) THESE FUND RESULTS WERE CALCULATED ACCORDING TO A FORMULA THAT IS REQUIRED
FOR ALL STOCK AND BOND FUNDS AND INCLUDE THE REINVESTMENT OF DIVIDEND AND
CAPITAL GAIN DISTRIBUTIONS.
(3) THE LIPPER GROWTH AND INCOME FUNDS INDEX IS AN EQUALLY WEIGHTED PERFORMANCE
INDEX THAT REPRESENTS FUNDS THAT COMBINE A GROWTH-OF-EARNINGS ORIENTATION
AND AN INCOME REQUIREMENT FOR LEVEL AND/OR RISING DIVIDENDS. THE RESULTS OF
THE UNDERLYING FUNDS IN THE INDEX INCLUDE THE REINVESTMENT OF DIVIDEND AND
CAPITAL GAIN DISTRIBUTIONS BUT DO NOT REFLECT SALES CHARGES, COMMISSIONS OR
EXPENSES.
(4) THE FUND BEGAN ITS INVESTMENT OPERATIONS ON JULY 31, 1952.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 7
<PAGE>
THE FOLLOWING INFORMATION RELATING TO THE FUND'S INVESTMENT PORTFOLIO IS
AS OF THE END OF THE FUND'S FISCAL YEAR, APRIL 30, 1999.
<TABLE>
<CAPTION>
PERCENT OF
LARGEST INDUSTRY CATEGORIES NET ASSETS
<S> <C>
- ------------------------------------------
Finance 22.37%
.........................................
Services 19.57
.........................................
Energy 15.93
.........................................
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
LARGEST INDUSTRY HOLDINGS NET ASSETS
<S> <C>
- ------------------------------------------
Banking 14.12%
.........................................
Telecommunications 10.66
.........................................
Utilities: Electric & Gas 8.45
.........................................
Health & Personal Care 8.16
.........................................
Energy Sources 7.48
.........................................
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
LARGEST INDIVIDUAL HOLDINGS NET ASSETS
<S> <C>
- ------------------------------------------
Bank of America 3.14%
.........................................
Sprint FON Group 2.52
.........................................
Ameritech 2.28
.........................................
First Union 2.24
.........................................
Household International 2.12
.........................................
AT&T 1.94
.........................................
Wells Fargo 1.80
.........................................
US WEST 1.77
.........................................
GTE 1.74
.........................................
Monsanto 1.71
</TABLE>
BECAUSE THE FUND IS ACTIVELY MANAGED, ITS HOLDINGS WILL CHANGE FROM TIME TO
TIME.
8 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
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YEAR 2000
The date-related computer issue known as the "Year 2000 problem" could have an
adverse impact on the quality of services provided to the fund and its
shareholders. However, the fund understands that its key service providers --
including the investment adviser and its affiliates -- are taking steps to
address the issue. In addition, the Year 2000 problem may adversely affect the
issuers in which the fund invests. For example, issuers may incur substantial
costs to address the problem. They may also suffer losses caused by corporate
and governmental data processing errors. The fund and its investment adviser
will continue to monitor developments relating to this issue.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 9
<PAGE>
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MANAGEMENT AND ORGANIZATION
BUSINESS MANAGER
Washington Management Corporation provides the services necessary to carry on
the fund's general administrative and corporate affairs. These services
encompass general corporate governance, regulatory compliance and oversight of
each of the fund's contractual service providers including custodian operations,
shareholder services and fund share distribution functions. Washington
Management Corporation, a wholly owned subsidiary of The Johnston-Lemon Group,
Incorporated, maintains its principal business address at 1101 Vermont Avenue,
NW, Washington, DC 20005.
INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including those in The American Funds Group. Capital Research and
Management Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
Research and Management Company manages the investment portfolio of the fund.
Total management fees paid by the fund to its business manager and investment
adviser, as a percentage of average net assets, for the previous fiscal year are
discussed earlier under "Fees and Expenses of the Fund."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company Institute's
Advisory Group on Personal Investing.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach the portfolio of
a 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 a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee. In addition, Capital Research and
Management Company's research professionals may make investment decisions with
respect to a portion of a fund's portfolio.
The primary individual portfolio counselors for Washington Mutual Investors Fund
are listed on the following page.
10 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
YEARS OF EXPERIENCE AS
INVESTMENT PROFESSIONAL
(INCLUDING THE
YEARS OF EXPERIENCE LAST FIVE YEARS)
PORTFOLIO AS PORTFOLIO COUNSELOR WITH CAPITAL
COUNSELORS (AND RESEARCH PROFESSIONAL, RESEARCH AND
FOR IF APPLICABLE) FOR MANAGEMENT
WASHINGTON MUTUAL WASHINGTON MUTUAL INVESTORS FUND COMPANY OR
INVESTORS FUND PRIMARY TITLE(S) (APPROXIMATE) ITS AFFILIATES TOTAL YEARS
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
TIMOTHY D. ARMOUR Chairman and Chief Executive 9 years (plus 4 years as a research 16 years 16 years
Officer, Capital Research Company* professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
STEPHEN E. Senior Vice President, Capital 18 years (plus 8 years as a 27 years 33 years
BEPLER Research Company* research professional prior to
becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
JAMES K. Senior Vice President and Director, 21 years (plus 7 years as a 37 years 37 years
DUNTON Capital Research and Management research professional prior to
Company becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
GREGG E. Senior Vice President, Capital 9 years (plus 7 years as a research 26 years 26 years
IRELAND Research and Management Company professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
JAMES B. Senior Vice President, Capital 9 years (plus 2 years as a research 17 years 17 years
LOVELACE Research and Management Company professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
ROBERT G. O'DONNELL Senior Vice President and Director, 6 years (plus 17 years as a 24 years 27 years
Capital Research and Management research professional prior to
Company becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
DONALD D. Vice President, Capital Research 5 years (plus 6 years as a research 14 years 14 years
O'NEAL and Management Company professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
JAMES F. ROTHENBERG President and Director, Capital 5 years (plus 9 years as a research 29 years 29 years
Research and Management Company professional-- 1971-1979--prior to
becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 11
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER INFORMATION
SHAREHOLDER SERVICES
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your needs
and circumstances change. These services may be terminated or modified at any
time upon 60 days' written notice. For your convenience, American Funds Service
Company has four service centers across the country.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
CALL TOLL-FREE FROM ANYWHERE IN THE U.S.
(8 A.M. TO 8 P.M. ET):
800/421-0180
[MAP]
<TABLE>
<S> <C> <C> <C>
WESTERN WESTERN CENTRAL EASTERN CENTRAL EASTERN
SERVICE CENTER SERVICE CENTER SERVICE CENTER SERVICE CENTER
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Norfolk, Virginia
92822-2205 78265-9522 Indiana 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 46206-6007 Fax: 757/670-4773
Fax: 317/735-6620
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS INCLUDED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION. In addition, an easy-to-read guide to
owning a fund in The American Funds Group titled "Welcome to the Family" is sent
to new shareholders and is available by writing or calling American Funds
Service Company.
YOU MAY INVEST IN THE FUND THROUGH VARIOUS RETIREMENT PLANS. However, some
retirement plans or accounts held by investment dealers may not offer certain
services. If you have any questions, please contact your plan
administrator/trustee or dealer.
12 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
EXCHANGE
You may exchange your shares into other funds in The American Funds Group
generally without a sales charge. Exchange of shares from the money market funds
initially purchased without a sales charge generally will be subject to the
appropriate sales charge. Exchanges have the same tax consequences as ordinary
sales and purchases. See "Transactions by Telephone..." for information
regarding electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE IS
CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A PERIOD
OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT
ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY INVESTOR
WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES ACTUAL OR
POTENTIAL HARM TO THE FUND.
INVESTMENT MINIMUMS
<TABLE>
<S> <C>
- ------------------------------------------------------------------
To establish an account $250
For a retirement plan account $250
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account through payroll deduction $ 25
</TABLE>
SHARE PRICE
The fund calculates its share price, also called net asset value, as of 4:00
p.m. New York time which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value, market
prices are used when available. If a market price for a particular security is
not available, the fund will determine the appropriate price for the security.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 13
<PAGE>
Your shares will be purchased at the offering price, or sold at the net asset
value, next determined after American Funds Service Company receives and accepts
your request. The offering price is the net asset value plus a sales charge, if
applicable.
SALES CHARGE
A sales charge may apply to your purchase. Your sales charge may be reduced for
larger purchases as indicated below.
<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE OF
.................................
NET DEALER CONCESSION
OFFERING AMOUNT AS % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Less than $50,000 5.75% 6.10% 5.00%
.......................................................................................................
$50,000 but less than $100,000 4.50% 4.71% 3.75%
.......................................................................................................
$100,000 but less than $250,000 3.50% 3.63% 2.75%
.......................................................................................................
$250,000 but less than $500,000 2.50% 2.56% 2.00%
.......................................................................................................
$500,000 but less than $1 million 2.00% 2.04% 1.60%
.......................................................................................................
$1 million or more and certain other
investments described below see below see below see below
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGE
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 100 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE
IMPOSED ON CERTAIN REDEMPTIONS BY ACCOUNTS THAT INVEST WITH NO INITIAL SALES
CHARGE (OTHER THAN EMPLOYER-SPONSORED PLANS), IF REDEMPTIONS ARE MADE WITHIN ONE
YEAR OF PURCHASE. A dealer concession of up to 1% may be paid by the fund under
its Plan of Distribution on investments made with no initial sales charge.
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your sales
charge. You must let your investment dealer or American Funds Service Company
know if you qualify for a reduction in your sales charge using one or any
combination of the methods described in the statement of additional information
and "Welcome to the Family."
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 fund's board
14 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
of directors. Up to 0.25% of average net assets is paid annually to qualified
dealers for providing certain services pursuant to the fund's Plan of
Distribution. The 12b-1 fee paid by the fund, as a percentage of average net
assets, for the previous fiscal year is indicated earlier under "Fees and
Expenses of the Fund." Since these fees are paid out of the fund's assets on an
ongoing basis, over time they will increase the cost of an investment and may
cost you more than paying higher initial sales charges.
OTHER COMPENSATION TO DEALERS
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.
HOW TO SELL SHARES
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)
- Shares held for you in your dealer's name must be sold through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- Requests must be signed by the registered shareholder(s)
- A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
- Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE-REGISTERED TRADEMARK- OR AMERICAN FUNDSLINE ONLINE-REGISTERED
TRADEMARK-:
- Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day
- Checks must be made payable to the registered shareholder
- Checks must be mailed to an address of record that has been used with the
account for at least 10 days
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 15
<PAGE>
TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE, OR AMERICAN FUNDSLINE ONLINE
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all of
these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your
account(s), you agree to hold the fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, the fund's business
manager, and each of their respective directors, trustees, officers, employees
and agents harmless from any losses, expenses, costs or liabilities (including
attorney fees) which may be incurred in connection with the exercise of these
privileges, provided American Funds Service Company employs reasonable
procedures to confirm that the instructions received from any person with
appropriate account information are genuine. If reasonable procedures are not
employed, it and/or the fund may be liable for losses due to unauthorized or
fraudulent instructions.
16 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
DIVIDENDS AND DISTRIBUTIONS
The fund intends to pay dividends to you, usually in March, June, September and
December. Capital gains, if any, are usually distributed in December.
You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash.
TAX CONSEQUENCES
As with any investment, your investment in the fund could have tax consequences.
If you are not investing through a tax-advantaged retirement account, you should
consider these tax consequences.
TAXES ON DISTRIBUTIONS
Distributions you receive from the fund are subject to income tax and may also
be subject to state or local taxes.
For federal tax purposes, the fund's dividends and distributions of short-term
capital gains are taxable to you as ordinary income. The fund's distributions of
long-term capital gains are taxable to you as capital gains. Any taxable
distributions from the fund will normally be taxable to you when made,
regardless of whether you reinvest distributions or receive them in cash.
TAXES ON TRANSACTIONS
Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment in the fund is
the difference between the cost of your shares, including any sales charges, and
the price you receive when you sell them.
Please see the statement of additional information, the "Welcome to the Family"
guide, and your tax adviser for further information.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 17
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
results for the past five years. Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statements, is included in the statement of additional information,
which is available upon request.
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30
...................................
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
-----------------------------------------
Net asset value,
beginning of year $33.92 $25.93 $22.77 $18.87 $17.11
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .60 .62 .62 .63 .63
.................................................................................
Net gains or losses on securities
(both realized and unrealized) 3.99 9.65 4.36 4.98 2.16
- ----------------------------------------------------------------------------------
Total from investment operations 4.59 10.27 4.98 5.61 2.79
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends (from net investment income) (.61) (.62) (.62) (.62) (.62)
.................................................................................
Distributions (from capital gains) (2.59) (1.66) (1.20) (1.09) (.41)
.................................................................................
Total distributions (3.20) (2.28) (1.82) (1.71) (1.03)
- ----------------------------------------------------------------------------------
Net asset value, end of year $35.31 $33.92 $25.93 $22.77 $18.87
- ----------------------------------------------------------------------------------
Total return(1) 14.61% 40.80% 22.43% 30.40% 17.01%
- ----------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in millions) $57,018 $45,764 $28,165 $20,689 $14,426
.................................................................................
Ratio of expenses to average net assets .61% .62% .64% .66% .69%
.................................................................................
Ratio of net income to average net
assets 1.84% 2.08% 2.56% 2.98% 3.57%
.................................................................................
Portfolio turnover rate 27.93% 17.61% 20.41% 23.41% 25.45%
</TABLE>
(1)EXCLUDES MAXIMUM SALES CHARGE OF 5.75%.
18 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
NOTES
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 19
<PAGE>
- -------------------------------------------------------------------
NOTES
20 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- -------------------------------------------------------------------
NOTES
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 21
<PAGE>
<TABLE>
<S> <C> <C>
FOR SHAREHOLDER FOR RETIREMENT PLAN FOR DEALER
SERVICES SERVICES SERVICES
American Funds Call your employer American Funds
Service Company or Distributors
800/421-0180 plan administrator 800/421-9900 ext. 11
FOR 24-HOUR INFORMATION
American American Funds
FundsLine-Registered Internet Web site
Trademark- http://www.americanfunds.com
800/325-3590
</TABLE>
Telephone conversations may be recorded or monitored for verification,
recordkeeping and quality assurance purposes.
------------------------------------------------------------------
MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. In the event of any
inconsistencies or ambiguity as to the meaning of any word or phrase in a
translation, the English text will prevail.
------------------------------------------------------------------
OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Contains additional information about the fund including financial
statements, investment results, portfolio holdings, a statement from
portfolio management discussing market conditions and the fund's investment
strategies, and the independent accountants' report (in the annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more detailed information on all aspects of the fund, including the
fund's financial statements.
A current SAI has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference into this prospectus. The SAI and
other related materials about the fund are available for review or to be
copied at the SEC's Public Reference Room in Washington, DC (1-800-SEC-0330)
or on the SEC's Internet Web site at http://www.sec.gov.
CODE OF ETHICS
Includes a description of the investment adviser's personal investing
policy.
To request a free copy of any of the documents above:
<TABLE>
<S> <C> <C>
Call American Funds or Write to the Secretary of the
Service Company fund
800/421-0180 ext. 1 1101 Vermont Avenue, NW
Washington, DC 20005
</TABLE>
Investment Company File No. 811-604
[LOGO]
Printed on recycled paper
THE FUND PROVIDES SPANISH TRANSLATIONS IN CONJUNCTION WITH
THE PUBLIC OFFERING AND SALE OF ITS SHARES. THE FOLLOWING
IS A FAIR AND ACCURATE ENGLISH TRANSLATION OF A SPANISH
LANGUAGE PROSPECTUS FOR THE FUND.
/s/ Howard L. Kitzmiller
Howard L. Kitzmiller
Secretary
<PAGE>
THE AMERICAN FUNDS GROUP LOGO
- --------------------------------------------------------------------------------
WASHINGTON MUTUAL
INVESTORS FUND -SM-
PROSPECTUS
JUNE 22, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
WASHINGTON MUTUAL INVESTORS FUND, INC.
1101 Vermont Avenue, NW
Washington, DC 20005
TICKER SYMBOL: AWSHX NEWSPAPER ABBREV.: Wsh FUND NO.: 01
- -------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk/Return Summary 2
........................................................................
Fees and Expenses of the Fund 5
........................................................................
Investment Objective, Strategies and Risks 6
........................................................................
Year 2000 9
........................................................................
Management and Organization 10
........................................................................
Shareholder Information 12
........................................................................
Purchase and Exchange of Shares 13
........................................................................
Distribution Arrangements 17
........................................................................
Financial Highlights 18
</TABLE>
- -------------------------------------------------------------------
01-010-0699/MC WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 1
<PAGE>
- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY
The fund seeks to produce current income and to provide an opportunity for
growth of principal consistent with sound common stock investing. The fund
invests primarily in common stocks of larger, more established companies that
are listed on the New York Stock Exchange and have a record of increasing
earnings and dividends.
The fund is designed to provide fiduciaries, organizations, institutions and
individuals with a convenient and prudent medium of investment in high quality
common stocks and securities convertible into common stocks. It is especially
designed to serve those individuals who are charged with the responsibility of
investing retirement plan trusts, other fiduciary type reserves, or family
funds, but who are reluctant to undertake the selection and supervision of
individual stocks.
The fund strives to maintain a fully invested, diversified portfolio, primarily
of high-quality stocks and securities convertible into common stocks. The fund
has stringent Investment Standards based upon criteria originally established by
the United States District Court for the District of Columbia for determining
eligibility under the Court's Legal List procedure which was in effect for many
years. Applying these Investment Standards, the fund's Investment Adviser
compiles an "Eligible List" of investments considered appropriate for a prudent
investor seeking opportunities for income and growth of principal consistent
with common stock investing. The Investment Adviser is required to select the
fund's investments exclusively from the Eligible List. The Investment Adviser
monitors the Eligible List and makes recommendations to the Board of Directors
of additions to, or deletions from, the List to comply with the fund's
Investment Standards.
An investment in the fund is subject to risks, including the possibility that
the fund may decline in value in response to economic, social or political
events in the U.S. or abroad. In addition, the prices of equity securities are
also affected by events specifically involving the companies whose securities
are owned by the fund. Accordingly, you may lose money by investing in the fund.
The likelihood of loss is greater if you invest for a shorter period of time.
Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
2 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
INVESTMENT RESULTS
The following information illustrates how the fund's results fluctuate. Past
results are not an indication of future results.
Here are the fund's results calculated without a sales charge on a CALENDAR
YEAR basis. (If a sales charge were included, results would be lower.)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
89 28.96%
90 -3.86%
91 23.49%
92 9.10%
93 13.05%
94 0.49%
95 41.22%
96 20.18%
97 33.29%
98 19.37%
</TABLE>
The fund's year-to-date return for the three months ending
March 31, 1999 was 0.22%.
The fund's highest/lowest QUARTERLY results during this time period were:
X HIGHEST 14.44% (quarter ended June 30, 1997)
X LOWEST -13.13% (quarter ended September 30, 1990)
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 3
<PAGE>
For periods ended March 31, 1999:
<TABLE>
<CAPTION>
THE FUND WITH
MAXIMUM
AVERAGE ANNUAL SALES CHARGE S&P LIPPER
TOTAL RETURN DEDUCTED(1,2) 500(3) INDEX(4)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------
One Year 0.46% 18.43% 4.12%
................................................................................
Five Years 21.97% 26.19% 19.10%
................................................................................
Ten Years 16.27% 18.92% 15.02%
................................................................................
