Washington Mutual Investors Fund
(Logo: The American Funds Group(R))
(picture: city)
Semi-Annual Report
October 31, 1999
Washington Mutual Investors Fund(SM) seeks to provide income and growth of
principal through investments in quality common stocks.
Washington Mutual Investors Fund is one of the 29 mutual funds in The American
Funds Group (R), the nation's third-largest mutual fund family. For more than
six decades Capital Research and Management Company, the American Funds
adviser, has invested with a long-term focus based on thorough research and
attention to risk.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the Fund's total returns and average annual
compound returns with all distributions reinvested for periods ended September
30, 1999 (the most recent calendar quarter), assuming payment of the 5.75%
maximum sales charge at the beginning of the stated periods _ 10 years:
+275.44%, or +14.14% a year; 5 years: +150.93%, or +20.20% a year; 12 months:
+6.72%. Sales charges are lower for accounts of $50,000 or more.
FIGURES SHOWN ARE PAST RESULTS. SHARE PRICE AND RETURN WILL VARY, SO YOU MAY
LOSE MONEY. INVESTING FOR SHORT PERIODS MAKES LOSSES MORE LIKELY.
INVESTMENTS
ARE NOT FDIC-INSURED, NOR ARE THEY DEPOSITS OF OR GUARANTEED BY A BANK OR ANY
OTHER ENTITY.
The Washington Mutual Investors Fund
Fellow Shareholders:
The first half of Washington Mutual's current fiscal year _ the six months
ended October 31 _ was a very unusual period. A majority of the stocks in the
unmanaged Standard & Poor's 500 Composite Index fell in price. Meanwhile, a
small number of S&P stocks _ mainly Internet and other high-tech issues _
rose dramatically, enabling the index to record a positive total return of
2.7%.
This small group of high-flying stocks is generally not represented in
your Fund's portfolio because most of those companies do not meet its strict
criteria, which include a strong balance sheet, a history of solid
earnings and
a record of dividend payments. Not surprisingly, the Fund lagged the index for
the half-year, registering a decline of 2.6% with dividends reinvested.
Against a backdrop of strong economic growth in the United States and a
recovery in Asia, the Federal Reserve raised the Federal funds rate by 25
basis
points on June 30, on August 24 and again on November 16. These actions
reflect
an effort to forestall an increase in inflationary pressure. So far, there has
been relatively little evidence of a rapid rise in prices, and wage increases
generally have been restrained.
On October 31, your Fund's portfolio reflected ownership of 171 companies
in 31 industries. The largest positions as a percent of net assets were
Banking
(14.0%), Diversified Telecommunications Services (12.0%), Energy Sources
(8.9%), Health & Personal Care (8.8%), Electric & Gas Utilities (8.2%) and
Food
& Household Products (4.9%).
Twenty-one companies appear in the Fund's portfolio for the first time
since April 30, 1999. These are Abbott Laboratories; American Greetings;
Becton, Dickinson; Burlington Northern Santa Fe; Campbell Soup; CenturyTel;
Computer Associates International; Conoco; Dow Chemical; Ford Motor; Harris
Corp.; Limited; Lowe's Companies; MBNA; National City; Phillips Petroleum;
Procter & Gamble; Providian Financial; Service Corp. International; Union
Carbide; and Washington Mutual (the largest savings institution in the U.S.,
which is not affiliated with the Fund). Eleven companies were eliminated:
Bankers Trust; Berkshire Hathaway; BP Amoco; Browning-Ferris; DaimlerChrysler;
Johnson & Johnson; Sears; St. Paul Companies; Tribune Co.; Tyco International;
and Wal-Mart Stores.
The portfolio changes during the past six months resulted in a
substantial
realized capital gain, which will be distributed prior to year-end. All of the
capital gain distribution will qualify for the long-term capital gain rate
of a
maximum of 20%. Shareholders who received taxable dividends or capital gain
distributions will be mailed a Tax Guide and a Form 1099-DIV in January 2000.
We are most appreciative of the continued loyalty of our
shareholders. You
have helped Washington Mutual grow substantially through the years. While
there
are bound to be bumps in the road along the way, it is our firm belief
that our
adviser's prudent approach to managing the portfolio will, over time, continue
to provide you with a rewarding investment experience. As always, we will be
pleased to respond to your questions and comments.
