(logo) The American Funds Group(R)
Washington Mutual Investors Fund
(cover montage)
Annual Report for the year ended April 30, 2000
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 funds in The American Funds Group,(R) the
nation's third-largest mutual fund family. For nearly seven 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 calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Here are the average
annual compound returns on a $1,000 investment for periods ended March 31, 2000
(the most recent calendar quarter) with all distributions reinvested:
10 years 5 years 12 months
Class A Shares
reflecting 5.75% maximum sales charge +14.58% +18.43% -5.64%
Results for Class B shares are not shown because of the brief time between their
introduction on March 15 and the end of the Fund's fiscal year.
There are two ways to invest in Washington Mutual Investors Fund. Class A shares
are subject to a 5.75% maximum up-front sales charge that declines for accounts
of $25,000 or more. Class B shares, which are not available for certain
employer-sponsored retirement plans, have no up-front charge. They are, however,
subject to additional expenses of approximately 0.75% a year over the first
eight years of ownership. If redeemed within six years, they may also be subject
to a contingent deferred sales charge (5% maximum) that declines over time.
Figures shown are past results and are not predictive of future 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.
(graphic; front cover)
About Our Cover:
The four stars on the U.S. map represent the locations of the four American
Funds service centers (west to east): Brea, California; San Antonio, Texas;
Indianapolis, Indiana; and Norfolk, Virginia.
Fellow Shareholders:
Following five consecutive years of double-digit gains that saw the value of an
investment rise by just over 200%, Washington Mutual Investors Fund recorded a
negative return of 7.0% during the fiscal year ended April 30. This was the
first fiscal year decline since 1988, and only the eighth since operations began
in 1952.
Unlike some periods in the past when the share value has gone down, the decline
in fiscal 2000 did not reflect any weakening of the U.S. economy or
deteriorating corporate profits. Throughout the year, the economy continued to
expand and earnings reports generally were favorable. This time, Washington
Mutual's results fell victim to rising interest rates and, most importantly, to
the speculative mania that swept through the technology sector of the market.
Internet and other high-tech stocks captured the investment community's
attention and soared in price, in some cases to astonishing levels. To finance
their purchases of these securities, many investors sold dividend-paying,
value-oriented investments - the type of less glamorous but fundamentally sound
securities that can be found in Washington Mutual's portfolio.
Since June 1999, the Federal Reserve has raised rates six times - three times
in calendar 1999 and three times thus far in 2000. These increases have been
made for the purpose of moderating the pace of economic growth and forestalling
inflation. However, the nation's growth rate has not yet slowed and recently
there have been signs of inflationary pressure. Rising rates traditionally hurt
banks and other financial services companies, which make up a large portion of
our portfolio.
As we have pointed out in the past, Internet and other high-tech issues are not
significantly represented in the Fund's portfolio because the companies, by and
large, do not meet our strict criteria, which include a strong balance sheet, a
history of solid earnings and a record of dividend payments. Some of the firms
that participated in the dramatic rise in fiscal 2000 have never paid a dividend
or earned a profit, and probably never will. Toward the end of the fiscal year,
there was strong evidence that enthusiasm for these stocks may have finally
subsided. From its March 10 high, the unmanaged Nasdaq Composite Index, which is
dominated by technology shares, fell more than 35% in just 10 weeks.
Since we last reported to you six months ago, 14 new companies have appeared in
the Fund's portfolio: Bell Atlantic, Cardinal Health, Coca-Cola, ConAgra,
Dillard's, Dollar General, Equifax, Goodyear Tire & Rubber, H.J. Heinz,
Raytheon, ServiceMaster, Southwest Airlines, St. Paul Companies, and Walgreen.
Fourteen names were eliminated: Allegheny Teledyne, American Express, Diebold,
Dow Jones & Co., DuPont, Electronic Data Systems, General Electric, OGE Energy,
Parker Hannifin, Procter & Gamble, Sempra Energy, Service Corp. International,
Sherwin-Williams, and Whitman.