Lifetime(5) 13.79% 12.84% n/a
</TABLE>
Yield(2): 1.76%
(For current yield information call American
FundsLine-Registered Trademark- at 1-800-325-3590)
(1) THESE RESULTS REFLECT AVERAGE ANNUAL COMPOUNDED RATES OF RETURN.
(2) THESE FUND RESULTS WERE CALCULATED ACCORDING TO A FORMULA WHICH REQUIRES
THAT THE MAXIMUM SALES CHARGE OF 5.75% BE DEDUCTED AND INCLUDE THE
REINVESTMENT OF DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS. RESULTS WOULD BE
HIGHER IF THEY WERE CALCULATED AT NET ASSET VALUE.
(3) THE STANDARD & POOR'S 500 COMPOSITE INDEX REPRESENTS PRIMARILY U.S. STOCKS.
THIS INDEX IS UNMANAGED AND DOES NOT REFLECT SALES CHARGES, COMMISSIONS OR
EXPENSES.
(4) THE LIPPER GROWTH AND INCOME FUNDS INDEX IS AN EQUALLY WEIGHTED PERFORMANCE
INDEX THAT REPRESENTS FUNDS THAT COMBINE A GROWTH-OF-EARNINGS ORIENTATION
AND AN INCOME REQUIREMENT FOR LEVEL AND/OR RISING DIVIDENDS. THE RESULTS OF
THE UNDERLYING FUNDS IN THE INDEX INCLUDE THE REINVESTMENT OF DIVIDEND AND
CAPITAL GAIN DISTRIBUTIONS BUT DO NOT REFLECT SALES CHARGES, COMMISSIONS OR
EXPENSES.
(5) THE FUND BEGAN ITS INVESTMENT OPERATIONS ON JULY 31, 1952.
4 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
THE FOLLOWING DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.
SHAREHOLDERS FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<S> <C>
- -----------------------------------------------
Maximum sales charge imposed on
purchases
(AS A PERCENTAGE OF OFFERING PRICE) 5.75%(1)
..............................................
Maximum sales charge imposed on
reinvested dividends 0%
..............................................
Maximum deferred sales charge 0%(2)
..............................................
Redemption or exchange fees 0%
</TABLE>
(1) SALES CHARGES ARE REDUCED OR ELIMINATED FOR LARGER PURCHASES.
(2) A CONTINGENT DEFERRED SALES CHARGE OF 1% APPLIES ON CERTAIN REDEMPTIONS MADE
WITHIN 12 MONTHS FOLLOWING ANY PURCHASES YOU MADE WITHOUT A SALES CHARGE.
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<S> <C>
- ---------------------------------------------
Management Fees 0.29%
............................................
Service (12b-1) Fees 0.23%*
............................................
Other Expenses 0.09%
............................................
Total Annual Fund Operating Expenses 0.61%
</TABLE>
*12b-1 EXPENSES MAY NOT EXCEED 0.25% OF THE FUND'S AVERAGE NET ASSETS ANNUALLY.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<S> <C>
- -----------------------------------------------
One Year $ 634
..............................................
Three Years $ 759
..............................................
Five Years $ 896
..............................................
Ten Years $1,293
</TABLE>
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 5
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to produce income and to provide an
opportunity for growth of principal consistent with sound common stock
investing. The fund strives to accomplish this objective through fundamental
research, careful selection, and broad diversification. In the selection of
securities for investment, current and potential yield as well as the potential
for long-term capital appreciation are considered. The fund strives in its
overall portfolio to achieve an above average yield and a below average price-
to-earnings ratio in relation to the Standard & Poor's 500 Composite Index (a
broad, unmanaged index). The fund's portfolio is limited to securities included
on its Eligible List, which is compiled to conform to the fund's Investment
Standards based on criteria that were applied by the United States District
Court for the District of Columbia. The Investment Adviser monitors the Eligible
List and makes recommendations to the Board of Directors of changes necessary
for continued compliance with the fund's Investment Standards.
The prices of equity securities may decline in response to certain events,
including those directly involving the companies whose securities are owned in
the fund, adverse conditions affecting the general economy or overall market
declines.
The fund's policy is to maintain at all times for its shareholders a fully
invested and widely diversified portfolio of securities; however, the fund may
hold to a limited extent, short-term U.S. government securities, cash and cash
equivalents.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic philosophy of Capital Research and Management Company is
to seek undervalued securities that represent good long-term investment
opportunities. Securities may be sold when they are judged to no longer
represent good long-term value.
OTHER IMPORTANT INVESTMENT PRACTICES
In addition to the principal investment strategies described above, the fund has
other investment practices that are described in the Statement of Additional
Information.
6 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
ADDITIONAL INVESTMENT RESULTS
(For periods ended March 31, 1999)
<TABLE>
<CAPTION>
AVERAGE ANNUAL THE FUND WITH NO LIPPER
TOTAL RETURN(1) SALES CHARGE(2) INDEX(3)
<S> <C> <C>
- -----------------------------------------------------------------------
One Year 6.59% 4.12%
......................................................................
Five Years 23.42% 19.10%
......................................................................
Ten Years 16.96% 15.02%
......................................................................
Lifetime(4) 13.93% n/a
</TABLE>
THESE RESULTS DO NOT REFLECT SALES CHARGES. SALES CHARGES ARE REDUCED OR
ELIMINATED FOR LARGER PURCHASES AND PURCHASES BY CERTAIN RETIREMENT PLANS.
(1) THESE RESULTS REFLECT AVERAGE ANNUAL COMPOUNDED RATES OF RETURN.
(2) THESE FUND RESULTS WERE CALCULATED ACCORDING TO A FORMULA THAT IS REQUIRED
FOR ALL STOCK AND BOND FUNDS AND INCLUDE THE REINVESTMENT OF DIVIDEND AND
CAPITAL GAIN DISTRIBUTIONS.
(3) THE LIPPER GROWTH AND INCOME FUNDS INDEX IS AN EQUALLY WEIGHTED PERFORMANCE
INDEX THAT REPRESENTS FUNDS THAT COMBINE A GROWTH-OF-EARNINGS ORIENTATION
AND AN INCOME REQUIREMENT FOR LEVEL AND/OR RISING DIVIDENDS. THE RESULTS OF
THE UNDERLYING FUNDS IN THE INDEX INCLUDE THE REINVESTMENT OF DIVIDEND AND
CAPITAL GAIN DISTRIBUTIONS BUT DO NOT REFLECT SALES CHARGES, COMMISSIONS OR
EXPENSES.
(4) THE FUND BEGAN ITS INVESTMENT OPERATIONS ON JULY 31, 1952.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 7
<PAGE>
THE FOLLOWING INFORMATION RELATING TO THE FUND'S INVESTMENT PORTFOLIO IS
AS OF THE END OF THE FUND'S FISCAL YEAR, APRIL 30, 1999.
<TABLE>
<CAPTION>
PERCENT OF
LARGEST INDUSTRY CATEGORIES NET ASSETS
<S> <C>
- ------------------------------------------
Finance 22.37%
.........................................
Services 19.57
.........................................
Energy 15.93
.........................................
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
LARGEST INDUSTRY HOLDINGS NET ASSETS
<S> <C>
- ------------------------------------------
Banking 14.12%
.........................................
Telecommunications 10.66
.........................................
Utilities: Electric & Gas 8.45
.........................................
Health & Personal Care 8.16
.........................................
Energy Sources 7.48
.........................................
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
LARGEST INDIVIDUAL HOLDINGS NET ASSETS
<S> <C>
- ------------------------------------------
Bank of America 3.14%
.........................................
Sprint FON Group 2.52
.........................................
Ameritech 2.28
.........................................
First Union 2.24
.........................................
Household International 2.12
.........................................
AT&T 1.94
.........................................
Wells Fargo 1.80
.........................................
US WEST 1.77
.........................................
GTE 1.74
.........................................
Monsanto 1.71
</TABLE>
BECAUSE THE FUND IS ACTIVELY MANAGED, ITS HOLDINGS WILL CHANGE FROM TIME TO
TIME.
8 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- -------------------------------------------------------------------
YEAR 2000
The date-related computer issue known as the "Year 2000 problem" could have an
adverse impact on the quality of services provided to the fund and its
shareholders. However, the fund understands that its key service providers --
including the investment adviser and its affiliates -- are taking steps to
address the issue. In addition, the Year 2000 problem may adversely affect the
issuers in which the fund invests. For example, issuers may incur substantial
costs to address the problem. They may also suffer losses caused by corporate
and governmental data processing errors. The fund and its investment adviser
will continue to monitor developments relating to this issue.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 9
<PAGE>
- -------------------------------------------------------------------
MANAGEMENT AND ORGANIZATION
BUSINESS MANAGER
Washington Management Corporation provides the services necessary to carry on
the fund's general administrative and corporate affairs. These services
encompass general corporate governance, regulatory compliance and oversight of
each of the fund's contractual service providers including custodian operations,
shareholder services and fund share distribution functions. Washington
Management Corporation, a wholly owned subsidiary of The Johnston-Lemon Group,
Incorporated, maintains its principal business address at 1101 Vermont Avenue,
NW, Washington, DC 20005.
INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including those in The American Funds Group. Capital Research and
Management Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
Research and Management Company manages the investment portfolio of the fund.
Total management fees paid by the fund to its business manager and investment
adviser, as a percentage of average net assets, for the previous fiscal year are
discussed earlier under "Fees and Expenses of the Fund."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company Institute's
Advisory Group on Personal Investing.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach the portfolio of
a 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 a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee. In addition, Capital Research and
Management Company's research professionals may make investment decisions with
respect to a portion of a fund's portfolio.
The primary individual portfolio counselors for Washington Mutual Investors Fund
are listed on the following page.
10 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
YEARS OF EXPERIENCE AS
INVESTMENT PROFESSIONAL
(INCLUDING THE
YEARS OF EXPERIENCE LAST FIVE YEARS)
PORTFOLIO AS PORTFOLIO COUNSELOR WITH CAPITAL
COUNSELORS (AND RESEARCH PROFESSIONAL, RESEARCH AND
FOR IF APPLICABLE) FOR MANAGEMENT
WASHINGTON MUTUAL WASHINGTON MUTUAL INVESTORS FUND COMPANY OR
INVESTORS FUND PRIMARY TITLE(S) (APPROXIMATE) ITS AFFILIATES TOTAL YEARS
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
TIMOTHY D. ARMOUR Chairman and Chief Executive 9 years (plus 4 years as a research 16 years 16 years
Officer, Capital Research Company* professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
STEPHEN E. Senior Vice President, Capital 18 years (plus 8 years as a 27 years 33 years
BEPLER Research Company* research professional prior to
becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
JAMES K. Senior Vice President and Director, 21 years (plus 7 years as a 37 years 37 years
DUNTON Capital Research and Management research professional prior to
Company becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
GREGG E. Senior Vice President, Capital 9 years (plus 7 years as a research 26 years 26 years
IRELAND Research and Management Company professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
JAMES B. Senior Vice President, Capital 9 years (plus 2 years as a research 17 years 17 years
LOVELACE Research and Management Company professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
ROBERT G. O'DONNELL Senior Vice President and Director, 6 years (plus 17 years as a 24 years 27 years
Capital Research and Management research professional prior to
Company becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
DONALD D. Vice President, Capital Research 5 years (plus 6 years as a research 14 years 14 years
O'NEAL and Management Company professional prior to becoming a
portfolio counselor for the fund)
- --------------------------------------------------------------------------------------------------------------------------
JAMES F. ROTHENBERG President and Director, Capital 5 years (plus 9 years as a research 29 years 29 years
Research and Management Company professional-- 1971-1979--prior to
becoming a portfolio counselor for
the fund)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 11
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER INFORMATION
SHAREHOLDER SERVICES
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your needs
and circumstances change. These services may be terminated or modified at any
time upon 60 days' written notice. For your convenience, American Funds Service
Company has four service centers across the country.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
CALL TOLL-FREE FROM ANYWHERE IN THE U.S.
(8 A.M. TO 8 P.M. ET):
800/421-0180
[MAP]
<TABLE>
<S> <C> <C> <C>
WESTERN WESTERN CENTRAL EASTERN CENTRAL EASTERN
SERVICE CENTER SERVICE CENTER SERVICE CENTER SERVICE CENTER
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Norfolk, Virginia
92822-2205 78265-9522 Indiana 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 46206-6007 Fax: 757/670-4773
Fax: 317/735-6620
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS INCLUDED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION. In addition, an easy-to-read guide to
owning a fund in The American Funds Group titled "Welcome to the Family" is sent
to new shareholders and is available by writing or calling American Funds
Service Company.
YOU MAY INVEST IN THE FUND THROUGH VARIOUS RETIREMENT PLANS. However, some
retirement plans or accounts held by investment dealers may not offer certain
services. If you have any questions, please contact your plan
administrator/trustee or dealer.
12 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
EXCHANGE
You may exchange your shares into other funds in The American Funds Group
generally without a sales charge. Exchange of shares from the money market funds
initially purchased without a sales charge generally will be subject to the
appropriate sales charge. Exchanges have the same tax consequences as ordinary
sales and purchases. See "Transactions by Telephone..." for information
regarding electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE IS
CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A PERIOD
OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT
ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY INVESTOR
WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES ACTUAL OR
POTENTIAL HARM TO THE FUND.
INVESTMENT MINIMUMS
<TABLE>
<S> <C>
- ------------------------------------------------------------------
To establish an account $250
For a retirement plan account $250
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account through payroll deduction $ 25
</TABLE>
SHARE PRICE
The fund calculates its share price, also called net asset value, as of 4:00
p.m. New York time which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value, market
prices are used when available. If a market price for a particular security is
not available, the fund will determine the appropriate price for the security.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 13
<PAGE>
Your shares will be purchased at the offering price, or sold at the net asset
value, next determined after American Funds Service Company receives and accepts
your request. The offering price is the net asset value plus a sales charge, if
applicable.
SALES CHARGE
A sales charge may apply to your purchase. Your sales charge may be reduced for
larger purchases as indicated below.
<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE OF
.................................
NET DEALER CONCESSION
OFFERING AMOUNT AS % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Less than $50,000 5.75% 6.10% 5.00%
.......................................................................................................
$50,000 but less than $100,000 4.50% 4.71% 3.75%
.......................................................................................................
$100,000 but less than $250,000 3.50% 3.63% 2.75%
.......................................................................................................
$250,000 but less than $500,000 2.50% 2.56% 2.00%
.......................................................................................................
$500,000 but less than $1 million 2.00% 2.04% 1.60%
.......................................................................................................
$1 million or more and certain other
investments described below see below see below see below
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGE
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 100 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE
IMPOSED ON CERTAIN REDEMPTIONS BY ACCOUNTS THAT INVEST WITH NO INITIAL SALES
CHARGE (OTHER THAN EMPLOYER-SPONSORED PLANS), IF REDEMPTIONS ARE MADE WITHIN ONE
YEAR OF PURCHASE. A dealer concession of up to 1% may be paid by the fund under
its Plan of Distribution on investments made with no initial sales charge.
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your sales
charge. You must let your investment dealer or American Funds Service Company
know if you qualify for a reduction in your sales charge using one or any
combination of the methods described in the statement of additional information
and "Welcome to the Family."
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 fund's board
14 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
of directors. Up to 0.25% of average net assets is paid annually to qualified
dealers for providing certain services pursuant to the fund's Plan of
Distribution. The 12b-1 fee paid by the fund, as a percentage of average net
assets, for the previous fiscal year is indicated earlier under "Fees and
Expenses of the Fund." Since these fees are paid out of the fund's assets on an
ongoing basis, over time they will increase the cost of an investment and may
cost you more than paying higher initial sales charges.
OTHER COMPENSATION TO DEALERS
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.
HOW TO SELL SHARES
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)
- Shares held for you in your dealer's name must be sold through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- Requests must be signed by the registered shareholder(s)
- A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
- Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE-REGISTERED TRADEMARK- OR AMERICAN FUNDSLINE ONLINE-REGISTERED
TRADEMARK-:
- Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day
- Checks must be made payable to the registered shareholder
- Checks must be mailed to an address of record that has been used with the
account for at least 10 days
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 15
<PAGE>
TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE, OR AMERICAN FUNDSLINE ONLINE
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all of
these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your
account(s), you agree to hold the fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, the fund's business
manager, and each of their respective directors, trustees, officers, employees
and agents harmless from any losses, expenses, costs or liabilities (including
attorney fees) which may be incurred in connection with the exercise of these
privileges, provided American Funds Service Company employs reasonable
procedures to confirm that the instructions received from any person with
appropriate account information are genuine. If reasonable procedures are not
employed, it and/or the fund may be liable for losses due to unauthorized or
fraudulent instructions.
16 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
DIVIDENDS AND DISTRIBUTIONS
The fund intends to pay dividends to you, usually in March, June, September and
December. Capital gains, if any, are usually distributed in December.
You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash.
TAX CONSEQUENCES
As with any investment, your investment in the fund could have tax consequences.
If you are not investing through a tax-advantaged retirement account, you should
consider these tax consequences.
TAXES ON DISTRIBUTIONS
Distributions you receive from the fund are subject to income tax and may also
be subject to state or local taxes.
For federal tax purposes, the fund's dividends and distributions of short-term
capital gains are taxable to you as ordinary income. The fund's distributions of
long-term capital gains are taxable to you as capital gains. Any taxable
distributions from the fund will normally be taxable to you when made,
regardless of whether you reinvest distributions or receive them in cash.
TAXES ON TRANSACTIONS
Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment in the fund is
the difference between the cost of your shares, including any sales charges, and
the price you receive when you sell them.
Please see the statement of additional information, the "Welcome to the Family"
guide, and your tax adviser for further information.
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 17
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
results for the past five years. Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statements, is included in the statement of additional information,
which is available upon request.
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30
...................................
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
-----------------------------------------
Net asset value,
beginning of year $33.92 $25.93 $22.77 $18.87 $17.11
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .60 .62 .62 .63 .63
.................................................................................
Net gains or losses on securities
(both realized and unrealized) 3.99 9.65 4.36 4.98 2.16
- ----------------------------------------------------------------------------------
Total from investment operations 4.59 10.27 4.98 5.61 2.79
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends (from net investment income) (.61) (.62) (.62) (.62) (.62)
.................................................................................
Distributions (from capital gains) (2.59) (1.66) (1.20) (1.09) (.41)
.................................................................................
Total distributions (3.20) (2.28) (1.82) (1.71) (1.03)
- ----------------------------------------------------------------------------------
Net asset value, end of year $35.31 $33.92 $25.93 $22.77 $18.87
- ----------------------------------------------------------------------------------
Total return(1) 14.61% 40.80% 22.43% 30.40% 17.01%
- ----------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in millions) $57,018 $45,764 $28,165 $20,689 $14,426
.................................................................................
Ratio of expenses to average net assets .61% .62% .64% .66% .69%
.................................................................................
Ratio of net income to average net
assets 1.84% 2.08% 2.56% 2.98% 3.57%
.................................................................................
Portfolio turnover rate 27.93% 17.61% 20.41% 23.41% 25.45%
</TABLE>
(1)EXCLUDES MAXIMUM SALES CHARGE OF 5.75%.
18 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
NOTES
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 19
<PAGE>
- -------------------------------------------------------------------
NOTES
20 WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS
<PAGE>
- -------------------------------------------------------------------
NOTES
WASHINGTON MUTUAL INVESTORS FUND / PROSPECTUS 21
<PAGE>
<TABLE>
<S> <C> <C>
FOR SHAREHOLDER FOR RETIREMENT PLAN FOR DEALER
SERVICES SERVICES SERVICES
American Funds Call your employer American Funds
Service Company or Distributors
800/421-0180 plan administrator 800/421-9900 ext. 11
FOR 24-HOUR INFORMATION
American American Funds
FundsLine-Registered Internet Web site
Trademark- http://www.americanfunds.com
800/325-3590
</TABLE>
Telephone conversations may be recorded or monitored for verification,
recordkeeping and quality assurance purposes.