Cordially,
(signatures)
Stephen Hartwell James H. Lemon, Jr. Harry J. Lister
Chairman of Vice Chairman of President of
the Board the Board the Fund
December 14, 1999
Investment Portfolio
October 31, 1999
Unaudited
(bar chart showing the following data)
Five Largest Investment Categories Percent of Net Assets
Finance 21.86%
Services 20.28%
Consumer Goods 18.04%
Energy 17.07%
Capital Equipment 10.06%
Ten Largest Individual Holdings Percent of Net Assets
Sprint FON Group 3.76%
Bank of America 3.46
U S WEST 2.54
Sara Lee2.11
Bristol-Myers Squibb 2.06
Wells Fargo 2.05
AT&T 1.98
SBC Communications 1.97
Household International 1.90
Monsanto 1.88
Market Percent
Value of Net
Common Stocks Shares (000)
Assets
Energy
Energy Sources _ 8.89%
Ashland Inc. 3,680,000 $ 121,440
.22%
Atlantic Richfield Co. 5,858,000 545,892 .97
Chevron Corp. 8,942,000 816,516 1.44
Conoco Inc., Class A 8,450,000 231,847 .41
Conoco Inc., Class B 8,598,957 233,247 .41
Exxon Corp. 3,700,000 274,031 .48
Kerr-McGee Corp. 3,478,900 186,991 .33
Mobil Corp. 8,375,000 808,188 1.43
Phillips Petroleum Co. 11,785,600 548,031 .97
Texaco Inc. 17,000,000 1,043,375 1.85
Unocal Corp. 6,296,500 217,229 .38
5,026,787 8.89
Utilities: Electric & Gas _ 8.18%
Ameren Corp. 6,577,400 248,708 .44
American Electric Power Co., Inc. 6,378,000 220,041 .39
Carolina Power & Light Co. 7,800,000 269,100 .48
Central and South West Corp. 9,050,800 200,815 .35
CINergy Corp. 2,250,000 63,563 .11
Conectiv 3,400,000 66,300 .12
Consolidated Edison, Inc. 4,921,700 187,947
.33%
Consolidated Natural Gas Co. 3,950,000 252,800 .45
Constellation Energy Group, Inc.
(formerly Baltimore Gas and Electric Co.) 7,300,000 224,019 .40
Dominion Resources, Inc. 2,000,000 96,250 .17
DTE Energy Co. 3,315,000 110,017 .19
Duke Energy Corp. 4,600,000 259,900 .46
Edison International 3,135,000 92,874 .16
Entergy Corp. 2,400,000 71,850 .13
Florida Progress Corp. 4,725,000 216,464 .38
FPL Group, Inc. 1,800,000 90,562 .16
GPU, Inc. 4,475,000 151,870 .27
New Century Energies, Inc. 3,050,000 99,316 .17
OGE Energy Corp. 800,000 18,150 .03
PECO Energy Co. 2,000,000 76,375 .14
PP & L Resources, Inc. 3,035,319 82,143 .15
Public Service Enterprise Group Inc. 2,020,000 79,916 .14
Puget Sound Energy, Inc. 3,800,000 84,075 .15
Reliant Energy, Inc. 1,800,000 49,050 .09
Sempra Energy 1,485,100 30,352 .05
Southern Co. 27,844,400 739,617 1.31
TECO Energy, Inc. 1,000,000 22,062 .04
Williams Companies, Inc. 13,500,000 506,250 .89
Wisconsin Energy Corp. 800,000 17,900 .03
4,628,286 8.18
Total Energy 9,655,073 17.07
Materials
Chemicals _ 4.10%
Air Products and Chemicals, Inc. 2,690,000 73,975 .13
CK Witco Corp. (formerly Witco Corp.) 4,200,000 39,375 .07
Dow Chemical Co. 1,050,000 124,162 .22
E.I. du Pont de Nemours and Co. 1,250,000 80,547 .14