Your Fund continues to emphasize companies with growing dividends. During the
second half of fiscal 2000, nearly 34% of the companies represented in the
portfolio raised their dividend payments, bringing to 80 the total number of
companies that have done so since the start of the fiscal year. This has enabled
Washington Mutual to provide increased returns for shareholders who reinvest
their dividends, as 93% do.
In our annual report one year ago, we cautioned that a collapse in the price of
highly inflated Internet stocks might have an injurious effect on the prices of
less volatile securities. It appears that is now beginning to happen. We are
confident that our emphasis on value and dividends can provide relative
stability during this period.
The year 2000 (Y2K) computer changeover - for which your Fund, its custodian,
transfer agent, investment adviser, and business manager carefully prepared -
did not present us with any problems. We would like to thank all personnel and
suppliers who helped us address this issue.
We are always pleased to receive questions and comments from our investors. A
wide range of information is available from your financial adviser and from the
American Funds Web site, www.americanfunds.com. Our next formal report to
shareholders will cover the
six months ending October 31.
Cordially,
(signature) (signature) (signature)
Stephen Hartwell James H. Lemon, Jr. Harry J. Lister
Chairman of the Board Vice Chairman of the Board President of the Fund
June 15, 2000
*All figures in this report include reinvestment of distributions unless
otherwise indicated.
Investment Adviser's Report
In evaluating Washington Mutual's results for fiscal 2000, it may be useful to
take a close look at what has been happening in the stock market over the past
two years. Anyone watching the unmanaged Standard & Poor's 500 Composite Index
climb higher and higher during this period might conclude that, at least until
March, the bull market remained intact. One of the most troubling misconceptions
that surfaced during the period was the notion that any mutual fund fully
invested in equities somehow should have been able to match the performance of
the S&P 500.
In fact, the market as a whole deteriorated during the 24-month span
encompassing the Fund's 1999 and 2000 fiscal years. While the S&P 500 Index was
gaining 34%, the average stock in the index was declining 10%. During this time,
the market narrowed until it reached a stage where only a relatively small
number of very large stocks were rising dramatically and pulling the index
upward. The vast majority of those were technology issues that are not suitable
as core holdings for an actively managed fund focused on dividends and committed
to paying shareholders an income return above the dividend yield generated by
the market as a whole.
Non-technology stocks in the S&P 500 did considerably less well, particularly in
the final half of fiscal 2000. Income-oriented securities that are prominent in
Washington Mutual's portfolio were further constrained by the rise in interest
rates over the past year. These factors negatively impacted five of the Fund's
10 largest holdings (page 14). They were Bank of America (-31.9%), Texaco
(-21.1%), Household International (-17.0%), AT&T (-7.5%), and Wells Fargo
(-4.9%). Not surprisingly, a number of investments that bucked the trend and
rose were technology-related issues which met the Fund's strict investment
criteria. The biggest gainers among all of our holdings were Texas Instruments
(+219.0%), PE Biosystems (+130.8%), Hewlett Packard (+71.2%), Warner Lambert
(+67.5%), and Motorola (+48.6%).
The portfolio, which begins on page 14, shows how assets were diversified at
fiscal year-end. The largest industry positions as a percentage of net assets
were Banking (12.4%), Health & Personal Care (11.6%), Diversified
Telecommunication Services (9.8%), Electric & Gas Utilities (9.2%), and Energy
Sources (7.8%). The Fund's holdings in these five industries accounted for about
half of net assets.
Looking back, it appears that the speculative boom in Internet and technology
stocks began un-winding approximately seven weeks before the close of fiscal
2000. While the downswing stunned some investors who had come to believe that
their holdings might never stop rising in price, it should not have come as any
great surprise. The boom had lifted many high-tech stocks to stratospheric
levels that could not possibly be sustained on a long-term basis.
We have entered a period where valuations are becoming more attractive.