------------------------------------------------------------------
MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. In the event of any
inconsistencies or ambiguity as to the meaning of any word or phrase in a
translation, the English text will prevail.
------------------------------------------------------------------
OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Contains additional information about the fund including financial
statements, investment results, portfolio holdings, a statement from
portfolio management discussing market conditions and the fund's investment
strategies, and the independent accountants' report (in the annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more detailed information on all aspects of the fund, including the
fund's financial statements.
A current SAI has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference into this prospectus. The SAI and
other related materials about the fund are available for review or to be
copied at the SEC's Public Reference Room in Washington, DC (1-800-SEC-0330)
or on the SEC's Internet Web site at http://www.sec.gov.
CODE OF ETHICS
Includes a description of the investment adviser's personal investing
policy.
To request a free copy of any of the documents above:
<TABLE>
<S> <C> <C>
Call American Funds or Write to the Secretary of the
Service Company fund
800/421-0180 ext. 1 1101 Vermont Avenue, NW
Washington, DC 20005
</TABLE>
Investment Company File No. 811-604
[LOGO]
Printed on recycled paper
WASHINGTON MUTUAL INVESTORS FUND, INC.
PART B
STATEMENT OF ADDITIONAL INFORMATION
June 22, 1999
This document is not a prospectus but should be read in conjunction with the
current prospectus dated June 22, 1999 of Washington Mutual Investors Fund,
Inc. (the fund or WMIF). The prospectus may be obtained from your investment
dealer or financial planner or by writing to the fund at the following address:
WASHINGTON MUTUAL INVESTORS FUND, INC.
Attention: Secretary
1101 Vermont Avenue, N.W.
Washington, D.C. 20005
(202) 842-5665
Shareholders who purchase shares at net asset value through eligible retirement
plans should note that not all of the services or features described below may
be available to them, and they should contact their employer for details.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE NO.
Description of Certain Securities and Investment Techniques 1
<S> <C>
The Fund and Its Investment Objective and Policies 2
Investment Restrictions 2
Fund Organization 3
Shareholder Voting Rights 3
Fund Directors, Advisory Board Members and Officers 4
Management 10
Dividends, Distributions and Federal Taxes 12
Purchasing Shares 15
Selling Shares 20
Shareholder Account Services and Privileges 22
Execution of Portfolio Transactions 24
General Information 24
Investment Results and Related Statistics 25
Financial Statements Attached
</TABLE>
DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
As set forth in its Prospectus, only common stocks and securities convertible
into common stocks meeting the fund's Investment Standards and on the fund's
Eligible List may be held by the fund; however, the fund may also hold, to a
limited extent, short-term U.S. Government securities, cash and cash
equivalents.
EQUITY SECURITIES -- Equity securities represent an ownership position in a
company. The prices of equity securities fluctuate based on changes in the
financial condition of their issuers and on market and economic conditions. The
fund's results will be related to the overall market for these securities.
CONVERTIBLE SECURITIES -- The fund may purchase securities convertible into
common stocks where the issuing corporation meets the fund's Investment
Standards and appears on the fund's Eligible List. The value of convertible
securities (which have both debt and equity characteristics) varies in response
to many factors, including the value of the underlying equity, general market
and economic conditions, convertible market valuations, as well as, changes in
interest rates, credit spreads and the credit quality of the issuer.
U.S. GOVERNMENT SECURITIES, CASH AND CASH EQUIVALENTS -- These securities may
include direct obligations of the U.S. Treasury (such as Treasury bills, notes
and bonds), federal agency obligations guaranteed as to principal and interest
by the U.S. Treasury, and certain securities issued by U.S. Government
instrumentalities and certain federal agencies which securities are neither
direct obligations of, nor guaranteed by, the Treasury. These latter
securities, however, generally involve federal sponsorship in one way or
another; some are backed by specific types of collateral; some are supported
by the issuer's right to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase certain obligations of the
issuer; and others are supported only by the credit of the issuing government
agency or instrumentality.
THE FUND AND ITS INVESTMENT OBJECTIVE AND POLICIES
The fund has Investment Standards based upon criteria originally established by
the United States District Court for the District of Columbia for determining
the eligibility of securities under the Court's Legal List procedure which was
in effect for many years. The fund has an Eligible List of investments based
upon its Investment Standards. The Investment Adviser is required to select
the fund's investments exclusively from the Eligible List. The Investment
Adviser monitors the Eligible List and makes recommendations to the Board of
Directors of additions to, or deletions from, the List for continued compliance
with the fund's Investment Standards.
It is believed that in applying the above disciplines and procedures, the fund
makes available to pension and profit-sharing trustees and other fiduciaries a
prudent stock investment and an assurance of continuity of investment quality
which it has always been the policy of the fund to provide. However, fiduciary
investment responsibility and the Prudent Investor Rule involve a mixed
question of law and fact which cannot be conclusively determined in advance.
Moreover, recent changes to the Prudent Investor Rule in some jurisdictions
speak to an allocation of funds among a variety of investments. Therefore, each
fiduciary should examine the common stock portfolio of the fund to see that it,
along with other investments, meets the requirements of the specific trust.
INVESTMENT RESTRICTIONS
The fund has adopted certain fundamental policies and investment restrictions
for the protection of shareholders that may not be changed without shareholder
approval. Approval requires the affirmative vote of 67% or more of the voting
securities present at a meeting of shareholders, provided more than 50% of
such securities are represented at the meeting or the vote of more than 50% of
the outstanding voting securities, whichever is less. Investment limitations
expressed in the following restrictions are considered at the time securities
are purchased and are based on the fund's net assets unless otherwise
indicated.
The fund may not:
Purchase any security which is not legal for the investment of trust funds in
the District of Columbia;
Purchase or sell real estate or commodities;
Make a purchase which would cause more than 5% of the value of the total
assets of the fund to be invested in the securities of any one issuer;
Make a purchase which would cause more than 10% of the outstanding securities
of any issuer to be held in the portfolio of the fund;
Invest in companies for the purpose of exercising control or management and
may not invest in securities of other investment companies;
Purchase securities on margin or sell securities short;
Lend money;
Borrow money except for temporary or emergency purposes and not for investment
purposes and then only from banks in an amount not exceeding at the time of
borrowing 10% of the fund's net assets, nor pledge or hypothecate more than 10%
of its net assets and then only to secure such borrowing, provided that the
fund may not purchase portfolio securities during any period when loans
amounting to 5% or more of the fund's net assets are outstanding; and
Purchase any securities which would cause 25% or more of the value of its
total assets at the time of such purchase to be invested in the securities of
one or more issuers having their principal business activities in the same
industry. The Board of Directors, acting upon the recommendations of the
Advisory Board, may from time to time establish lower limitations on the amount
of investment in specific industries.
It is the declared policy of the fund to maintain a fully invested position
with cash equivalents not to exceed 5% of net assets after allowing for sales
of portfolio securities and fund shares within thirty days and the accumulation
of cash balances representing undistributed net investment income and realized
capital gains.
Notwithstanding the restriction on investing in the securities of other
investment companies, the fund may invest in securities of other investment
companies if deemed advisable by its officers in connection with the
administration of a deferred compensation plan adopted by Directors as
permitted by the Securities and Exchange Commission.
The fund does not act as an underwriter of securities issued by others, except
to the extent that the disposal of an investment position may technically
constitute the fund an underwriter as the term is defined in the Securities Act
of 1933.
FUND ORGANIZATION
The fund, an open-end, diversified management investment company, was organized
as a Delaware corporation in 1952 and reincorporated as a Maryland corporation
in 1990. All fund operations are supervised by the fund's Board of Directors
which meets periodically and performs duties required by applicable state and
federal laws. 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.
SHAREHOLDER VOTING RIGHTS
The fund does not hold annual meetings of its shareholders. However,
significant corporate matters which require shareholder approval, such as
certain elections of Board members or a change in a fundamental investment
policy, will be presented to shareholders at a meeting called for such purpose.
Shareholders have one vote per share owned. 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.
FUND DIRECTORS, ADVISORY BOARD MEMBERS AND OFFICERS
(WITH THEIR PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS)#
DIRECTOR AND ADVISORY BOARD COMPENSATION
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH PRINCIPAL OCCUPATION(S) AGGREGATE COMPENSATION TOTAL COMPENSATION TOTAL
NUMBER
REGISTRANT DURING PAST 5 YEARS# (INCLUDING VOLUNTARILY DEFERRED FROM ALL FUNDS OF
FUND
COMPENSATION/1/) FROM FUND AFFILIATED WITH THE BOARDS ON
DURING FISCAL YEAR ENDED AMERICAN FUNDS WHICH
4/30/99 GROUP INDIVIDUAL
SERVES/2/
<S> <C> <C> <C> <C> <C>
Charles T. Akre Director Emeritus Miller & Chevalier, $18,200 $18,200 1
700 John Ringling Blvd. Chartered,
Apt. 1108 Of Counsel
Sarasota, FL 34236
Age: 89
Cyrus A. Ansary Director Investment Services $50,700 $53,950 3
1725 K Street, N.W., Suite 410 International Co. LLC,
Washington, D.C. 20006 President
Age: 65
Nathan A. Baily Director Emeritus Management, Marketing, $17,700 $17,700 1
5516 Greystone Street Education Consultant
Chevy Chase, MD 20815
Age: 78
John A. Beck{ Director Emeritus Washington Management none/4/ none/4/ 1
Age: 73 Corporation, Counsel
Fred J. Brinkman*{ Director Washington Management none/4/ none/4/ 1
Age: 70 Corporation, Senior
Financial Consultant
Charles A. Bowsher Advisory Board Retired Comptroller $6,200 $6,200 1
4503 Boxwood Road Member General of
Bethesda, MD 20816 The United States
Age: 68
Mary K. Bush Advisory Board Bush & Company, $6,200 $6,200 1
4201 Cathedral Ave., N.W. Member President
Number 1016 East
Washington, D.C. 20016
Age: 51
Daniel J. Callahan III Director The Morris & Gwendolyn $48,100 $48,100 1
1825 K Street, N.W. Cafritz Foundation,
Washington, D.C. 20006 Vice Chairman &
Age: 67 Treasurer
Stephen Hartwell*{ Chairman of the Board Washington Management none/4/ none/4/ 3
Age: 84 Corporation, Chairman of
the Board
Vernon W. Holleman, Jr. Advisory Board Vernon W. Holleman, Jr. $5,200/3/ $5,200 1
5550 Friendship Drive Member Company, President
Suite 360
Chevy Chase, MD 20815
Age: 63
James H. Lemon, Jr.*{ Vice Chairman of the The Johnston-Lemon none/4/ none/4/ 3
Age: 63 Board Group, Incorporated,
Chairman of the Board
and
Chief Executive Officer
Harry J. Lister*{ President Washington Management none/4/ none/4/ 3
Age: 63 Corporation, President
and Director
James C. Miller III Director Citizens for a Sound $50,400 $50,400 1
1250 H Street, N.W., Suite 700 Economy, Counselor
Washington, D.C. 20005
Age: 56
Bernard J. Nees Chairman Emeritus of Washington Management none/4/ none/4/ 1
1101 Vermont Avenue, N.W. the Board Corporation,
Washington, D.C. 20005 Former Chairman
Age: 91
Katherine D. Ortega Advisory Board Former Treasurer of the $6,200/3/ $6,200 1
800 25th Street, NW Member United States
Suite 1003
Washington, D.C. 20038
Age: 65
Mr. John Knox Singleton Advisory Board President, INOVA $6,200/3/ $6,200 1
8110 Gatehouse Road Member Health System
Falls Church, VA 22042
Age: 50
Jean Head Sisco Director Emeritus Sisco Associates, $19,600 $22,950 3
2517 Massachusetts Avenue, N.W. Management Consulting
Washington, D.C. 20008 Firm, Partner
Age: 73
T. Eugene Smith Director T. Eugene Smith, Inc., $51,600 $55,050 3
666 Tintagel Lane President
McLean, VA 22101
Age: 68
William B. Snyder Advisory Board Merastar Partners $5,200 $5,200 1
6900 Wisconsin Avenue, Suite 304 Member Limited Partnership,
Bethesda, MD 20815 General Partner
Age: 69
Leonard P. Steuart II Director Steuart Investment $49,400/3/ $49,400 1
5454 Wisconsin Avenue Company, Vice President
Suite 1600
Chevy Chase, MD 20815
Age: 64
Robert F. Tardio Advisory Board Senior Managing Director, $4,200 $4,200 1
1054 Thirty-first Street, NW Member GKMG Consulting
Washington, DC 20007 Services, Inc.
Age:70
Margita E. White Director Association for Maximum $48,700 $48,700 1
1776 Massachusetts Avenue, N.W. Service Television Inc.,
Suite 310 President
Washington, D.C. 20036
Age: 61
Stephen G. Yeonas Director Emeritus Stephen G. Yeonas $19,600/3/ $23,050 3
6867 Elm Street, Suite 210 Company, Chairman of
McLean, VA 22101 the Board and Chief
Age: 74 Executive Officer
</TABLE>
# Positions within the organizations listed may have changed during this
period.
* Directors who are considered "interested persons" as defined in the 1940 Act,
on the basis of their affiliation with the fund's Business Manager, Washington
Management Corporation.
{ Address is 1101 Vermont Avenue, N.W., Washington, D.C. 20005.
/1/Amounts may be deferred by eligible Directors and Advisory Board members
under a non-qualified deferred compensation plan adopted by the fund in 1994.
Deferred amounts accumulate at an earnings rate determined by the total return
of one or more funds in The American Funds Group as designated by the Director
or Advisory Board member.
/2/In each instance where a Director of the fund serves on other funds
affiliated with The American Funds Group, such service is as a trustee of The
Tax-Exempt Fund of Maryland and The Tax-Exempt Fund of Virginia, both
portfolios of The American Funds Tax-Exempt Series I. Earnings from these
funds reflect the latest fiscal year (8/1/97 -- 7/31/98).
/3/Since the plan's adoption, the total amount of deferred compensation accrued
by the fund (plus earnings thereon) through 3/31/99, the latest calendar
quarter, for participants is as follows: Director Leonard P. Steuart II
($121,476), Director Emeritus Stephen G. Yeonas ($328,371), and Advisory Board
members Katherine Ortega ($15,000), Vernon W. Holleman, Jr. ($39,180) and J.
Knox Singleton ($12,946) Amounts deferred and accumulated earnings thereon are
not funded and are general unsecured liabilities of the fund until paid to the
participant.
/4/John A. Beck, Fred J. Brinkman, Stephen Hartwell, James H. Lemon, Jr., Harry
J. Lister and Bernard J. Nees are affiliated with the Business Manager and,
accordingly, receive no remuneration from the fund.//
OTHER OFFICERS
(WITH THEIR PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS)#
1101 VERMONT AVENUE, N.W., WASHINGTON, D.C. 20005
HOWARD L. KITZMILLER (Age: 69)
Senior Vice President, Secretary
and Assistant Treasurer
Washington Management Corporation,
Senior Vice President, Secretary,
Assistant Treasurer and Director
RALPH S. RICHARD (Age: 80)
Vice President and Treasurer
Washington Management Corporation,
Vice President, Treasurer and Director
LOIS A. ERHARD (Age: 47)
Vice President
Washington Management Corporation,
Vice President
MICHAEL W. STOCKTON (Age: 32)
Assistant Vice President, Assistant Secretary and Assistant Treasurer
Washington Management Corporation,
Assistant Vice President, Assistant Secretary and Assistant Treasurer
J. LANIER FRANK (Age: 38)
Assistant Vice President
Washington Management Corporation,
Assistant Vice President
# Positions within the organizations listed may have changed during this
period.
All of the officers listed are officers of the Business Manager. Most of the
Directors and officers are also officers and/or directors/trustees of one or
more of the other funds for which Washington Management Corporation serves as
Business Manager. All unaffiliated Directors receive from the fund a fee of
$40,000 per annum and an attendance fee of $2,000 for each board meeting
attended. The chairman of a committee receives an attendance fee of $1,500 and
committee members receive $1,000 for each committee meeting attended. No
Director compensation is paid by the fund to any officer or Director who is a
director, officer or employee of the Business Manager, the Investment Adviser
or affiliated companies. Directors Emeritus receive from the fund a fee of
$20,000 per annum plus $500 per Board meeting attended.
The Board of Directors has established an Advisory Board whose members are, in
the judgment of the Directors, highly knowledgeable about political and
economic matters. In addition to holding meetings with the Board of Directors,
members of the Advisory Board, while not participating in specific investment
decisions, consult from time to time with the Investment Adviser, primarily
with respect to trade and business conditions. Members of the Advisory Board,
however, possess no authority or responsibility with respect to the fund's
investments or management. Members of the Advisory Board receive a fee of
$5,000 per annum plus $1,000 per meeting attended.
Directors and Advisory Board Members, but not Directors Emeritus, may elect, on
a voluntary basis, to defer all or a portion of these fees through a deferred
compensation plan in effect for the fund. The fund also reimburses certain
meeting-related expenses of the Directors, Directors Emeritus and Advisory
Board members. For deferred compensation, see footnote 3 at page 8. As of May
31, 1999 the Directors, Officers and Advisory Board members, as a group, owned
beneficially or of record less than 1% of the outstanding shares.
MANAGEMENT
BUSINESS MANAGER - Since its inception, the fund has operated under a Business
Management Agreement with Washington Management Corporation or its
predecessors, 1101 Vermont Avenue, N.W., Washington, D.C. 20005.
The primary function of the Business Manager is to oversee the various services
and operations of the fund. The Business Manager provides services necessary
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
record keeping facilities. The Business Manager provides similar services to
other mutual funds.
The fund pays all expenses not specifically assumed by the Business Manager,
including, but not limited to, custodian, transfer and dividend disbursing
agency fees and expenses; costs of the designing, printing, and mailing of
reports, prospectuses, proxy statements, and notices to its shareholders;
expenses of shareholders' meetings; taxes; insurance; expenses of the issuance,
sale (including stock certificates, registration and qualification expenses),
or repurchase of shares of the fund; legal and auditing expenses; expenses
pursuant to the fund's Plan of Distribution; fees and expense reimbursements
paid to Directors and Advisory Board members; association dues; and costs of
stationery and forms prepared exclusively for the fund.
The Business Manager has agreed to pay to the fund annually, immediately after
the fiscal year end, the amount by which the total expenses of the fund for any
particular fiscal year exceed an amount equal to 1% of the average net assets
of the fund for the year. No such reimbursement was necessary in fiscal 1999.
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 nets assets in
excess of $12 billion but not exceeding $21 billion, 0.075% of net assets in
excess of $21 billion but not exceeding $34 billion, 0.06% of net assets in
excess of $34 billion but not exceeding $55 billion and 0.05% of net assets in
excess of $55 billion. During the fiscal years ended April 30, 1999, 1998 and
1997, the Business Manager's fees amounted to $44,286,000, $36,895,000 and
$28,014,000, respectively.
The current Business Management Agreement, unless sooner terminated, will
continue in effect until August 31, 1999 and may be renewed from year to year
thereafter, provided that any such renewal has been specifically approved at
least annually by (i) the Board of Directors , or by the vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities of the fund, and
(ii) the vote of a majority of directors who are not parties to the Agreement
or interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval. The
Agreement provides that the Business Manager has no liability to the fund for
its acts or omissions in the performance of its obligations to the fund not
involving willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations under the Agreement. The Agreement also provides
that either party has the right to terminate it, without penalty, upon sixty
(60) days' written notice to the other party and that the Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).