Hercules Inc. 5,220,000 125,606 .22
International Flavors
& Fragrances Inc. 2,250,000 86,063 .15
Mallinckrodt Inc. 3,585,000 121,666 .22
Monsanto Co. 27,577,000 1,061,714 1.88
PPG Industries, Inc. 8,716,500 528,438 .94
Sherwin-Williams Co. 3,000,000 67,125
.12%
Union Carbide Corp. 125,000 7,625 .01
2,316,296 4.10
Forest Products & Paper _ 2.60%
International Paper Co. 13,100,000 689,388 1.22
Westvaco Corp. 5,500,000 163,281 .29
Weyerhaeuser Co. 8,675,000 517,789 .91
Willamette Industries, Inc. 2,475,000 102,867 .18
1,473,325 2.60
Metals: Nonferrous _ .60%
Alcoa Inc. 2,972,600 180,585 .32
Phelps Dodge Corp. 2,807,300 158,262 .28
338,847 .60
Metals: Steel _ .06%
Allegheny Teledyne Inc. 2,250,000 34,172 .06
Total Materials 4,162,640 7.36
Capital Equipment
Aerospace & Military Technology _ 1.79%
Boeing Co. 9,200,000 423,775 .75
United Technologies Corp. 9,736,000 589,028 1.04
1,012,803 1.79
Data Processing & Reproduction _ 2.56%
Computer Associates International, Inc. 5,635,000 318,377 .56
Hewlett-Packard Co. 4,700,000 348,094 .62
International Business Machines Corp. 1,200,000 118,050 .21
Xerox Corp. 23,659,000 662,452 1.17
1,446,973 2.56
Electrical & Electronics _ .52%
Emerson Electric Co. 2,800,000 168,175
.30%
General Electric Co. 300,000 40,669 .07
Harris Corp. 3,850,000 86,384 .15
295,228 .52
Electronic Components _ 1.13%
Motorola, Inc. 2,000,000 194,875 .34
Texas Instruments Inc. 3,600,000 323,100 .57
Thomas & Betts Corp. 2,720,000 122,060 .22
640,035 1.13
Electronic Instruments _ .55%
PE Biosystems Group
(formerly Perkin-Elmer Corp.) 4,817,800 312,555 .55
Energy Equipment _ .21%
Halliburton Co. 3,200,000 120,600 .21
Industrial Components _ 2.06%
Dana Corp. 6,726,600 198,855 .35
Eaton Corp. 2,712,900 204,146 .36
Genuine Parts Co. 8,615,800 224,549 .40
Illinois Tool Works Inc. 866,700 63,486 .11
Johnson Controls, Inc. 4,052,400 246,183 .44
TRW Inc. 5,283,200 226,517 .40
1,163,736 2.06
Machinery & Engineering _ 1.24%
Caterpillar Inc. 1,200,000 66,300 .12
Deere & Co. 6,990,000 253,387 .45
Fluor Corp. 3,700,000 147,538 .26
Ingersoll-Rand Co. 1,012,500 52,903 .09
Pall Corp. 6,100,000 133,819 .24
Parker Hannifin Corp. 950,000 43,522 .08
697,469 1.24
Total Capital Equipment 5,689,399 10.06
Consumer Goods
Appliances & Household Durables _ .64%
Newell Rubbermaid Inc. 10,400,000 360,100
.64%
Automobiles _ .39%
Ford Motor Co. 4,000,000 219,500 .39
Beverages _ 1.26%
PepsiCo, Inc. 20,650,000 716,297 1.26
Food & Household Products _ 4.88%
Bestfoods 3,033,600 178,224 .32
Campbell Soup Co. 3,000,000 135,000 .24
Colgate-Palmolive Co. 3,600,000 217,800 .38
General Mills, Inc. 7,485,000 652,598 1.15
Kellogg Co. 7,302,700 290,739 .51
Procter & Gamble Co. 900,000 94,388 .17
Sara Lee Corp. 44,050,000 1,192,103 2.11
2,760,852 4.88
Health & Personal Care _ 8.80%