Although the S&P 500 was still selling at more than 25 times earnings at the
close of fiscal 2000, about one-fourth of all stocks in the index - including
some very high-quality companies - were selling at less than 12 times.
Drawing on our organization's extensive research capabilities, we have been
taking advantage of a number of these opportunities. As those of you who have
been shareholders for some time know, we employ a bottom-up approach, investing
on a stock-by-stock basis. We also believe that the current portfolio is well
structured to be less vulnerable than the overall market to the effect of any
further significant downturn in equity prices, while at the same time giving the
Fund the potential to participate significantly in the market's recovery.
- Capital Research and Management Company
The Value of a Long-Term Perspective
Washington Mutual Investors Fund 2000 Annual Report
(3 page spread of Graph showing growth of a $10,000 investment in the fund since
1952)
This chart shows how a $10,000 investment grew between July 31, 1952, when the
Fund began operations, and April 30, 2000.
As you can see, that $10,000 investment in Washington Mutual, with all
distributions reinvested, would have grown to $4,148,122. Over the same period,
that $10,000 would have grown to $3,209,578 in the unmanaged Standard & Poor's
500 Composite Index of U.S. common stocks. According to the Consumer Price
Index, it now requires $64,120 to purchase what $10,000 would have bought on
July 31, 1952. In the average savings institution, $10,000 with interest
compounded would have grown to $116,258.
The year-by-year progress of the $10,000 investment is summarized in the table
below the chart. You can use those figures to estimate how the value of your own
holdings has grown. Let_s say, for example, that you have been reinvesting all
your distributions and want to know how your investment has done since April 30,
1990. At that time, according to the table, the value of the investment
illustrated here was $971,049. Since then it has gone up more than fourfold to
$4,148,122. Thus, in the same 10-year period, the value of your 1990 investment
- regardless of its size - has increased more than fourfold.
During the period illustrated, stock prices fluctuated and were higher at the
end than at the beginning. These results should not be considered as a
representation of the results that may be realized from an investment made in
the Fund today. Past performance is not predictive of future performance. The
indexes are unmanaged and do not reflect sales charges, commissions or expenses.
Average Annual Compound Returns<F1>
for periods ended April 30, 2000
10 Years 5 Years 1 Year
+14.94% +17.70% 12.30%
[FN]
<F1> Based on the maximum sales charge of 5.75%. Sales charges are lower for
investments of $25,000 or more.
</FN>
A "mountain chart" showing the increase in value of a $10,000 investment:
in Washington Mutual with dividends reinvested growing to $4,146,122<F1><F6>;
in the S&P 500 with dividends reinvested growing to $3,209,578;
in Washington Mutual with dividends taken in cash growing to $646,506<F1><F6>;
in an Average Savings Institution growing to $116,256<F4>;
and factored by the Consumer Pice Index growing to $64,120<F5> (inflation).