The Business Manager has established a charitable foundation, The Washington
Management Corporation Foundation, which makes contributions to charities
organized under Section 501(c)(3) or 509(a)(2) of the Internal Revenue Code.
Directors, Directors Emeriti, Advisory Board members and officers of the fund,
as well as all employees of the Business Manager and its affiliates, may
participate in a gift matching program sponsored by the Foundation.
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains
research facilities in the U.S. and abroad (Los Angeles, San Francisco, New
York, Washington, D.C., London, Geneva, Singapore, Hong Kong and Tokyo), with a
staff of professionals, many of whom have a number of years of investment
experience. The Investment Adviser is located at 333 South Hope Street, Los
Angeles, CA 90071, and at 135 South State College Boulevard, Brea, CA 92821.
The Investment Adviser's professionals travel several million miles a year,
making more than 5,000 research visits in more than 50 countries around the
world. The Investment Adviser believes that it is able to attract and retain
quality personnel. The Investment Adviser is a wholly owned subsidiary of The
Capital Group Companies, Inc.
An affiliate of the Investment Adviser compiles indices for major stock markets
around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The Investment Adviser is responsible for more than $200 billion of stocks,
bonds and money market instruments and serves over eight million investors of
all types throughout the world. These investors include privately owned
businesses and large corporations, as well as schools, colleges, foundations
and other non-profit and tax-exempt organizations.
The Investment Adviser manages the investment portfolio of the fund subject to
the policies established by the Board of Directors and places orders for the
fund's portfolio securities transactions. The Investment Adviser 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, 0.195% of net assets in excess of $21 billion but
not exceeding $34 billion, 0.19% of net assets in excess of $34 billion but
not exceeding $55 billion and 0.185% in excess of $55 billion. During the
fiscal years ended April 30, 1999, 1998 and 1997, the Investment Adviser's fees
amounted to $96,791,000, $73,646,000 and $49,383,000, respectively.
The Investment Advisory Agreement, unless sooner terminated, will continue in
effect until August 31, 1999 and may be renewed from year to year thereafter,
provided that any such renewal has been specifically approved at least annually
by (i) the Board of Directors, or by the vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of the fund, and (ii) the vote
of a majority of directors who are not parties to the Agreement or interested
persons (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval. The Agreement
provides that the Investment Adviser has no liability to the fund for its acts
or omissions in the performance of its obligations to the fund not involving
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations under the Agreement. The Agreement also provides that either party
has the right to terminate it, without penalty, upon sixty (60) days' written
notice to the other party and that the Agreement automatically terminates in
the event of its assignment (as defined in the 1940 Act).
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the Principal
Underwriter) is the principal underwriter of the fund's shares. The Principal
Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92821, 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240
and 5300 Robin Hood Road, Norfolk, VA 23513. The fund has adopted a Plan of
Distribution (the Plan), pursuant to rule 12b-1 under the 1940 Act (see
"Principal Underwriter" in the prospectus). The Principal Underwriter receives
amounts payable pursuant to the Plan (described below) and commissions
consisting of that portion of the sales charge remaining after the discounts
which it allows to investment dealers. Commissions retained by the Principal
Underwriter on sales of fund shares during the fiscal year ended April 30, 1999
amounted to $42,516,000 after allowance of $218,501,000 to dealers including
$1,046,000 earned by Johnston, Lemon & Co. Incorporated on its retail sales of
shares and the Distribution Plan of the fund. During the fiscal years ended
April 30, 1998 and 1997, the Principal Underwriter retained $38,821,000 and
$22,625,000, respectively.
As required by rule 12b-1, the Plan (together with the Principal Underwriting
Agreement) has been approved by the full Board of Directors and separately by a
majority of the Directors who are not "interested persons" of the fund and who
have no direct or indirect financial interest in the operation of the Plan or
the Principal Underwriting Agreement, and the Plan has been approved by the
vote of a majority of the outstanding voting securities of the fund. The
officers and Directors who are "interested persons" of the fund may be
considered to have a direct or indirect financial interest in the operation of
the Plan. Potential benefits of the Plan to the fund include improved
shareholder services, savings to the fund in transfer agency costs, savings to
the fund in advisory fees and other expenses, benefits to the investment
process from growth or stability of assets and maintenance of a financially
healthy management organization. The selection and nomination of directors who
are not "interested persons" of the fund are committed to the discretion of the
directors who are not "interested persons" during the existence of the Plan.
Expenses under the Plan are reviewed quarterly and the Plan must be considered
for renewal annually by the Board of Directors.
Under the Plan the fund may expend up to 0.25% of its average net assets
annually to finance any activity primarily intended to result in the sale of
fund shares, provided the fund's Board of Directors has approved the category
of expenses for which payment is being made. The following categories of
expenses have been approved: service fees for qualified dealers; dealer
commissions and wholesaler compensation on no-load sales of shares (including
sales exceeding $1 million (including purchases by any employer-sponsored
403(b) plan, any defined contribution plan qualified under Section 401(a) of
the Internal Revenue Code including a 401(k) plan with 100 or more eligible
employees or a community foundation).
Commissions on sales of shares exceeding $1 million (including purchases by any
employer-sponsored 403(b) plan or purchases by any defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code, including any
"401(k)" plan with 100 or more eligible employees) in excess of the Plan
limitation not reimbursed during the most recent fiscal quarter are recoverable
for five quarters, provided that such commissions do not exceed the annual
expense limit. After five quarters, commissions are not recoverable. During
the fiscal year ended April 30, 1999, the fund paid or accrued $110,672,000
under the Plan, for compensation to dealers. As of April 30, 1999,
distribution expenses accrued and unpaid amounted to $20,594,000.
The Glass-Steagal Act and other applicable laws, among other things, generally
prohibit commercial banks from engaging in the business of underwriting,
selling or distributing securities, but permit banks to make shares of mutual
funds available to their customers and to perform administrative and
shareholder servicing functions. However, judicial or administrative
decisions or interpretations of such laws, as well as changes in either federal
or state statutes or regulations relating to the permissible activities of
banks or their subsidiaries or affiliates, could prevent a bank from continuing
to perform all or a part of its servicing activities. If a bank were
prohibited from so acting, shareholder clients of such bank would be permitted
to remain shareholders of the fund and alternate means of servicing such
shareholders would be sought. In such event, changes in the operation of the
fund might occur and shareholders serviced by such bank might no longer be able
to avail themselves of any automatic investment or other services then being
provided by such bank. It is not expected that shareholders would suffer
adverse financial consequences as a result of any of these occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and certain banks and financial
institutions may be required to be registered as dealers pursuant to state law.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
DIVIDENDS - The fund intends to follow the practice of distributing
substantially all of its investment company taxable income which includes any
excess of net realized short-term gains over net realized long-term capital
losses. The fund may follow the practice of distributing the entire excess of
net realized long-term capital gains over net realized short-term capital
losses. However, the fund may retain all or part of such gain for
reinvestment, after paying the related federal taxes for which shareholders may
then be able to claim a credit against their federal tax liability. If the
fund does not distribute the amount of capital gain and/or net investment
income required to be distributed by an excise tax provision of the Code, the
fund may be subject to that excise tax. In certain circumstances, the fund may
determine that it is in the interest of shareholders to distribute less than
the required amount. In this case, the fund will pay any income or excise
taxes due.
The fund intends to distribute each year its investment company taxable income,
including any net short-term capital gains in excess of net long-term capital
losses, and any net capital gains realized during each fiscal year. Additional
distributions may be made, if necessary.
Dividends will be reinvested in shares of the fund unless shareholders indicate
in writing that they wish to receive them in cash or in shares of other
American Funds, as provided in the prospectus.
TAXES --The fund intends to elect to be treated as a regulated investment
company under Subchapter M of the Code. A regulated investment company
qualifying under Subchapter M of the Code is required to distribute to its
shareholders at least 90% of its investment company taxable income (including
the excess of net short-term capital gain over net long-term capital losses)
and generally is not subject to federal income tax to the extent that it
distributes annually its investment company taxable income and net realized
capital gains in the manner required under the Code. The fund intends to
distribute annually all of its investment company taxable income and net
realized capital gains and therefore does not expect to pay federal income tax,
although in certain circumstances the fund may determine that it is in the
interest of shareholders to distribute less than that amount.
T
he fund will be subject to a 4% nondeductible excise tax on amounts required to
be but not distributed under a prescribed formula. The formula requires the
fund to distribute to shareholders for a calendar year an amount equal to at
least 98% of the fund's ordinary income for that calendar year, at least 98% of
the excess of its capital gains over capital losses realized during the
one-year period ending October 31 during such year, and all ordinary income and
capital gains for prior years that were not previously distributed.
Investment company taxable income generally includes dividends, interest and
net short-term capital gains in excess of net long-term capital losses. Net
capital gains for a fiscal year are computed by taking into account any capital
loss carryforward of the fund.
If any net long-term capital gains in excess of net short-term capital losses
are retained by a fund for reinvestment, requiring federal income taxes to be
paid thereon by the fund, the fund intends to elect to treat such capital gains
as having been distributed to shareholders. As a result, each shareholder will
report such capital gains as long-term capital gains taxable to individual
shareholders at a maximum 20% capital gains rate, will be able to claim a pro
rata share of federal income taxes paid by the fund on such gains as a credit
against personal federal income tax liability, and will be entitled to
increase the adjusted tax basis on fund shares by the difference between a pro
rata share of the retained gains less the related tax paid by the fund.
Distributions of investment company taxable income are taxable to shareholders
as ordinary income.
Distributions of the excess of net long-term capital gains over net short-term
capital losses which the fund properly designates as "capital gain
distributions" generally will be taxable to individual shareholders at a
maximum 20% capital gains rate, regardless of the length of time the shares of
the fund have been held by such shareholders. Such distributions are not
eligible for the dividends-received deduction. Any loss realized upon the
redemption of shares held at the time of redemption for six months or less from
the date of their purchase will be treated as a long-term capital loss to the
extent of any amounts treated as distributions of long-term capital gain during
such six-month period.
Distributions of investment company taxable income and net realized capital
gains to individual shareholders will be taxable as described above, whether
received in shares or in cash. Shareholders electing to receive distributions
in the form of additional shares will have a cost basis for federal income tax
purposes in each share so received equal to the net asset value of a share on
the reinvestment date.
All distributions of investment company taxable income and net realized capital
gain, whether received in shares or in cash, must be reported by each
shareholder subject to tax on his or her federal income tax return. Dividends
and capital gains distributions declared in October, November or December and
payable to shareholders of record in such a month will be deemed to have been
received by shareholders on December 31 if paid during January of the following
year. Redemptions of shares, including exchanges for shares of another
American Fund, may result in tax consequences (gain or loss) to the shareholder
and must also be reported on the shareholder's federal income tax return.
Dividends from domestic corporations are expected to comprise some portion of
the fund's gross income. To the extent that such dividends constitute any of
the fund's gross income, a portion of the income distributions of the fund will
be eligible for the deduction for dividends received by corporations.
Shareholders will be informed of the portion of dividends which so qualify.
The dividends-received deduction is reduced to the extent that either the fund
shares, or the underlying shares of stock held by the fund, with respect to
which dividends are received, are treated as debt-financed under federal income
tax law and is eliminated if the shares are deemed to have been held by the
shareholder or the fund, as the case may be, for less than 46 days during the
90 day holding period beginning 45 days before the ex-dividend date.
Distributions by the fund result in a reduction in the net asset value of the
fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to
the shareholder as ordinary income or capital gain as described above, even
though, from an investment standpoint, it may constitute a partial return of
investment capital. For this reason, investors should consider the tax
implications of buying shares just prior to a distribution. The price of
shares purchased at that time includes the amount of the forthcoming
distribution. Those purchasing just prior to a distribution will then receive
a partial return of investment capital upon the distribution, which will
nevertheless be taxable to them.
The fund will be required to report to the IRS all distributions of investment
company taxable income and capital gains as well as gross proceeds from the
redemption or exchange of fund shares, except in the case of certain exempt
shareholders. Under the backup withholding provisions of Section 3406 of the
Code, distributions of investment company taxable income and capital gains and
proceeds from the redemption or exchange of the shares of a regulated
investment company may be subject to withholding of federal income tax at the
rate of 31% in the case of non-exempt U.S. shareholders who fail to furnish the
investment company with their taxpayer identification numbers and with required
certifications regarding their status under the federal income tax law.
Withholding may also be required if the fund is notified by the IRS or a broker
that the taxpayer identification number furnished by the shareholder is
incorrect or that the shareholder has previously failed to report interest or
dividend income. If the withholding provisions are applicable, any such
distributions and proceeds, whether taken in cash or reinvested in additional
shares, will be reduced by the amounts required to be withheld.
Shareholders of the fund may be subject to state and local taxes on
distributions received from the fund and on redemptions of the fund's shares.
Each distribution is accompanied by a brief explanation of the form and
character of the distribution. In January of each year fund shareholders will
receive a statement of the federal income tax status of all distributions.
The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. persons, I.E., U.S. citizens and residents and
U.S. corporations, partnerships, trusts and estates. Each shareholder who is
not a U.S. person should consider the U.S. and foreign tax consequences of
ownership of shares of the fund, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30% (or at a
lower rate under an applicable income tax treaty) on dividend income received
by him or her.
Shareholders should consult their tax advisers about the application of the
provisions of tax law described in this statement of additional information in
light of their particular tax situations.
PURCHASE OF SHARES
<TABLE>
<CAPTION>
<S> <C> <C>
METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
See "Investment Minimums and $50 minimum (except where a lower
Fund Numbers" for initial minimum is noted under "Investment
investment minimums. Minimums and Fund Numbers").
By contacting Visit any investment dealer who is Mail directly to your investment dealer's address
your investment registered in the state where the printed on your account statement.
dealer purchase is made and who has a
sales agreement with American
Funds Distributors.
By mail Make your check payable to the fund and mail to the address indicated on the account application. Please indicate
an investment dealer on the account application. Fill out the account additions form at the
bottom of a recent account statement, make your check payable to the fund, write your
account number on your check, and mail the check and form in the envelope provided with your account statement.
By telephone Please contact your investment dealer to open account, then follow the procedures for additional investments.
Complete the "Investments by Phone"
section on the account application or
American FundsLink Authorization Form.
Once you establish the privilege, you, your financial advisor or any person with your
account information can call American FundsLineR and make investments by telephone (subject to conditions noted in "Shareholder
Account Services and Privileges -
Telephone and
Computer Purchase, Redemptions and
Exchanges" below).
By computer Please contact your investment Complete the American FundsLink
dealer to open account, then follow Authorization Form. Once you've established
the procedures for additional the privilege, you, your financial adviser
investments. or any person with your account information
may access American FundsLine OnLine/SM/ on
the Internet and make investments by computer
(subject to conditions noted in "Telephone and
Computer Purchases, Redemptions and
Exchanges" below).
By wire Call 800/421-0180 to obtain Your bank should wire your additional
your account number(s), if investments in the same manner as
necessary. Please indicate an described under "Initial Investment."
investment dealer on the
account. Instruct your bank to
wire funds to:
Wells Fargo Bank
155 Fifth Street
Sixth Floor
San Francisco, CA 94106
(ABA #121000248)
For credit to the account of:
American Funds Service
Company
a/c #4600-076178
(fund name)
(your fund acct. no.)
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER.
</TABLE>
INVESTMENT MINIMUMS AND FUND NUMBERS - Here are the minimum initial investments
required by the funds in The American Funds Group along with fund numbers for
use with our automated phone line, American FundsLineR (see description below):
<TABLE>
<CAPTION>
<S> <C> <C>
FUND MINIMUM FUND
INITIAL NUMBER
INVESTMENT
STOCK AND STOCK/BOND FUNDS
AMCAP FundR 02
$1,000
American Balanced FundR 11
500
American Mutual FundR 03
250
Capital Income BuilderR 12
1,000
Capital World Growth and Income Fund/SM/ 33
1,000
EuroPacific Growth FundR 16
250
Fundamental Investors/SM/ 10
250
The Growth Fund of AmericaR 05
1,000
The Income Fund of AmericaR 06
1,000
The Investment Company of AmericaR 04
250
The New Economy FundR 14
1,000
New Perspective FundR 07
250
New World Fund/SM/* 36
1,000
SMALLCAP World FundR 35
1,000
Washington Mutual Investors Fund/SM/ 01
250
BOND FUNDS
American High-Income Municipal Bond FundR 40
1,000
American High-Income Trust/SM/ 21
1,000
The Bond Fund of America/SM/ 08
1,000
Capital World Bond FundR 31
1,000
Intermediate Bond Fund of America/sm/ 23
1,000
Limited Term Tax-Exempt Bond Fund of America/SM/ 43
1,000
The Tax-Exempt Bond Fund of AmericaR 19
1,000
The Tax-Exempt Fund of CaliforniaR** 20
1,000
The Tax-Exempt Fund of MarylandR** 24
1,000
The Tax-Exempt Fund of VirginiaR** 25
1,000
U.S. Government Securities Fund/sm/ 22
1,000
MONEY MARKET FUNDS
The Cash Management Trust of AmericaR 09
2,500
The Tax-Exempt Money Fund of America/sm/ 39
2,500
The U.S. Treasury Money Fund of America/sm/ 49
2,500
___________
*Available after fund reopens on September 15, 1999.
**Available only in certain states.
</TABLE>
For retirement plan investments, the minimum is $250, except that the money
market funds have a minimum of $1,000 for 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. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS RETIREMENT PLAN INVESTMENTS.
The minimum is $50 for additional investments (except as noted above).
SALES CHARGES - The sales charges you pay when purchasing the stock,
stock/bond, and bond funds of The American Funds Group are set forth below.
The money market funds of The American Funds Group are offered at net asset
value. (See "Investment Minimums and Fund Numbers" for a listing of the
funds.)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNT OF PURCHASE SALES CHARGE AS DEALER
AT THE OFFERING PRICE PERCENTAGE OF THE: CONCESSION
AS PERCENTAGE
OF THE
OFFERING
PRICE
NET AMOUNT OFFERING
INVESTED PRICE
STOCK AND STOCK/BOND FUNDS
Less than $50,000
6.10% 5.75% 5.00%
$50,000 but less than $100,000
4.71 4.50 3.75
BOND FUNDS
Less than $25,000
4.99 4.75 4.00
$25,000 but less than $50,000
4.71 4.50 3.75
$50,000 but less than $100,000
4.17 4.00 3.25
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000
3.63 3.50 2.75
$250,000 but less than $500,000
2.56 2.50 2.00
$500,000 but less than $1,000,000
2.04 2.00 1.60
$1,000,000 or more (see below)
none none PURCHASES NOT SUBJECT TO SALES CHARGES -- Investment of $1
million or more and investments made by
employer-sponsored defined contribution-type plans with 100 or
more eligible employees are sold with no
initial sales charge. A contingent deferred sales charge may be
imposed on certain redemptions by these
accounts made within one year of purchases. Investments by
retirement plans, foundations or endowments
with $50 million or more in assets, and employer-sponsored
defined contribution-type plans with 100 or more
eligible employees made with no sales charge are not subject to a
contingent deferred sales charge.
</TABLE>
In addition, the stock, stock/bond and bond funds may sell shares at net asset
value to:
(1) current or retired directors, trustees, officers and advisory board members
of the funds managed by Capital Research and Management Company, employees of
Washington Management Corporation, employees and partners of The Capital Group
Companies, Inc. and its affiliated companies, certain family members of the
above persons, and trusts or plans primarily for such persons;
(2) current registered representatives, retired registered representatives with
respect to accounts established while active, or full-time employees (and their
spouses, parents, and children) of dealers who have sales agreements with
American Funds Distributors (or who clear transactions through such dealers)
and plans for such persons or the dealers;
(3) companies exchanging securities with the fund through a merger, acquisition
or exchange offer;
(4) trustees or other fiduciaries purchasing shares for certain retirement
plans of organizations with retirement plan assets of $50 million or more;
(5) insurance company separate accounts;
(6) accounts managed by subsidiaries of The Capital Group Companies, Inc.; and
(7) The Capital Group Companies, Inc., its affiliated companies and Washington
Management Corporation.