Abbott Laboratories 5,000,000 201,875 .36
American Home Products Corp. 2,000,000 104,500 .18
Avon Products, Inc. 7,317,700 235,996 .42
Baxter International Inc. 2,950,000 191,381 .34
Becton, Dickinson and Co. 3,100,000 78,663 .14
Bristol-Myers Squibb Co. 15,182,000 1,166,167 2.06
Eli Lilly and Co. 8,765,000 603,689 1.07
Kimberly-Clark Corp. 14,507,000 915,754 1.62
McKesson Corp. 2,163,000 43,395 .08
Merck & Co., Inc. 1,600,000 127,300 .22
Pfizer Inc 6,600,000 260,700 .46
Pharmacia & Upjohn, Inc. 4,500,000 242,719 .43
Schering-Plough Corp. 5,757,000 284,972 .50
Warner-Lambert Co. 6,500,000 518,781 .92
4,975,892 8.80
Recreation & Other Consumer Products _ 1.06%
American Greetings Corp., Class A 1,550,000 40,106
.07%
Eastman Kodak Co. 6,381,500 439,925 .78
Stanley Works 4,350,000 120,712 .21
600,743 1.06
Textiles & Apparel _ 1.01%
NIKE, Inc., Class B 8,560,425 483,129 .85
VF Corp. 3,000,000 90,188 .16
573,317 1.01
Total Consumer Goods 10,206,701 18.04
Services
Broadcasting & Publishing _ .78%
Dow Jones & Co., Inc. 3,157,600 194,192 .34
Gannett Co., Inc. 1,675,800 129,246 .23
Knight-Ridder, Inc. 1,850,000 117,475 .21
440,913 .78
Business Services _ 1.97%
Deluxe Corp. 2,000,000 56,500 .10
Diebold, Inc. 700,000 18,375 .03
Dun & Bradstreet Corp. 4,962,800 145,782 .26
Electronic Data Systems Corp. 3,050,000 178,425 .31
First Data Corp. 5,396,400 246,548 .44
IKON Office Solutions, Inc. 7,285,000 50,084 .09
Interpublic Group
of Companies, Inc. 2,724,400 110,679 .19
Pitney Bowes Inc. 5,314,500 242,142 .43
Service Corp. International 7,078,000 67,684 .12
1,116,219 1.97
Leisure & Tourism _ .37%
McDonald's Corp. 5,000,000 206,250 .37
Merchandising _ 3.60%
Albertson's, Inc. 20,694,440 $ 751,467
1.33%
J.C. Penney Co., Inc. 12,540,500 318,215 .56
Limited Inc. 6,750,000 277,594 .49
Lowe's Companies, Inc. 2,500,000 137,500 .24
May Department Stores Co. 15,870,800 550,518 .98
2,035,294 3.60
Diversified Telecommunication Services_11.96%
AT&T Corp. 23,987,500 1,121,416 1.98
CenturyTel, Inc. 670,000 27,093 .05
GTE Corp. 12,472,000 935,400 1.66
SBC Communications Inc. 21,845,732 1,112,767 1.97
Sprint FON Group 28,655,800 2,129,484 3.76
U S WEST, Inc. 23,564,400 1,438,901 2.54
6,765,061 11.96
Transportation: Rail _ 1.60%
Burlington Northern Santa Fe Corp. 4,750,000 151,406 .27
CSX Corp. 7,400,000 303,400 .54
Norfolk Southern Corp. 13,271,400 324,320 .57
Union Pacific Corp. 2,250,000 125,438 .22
904,564 1.60
Total Services 11,468,301 20.28
Finance
Banking _ 13.98%
Bank of America Corp. 30,400,000 1,957,000 3.46
Bank of New York Co., Inc. 14,550,000 609,281 1.08
BANK ONE CORP. 10,151,500 381,316 .67
Chase Manhattan Corp. 8,950,500 782,050 1.38
Citigroup Inc. 7,159,500 387,508 .69
First Union Corp. 21,653,600 924,338 1.63
Fleet Boston Corp.