Capital Value<F3> Total Value<F2>
Fiscal Year Dividends Value at Dividends Value at WMIF Total
ended April 30 in Cash Year-End<F1> Reinvested Year-End<F1> Return
1953<F6> $169 $9,161 $170 $9,330 (6.7)%
1954 434 10,773 450 11,494 23.2
1955 501 14,665 542 16,288 41.7
1956 580 17,851 654 20,565 26.3
1957 648 18,304 756 21,877 6.4
1958 680 16,928 825 21,055 (3.8)
1959 700 24,125 885 31,071 47.6
1960 728 21,871 947 29,041 (6.5)
1961 815 26,300 1,097 36,167 24.5
1962 823 26,592 1,145 37,654 4.1
1963 890 28,838 1,279 42,278 12.3
1964 923 31,149 1,368 47,109 11.4
1965 957 36,940 1,463 57,490 22.0
1966 1,049 38,487 1,648 61,603 7.2
1967 1,177 39,424 1,906 65,270 6.0
1968 1,332 42,481 2,231 72,692 11.4
1969 1,516 48,408 2,626 85,576 17.7
1970 1,604 39,049 2,874 71,603 (16.3)
1971 1,710 48,769 3,193 93,387 30.4
1972 1,779 47,991 3,456 95,521 2.3
1973 1,818 43,290 3,671 89,522 (6.3)
1974 1,857 40,682 3,907 87,956 (1.7)
1975 2,185 42,855 4,829 98,315 11.8
1976 2,349 53,771 5,498 129,949 32.2
1977 2,509 55,449 6,171 140,348 8.0
1978 2,658 54,228 6,849 144,339 2.8
1979 2,870 58,180 7,785 163,075 13.0
1980 3,203 56,032 9,167 165,847 1.7
1981 4,785 72,410 14,603 230,423 38.9
1982 4,098 69,851 13,326 235,768 2.3
1983 4,496 101,855 15,516 362,292 53.7
1984 4,839 100,116 17,526 373,508 3.1
1985 5,464 115,473 20,783 452,497 21.1
1986 6,109 152,209 24,381 623,767 37.8
1987 6,780 180,960 28,229 771,947 23.8
1988 7,116 167,083 30,815 742,854 (3.8)
1989 6,183 198,139 27,837 911,607 22.7
1990 8,920 202,429 41,689 971,049 6.5
1991 9,135 222,015 44,572 1,113,744 14.7
1992 8,318 244,606 42,318 1,272,370 14.2
1993 8,467 268,131 44,627 1,442,386 13.4
1994 8,583 266,513 46,718 1,479,109 2.5
1995 9,790 301,054 55,058 1,730,691 17.0
1996 10,007 381,514 58,187 2,256,889 30.4
1997 10,505 455,550 62,763 2,763,026 22.4
1998 11,032 628,863 67,444 3,890,245 40.8
1999 11,526 707,653 71,812 4,458,474 14.6
2000 11,935 646,506 75,684 4,148,122 (7.0)
Fund's lifetime average annual compound return: 13.5%<F1>
[FN]
<F1> These figures, unlike some of those noted earlier in this report, reflect
payment of the maximum sales charge of 5.75% on the $10,000 investment. Thus,
the net amount invested was $9,425. As outlined in the prospectus, the sales
charge is reduced for larger investments of $25,000 or more. There is no sales
charge on dividends or capital gain distributions that are reinvested in
additional shares. Results shown do not take into account income or capital gain
taxes.
<F2> Total Value includes reinvested dividends of $881,280 and reinvested
capital gain distributions of $1,495,251.
<F3> Capital Value includes reinvested capital gain distributions of $285,811,
but does not reflect income dividends of $196,552 taken in cash.
<F4> With all interest compounded. Based on figures, supplied by the U.S. League
of Savings Institutions and the Federal Reserve Board, that reflect all kinds of
savings deposits, including longer term certificates. Unlike investments in the
Fund, such deposits are insured and, if held to maturity, offer a guaranteed
return of principal and a fixed rate of interest, but no opportunity for capital
growth. Maximum allowable interest rates were imposed by law until 1983.
<F5> Computed from data supplied by the U.S. Department of Labor, Bureau of
Labor Statistics.
<F6> Since the Fund's inception on July 31, 1952.
</FN>
Inside Washington Mutual
Last year we introduced you to several of the Fund's Investment Standards that
have provided the investment foundation for your Fund.
This year, we will take you behind the scenes so you can meet some of the many
talented associates who support your investment in Washington Mutual across a
wide range of disciplines.
(Photograph of office area with employees)
(caption:)
Teamwork in Responding
One of the many teams available to answer your questions when you call.
These are the individuals who are there when you phone, who keep your account
current, and who provide the technology to do that as swiftly and efficiently as
possible. These are the people who watch securities markets minute-by-minute to
buy the best securities at the best prices - important even for a fund that
buys for the long term. Here also is the group that each market day races
against a tight deadline to compute what your shares are worth and make it
possible for you to keep tabs on those numbers in the daily press, American
FundsLine(R) and our Web site.