Shares are offered at net asset value to these persons and organizations due to
anticipated economies in sales effort and expense.
DEALER COMMISSIONS -- 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 purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revue Code including a
"401(k)" plan with 100 or more eligible employees, and for purchases made at
net asset value by certain retirement plans of organizations with collective
retirement plan assets of $50 million or more: 1.00% on amounts of $1 million
to $4 million, 0.50% on amounts over $4 million to $10 million, and 0.25% on
amounts over $10 million. For certain tax-exempt accounts open prior to
September 1, 1969, sales charges and dealer commissions, as a percent of
offering price, are respectively 3% and 2.5% (under $50,000); 2.5% and 2.0%
($50,000 but less than $100,000); 2.0% and 1.5% ($100,000 but less than
$250,000) and 1.5% and 1.25% ($250,000 but less than $1 million).
OTHER COMPENSATION TO DEALERS -- American Funds Distributors, at its expense
(from a designated percentage of its income), currently provides additional
compensation to dealers. Currently these payments are limited to the top 100
dealers who have sold shares of the fund or other funds in The American Funds
Group. These payments will be based principally 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 (0.15% in the case of the money market funds)
annually in order to promote selling efforts and to compensate them for
providing certain services. These services include processing purchase and
redemption transactions, establishing shareholder accounts and providing
certain information and assistance with respect to the fund.
STATEMENT OF INTENTION - You may enter into a non-binding commitment to
purchase shares of a fund(s) over a 13-month period and receive the same sales
charge as if all shares had been purchased at once. This includes purchases
made during the previous 90 days, but does not include appreciation of your
investment or reinvested distributions. The reduced sales charges and offering
prices set forth in the Prospectus apply to purchases of $50,000 or more made
within a 13-month period subject to a statement of intention (the "Statement").
The Statement is not a binding obligation to purchase the indicated amount.
When a shareholder elects to utilize a Statement in order to qualify for a
reduced sales charge, shares equal to 5% of the dollar amount specified in the
Statement will be held in escrow in the shareholder's account out of the
initial purchase (or subsequent purchases, if necessary) by the Transfer Agent.
All dividends and any capital gain distributions on shares held in escrow will
be credited to the shareholder's account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified
13-month period, the purchaser will remit to the Principal Underwriter the
difference between the sales charge actually paid and the sales charge which
would have been paid if the total of such purchases had been made at a single
time. If the difference is not paid within 45 days after written request by
the Principal Underwriter or the securities dealer, the appropriate number of
shares held in escrow will be redeemed to pay such difference. If the proceeds
from this redemption are inadequate, the purchaser will be liable to the
Principal Underwriter for the balance still outstanding. The Statement may be
revised upward at any time during the 13-month period, and such a revision will
be treated as a new Statement, except that the 13-month period during which the
purchase must be made will remain unchanged and there will be no retroactive
reduction of the sales charges paid on prior purchases. Existing holdings
eligible for rights of accumulation (see the prospectus and account
application) may be credited toward satisfying the Statement. During the
Statement period reinvested dividends and capital gain distributions,
investments in money market funds, and investments made under a right of
reinstatement will not be credited toward satisfying the Statement.
When the trustees of certain retirement plans by payroll deduction, the sales
charge for the investments made during the 13-month period will be handled as
follows: The regular monthly payroll deduction investment will be multiplied
by 13 and then multiplied by 1.5. The current value of existing American Funds
investments (other than money market fund investments) and any rollovers or
transfers reasonably anticipated to be invested in non-money market American
Funds during the 13-month period are added to the figure determined above. The
sum is the Statement amount and applicable breakpoint level. On the first
investment and all other investments made pursuant to the Statement, a sales
charge will be assessed according to the sales charge breakpoint thus
determined. There will be no retroactive adjustments in sales charges on
investments previously made during the 13-month period.
Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms with their first purchase.
AGGREGATION - Sales charge discounts are available for certain aggregated
investments. Qualifying investments include those by you, your spouse and your
children under the age of 21, if all parties are purchasing shares for their
own account(s), which may include purchases through employee benefit plan(s)
such as an IRA, individual-type 403(b) plan or single-participant Keogh-type
plan or by a business solely controlled by these individuals (for example, the
individuals own the entire business) or by a trust (or other fiduciary
arrangement) solely for the benefit of these individuals. Individual purchases
by a trustee(s) or other fiduciary(ies) may also be aggregated if the
investments are (1) for a single trust estate or fiduciary account, including
an employee benefit plan other than those described above, or (2) made for two
or more employee benefit plans of a single employer or of affiliated employers
as defined in the Investment Company Act of 1940, again excluding employee
benefit plans described above, or (3) for a diversified common trust fund or
other diversified pooled account not specifically formed for the purpose of
accumulating fund shares. Purchases made for nominee or street name accounts
(securities held in the name of an investment dealer or another nominee such as
a bank trust department instead of the customer) may not be aggregated with
those made for other accounts and may not be aggregated with other nominee or
street name accounts unless otherwise qualified as described above.
CONCURRENT PURCHASES - You may combine purchases of two or more funds in The
American Funds Group, except direct purchases of the money market funds.
Shares of money market funds purchased through an exchange, reinvestment or
cross-reinvestment from a fund having a sales charge do qualify.
RIGHT OF ACCUMULATION - You may take into account the current value of your
existing holdings in The American Funds Group, as well as your holdings in
Endowments (shares of which may be owned only by tax-exempt organizations), to
determine your sales charge on investments in accounts eligible to be
aggregated, or when making a gift to an individual or charity. Direct
purchases of the money market funds are excluded.
PRICE OF SHARES - Shares are purchased at the offering price next determined
after the purchase order is received and accepted by the fund or American Funds
Service Company; this offering price is effective for orders received prior to
the time of determination of the net asset value and, in the case of orders
placed with dealers, accepted by the Principal Underwriter prior to its close
of business. In case of orders sent directly to the fund or the Transfer
Agent, an investment dealer MUST be indicated. The dealer is responsible for
promptly transmitting purchase orders to the Principal Underwriter. Orders
received by the investment dealer, the Transfer Agent, or the fund after the
time of the determination of the net asset value will be entered at the next
calculated offering price. Prices which appear in the newspaper are not always
indicative of prices at which you will be purchasing and redeeming shares of
the fund, since such prices generally reflect the previous day's closing price
whereas purchases and redemptions are made at the next calculated price.
The price you pay for shares, the offering price, is based on the net asset
value per share which is calculated once daily at 4:00 p.m., New York Time each
day the New York Stock Exchange is open. For example, if the Exchange closes
at 1:00 p.m. on one day and 4:00 p.m. on the next day, the fund's share price
would be determined as of 4:00 p.m. New York time on both days. The New York
Stock Exchange is currently closed on weekends and on the following holidays:
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. All
portfolio securities of funds advised by Capital Research and Management
Company (other than money market funds) are valued, and the net asset value per
share is determined as follows:
1. Equity securities, including depositary receipts, are valued at the
last reported sale price on the exchange or market on which such securities are
traded, as of the close of business on the day the securities are being valued
or, lacking any sales, at the last available bid price. In cases where equity
securities are traded on more than one exchange, the securities are valued on
the exchange or market determined by the Investment Adviser to be the broadest
and most representative market, which may be either a securities exchange or
the over-the-counter market. Fixed-income securities are valued at prices
obtained from a pricing service, when such prices are available; however, in
circumstances where the Investment Adviser deems it appropriate to do so, such
securities will be valued at the mean quoted bid and asked prices or at prices
for securities of comparable maturity, quality and type.
Securities with original maturities of one year or less having 60 days or
less to maturity are amortized to maturity based on their cost if acquired
within 60 days of maturity or, if already held on the 60th day, based on the
value determined on the 61st day. Forward currency contracts are valued at the
mean of representative quoted bid and asked prices.
Assets or liabilities initially expressed in terms of foreign currencies
are translated prior to the next determination of the net asset value of the
fund's shares into U.S. dollars at the prevailing market rates.
Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith under
policies approved by the fund's Board; The fair value of all other assets is
added to the value of securities to arrive at the total assets;
2. Liabilities, including accruals of taxes and other expense items, are
deducted from total assets; and
3. Net assets so obtained are then divided by the total number of shares
outstanding, and the result, rounded to the nearer cent, is the net asset value
per share.
Any purchase order may be rejected by the Principal Underwriter or by the fund.
The Principal Underwriter will not knowingly sell shares (other than for the
reinvestment of dividends or capital gain distributions) directly or indirectly
or through a unit investment trust to any other investment company, person or
entity, where, after the sale, such investment company, person, or entity would
own beneficially directly, indirectly, or through a unit investment trust more
than 3% of the outstanding shares of the fund without the consent of a majority
of the fund's Board of Directors.
SELLING SHARES
Shares are sold at the net asset value next determined after your request is
received in good order by American Funds Service Company. You may sell
(redeem) shares in your account in any of the following ways:
THROUGH YOUR DEALER (certain charges may apply)
- - Shares held for you in your dealer's street name must be sold through the
dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- - Requests must be signed by the registered shareholder(s)
- - A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
- -- Sent to an address other than the address of record, or an address of record
which has been changed within the last 10 days.
Your signature may be guaranteed by a domestic stock exchange or the National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution.
- - Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
- - You must include any shares you wish to sell that are in certificate form.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE OR AMERICAN FUNDSLINE ONLINE
- - Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day.
- - Checks must be made payable to the registered shareholder(s).
- - Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
MONEY MARKET FUNDS
- - You may have redemptions of $1,000 or more wired to your bank by writing
American Funds Service Company.
- - You may establish check writing privileges (use the money market funds
application)
- -- If you request check writing privileges, you will be provided with checks
that you may use to draw against your account. These checks may be made
payable to anyone you designate and must be signed by the authorized number or
registered shareholders exactly as indicated on your checking account signature
card.
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), sale proceeds will be
paid on or before the seventh day following receipt and acceptance of an order.
Interest will not accrue or be paid on amounts that represent uncashed
distribution or redemption checks.
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution without a sales charge (any contingent deferred sales charge paid
will be credited to your account) in any fund in The American Funds Group
within 90 days after the date of the redemption or distribution. Redemption
proceeds of shares representing direct purchases in the money market funds are
excluded. Proceeds will be reinvested at the next calculated net asset value
after your request is received and accepted by American Funds Service Company.
CONTINGENT DEFERRED SALES CHARGE - A contingent deferred sales charge of 1%
applies to certain redemptions made within twelve months of purchase on
investments of $1 million or more (other than redemptions by employer-sponsored
retirement plans). The charge is 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividends and capital gain distributions) or
the total cost of such shares. Shares held for the longest period are assumed
to be redeemed first for purposes of calculating this charge. The charge is
waived for exchanges (except if shares acquired by exchange were then redeemed
within 12 months of the initial purchase); for distributions from 403(b) plans
or IRAs due to death, disability or attainment of age 59$; for tax-free returns
of excess contributions to IRAs; and for redemptions through certain automatic
withdrawals not exceeding 10% of the amount that would otherwise be subject to
the charge.
REDEMPTION OF SHARES - The Transfer Agent may redeem the shares of any
shareholder if the shares owned by such shareholder through redemptions, market
decline or otherwise, have a value of less than the minimum initial investment
amount required of new shareholders, (determined, for this purpose only as the
greater of the shareholder's cost or current net asset value of the shares,
including any shares acquired through reinvestment of income dividends and
capital gains distributions). Prior notice of at least 60 days will be given
to a shareholder before the involuntary redemption provision is made effective
with respect to the shareholder's account . The shareholder will have not less
than 30 days from the date of such notice within which to bring the account up
to the minimum determined as set forth above.
The Fund's Articles of Incorporation permit the Fund to direct the Transfer
Agent to redeem the shares of any shareholder if the value of shares in the
account is less than the minimum initial investment amount set forth in the
Fund's current registration statement under the 1940 Act, subject to such
further terms and conditions as the Board of Directors may adopt. Prior notice
of at least 60 days will be given to a shareholder before the involuntary
redemption provision is made effective with respect to the shareholder's
account to provide the shareholder with an opportunity to bring the account up
to the minimum.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - The automatic investment plan enables shareholders
to make regular investments monthly or quarterly in shares through automatic
charges to their bank accounts. With shareholder authorization and bank
approval, the Transfer Agent will automatically charge the bank account for the
amount specified ($50 minimum) and the date on which you would like your
reinvestments to occur. The plan will begin within 30 days after your account
application is received. Your bank account will be debited on the day or a few
days before investments are credited, depending on the bank's capabilities.
Your bank account cannot be charged due to insufficient funds, a stop-payment
order or closing of the account, the plan may be terminated and the related
investment reversed. You may change the amount of the investment or
discontinue the plan at any time by writing to the Transfer Agent.
AUTOMATIC REINVESTMENT - Dividends and capital gain distributions are
reinvested in additional shares at no sales charge unless you indicate
otherwise on the account application. You also may elect to have dividends
and/or capital gain distributions paid in cash by informing the fund, American
Funds Service Company or your investment dealer.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -- You may cross-reinvest
dividends and capital gains ("distributions") into any other fund in The
American Funds Group at net asset value, subject to the following conditions:
(a) The aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the
fund receiving the distributions equals or exceeds that fund's minimum initial
investment requirement),
(b) If the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested,
(c) If you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distribution must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.
EXCHANGE PRIVILEGE - You may exchange shares into other funds in The American
Funds Group. Exchange purchases are subject to the minimum investment
requirements of the fund purchased and no sales charge generally applies.
However, exchanges of shares from the money market funds are subject to
applicable sales charges on the fund being purchased, unless the money market
fund shares were acquired by an exchange from a fund having a sales charge, or
by reinvestment or cross-reinvestment of dividends or capital gain
distributions.
You may exchange shares by writing to American Funds Service Company (see
"Selling Shares"), by contacting your investment dealer, by using American
FundsLine and American FundsLine OnLine (see "American FundsLine and American
FundsLine OnLine" below), or by telephoning 800/421-0180 toll-free, faxing (see
"Principal Underwriter and Transfer Agent" in the prospectus for the
appropriate fax numbers) or telegraphing American Funds Service Company. (See
"Telephone and Computer Purchases, Redemptions and Exchanges" below.) Shares
held in corporate-type retirement plans for which Capital Guardian Trust
Company serves as trustee may not be exchanged by telephone, computer, fax or
telegraph. Exchange redemptions and purchases are processed simultaneously at
the share prices next determined after the exchange order is received. (See
"Purchase of Shares--Price of Shares.") THESE TRANSACTIONS HAVE THE SAME TAX
CONSEQUENCES AS ORDINARY SALES AND PURCHASES.
AUTOMATIC EXCHANGES - You may automatically exchange shares (in amounts of $50
or more) among any of the funds in The American Funds Group on any day (or
preceding business day if the day falls on a non-business day) of each month
you designate. You must either (a) meet the minimum initial investment
requirement for the receiving fund OR (b) the originating fund's balance must
be at least $5,000 and the receiving fund's minimum must be met within one
year.
AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the Fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
ACCOUNT STATEMENTS - Your account is opened in accordance with your
registration instructions. Transactions in the account, such as additional
investments and dividend reinvestments, will be reflected on regular
confirmation statements from American Funds Service Company. Purchases through
automatic investment plans and certain retirement plans will be confirmed at
least quarterly.
AMERICAN FUNDSLINE AND AMERICAN FUNDSLINE ONLINE- You may check your share
balance, the price of your shares, or your most recent account transaction,
sell shares (up to $50,000 per shareholder, per day), or exchange shares around
the clock with American FundsLine and American FundsLine OnLine. To use this
service, call 800/325-3590 from a TouchTonet telephone or access the American
Funds Web site on the Internet at www.americanfunds.com. Redemptions and
exchanges through American FundsLineR and American FundsLine OnLine are subject
to the conditions noted above and in "Telephone and Computer Redemptions and
Exchanges" below. You will need your fund number (see the list of funds in The
American Funds Group under "Purchase of Shares--Investment Minimums and Fund
Numbers"), personal identification number (the last four digits of your Social
Security number or other tax identification number associated with your
account) and account number.
TELEPHONE AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES - By using the
telephone (including American FundsLine and American FundsLine OnLine), fax or
telegraph redemption and/or exchange options, you agree to hold the fund,
American Funds Service Company, any of its affiliates or mutual funds managed
by such affiliates, the Fund's Business Manager and each of their respective
directors, trustees, officers, employees and agents harmless from any losses,
expenses, costs or liability (including attorney fees) which may be incurred in
connection with the exercise of these privileges. Generally, all shareholders
are automatically eligible to use these options. However, you may elect to opt
out of these options by writing American Funds Service Company (you may also
reinstate them at any time by writing American Funds Service Company). If
American Funds Service Company does not employ reasonable procedures to confirm
that the instructions received from any person with appropriate account
information are genuine, it and/or the fund may be liable for losses due to
unauthorized or fraudulent instructions. In the event that shareholders are
unable to reach the fund by telephone because of technical difficulties, market
conditions, or a natural disaster, redemption and exchange requests may be made
in writing only.
SHARE CERTIFICATES - Shares are credited to your account and certificates are
not issued unless you request them by writing to the Transfer Agent.
EXECUTION OF PORTFOLIO TRANSACTIONS
Orders for the fund's portfolio securities transactions are placed by the
Investment Adviser. The Investment Adviser strives to obtain the best
available prices in its portfolio transactions taking into account the costs
and quality of executions. When, in the opinion of the Investment Adviser, two
or more brokers (either directly or through their correspondent clearing
agents) are in a position to obtain the best price and execution, preference
may be given to brokers who have sold shares of the fund or who have provided
investment research, statistical, or other related services to the Investment
Adviser. The fund does not consider that it has an obligation to obtain the
lowest available commission rate to the exclusion of price, service and
qualitative considerations.
There are occasions on which portfolio transactions for the fund may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the fund, they are effected only when the
Investment Adviser believes that to do so is in the interest of the fund. When
such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner. The fund will not pay a mark-up for
research in principal transactions.
As of the end of the fund's most recent fiscal year, it held certain equity
securities of some of its regular brokers and dealers or their parents that
derive more than 15% of gross revenues from securities-related activities which
included securities of The Chase Manhattan Bank and J.P. Morgan in the amounts
of $843,620,000 and $427,831,000, respectively, at the year ended April 30,
1999.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, for the fiscal years ended April 30, 1999, 1998
and 1997 amounted to $28,860,000, $18,302,000 and $14,511,000, respectively.
During fiscal years 1999, 1998 and 1997 Johnston, Lemon & Co. Incorporated
received no commissions for executing portfolio transactions for the fund.
Johnston, Lemon & Co. Incorporated will not participate in commissions paid by
the fund to other brokers or dealers and will not receive any reciprocal
business, directly or indirectly, as a result of such commissions.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by The Chase Manhattan Bank, 3 Metrotech Center, Brooklyn, NY 11245,
as Custodian.
TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the record of each shareholder's account,
processes purchases and redemptions of the fund's shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee
of $32,657,000 for the fiscal year ended April 30, 1999.
INDEPENDENT ACCOUNTANTS - PricewaterhouseCoopers LLP, 400 South Hope Street,
Los Angeles, CA 90071, has served as the fund's independent accountants since
its inception, providing audit services, preparation of tax returns and review
of certain documents to be filed with the Securities and Exchange Commission.