(formerly Fleet Financial Group, Inc.) 10,099,473 440,590 .78
J.P. Morgan & Co. Inc. 2,175,000 284,653 .50
KeyCorp 5,900,000 164,831
.29%
National City Corp. 2,000,000 59,000 .11
SunTrust Banks, Inc. 5,975,000 437,295 .77
Wachovia Corp. 850,000 73,312 .13
Washington Mutual, Inc. 6,992,300 251,286 .44
Wells Fargo & Co. 24,177,000 1,157,474 2.05
7,909,934 13.98
Financial Services _ 3.28%
American Express Co. 300,000 46,200 .08
Fannie Mae 4,925,000 348,444 .62
Household International, Inc. 24,047,482 1,073,119 1.90
MBNA Corp. 1,396,200 38,570 .07
Providian Financial Corp. 1,947,400 212,267 .37
SLM Holding Corp. 2,750,000 134,578 .24
1,853,178 3.28
Insurance _ 4.60%
Aetna Inc. 4,875,005 244,969 .43
Allstate Corp. 25,900,000 744,625 1.32
American General Corp. 7,205,000 534,521 .94
Aon Corp. 12,031,000 427,101 .76
Jefferson-Pilot Corp. 3,700,000 277,731 .49
Lincoln National Corp. 6,050,000 279,056 .49
Marsh & McLennan Companies, Inc. 1,200,000 94,875 .17
2,602,878 4.60
Total Finance 12,365,990 21.86
Multi-Industry
Multi-Industry _ 1.86%
AlliedSignal Inc. 9,300,000 529,519 .94
Dover Corp. 6,350,500 270,293 .48
Minnesota Mining and Manufacturing Co. 2,500,000 237,656 .42
Whitman Corp. 1,050,000 13,650 .02
Total Multi-Industry 1,051,118 1.86
Miscellaneous
Miscellaneous _ 1.22%
Common stocks in initial
period of acquisition 17,952,368 688,215
1.22%
TOTAL COMMON STOCKS
(cost: $41,128,318,000) 55,287,437 97.75
U.S. Treasuries and Other Federal Agencies
U.S. Treasuries and Other Federal Agencies _ 2.06%
Federal Farm Credit Banks
5.17%-5.21% due 11/18-12/17/99 $ 26,361 26,206 .05
Federal Home Loan Bank
5.16%-5.52% due 11/5/99-1/28/00 555,571 550,787 .97
United States Treasury bills
4.57%-4.98% due 12/9/99-1/27/00 595,818 590,384 1.04
TOTAL SHORT-TERM SECURITIES
(cost: $1,167,432,000) 1,167,377 2.06
TOTAL INVESTMENT SECURITIES
(cost: $42,295,750,000) 56,454,814 99.81
Excess of cash and receivables over payables 107,051 .19
NET ASSETS $56,561,865
100.00%
See Notes to Financial Statements
Financial Statements Washington Mutual Investors
Fund
Statement of Assets and Liabilities
October 31, 1999
Unaudited (dollars in
thousands)
Assets:
Investment securities at market
(cost: $42,295,750)
$56,454,814
Cash
4,938
Receivables for _
Sales of investments $ 93,500
Sales of Fund's shares 48,608
Dividends 101,421
243,529
56,703,281
Liabilities:
Payables for _
Purchases of investments 39,997
Repurchases of Fund's shares 62,162
Management services 13,101
Other expenses 26,156
141,416
Net Assets at October 31, 1999 _
Equivalent to $34.09 per share on
1,659,123,090 shares of $1 par value
capital stock outstanding (authorized
capital stock _ 2,000,000,000 shares) $56,561,865
See Notes to Financial Statements
Statement of Operations
for the six months ended October 31, 1999
Unaudited (dollars in
thousands)
Investment Income:
Income:
Dividends $ 631,370
Amortization 42,938
674,308
Expenses:
Investment adviser fee 56,334
Business management fee 24,624
Distribution expenses 68,059
Transfer agent fee 20,320
Reports to shareholders 744
Registration statement and prospectus 3,004
Postage, stationery and supplies 3,464
Directors' and Advisory Board fees 238
Auditing and legal fees 115
Custodian fee 231
Other expenses 24
177,157
Net investment income
497,151
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 2,215,473
Net unrealized appreciation:
Beginning of period 18,414,413
End of period 14,159,064
Net change in unrealized
appreciation (4,255,349)
Net realized gain and change in
unrealized appreciation (2,039,876)
Net Decrease in Net Assets
Resulting from Operations $(1,542,725)
See Notes to Financial Statements
Washington Mutual Investors Fund
Statement of Changes in Net Assets
Six Months Ended Year Ended
(dollars in thousands) October 31, 1999<F1> April 30, 1999
Operations:
Net investment income $ 497,151 $ 897,215
Net realized gain on investments 2,215,473 5,230,170
Net change in unrealized
appreciation on investments (4,255,349) 1,076,341
Net Increase (Decrease) in Net Assets
Resulting from Operations (1,542,725) 7,203,726
Dividends and Distributions
Paid to Shareholders:
Dividends from net investment income (475,439) (890,284)
Distributions from net realized
gain on investments _ (3,760,550)
Total Dividends and Distributions (475,439) (4,650,834)
Capital Share Transactions:
Proceeds from shares sold:
132,534,308 and 334,983,835
shares, respectively 4,592,599 11,104,242
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
12,822,714 and 137,585,488
shares, respectively 444,410 4,421,141
Cost of shares repurchased:
100,959,263 and 206,861,783
shares, respectively (3,475,205) (6,823,584)
Net Increase in Net Assets Resulting
from Capital Share Transactions 1,561,804 8,701,799
Total Increase (Decrease) in Net Assets (456,360) 11,254,691
Net Assets:
Beginning of period 57,018,225 45,763,534
End of period (including undistributed
net investment income: $134,353 and
$112,641, respectively) $56,561,865 $57,018,225
[FN]
<F1>Unaudited
</FN>
See Notes to Financial Statements
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 current income and to provide an opportunity for growth of
principal consistent with sound common stock investing.