The financial statements included in this Statement of Additional Information,
have been so included in reliance on the report of PricewaterhouseCoopers LLP
given on the authority of said firm as experts in accounting and auditing. The
selection of the fund's independent accountant is reviewed and determined
annually by the Board of Directors.
REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on April 30.
Shareholders are provided at least semi-annually with reports containing the
financial statements, including the investment portfolio and other information.
The fund's annual financial statements are audited by the fund's independent
accountants, PricewaterhouseCoopers LLP. In an effort to reduce the volume of
mail shareholders receive from the fund when a household owns more than one
account, the Transfer Agent has taken steps to eliminate duplicate mailings of
shareholder reports. To receive additional copies of a report shareholders
should contact the Transfer Agent.
YEAR 2000 - The fund and its shareholders depend on the proper functioning of
computer systems maintained by the Investment Adviser and its affiliates and
other key service providers. Many computer systems in use today will require
reprogramming or replacement prior to the year 2000 because of the way they
store dates and make date-related calculations. The fund understands that
these service providers are taking steps to address the "Year 2000 problem".
However, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the fund. In addition, the fund's investments could be
adversely affected by the Year 2000 problem. For example, the markets for
securities in which the fund invests could experience settlement problems and
liquidity issues. Corporate and government data processing errors may cause
losses for individual companies and overall economic uncertainties. Earnings
of individual issuers are likely to be affected by the costs of addressing the
problem, which may be substantial and may be reported inconsistently.
PERSONAL INVESTING POLICY - Capital Research and Management Company and its
affiliated companies have adopted a personal investing policy consistent with
Investment Company Institute guidelines. This policy includes: a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; pre-clearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; blackout periods on
personal investing for certain investment personnel; limitations on service as
a director of publicly traded companies; and disclosure of personal securities
transactions.
OTHER INFORMATION - The financial statements including the investment portfolio
and the report of Independent Accountants contained in the Annual Report are
included in this Statement of Additional Information. The following
information is not included in the Annual Report:
DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND
MAXIMUM OFFERING PRICE PER SHARE -- APRIL 30, 1999
Net asset value and redemption price per share
(Net assets divided by shares outstanding) . . . . . . . . .
$35.31
Maximum offering price per share (100/94.25 of
net asset value per share, which takes into
account the fund's current maximum sales charge). . . . . $37.46
INVESTMENT RESULTS
The fund's yield is 1.57% based on a 30-day (or one month) period ended April
30, 1999, computed by dividing the net investment income per share earned
during the period by the maximum offering price per share on the last day of
the period, according to the following formula:
YIELD = 2[( a-b/cd + 1)/6/ -1]
Where:a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.
The fund's total return over the past year and average total returns for the
five- and ten-year periods ending on April 30, 1999 was +8.01%, +23.23% and
+16.51%, respectively. The average annual total return (T) is computed by
equating the value at the end of the period (ERV) with a hypothetical initial
investment of $1,000 (P) over a period of years (n) according to the following
formula as required by the Securities and Exchange Commission: P(1+T)/n/ =
ERV.
To calculate total return, an initial investment is divided by the offering
price (which includes the sales charge) as of the first day of the period in
order to determine the initial number of shares purchased. Subsequent
dividends and capital gain distributions are reinvested at net asset value on
the reinvestment date determined by the Board of Directors. The sum of the
initial shares purchased and shares acquired through reinvestment is multiplied
by the net asset value per share as of the end of the period in order to
determine ending value. The difference between the ending value and the
initial investment divided by the initial investment converted to a percentage
equals total return. The resulting percentage indicates the positive or
negative investment results that an investor would have experienced from
reinvested dividends and capital gain distributions and changes in share price
during the periods. Total return may be calculated for the one year, five
year, ten year and for other periods: The average annual total return over
periods greater than one year may also be computed by utilizing ending values
as determined above.
The fund may also, at times, calculate total return based on net asset value
per share (rather than the offering price), in which case the figure would not
reflect the effect of any sales charges which would have been paid if shares
were purchased during the period reflected in the computation. Consequently,
total return calculated in this manner will be higher. These total returns may
be calculated over periods in addition to those described above.
The following assumptions will be reflected in computations made in accordance
with the formulas stated above: (1) deduction of the maximum sales charge of
5.75% from the $1,000 initial investment; (2) reinvestment of dividends and
distributions at net asset value on the reinvestment date determined by the
Board; and (3) a complete redemption at the end of any period illustrated. In
addition, the fund may provide lifetime average total return figures.
The fund may also calculate a distribution rate on a taxable and tax equivalent
basis. The distribution rate is computed by dividing the dividends paid by the
fund over the last 12 months by the sum of the month-end net asset value or
maximum offering price and the capital gains paid over the last 12 months. The
distribution rate may differ from the yield.
The fund may include information on its investment results and/or comparisons
of its investment results to various unmanaged indices (such as The Dow Jones
Average of 30 Industrial Stocks and The Standard & Poor's 500 Stock Composite
Index) or results of other mutual funds or investment or savings vehicles in
advertisements or in reports furnished to present or prospective shareholders.
Total return for the unmanaged indices will be calculated assuming reinvestment
if dividends and interest, but will not reflect any deductions for advisory
fees, brokerage costs or administrative expenses. For educational purposes,
fund literature may contain discussions and/or illustrations of volatility,
risk tolerance, asset allocation and investment strategies.
The fund may also, from time to time, combine its results with those of other
funds in The American Funds Group for purposes of illustrating investment
strategies involving multiple funds.
The fund may refer to results compiled by organizations such as CDA Investment
Technologies, Ibbottson Associates, Lipper Analytical Services, Morningstar,
Inc. Wiesenberger Investment Companies Services and the U.S. Department of
Commerce. Additionally, the Fund may, from time to time, refer to results
published in various newspapers or periodicals, including Barron's, Forbes,
Fortune, Institutional Investor, Kiplinger's Personal Finance Magazine, Money,
U.S. News and World Report and The Wall Street Journal.
The fund may from time to time compare its investment results with the
following:
(1) Average of Savings Institutions deposits, which is a measure of all kinds
of savings deposits, including longer-term certificates (based on figures
supplied by the U.S. League of Savings Institutions and the Federal Reserve
Board). Savings deposits offer a guaranteed rate of return on principal, but
no opportunity for capital growth. The period shown may include periods during
which the maximum rates paid on some savings deposits were fixed by law.
(2) The Consumer Price Index, which is a measure of the average change in
prices over time in a fixed market basket of goods and services (e.g. food,
clothing, shelter, and fuels, transportation fares, charges for doctors' and
dentists' services, prescription medicines, and other goods and services that
people buy for day-to-day living).
The fund may also from time to time illustrate the benefits of tax-deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans.
EXPERIENCE OF THE INVESTMENT ADVISER - Capital Research and Management Company
manages nine growth and growth- income funds that are at least 10 years old.
In the rolling 10-year periods since January 1, 1969 (138 in all), those funds
have had better total returns than their comparable Lipper indices in 128 of
the 138 periods.
Note that past results are not an indication of future investment results.
Also, the fund has different investment policies than some of the funds
mentioned above. These results are included solely for the purpose of
informing investors about the experience and history of Capital Research and
Management Company.
The investment results set forth below were calculated as described in the
fund's Prospectus. The fund's results will vary from time to time depending
upon market conditions, the composition of the fund's portfolio and operating
expenses of the fund, so that any investment results reported by the fund
should not be considered representative of what an investment in the fund may
earn in any future period. These factors and possible differences in
calculation methods should be considered when comparing the fund's investment
results with those published for other mutual funds, other investment vehicles
and unmanaged indices. The fund's results also should be considered relative
to the risks associated with the fund's investment objective and policies.
The investment results set forth below were calculated as described in the
fund's prospectus.
WMIF VS. VARIOUS UNMANAGED INDICES
<TABLE>
<CAPTION>
10-Year Periods WMIF DJIA/1/ S&P 500/2/ Average Savings
5/01 - 4/30 Deposit/3/
<S> <C> <C> <C> <C>
1989-1999 +361% +487% +459% +59%
1988-1998 +393% +500% +464% +63%
1987-1997 +237% +319% +275% +65
1986-1996 +241 +333 +279 +69
1985-1995 +261 +385 +296 +75
1984-1994 +273 +355 +297 +85
1983-1993 +275 +312 +284 +95
1982-1992 +409 +498 +424 +108
1981-1991 +356 +351 +325 +118
1980-1990 +453 +418 +375 +123
1979-1989 +426 +360 +374 +124
1978-1988 +386 +302 +327 +124
1977-1987 +419 +319 +372 +125
1976-1986 +353 +207 +277 +124
1975-1985 +334 +162 +235 +120
1974-1984 +300 +140 +189 +114
1973-1983 +281 +127 +148 +108
1972-1982 +133 +49 +70 +98
1971-1981 +132 +72 +96 +88
1970-1980 +117 +77 +98 +80
1969-1979 +80 +40 +46 +76
1968-1978 +87 +40 +44 +72
1967-1977 +103 +54 +49 +70
1966-1976 +98 +58 +58 +67
1965-1975 +61 +30 +37 +64
1964-1974 +76 +48 +57 +61
1963-1973 +100 +83 +111 +58
1962-1972 +138 +105 +129 +55
1961-1971 +144 +98 +120 +53
1960-1970 +133 +73 +107 +50
</TABLE>
/1/ The Dow Jones Average of 30 Industrial Stocks is comprised of 30 industrial
companies such as General Motors and General Electric.
/2/ The Standard & Poor's 500 Composite Stock Index is comprised of
industrial, transportation, public utilities and financial stocks and
represents a large portion of the value of issues traded on the New York Stock
Exchange. Selected issues traded on the American Stock Exchange are also
included.
/3/ Based on figures supplied by the U.S. League of Savings Institutions and
the Federal Reserve Board which reflect all kinds of savings deposits,
including longer-term certificates. Savings deposits offer a guaranteed return
of principal and a fixed rate of interest, but no opportunity for capital
growth. Maximum allowable rates were imposed by law during a part of this
period.
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
<TABLE>
<CAPTION>
If you had invested Periods ...and taken all
$10,000 in the fund distributions in shares,
this many years ago... your investment would
have been worth this
much at April 30, 1999
Number of Years 5/1-4/30 Value
<S> <C> <C>
1 1998 - 1999 10,801
2 1997 - 1999 15,209
3 1996 - 1999 18,618
4 1995 - 1999 24,281
5 1994 - 1999 28,416
6 1993 - 1999 29,138
7 1992 - 1999 33,025
8 1991 - 1999 37,721
9 1990 - 1999 43,270
10 1989 - 1999 46,096
11 1988 - 1999 56,547
12 1987 - 1999 54,443
13 1986 - 1999 67,356
14 1985 - 1999 92,911
15 1984 - 1999 112,446
16 1983 - 1999 115,993
17 1982 - 1999 178,145
18 1981 - 1999 182,448
19 1980 - 1999 253,865
20 1979 - 1999 257,416
21 1978 - 1999 291,509
22 1977 - 1999 299,509
23 1976 - 1999 323,560
24 1975 - 1999 427,743
25 1974 - 1999 477,324
26 1973 - 1999 469,360
27 1972 - 1999 440,124
28 1971 - 1999 449,607
29 1970 - 1999 583,524
30 1969 - 1999 491,526
</TABLE>
ILLUSTRATION OF A $10,000 INVESTMENT IN WMIF WITH
DIVIDENDS REINVESTED AND CAPITAL GAIN DISTRIBUTIONS TAKEN IN SHARES
(For the lifetime of the fund July 31, 1952 through April 30,1999)
<TABLE>
<CAPTION>
COST OF SHARES VALUE
OF SHARES
Fiscal Annual Total From From From Total
Year End Dividends Dividends Investment Initial Capital Gains Dividends Value
4/30 (cumulative) Cost Investment Reinvested Reinvested
<S> <C> <C> <C> <C> <C> <C> <C>
1953* $ 170 $ 170 $ 10,170 $ 9,161 ---- $ 169 $ 9,330
1954 450 620 10,620 10,781 ---- 713 11,494
1955 542 1,162 11,162 14,732 ---- 1,556 16,288
1956 654 1,816 11,816 17,447 $ 613 2,505 20,565
1957 756 2,572 12,572 17,145 1,553 3,179 21,877
1958 825 3,397 13,397 15,056 2,339 3,660 21,055
1959 885 4,282 14,282 21,119 3,915 6,037 31,071
1960 947 5,229 15,229 18,644 4,411 5,986 29,041
1961 1,097 6,326 16,326 21,113 6,918 8,136 36,167
1962 1,145 7,471 17,471 20,880 7,903 8,871 37,654
1963 1,279 8,750 18,750 21,292 10,289 10,697 42,278
1964 1,368 10,118 20,118 22,614 11,980 12,515 47,109
1965 1,463 11,581 21,581 25,782 15,757 15,951 57,490
1966 1,648 13,229 23,229 26,237 17,691 17,675 61,603
1967 1,906 15,135 25,135 25,833 19,766 19,671 65,270
1968 2,231 17,366 27,366 28,313 21,945 22,434 72,692
1969 2,626 19,992 29,992 31,708 27,163 26,705 85,576
1970 2,874 22,866 32,866 23,523 24,878 23,202 71,603
1971 3,193 26,059 36,059 26,927 33,989 32,471 93,387
1972 3,456 29,515 39,515 27,419 33,511 34,591 95,521
1973 3,671 33,186 43,186 23,933 31,776 33,813 89,522
1974 3,907 37,093 47,093 21,893 31,023 35,040 87,956
1975 4,829 41,922 51,922 22,959 33,179 42,177 98,315
1976 5,498 47,420 57,420 30,739 41,142 58,068 129,949
1977 6,171 53,591 63,591 31,274 44,673 64,401 140,348
1978 6,849 60,440 70,440 29,078 46,414 68,847 144,339
1979 7,785 68,225 78,225 33,575 50,187 79,313 163,075
1980 9,167 77,392 87,392 34,433 50,777 80,637 165,847
1981 14,603 91,995 101,995 28,652 86,269 115,502 230,423
1982 13,326 105,321 115,321 26,352 90,133 119,283 235,768
1983 15,516 120,837 130,837 36,494 142,811 182,987 362,292
1984 17,526 138,363 148,363 32,460 162,054 178,994 373,508
1985 20,783 159,146 169,146 34,910 204,484 213,103 452,497
1986 24,381 183,527 193,527 44,373 281,961 297,433 623,767
1987 28,229 211,756 221,756 50,179 356,068 365,700 771,947
1988 30,815 242,571 252,571 44,826 341,861 356,167 742,854
1989 27,837 270,408 280,408 53,157 405,403 453,047 911,607
1990 41,689 312,097 322,097 51,838 438,105 481,106 971,049
1991 44,572 356,669 366,669 56,626 482,927 574,191 1,113,744
1992 42,318 398,987 408,987 61,150 546,304 664,916 1,272,370
1993 44,627 443,614 453,614 66,315 607,607 768,464 1,442,386
1994 46,718 490,332 500,332 64,505 622,162 792,442 1,479,109
1995 55,058 545,390 555,390 71,140 726,340 933,211 1,730,691
1996 58,187 603,577 613,577 85,844 982,808 1,188,237 2,256,889
1997 62,763 666,340 676,340 97,757 1,245,507 1,419,762 2,763,026
1998 67,444 733,784 743,784 127,879 1,831,030 1,931,336 3,890,245
1999 71,812 805,596 815,596 133,120 2,236,997 2,088,357 4,458,474
</TABLE>
The dollar amount of capital gain distributions from inception was
$1,099,907.
/*/From July 31, 1952, the date the fund commenced operation.
THE BENEFITS OF SYSTEMATIC INVESTING IN WMIF.......
<TABLE>
<CAPTION>
An initial investment of $1,000 in WMIF on May 1 would have grown to
these amounts over the past 10, 20, 30 and 40 years:
<S> <C> <C> <C>
10 Years 20 Years 30 Years 40 Years
(5/1/89-4/30/99) (5/1/79-4/30/99) (5/1/69-4/30/99) (5/1/59-4/30/99)
$4,610 $25,741 $49,156 $135,249
</TABLE>
<TABLE>
<CAPTION>
$1,000 invested in WMIF followed by annual $500 investments (all
investments made on May 1) would have grown to these amounts over
the past 10, 20, 30 and 40 years:
<S> <C> <C> <C>
10 Years 20 Years 30 Years 40 Years
(5/1/89-4/30/99) (5/1/79-4/30/99) (5/1/69-4/30/99) (5/1/59-4/30/99)
$16,622 $95,785 $320,506 $844,013
</TABLE>
<TABLE>
<CAPTION>
$2,000 invested in WMIF on May 1 of each year would have grown to these
amounts over the past 10, 20, 30 and 40 years:
<S> <C> <C> <C>
10 Years 20 Years 30 Years 40 Years
(5/1/89-4/30/99) (5/1/79-4/30/99) (5/1/69-4/30/99) (5/1/59-4/30/99)
$57,299 $332,638 $1,186,927 $3,114,473
</TABLE>
<TABLE>
<S> <C> <C> <C>
Washington Mutual Investors Fund, Inc.
Investment Portfolio, April 30, 1999
Shares/PriMarket Percent
Equity Securitites Amount Value Of Net
(Common and Preferred Stocks) (000) Assets
- --------------------------------------------------- ---------------
ENERGY
ENERGY SOURCES - 7.48%
Ashland Inc. 3,680,000$ 155, .27
Atlantic Richfield Co. 8,108,000680,565 1.19
BP Amoco 1,625,999184,043 .32
Chevron Corp. 7,892,000787,227 1.38
Exxon Corp. 3,700,000307,331 .54
Kerr-McGee Corp. 3,150,000133,481 .24
Mobil Corp. 8,175,000856,331 1.50
Texaco Inc. 14,000,000878,500 1.54
Unocal Corp. 6,800,000282,625 .50
-----------------
4,265,5 7.48
-----------------
UTILITIES: ELECTRIC & GAS - 8.45%
Ameren Corp. 6,800,000263,075 .46
American Electric Power Co., Inc. 4,400,000182,325 .32
Baltimore Gas and Electric Co. 7,300,000205,313 .36
Carolina Power & Light Co. 6,450,000260,016 .46
Central and South West Corp. 9,575,800237,600 .42
CINergy Corp. 2,250,000 67,078 .12
Conectiv 3,400,000 81,388
Conectiv, Class A 325,000 11,395 .16
Consolidated Edison, Inc. 5,550,000252,178 .44
Consolidated Natural Gas Co. 3,425,000203,787 .36
Dominion Resources, Inc. 2,000,000 82,250 .14
DTE Energy Co. 3,465,000141,415 .25
Duke Energy Corp. 4,950,000277,200 .49
Edison International 3,135,000 76,807 .13
Entergy Corp. 2,400,000 75,000 .13
Florida Progress Corp. 4,725,000181,912 .32
FPL Group, Inc. 1,800,000101,475 .18
GPU, Inc. 6,325,000241,141 .42
Houston Industries Inc. 1,800,000 50,963 .09
New Century Energies, Inc. 3,050,000106,750 .19
OGE Energy Corp. 800,000 18,950 .03
PECO Energy Co. 2,500,000118,594 .21
PP & L Resources, Inc. 3,490,319 97,511 .17
Public Service Enterprise Group Inc. 2,020,000 80,800 .14
Puget Sound Energy, Inc. 3,800,000 93,812 .16
Sempra Energy 2,026,300 42,046 .07
Southern Co. 25,259,400683,583 1.20
TECO Energy, Inc. 1,000,000 21,313 .04
Williams Companies, Inc. 11,500,000543,375 .95
Wisconsin Energy Corp. 800,000 21,500 .04
-----------------
4,820,5 8.45
-----------------
Total Energy 9,086,115.93
-----------------
MATERIALS
CHEMICALS - 5.61%
Air Products and Chemicals, Inc. 4,290,000201,630 .35
E.I. du Pont de Nemours and Co. 12,520,500884,260 1.55
Hercules Inc. 4,900,000185,281 .33
International Flavors & Fragrances Inc. 2,940,000116,130 .20
Mallinckrodt Inc. 3,585,000125,699 .22
Monsanto Co. 21,532,000974,323 1.71
PPG Industries, Inc. 8,716,500566,028 .99
Sherwin-Williams Co. 3,000,000 93,375 .16
Witco Corp. 2,825,000 53,851 .10
-----------------
3,200,5 5.61
-----------------
FOREST PRODUCTS & PAPER - 2.81%
International Paper Co. 13,500,000$ 719, 1.26
Westvaco Corp. 5,500,000164,312 .29
Weyerhaeuser Co. 8,975,000602,447 1.06
Willamette Industries, Inc. 2,475,000115,706 .20
-----------------
1,602,1 2.81
-----------------
METALS: NONFERROUS - 0.54%
Alcoa Inc. 2,117,600131,821 .23
Phelps Dodge Corp. 2,807,300177,562 .31
-----------------
309,383 0.54
-----------------
METALS: STEEL - 0.09%
Allegheny Teledyne Inc. 2,250,000 50,344 .09
-----------------
Total Materials 5,162,4 9.05
-----------------
CAPITAL EQUIPMENT
AEROSPACE & MILITARY TECHNOLOGY - 2.16%
Boeing Co. 10,767,900437,446 .77
Sundstrand Corp. 1,300,000 93,275 .16
United Technologies Corp. 4,825,300699,065 1.23
-----------------
1,229,7 2.16
-----------------
DATA PROCESSING & REPRODUCTION - 2.50%
Hewlett-Packard Co. 7,250,000571,844 1.01
International Business Machines Corp. 600,000125,512 .22
Xerox Corp. 12,347,500725,416 1.27
-----------------
1,422,7 2.50
-----------------
ELECTRICAL & ELECTRONICS - 0.41%
Emerson Electric Co. 2,800,000180,600 .32
General Electric Co. 500,000 52,750 .09
-----------------
233,350 0.41
-----------------
ELECTRONIC COMPONENTS - 0.87%
Motorola, Inc. 2,610,900209,198 .37
Texas Instruments Inc. 1,700,000173,613 .30
Thomas & Betts Corp. 2,720,000114,240 .20
-----------------
497,051 0.87
-----------------
ELECTRONIC INSTRUMENTS - 0.46%
Perkin-Elmer Corp. 2,408,900260,462 .46
-----------------
ENERGY EQUIPMENT - 0.37%
Halliburton Co. 4,900,000208,863 .37
-----------------
INDUSTRIAL COMPONENTS - 2.46%
Dana Corp. 4,943,100232,944 .41
Eaton Corp. 3,300,000302,569 .53
Genuine Parts Co. 8,775,000263,250 .46
Illinois Tool Works, Inc. 866,700 66,736 .12
Johnson Controls Inc. 4,152,400302,866 .53
TRW Inc. 5,550,000232,753 .41
-----------------
1,401,1 2.46
-----------------
MACHINERY & ENGINEERING - 1.31%
Caterpillar Inc. 1,350,000 86,906 .15
Deere & Co. 7,240,000311,320 .54
Fluor Corp. 3,700,000123,487 .22
Ingersoll-Rand Co. 1,012,500 70,052 .12
Pall Corp. 6,100,000112,469 .20
Parker Hannifin Corp. 950,000 44,591 .08
-----------------
748,825 1.31
-----------------
Total Capital Equipment 6,002,210.54
-----------------
CONSUMER GOODS
APPLIANCES & HOUSEHOLD DURABLES - 0.33%
Newell Rubbermaid Inc. (formerly Rubbermaid 3,937,716$ 186, .33
-----------------
AUTOMOBILES - 0.19%
DaimlerChrysler AG (formerly Chrysler Corp. 1,075,538 0.19
-----------------
BEVERAGES - 1.06%
PepsiCo, Inc. 16,350,000603,928 1.06
-----------------
FOOD & HOUSEHOLD PRODUCTS - 3.08%
Bestfoods 3,915,400196,504 .35
Colgate-Palmolive Co. 2,000,000204,875 .36
General Mills, Inc. 6,650,000486,282 .85
Kellogg Co. 6,839,600253,065 .44
Sara Lee Corp. 27,691,500616,136 1.08
-----------------
1,756,8 3.08
-----------------
HEALTH & PERSONAL CARE - 8.16%
American Home Products Corp. 2,200,000134,200 .23
Avon Products, Inc. 4,679,600254,161 .45
Baxter International Inc. 3,200,000201,600 .35
Bristol-Myers Squibb Co. 14,700,000934,369 1.64
Eli Lilly and Co. 7,990,000588,264 1.03
Johnson & Johnson 800,000 78,000 .14
Kimberly-Clark Corp. 12,415,600761,231 1.34
McKesson Corp. 3,000,000105,000 .18
Merck & Co., Inc. 2,000,000140,500 .25
Pfizer Inc 3,600,000414,225 .73
Pharmacia & Upjohn, Inc. 4,500,000252,000 .44
Schering-Plough Corp. 7,200,000347,850 .61
Warner-Lambert Co. 6,500,000441,594 .77
-----------------
4,652,9 8.16
-----------------
RECREATION & OTHER CONSUMER PRODUCTS - 0.94%
Eastman Kodak Co. 5,656,500422,116 .74
Stanley Works 3,675,000111,858 .20
-----------------
533,974 0.94
-----------------
TEXTILES & APPAREL - 1.05%
NIKE, Inc., Class B 7,685,425477,937 .84
VF Corp. 2,400,000123,600 .21
-----------------
601,537 1.05
-----------------
Total Consumer Goods 8,441,614.81
-----------------
SERVICES
BROADCASTING & PUBLISHING - 0.71%
Dow Jones & Co., Inc. 3,292,400179,436 .31
Gannett Co., Inc. 1,675,800118,667 .21
Knight-Ridder, Inc. 1,600,000 86,100 .15
Tribune Co. 253,300 21,135 .04
-----------------
405,338 0.71
-----------------
BUSINESS & PUBLIC SERVICES - 2.72%
Browning-Ferris Industries, Inc. 9,158,700365,203 .64
Deluxe Corp. 2,489,800 86,209 .15
Diebold, Inc. 700,000 16,844 .03
Dun & Bradstreet Corp. 2,803,500103,029 .18
Electronic Data Systems Corp. 5,214,700280,290 .49
First Data Corp. 7,575,000321,464 .57
IKON Office Solutions, Inc. 7,285,000 87,875 .15
Interpublic Group of Companies, Inc. 1,362,200105,656 .19
Pitney Bowes Inc. 2,634,500184,250 .32
-----------------
1,550,8 2.72
-----------------
LEISURE & TOURISM - 0.37%
Mc Donald's Corp. 5,000,000211,875 .37
-----------------
MERCHANDISING - 4.06%
Albertson's, Inc. 12,033,200$ 619, 1.09
American Stores Co. 13,423,000423,663 .74
J.C. Penney Co., Inc. 13,120,500598,623 1.05
May Department Stores Co. 11,100,000441,919 .77
Sears, Roebuck and Co. 1,600,000 73,600 .13
Wal-Mart Stores, Inc. 3,430,000157,780 .28
-----------------
2,315,2 4.06
-----------------
TELECOMMUNICATIONS - 10.66%
Ameritech Corp. 19,017,0001,301,4 2.28
AT&T Corp. 21,899,0501,105,9 1.94
GTE Corp. 14,763,300988,218 1.74
SBC Communications Inc. 4,194,350234,884 .41
Sprint FON Group (formerly Sprint Corp.) 13,993,8001,435,2 2.52
U S WEST, Inc. 19,319,7001,010,6 1.77
-----------------
6,076,310.66
-----------------
TRANSPORTATION: RAIL - 1.05%
CSX Corp. 2,831,000139,427 .24
Norfolk Southern Corp. 10,450,000341,584 .60
Union Pacific Corp. 2,000,000120,000 .21
-----------------
601,011 1.05
-----------------
Total Services 11,160,19.57
-----------------
FINANCE
BANKING - 14.12%
Bankers Trust Corp. 3,040,000273,790 .48
Bank of America Corp. (formerly BankAmerica24,825,0001,787,4 3.14
Bank of New York Co., Inc. 15,100,000604,000 1.06
BANK ONE CORP. (formerly BANC ONE CORP.) 8,174,500482,296 .85
Chase Manhattan Corp. 10,194,800843,620 1.48
Citigroup Inc. 3,500,000263,375 .46
First Union Corp. 23,086,7001,278,4 2.24
Fleet Financial Group, Inc. 6,100,000262,681 .46
J.P. Morgan & Co. Inc. 3,175,000427,831 .75
KeyCorp 9,550,000295,453 .52
SunTrust Banks, Inc. 5,975,000427,213 .75
Wachovia Corp. 850,000 74,694 .13
Wells Fargo & Co. 23,727,0001,024,7 1.80
-----------------
8,045,414.12
-----------------
FINANCIAL SERVICES - 3.34%
American Express Co. 600,000 78,413 .14
Fannie Mae 3,900,000276,656 .48
Household International, Inc. 24,047,4821,209,8 2.12
SLM Holding Corp. 2,000,000 85,375 .15
Transamerica Corp. 3,600,000256,500 .45
-----------------
1,906,8 3.34
-----------------
INSURANCE - 4.91%
Aetna Inc. 2,650,000232,372
Aetna Inc., Class C, 6.25% convertible pref 315,000 24,353 .45
Allstate Corp. 14,950,000543,806 .95
American General Corp. 6,555,000485,070 .85
Aon Corp. 7,829,400536,314 .94
Jefferson-Pilot Corp. 3,350,000225,706 .40
Lincoln National Corp. 3,025,000290,589 .51
Marsh & McLennan Companies, Inc. 2,512,500192,363 .34
St. Paul Companies, Inc. 9,402,400269,731 .47
-----------------
2,800,3 4.91
-----------------
Total Finance 12,752,22.37
-----------------
MULTI-INDUSTRY
MULTI-INDUSTRY - 2.02%
AlliedSignal Inc. 9,300,000546,375 .96
Berkshire Hathaway Inc., Class A (formerly 600 45,840 .08
Dover Corp. 6,150,500227,184 .40
Minnesota Mining and Manufacturing Co. 2,500,000$ 222, .39
Tyco International Ltd. (formerly AMP Inc.) 1,175,501 95,509 .16
Whitman Corp. 1,050,000 17,194 .03
-----------------
Total Multi-Industry 1,154,6 2.02
-----------------
MISCELLANEOUS - 2.27%
Equity securities in initial period of acqu 1,297,1 2.27
TOTAL EQUITY SECURITIES
(cost: $36,643,354,000) 55,057,96.56
Principal
Amount
Short-Term Securities (000)
- --------------------------------------------------- ---------------
U.S. Treasuries and Other Federal Agencies - 3.25%
Federal Home Loan Bank
4.67%-4.74% due 5/5-7/23/99 735,029 1.29
United States Treasury bills
4.16%-4.52% due 5/6-7/29/99 1,116,6771,116,8 1.96
-----------------
TOTAL SHORT-TERM SECURITIES 1,851,8 3.25
(cost: $1,851,731,000) -----------------
TOTAL INVESTMENT SECURITIES
(cost: $38,495,085,000) 56,909,99.81
Excess of cash and receivables over payables 108,727 0.19
-----------------
NET ASSETS 57,018,100.00
-----------------
-----------------
</TABLE>
<TABLE>
<S> <C> <C>
Financial Statements
Statement of Assets and Liabilities
April 30, 1999
(dollars in thousands)
Assets:
Investment securities at market
(cost: $38,495,085) $56,909,498
Cash 251
Receivables for--
Sales of investments $202,921
Sales of Fund's shares 109,035
Dividends 79,866 391,822
------------ ------------
57,301,571
Liabilities:
Payables for--
Purchases of investments 192,301
Repurchases of Fund's shares 53,149
Management services 12,906
Other expenses 24,990 283,346
------------ ------------
Net Assets at April 30, 1999
Equivalent to $35.31 per share on
1,614,725,331 shares of $1 par value
capital stock outstanding (authorized
capital stock -- 2,000,000,000 shares) $57,018,225
============
Statement of Operations
for the year ended April 30, 1999
(dollars in thousands)
Investment Income:
Income:
Dividends $ 1,097,923
Interest 95,445 $1,193,368
------------
Expenses:
Investment adviser fee 96,791
Business management fee 44,286
Distribution expenses 110,672
Transfer agent fee 32,657
Reports to shareholders 1,545
Registration statement and prospectus 3,634
Postage, stationery and supplies 5,326
Directors' and Advisory Board fees 413
Auditing and legal fees 135
Custodian fee 403
Other expenses 291 296,153
------------ ------------
Net investment income 897,215
------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 5,230,170
Net unrealized appreciation:
Beginning of year 17,338,072
End of year 18,414,413
------------
Net change in unrealized
appreciation 1,076,341
------------
Net realized gain and change in
unrealized appreciation 6,306,511
------------
Net Increase in Net Assets
Resulting from Operations $7,203,726
============
Statement of Changes in Net Assets
(dollars in thousands)
Year Ended April 30
1999 1998
------------ ------------
Operations:
Net investment income $ 897,215 $ 759,844
Net realized gain on investments 5,230,170 2,816,947
Net change in unrealized
appreciation on investments 1,076,341 8,654,558
------------ ------------
Net Increase in Net Assets
Resulting from Operations 7,203,726 12,231,349
------------ ------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (890,284) (736,632)
Distributions from net realized gain
on investments (3,760,550) (1,958,463)
------------ ------------
Total Dividends and Distributions (4,650,834) (2,695,095)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
334,983,835 and 298,975,826
shares, respectively 11,104,242 9,237,792
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
137,585,488 and 84,081,074 shares,
respectively 4,421,141 2,539,311
Cost of shares repurchased:
206,861,783 and 120,245,204
shares, respectively (6,823,584) (3,714,819)
------------ ------------
Net Increase in Net Assets Resulting
from Capital Share Transactions 8,701,799 8,062,284
------------ ------------
Total Increase in Net Assets 11,254,691 17,598,538
Net Assets:
Beginning of year 45,763,534 28,164,996
------------ ------------
End of year (including undistributed
net investment income: $112,641 and
$105,710, respectively) $57,018,225 $45,763,534
============ ============
See Notes to Financial Statements
</TABLE>
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - Washington Mutual Investors Fund (the "Fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The Fund's investment objective is to produce income and
to provide an opportunity for growth of principal consistent with sound common
stock investing.
SIGNIFICANT ACCOUNTING POLICIES - The following paragraphs summarize the
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements:
SECURITY VALUATION - Equity securities, including convertible debentures, are
stated at market value based upon closing sales prices reported on a national
securities exchange on the day of valuation or, for listed securities having no
sales reported, upon last-reported bid prices on that date. Treasury bills and
other cash-equivalent securities with original or remaining maturities in
excess of 60 days are valued at the mean of their quoted bid and asked prices
obtained from a major dealer in short-term securities. Treasury bills and
other cash-equivalent securities with 60 days or less to maturity are valued at
amortized cost, which approximates market value. Securities for which
representative market quotations are not readily available are valued at fair
value as determined in good faith under policies approved by the Fund's Board.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - As is customary in the
mutual fund industry, securities transactions are accounted for on the date the
securities are purchased or sold. Realized gains and losses from securities
transactions are reported on an identified cost basis. Dividend and interest
income is reported on the accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions paid
to shareholders are recorded on the ex-dividend date.
2. FEDERAL INCOME TAXATION - It is the Fund's policy to continue to comply
with the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its net taxable income, including
any net realized gain on investments, to its shareholders. Therefore, no
federal income tax provision is required.
As of April 30, 1999, net unrealized appreciation on investments for book and
federal income tax purposes aggregated $18,414,413,000, of which
$19,030,435,000 related to appreciated securities and $616,022,000 related to
depreciated securities. There was no difference between book and tax realized
gains on securities transactions for the year ended April 30, 1999. The cost
of portfolio securities for book and federal income tax purposes was
$38,495,085,000 at April 30, 1999.
3. FEES AND TRANSACTIONS WITH RELATED PARTIES
BUSINESS MANAGEMENT AND INVESTMENT ADVISORY FEES - Officers of the Fund
received no remuneration from the Fund in such capacities. Their remuneration
was paid by Washington Management Corporation (WMC), a wholly owned subsidiary
of The Johnston-Lemon Group, Incorporated. WMC, business manager of the Fund,
was paid a fee of $44,286,000 for business management services. The business
management agreement provides for monthly fees, accrued daily, based on an
annual rate of 0.175% of the first $3 billion of net assets; 0.15% of such
assets in excess of $3 billion but not exceeding $5 billion; 0.135% of such
assets in excess of $5 billion but not exceeding $8 billion; 0.12% of such
assets in excess of $8 billion but not exceeding $12 billion; 0.095% of such
assets in excess of $12 billion but not exceeding $21 billion; 0.075% of such
assets in excess of $21 billion but not exceeding $34 billion; 0.06% of such
assets in excess of $34 billion but not exceeding $55 billion; and 0.05% of net
assets in excess of $55 billion. Under this agreement all expenses chargeable
to the Fund, including compensation to the business manager, shall not exceed
1% of the average net assets of the Fund on an annual basis. Johnston, Lemon &
Co. Incorporated, a wholly owned subsidiary of The Johnston-Lemon Group,
Incorporated, has informed the Fund that it has earned $1,046,000 on its retail
sales of shares and under the distribution plan of the Fund but received no net
brokerage commissions resulting from purchases and sales of securities for the
investment account of the Fund. All officers of the Fund and four of its
directors are affiliated with The Johnston-Lemon Group, Incorporated. Capital
Research and Management Company, investment adviser of the Fund, was paid a fee
of $96,791,000 for investment management services. The investment advisory
agreement provides for monthly fees, accrued daily, based on an annual rate of
0.225% of the first $3 billion of net assets; 0.21% of such assets in excess of
$3 billion but not exceeding $8 billion; 0.20% of such assets in excess of $8
billion but not exceeding $21 billion; 0.195% of such assets in excess of $21
billion but not exceeding $34 billion; 0.19% of such assets in excess of $34
billion but not exceeding $55 billion; and 0.185% of net assets in excess of
$55 billion.
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution, the Fund may
expend up to 0.25% of its average net assets annually for any activities
primarily intended to result in sales of Fund shares, provided the categories
of expenses for which reimbursement is made are approved by the Fund's Board of
Directors. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. During the year ended
April 30, 1999, distribution expenses under the Plan were $110,672,000,
including accrued and unpaid expenses of $20,594,000.
American Funds Distributors, Inc., the principal underwriter of the Fund's
shares, has informed the Fund that it has received $42,516,000 (after
allowances to dealers) as its portion of the sales charges paid by purchasers
of the Fund's shares. Such sales charges are not an expense of the Fund and,
hence, are not reflected in the accompanying Statement of Operations.
TRANSFER AGENT FEE - American Funds Service Company, the transfer agent for
the Fund, was paid a fee of $32,657,000.
DEFERRED DIRECTORS' FEES - Independent Directors and Advisory Board members of
the Fund may elect to defer part or all of the fees earned for such services.
Amounts deferred are not funded and are general unsecured liabilities of the
Fund. As of April 30, 1999, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
directors, were $560,000.
4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The Fund made purchases and sales of investment securities, excluding
short-term securities, of $17,664,899,000 and $13,097,547,000, respectively,
during the year ended April 30, 1999.