Significant Accounting Policies _ The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could
differ from those estimates. The following is a summary of the significant
accounting policies consistently followed by the Fund in the preparation
of its financial statements:
Security Valuation _ Equity securities are valued at the last reported
sales 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. Short-term securities maturing
within 60 days are valued at amortized cost, which approximates market value.
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 Board of Directors.
Security Transactions and Related Investment Income _ Security
transactions are accounted for as of the trade date. Realized gains and
losses from securities transactions are determined based on specific
identified cost. Dividend income is recognized on the ex-dividend date, and
interest income is recognized on an accrual basis.
Dividends and Distributions to Shareholders _ Dividends and distributions
paid to shareholders are recorded on the ex-dividend date.
2. Federal Income Taxation
The Fund complies with the requirements of the Internal Revenue Code
applicable to regulated investment companies and intends to distribute all of
its net taxable income and net realized gains for the fiscal year. As a
regulated investment company, the Fund is not subject to income taxes if such
distributions are made. Required distributions are determined on a tax basis
and may differ from net investment income and net realized gains for financial
reporting purposes. In addition, the fiscal year in which amounts are
distributed may differ from the year in which the net investment income
and net realized gains are recorded by the Fund.
As of October 31, 1999, net unrealized appreciation on investments for
book and federal income tax purposes aggregated $14,159,064,000, of which
$15,533,077,000 related to appreciated securities and $1,374,013,000
related to depreciated securities. There was no difference between book and
tax realized gains on securities transactions for the six months ended
October 31, 1999.
The cost of portfolio securities for book and federal income tax purposes was
$42,295,750,000 at October 31, 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 fee of $24,624,000 was
paid to WMC as business manager of the Fund pursuant to the business
management contract under which WMC provides business management services.
Under the contract 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. The contract provides for monthly
fees, accrued daily, computed at 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.
Johnston, Lemon & Co. Incorporated, (JLC), earned $528,000 on its retail
sales of shares and distribution plan of the Fund and received no brokerage
commissions resulting from purchases and sales of securities for the
investment account of the Fund.
A fee of $56,334,000 for investment advisory services was incurred
pursuant to an agreement with Capital Research and Management Company (CRMC).
The 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 _ American Funds Distributors, Inc. (AFD), the
principal underwriter of the Fund's shares, received $16,984,000 (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.
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 six months ended October 31,
1999, distribution expenses under the Plan were $68,059,000. As of
October 31, 1999, accrued and unpaid distribution expenses were $20,694,000.
Transfer Agent Fee _ American Funds Service Company (AFS), the transfer
agent for the Fund, was paid a fee of $20,320,000.
Deferred Directors' Fees _ Independent Directors and Advisory Board
members 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 October 31, 1999, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1994), net of any payments to
Directors and Advisory Board members, were $509,000.
WMC and JLC are both wholly owned subsidiaries of The Johnston-Lemon
Group, Incorporated (JLG). CRMC is wholly owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC. All
the officers of the Fund and four of its directors are affiliated with JLG.
4. Investment Transactions and Other Disclosures
The Fund made purchases and sales of investment securities, excluding
short-term securities, of $8,818,460,000 and $6,782,300,000, respectively,
during the six months ended October 31, 1999.
As of October 31, 1999, accumulated undistributed net realized gain on
investments was $5,193,686,000 and additional paid-in capital was
$35,415,639,000. The Fund reclassified $229,790,000 from undistributed net
realized gains to additional paid-in capital for the six months ended October
31, 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 $231,000 includes $137,000 that was paid by these credits
rather than in cash.
The Fund owns 5.1%, 5.0%, 5.0%, 5.0% and 5.5% of the outstanding voting
securities of Ashland, Household International, Mallinckrodt, PPG Industries,
and Westvaco, respectively, which represent investments in affiliates as
defined in the Investment Company Act of 1940.