As of April 30, 1999, accumulated undistributed net realized gain on
investments was $3,208,003,000 and additional paid-in capital was
$33,668,443,000. The fund reclassified $67,224,000 from undistributed net
realized gains to additional paid-in capital for the year ended April 30, 1999.
Pursuant to the custodian agreement, the Fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $403,000 included $76,000 that was paid by these credits
rather than in cash.
The fund owns 5.8%, 5.5%, and 5.0% of the outstanding voting securities of
Browning-Ferris Industries, Westvaco, and Mallinckrodt, respectively, which
represent investments in affiliates as defined in the Investment Company Act of
1940.
<TABLE>
Per-Share
Data and Ratios
Year ended April 30
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
Net Asset Value,
Beginning of Year $ 33 $ 25. $ 22 $18.87 $17.11
------- ------- ------- ------- -------
Income from Investment
Operations:
Net investment income .60 .62 .62 .63 .63
Net gains on securities
(both realized and
unrealized) 3.99 9.65 4.36 4.98 2.16
------- ------- ------- ------- -------
Total from investment
operations 4.59 10.27 4.98 5.61 2.79
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net
investment income) (.61) (.62) (.62) (.62) (.62)
Distributions (from
capital gains) (2.59) (1.66) (1.20) (1.09) (.41)
------- ------- ------- ------- -------
Total distributions (3.20) (2.28) (1.82) (1.71) (1.03)
------- ------- ------- ------- -------
Net Asset Value,
End of Year $35.31 $33.92 $25.93 $22.77 $18.87
======= ======= ======= ======= =======
Total Return/*/ 14.61% 40.80% 22.43% 30.40% 17.01%
Ratios/Supplemental Data:
Net assets, end of
year (in millions) $57,018 $45,764 $28,165 $20,689 $14,426
Ratio of expenses to
average net assets .61% .62% .64% .66% .69%
Ratio of net income to
average net assets 1.84% 2.08% 2.56% 2.98% 3.57%
Portfolio turnover rat 27.93% 17.61% 20.41% 23.41 25.45%
/*/Excludes maximum
sales charge of 5.75%.
</TABLE>
Report of Independent Accountants
To the Board of Directors and Shareholders of Washington Mutual Investors Fund,
Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of Washington Mutual Investors Fund,
Inc. (the "Fund") at April 30, 1999, the results of its operations, the changes
in its net assets and the per-share data and ratios for the years indicated, in
conformity with generally accepted accounting principles. These financial
statements and per-share data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at April 30, 1999 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
Los Angeles, California
May 28, 1999
TAX INFORMATION FOR THE YEAR ENDED APRIL 30, 1999 (Unaudited)
We are required to advise you within 60 days of the Fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
Fund were earned from the following sources:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Dividends and Distributions per Share
From Net From Net Realized
To Shareholders of Record Payment Date Investment Income Long-Term Gains
June 19, 1998 June 22, 1998 0.145 ----
September 18, 1998 September 21, 1998 0.145 ----
December 18, 1998 December 21, 1998 0.175 2.595
March 19, 1999 March 22, 1999 0.145 ----
</TABLE>
The Fund also designates as a capital gain distribution a portion of earnings
and profits to shareholders in redemption of their shares.
Corporate shareholders may exclude up to 100% of qualifying dividends received
during the year. Certain states may exempt from income taxation that portion
of the dividends paid from net investment income that was derived from direct
U.S. Treasury obligations. For purposes of computing this exclusion, 8% of the
dividends paid by the Fund from net investment income were derived from
interest on direct U.S. Treasury obligations.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many plan retirement trusts may need this information for their annual
information reporting.
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISERS.
PART C
OTHER INFORMATION
ITEM 23 EXHIBITS:
(a). On file (see SEC files nos. 811-604 and 2-11051)
(b). On file (see SEC files nos. 811-604 and 2-11051)
(c). None
(d). On file (see SEC files nos. 811-604 and 2-11051)
(e). On file (see SEC files nos. 811-604 and 2-11051)
(f). None
(g). On file (see SEC files nos. 811-604 and 2-11051)
(h). On file (see SEC files nos. 811-604 and 2-11051)
(i). On file (see SEC files nos. 811-604 and 2-11051)
(j). Consent of Independent Accountants
(k). None
(l). Not applicable to this filing.
(m). On file (see SEC files nos. 811-604 and 2-11051)
(n). EX-27 Financial Data Schedule (EDGAR)
(o). None
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None
ITEM 25. INDEMNIFICATION.
Registrant is a joint-insured under an Investment Advisor/Mutual Fund Errors
and Omissions Policy written by American International Surplus Lines Insurance
Company, Chubb Custom Insurance Company and ICI Mutual Insurance Company which
insures its officers and directors against certain liabilities.
ARTICLE VIII (H) AND (I) OF THE ARTICLES OF INCORPORATION OF THE FUND PROVIDE
THAT:
(h) "The Corporation shall indemnify (1) its directors and officers, whether
serving the Corporation or at its request any other entity, to the full extent
required or permitted by the General Laws of the State of Maryland now or
hereafter in force, including the advance of expenses under the procedures and
to the full extent permitted by law, and (2) its other employees and agents to
such extent as shall be authorized by the Board of Directors or the
Corporation's By-Laws and be permitted by law. The foregoing rights of
indemnification shall not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of Directors may take such
action
ITEM 25. INDEMNIFICATION (CONT.)
as is necessary to carry out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time such By-Laws,
resolutions or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No amendment of these
Articles of the Corporation shall limit or eliminate the right to
indemnification provided hereunder with respect to acts or omissions occurring
prior to such amendment or repeal. Nothing contained herein shall be construed
to authorize the Corporation to indemnify any director or officer of the
Corporation against any liability to the Corporation or to any holders of
securities of the Corporation to which he is subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. Any indemnification by the Corporation
shall be consistent with the requirements of law, including the [Investment
Company] Act [of 1940].
(i) To the fullest extent permitted by Maryland statutory and decisional law
and the [Investment Company] Act [of 1940], no director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
for money damages; provided, however, that nothing herein shall be construed to
protect any director or officer of the Corporation against any liability to
which such director or officer would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. No amendment, modification or repeal of
this Article VIII shall adversely affect any right or protection of a director
or officer that exists at the time of such amendment, modification or repeal."
Subsection (b) of Section 2-418 of the GENERAL CORPORATION LAW OF MARYLAND
empowers a corporation to indemnify any person who was or is party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or enterprise, against reasonable
expenses (including attorneys' fees), judgments, penalties, fines and amounts
paid in settlement actually incurred by him in connection with such action,
suit or proceeding unless it is proved that: (i) the act or omission of the
person was material to the cause of action adjudicated in the proceeding and
was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the person actually received an improper personal benefit of
money, property or services; or (iii) with respect to any criminal action or
proceeding, the person had reasonable cause to believe his act or omission was
unlawful.
Indemnification under subsection (b) of Section 2-418 may not be made by a
corporation unless authorized for a specific proceeding after a determination
has been made that indemnification is permissible in the circumstances because
the party to be indemnified has met the standard of conduct set forth in
subsection (b). This determination shall be made (i) by the Board of Directors
by a majority vote of a quorum consisting of directors not, at the time,
parties to the proceeding, or, if such quorum cannot be obtained, then by a
majority vote of a committee of the Board consisting solely of two or more
directors not, at the time, parties to such proceeding and who were duly
designated to act in the matter by a majority vote of the full Board in which
the designated directors who are parties may participate; (ii) by special legal
counsel selected by the Board of Directors of a committee of the Board by vote
as set forth in subparagraph (i), or, if the requisite quorum of the full Board
cannot be obtained therefor and the committee cannot be established, by a
majority vote of the full Board in which any director who is a party may
participate; or (iii) by the shareholders (except that shares held by any party
to the specific proceeding may not be voted). A court of appropriate
jurisdiction may also order indemnification if the court determines that a
person seeking indemnification is entitled to reimbursement under subsection
(b).
Section 2-418 further provides that indemnification provided for by Section
2-418 shall not be deemed exclusive of any rights to which the indemnified
party may be entitled; that the scope of indemnification extends to directors,
officers, employees or agents of a constituent corporation absorbed in a
consolidation or merger and persons serving in that capacity at the request of
the constituent corporation for another; and empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against or incurred by
such person in any such capacity or arising out of such person's status as such
whether or not the corporation would have the power to indemnify such person
against such liabilities under Section 2-418.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
None.
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) American Funds Distributors, Inc. is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds
Income Series, The American Funds Tax-Exempt Series I, The American Funds
Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American
High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc.,
Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World
Growth and Income Fund, Inc., The Cash Management Trust of America, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America,
Inc., The Investment Company of America, Intermediate Bond Fund of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., New World Fund, Inc., SMALLCAP World Fund, Inc., The
Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Money Fund of America,
U.S. Treasury Money Fund of America and Washington Mutual Investors Fund, Inc.
<TABLE>
<CAPTION>
(B) (1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C>
David L. Abzug Regional Vice President None
27304 Park Vista Road
Agoura Hills, CA 91301
John A. Agar Vice President None
1501 N. University, Suite 227A
Little Rock, AR 72207
Robert B. Aprison Vice President None
2983 Bryn Wood Drive
Madison, WI 53711
L William W. Bagnard Vice President None
Steven L. Barnes Senior Vice President None
5400 Mount Meeker Road
Boulder, CO 80301
B Carl R. Bauer Assistant Vice President None
Michelle A. Bergeron Vice President None
4160 Gateswalk Drive
Smyrna, GA 30080
Joseph T. Blair Senior Vice President None
27 Drumlin Road
West Simsbury, CT 06092
John A. Blanchard Vice President None
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior Vice President None
P.O. Box 1665
Brentwood, TN 37024-1665
Michael L. Brethower Senior Vice President None
2320 North Austin Avenue
Georgetown, TX 78626
C. Alan Brown Regional Vice President None
4129 Laclede Avenue
St. Louis, MO 63108
H J. Peter Burns Vice President None
Brian C. Casey Regional Vice President None
8002 Greentree Road
Bethesda, MD 20817
Victor C. Cassato Senior Vice President None
609 W. Littleton Blvd., Suite 310
Littleton, CO 80120
Christopher J. Cassin Senior Vice President None
111 W. Chicago Avenue, Suite G3
Hinsdale, IL 60521
Denise M. Cassin Vice President None
1301 Stoney Creek Drive
San Ramon, CA 94538
L Larry P. Clemmensen Director None
L Kevin G. Clifford Director, President and Co-Chief Executive Officer None
Ruth M. Collier Senior Vice President None
145 West 67th St., #12K
New York, NY 10023
S David Coolbaugh Assistant Vice President None
Thomas E. Cournoyer Vice President None
2333 Granada Boulevard
Coral Gables, FL 33134
Douglas A. Critchell Senior Vice President None
3521 Rittenhouse Street, N.W.
Washington, D.C. 20015
L Carl D. Cutting Vice President None
Daniel J. Delianedis Regional Vice President None
8689 Braxton Drive
Eden Prairie, MN 55347
Michael A. Dilella Vice President None
P. O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President None
505 E. Main Street
Jenks, OK 74037
Kirk D. Dodge Senior Vice President None
633 Menlo Avenue, Suite 210
Menlo Park, CA 94025
Peter J. Doran Senior Vice President None
1205 Franklin Avenue
Garden City, NY 11530
L Michael J. Downer Secretary None
Robert W. Durbin Vice President None
74 Sunny Lane
Tiffin, OH 44883
I Lloyd G. Edwards Senior Vice President None
L Paul H. Fieberg Senior Vice President None
John Fodor Vice President None
15 Latisquama Road
Southborough, MA 01772
Clyde E. Gardner Senior Vice President None
Route 2, Box 3162
Osage Beach, MO 65065
B Evelyn K. Glassford Vice President None
Jeffrey J. Greiner Vice President None
12210 Taylor Road
Plain City, OH 43064
L Paul G. Haaga, Jr. Director None
B Mariellen Hamann Assistant Vice President None
David E. Harper Senior Vice President None
R.D. 1, Box 210, Rte 519
Frenchtown, NJ 08825
Ronald R. Hulsey Vice President None
6744 Avalon
Dallas, TX 75214
Robert S. Irish Regional Vice President None
1225 Vista Del Mar Drive
Delray Beach, FL 33483
Michael J. Johnston Director None
630 Fifth Avenue, 36th Floor
New York, NY 10111
B Damien M. Jordan Vice President None
Arthur J. Levine Senior Vice President None
12558 Highlands Place
Fishers, IN 46038
B Karl A. Lewis Assistant Vice President None
T. Blake Liberty Regional Vice President None
5506 East Mineral Lane
Littleton, CO 80122
Mark Lien Regional Vice President None
5570 Beechwood Terrace
West Des Moines, IA 50266
L Lorin E. Liesy Assistant Vice President None
L Susan G. Lindgren Vice President - Institutional None
Investment Services
LW Robert W. Lovelace Director None
Stephen A. Malbasa Vice President None
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President None
5241 South Race Street
Littleton, CO 80121
L J. Clifton Massar Director, Senior Vice President None
L E. Lee McClennahan Senior Vice President None
L Jamie R. McCrary Assistant Vice President None
S John V. McLaughlin Senior Vice President None
Terry W. McNabb Vice President None
2002 Barrett Station Road
St. Louis, MO 63131
L R. William Melinat Vice President - Institutional None
Investment Services
David R. Murray Vice President None
60 Briant Drive
Sudbury, MA 01776
Stephen S. Nelson Vice President None
P.O. Box 470528
Charlotte, NC 28247-0528
William E. Noe Regional Vice President None
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Vice President None
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Vice President None
62 Park Drive
Glenview, IL 60025
Fredric Phillips Senior Vice President None
175 Highland Avenue, 4th Floor
Needham, MA 02494
B Candance D. Pilgrim Assistant Vice President None
Carl S. Platou Vice President None
4021 96th Avenue, S.E.
Mercer Island, WA 98040
L John O. Post Vice President None
S Richard P. Prior Assistant Vice President None
Steven J. Reitman Senior Vice President None
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Vice President None
P.O. Box 472245
Charlotte, NC 28247
George S. Ross Senior Vice President None
55 Madison Avenue
Morristown, NJ 07962
L Julie D. Roth Vice President None
L James F. Rothenberg Director None
Douglas F. Rowe Vice President None
30008 Oakland Hills Drive
Georgetown, TX 78628
Christopher S. Rowey Regional Vice President None
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Senior Vice President None
1080 Bay Pointe Crossing
Alpharetta, GA 30005
Richard R. Samson Senior Vice President None
4604 Glencoe Avenue, #4
Marina del Rey, CA 90292
Joseph D. Scarpitti Vice President None
31465 St. Andrews
Westlake, OH 44145
L R. Michael Shanahan Director None
David W. Short Director, Chairman of the Board and Co-Chief Executive Officer None
1000 RIDC Plaza, Suite 212
Pittsburgh, PA 15238
William P. Simon, Jr. Senior Vice President None
912 Castlehill Lane
Devon, PA 91333
L John C. Smith Assistant Vice President - Institutional Investment Services None
Rodney G. Smith Vice President None
100 N. Central Expressway
Suite 1214
Richardson, TX 75080
Tony Soave Regional Vice President None
8831 Morning Mist Drive
Clarkston, MI 48348
Nicholas D. Spadaccini Regional Vice President None
855 Markley Woods Way
Cincinnati, OH 45230
L Kristen J. Spazafumo Assistant Vice President None
Daniel S. Spradling Senior Vice President None
181 Second Avenue
Suite 228
San Mateo, CA 94401
B Max D. Stites Vice President None
Thomas A. Stout Regional Vice President None
3919 Whooping Crane Circle
Virginia Beach, VA 23455
Craig R. Strauser Vice President None
3 Dover Way
Lake Oswego, OR 97034
Francis N. Strazzeri Senior Vice President None
31641 Saddletree Drive
Westlake Village, CA 91361
L Drew W. Taylor Assistant Vice President None
S James P. Toomey Vice President None
I Christopher E. Trede Vice President None
George F. Truesdail Vice President None
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Vice President None
60 Reedland Woods Way
Tiburon, CA 94920
Thomas E. Warren Regional Vice President None
119 Faubel Street
Sarasota, FL 34242
L J. Kelly Webb Senior Vice President, Treasurer None
Gregory J. Weimer Vice President None
206 Hardwood Drive
Venetia, PA 15367
B Timothy W. Weiss Director None
George Wenzel Regional Vice President None
3406 Shakespeare Drive
Troy, MI 48084
N. Dexter Williams Senior Vice President None
P.O. Box 2200
Danville, CA 94526
Timothy J. Wilson Vice President None
113 Farmview Place
Venetia, PA 15367
B Laura L. Wimberly Vice President None
H Marshall D. Wingo Director, Senior Vice President None
L Robert L. Winston Director, Senior Vice President None
William R. Yost Vice President None
9320 Overlook Trail
Eden Prairie, MN 55347
Janet M. Young Regional Vice President None
1616 Vermont
Houston, TX 77006
Scott D. Zambon Regional Vice President None
320 Robinson Drive
Tustin Ranch, CA 92782
</TABLE>
__________
L Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW Business Address, 11100 Santa Monica Boulevard, 15th Floor, Los Angeles, CA
90025
B Business Address, 135 South State College Boulevard, Brea, CA 92821
S Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251
H Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
(c) None.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, are maintained and kept in the offices of the
fund, 1101 Vermont Avenue, N.W., Washington, D.C. 20005, and its investment
adviser, Capital Research and Management Company, 333 South Hope Street, Los
Angeles, CA 90071. Certain accounting records are maintained and kept in the
offices of the fund's accounting department,
5300 Robin Hood Road, Norfolk, VA 23513 .
Records covering shareholder accounts are maintained and kept by the Transfer
Agent, American Funds Service Company, 135 South State College Blvd., Brea, CA
92821, 3500 Wiseman Boulevard, San Antonio, TX 78251, 5300 Robin Hood Road,
Norfolk, VA 23513 and 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240.
Records covering portfolio transactions are also maintained and kept by the
custodian, The Chase Manhattan Bank, N.A., One Chase Manhattan Plaza, New
York, New York, 10081.
ITEM 29. MANAGEMENT SERVICES.
None.
ITEM 30. UNDERTAKINGS.
None.
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to rule
485(b) under the Securites Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Washington, District of Columbia, on the 17th day of
June, 1999.
WASHINGTON MUTUAL INVESTORS FUND, INC.
By Stephen Hartwell, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this amendment to
the Registration Statement has been signed below on June 17, 1999, by the
following persons in the capacities indicated.
SIGNATURE TITLE
(1) PRINCIPAL EXECUTIVE OFFICER:
Stephen Hartwell Chairman of the Board
(2) PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER:
Ralph S. Richard Vice President and Treasurer
(3) DIRECTORS
Stephen Hartwell Chairman of the Board
James H. Lemon, Jr.* Vice Chairman of the Board
Harry J. Lister* President
Cyrus A. Ansary* Director
Fred J. Brinkman* Director
Daniel J. Callahn III* Director
James C. Miller III* Director
T. Eugene Smith* Director
Leonard P. Steuart II* Director
Margita E. White* Director
*By Howard L. Kitzmiller,
Attorney-in-Fact
Counsel represents that this amendment does not contain disclosures that would
make the amendment ineligible for effectiveness under the provisions of rule
485(b).
Howard L. Kitzmiller
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 101 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated May
28, 1999, relating to the financial statements and per share data and ratios of
Washington Mutual Investors Fund, Inc., which appears in such Statement of
Additional Information, and to the incorporation by reference of our report
into the Prospectus which constitutes part of this Registration Statement. We
also consent to the references to us under the headings "Independent
Accountants" and "Reports to Shareholders" in such Statement of Additional
Information and to the reference to us under the heading "Financial Highlights"
in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
June 14, 1999
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<S> <C>
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