Per Share Data and Ratios
Six Months
Ended Year ended April 30
10/31/1999<F1> 1999 1998 1997 1996 1995
Net Asset Value,
Beginning of Period $35.31 $33.92 $25.93 $22.77 $18.87 $17.11
Income (Loss) from
Investment Operations:
Net investment income .30 .60 .62 .62 .63 .63
Net gains (loss) on
securities (both realized
and unrealized) (1.23) 3.99 9.65 4.36 4.98 2.16
Total income (loss) from
investment operations (.93) 4.59 10.27 4.98 5.61 2.79
Less Distributions:
Dividends (from net
investment income) (.29) (.61) (.62) (.62) (.62) (.62)
Distributions (from
capital gains) -.- (2.59) (1.66) (1.20) (1.09) (.41)
Total distributions (.29) (3.20) (2.28) (1.82) (1.71) (1.03)
Net Asset Value,
End of Period $34.09 $35.31 $33.92 $25.93 $22.77 $18.87
Total Return<F2> <F3>(2.65)% 14.61% 40.80% 22.43% 30.40% 17.01%
Ratios/Supplemental Data:
Net assets, end of
period (in millions) $56,449 $57,018 $45,764 $28,165 $20,689 $14,426
Ratio of expenses to
average net assets .31% .61% .62% .64% .66% .69%
Ratio of net income
to average net assets .88% 1.84% 2.08% 2.56% 2.98% 3.57%
Portfolio turnover rate 12.38% 27.93% 17.61% 20.41% 23.41% 25.45%
[FN]
<F1>Unaudited
<F2>Excludes maximum sales charge of 5.75%.
<F3>Based on operations for the period shown and, accordingly, not
representative of a full year.
</FN>
Washington Mutual Investors Fund
Board of Directors
Stephen Hartwell
Chairman of the Board
James H. Lemon, Jr.
Vice Chairman of the Board
Harry J. Lister
President of the Fund
Cyrus A. Ansary
Fred J. Brinkman
Daniel J. Callahan III
James C. Miller III
T. Eugene Smith
Leonard P. Steuart II
Margita E. White
Directors Emeritus
Bernard J. Nees
Chairman Emeritus of the Fund
Charles T. Akre
Nathan A. Baily
John A. Beck
Jean Head Sisco
Stephen G. Yeonas
Advisory Board
Charles A. Bowsher
Mary K. Bush
Katherine D. Ortega
J. Knox Singleton
William B. Snyder
Robert F. Tardio
Other Officers
Howard L. Kitzmiller
Senior Vice President, Secretary
and Assistant Treasurer of the Fund
Ralph S. Richard
Vice President and Treasurer of
the Fund
Lois A. Erhard
Vice President of the Fund
Michael W. Stockton
Assistant Vice President,
Assistant Secretary and
Assistant Treasurer of the Fund
J. Lanier Frank
Assistant Vice President of the Fund
Offices of the Fund
and of the Business Manager
Washington Management Corporation
1101 Vermont Avenue, NW
Washington, DC 20005-3585
202/842-5665
Investment Manager
Capital Research and
Management Company
333 South Hope Street
Los Angeles, CA 90071-1443
135 South State College Boulevard
Brea, CA 92821-5823
Transfer Agent
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 2205
Brea, CA 92822-2205
P.O. Box 659522
San Antonio, TX 78265-9522
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of Assets
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081-0001
Counsel
Thompson, O'Donnell,
Markham, Norton & Hannon
805 Fifteenth Street, NW
Washington, DC 20005-2216
Principal Underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1462
We are sad to report that Vernon W. Holleman, Jr. passed away on July 21,
1999.
Mr. Holleman was a member of the Fund's Advisory Board from October 18, 1984
until his death. His wise counsel and friendship will be missed.
Printed on recycled paper
WMIF-013-1299
(logo American Funds)
For information about your account or any of the Fund's services, please
contact your financial adviser. You may also call American Funds Service
Company, toll-free, at 800/421-0180 or visit www.americanfunds.com on the
World
Wide Web.
This report is for the information of shareholders of Washington Mutual
Investors Fund, Inc., but it may also be used as sales literature when
preceded
or accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the Fund. If used as
sales material after December 31, 1999, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