Along with the investment professionals who manage the portfolio, they are part
of the Capital Research and Management Company and Washington Management
Corporation team, which have been Washington Mutual's investment adviser and
business manager for nearly 48 years.
In this era of exuberance over the long bull market, leading to such risky
ventures as day trading on the Internet and other do-it-yourself forms of stock
picking, we think you will be pleased to know just how much expertise goes into
managing a successful mutual fund. Rather than go it alone, you have chosen a
capable base of professionals to shepherd your investment.
(photograph of headset)
Excellence of service is a top priority, so let's begin our tour in the area
charged most directly with achieving that, American Funds Service Company. From
four interconnected service centers across the nation - in California, Texas,
Indiana, and Virginia - associates service 11 million accounts for the American
Funds family, Washington Mutual's 2 million among them. On average, the centers'
service representatives field some 18,000 calls a day.
(graphic; phone)
(caption:)
18,000 daily calls, answered in seconds.
(graphic; globe)
Many of those who serve you at the centers are organized into teams that provide
the most effective possible responses to your questions or requests, simple or
complex. The centers handle 70 million contacts annually with shareholders or
their financial advisers. American FundsLine, our 24-hour automated telephone
system, and the American Funds Web site (www.americanfunds.com) are also
convenient sources of information and reduce the cost of servicing your account.
Imaging Technology
A sizable part of service center activity still involves nonelectronic mail.
Imaging technology has allowed the centers to "move the work to where the people
are," says Gary Winsbury, an American Funds manager at the Brea, California
center. The result is a level workload, reducing such costs as overtime and
heavier staffing. Each center feeds mail into a computer imaging system that
allows it to be transferred from center to center instantaneously. In a typical
month over a quarter million transactions are scanned and processed using
imaging technology.
Getting quarterly account statements out to you is an around-the-clock,
seven-day-a-week operation at the turn of each calendar quarter. At the end of
March, some 13 million pages of statements were sent to American Funds
shareholders and their financial advisers.
Protecting your records is another important operation. Marilyn Gravell and Mary
Xavier are part of a team that works with an outside firm called DST to update
and monitor account records. "We can access those records through our computers,
and DST maintains a backup location as well as a storage facility in a limestone
cave in the Midwest," explains Mary.
(graphic; man and woman at computer)
(caption:)
From Paper to Computer
Employees route letters electronically to where they can be handled most
effectively.
Above, Sarah Molina and Dax Velasquez.
Below, Lourdes Villegas, at the keyboard, with Tonya Rodgers and Gary Winsbury.
(graphic; people at computer)
(graphic; two people at compture)
(caption:)
Safeguarding Your Account Records
Much of Capital's technology is self-developed and tested. Mary Xavier and
Marilyn Gravell, in the technology lab, discuss the system used to store and
retrieve account records.
(graphic; people around a computer)
(caption:)
New Numbers Every Day
Nida Murakawa, Jeanne Feybush, and Shane Lawlor are part of the group that
analyzes pricing data on Washington Mutual's individual securities holdings.
Accurate Daily Share Pricing
Around 7 p.m. Eastern time of every stock market day, the updated value of a
share of Washington Mutual appears on the American Funds Web site and the
American FundsLine phone system. By morning, it's in your local newspaper.
Magically to you, perhaps, but a complex race against time for a number of
people at American Funds.
While the general pricing process begins early in the day at Capital Research,
as prices of individual securities are gathered from markets elsewhere in the
world, the real drama begins at 4 p.m. Eastern time when the New York Stock
Exchange closes.
"Six of our associates go behind a closed door for 50 minutes to concentrate in
almost total silence on gathering and checking prices," says Jeanne Feybush, a
senior vice president who oversees the effort. They collect the data on some
3,800 securities from a number of services reporting New York Stock Exchange,
Nasdaq, and other market results.
"Our system goes through many edits," she adds, including intense crosschecking
of any unusual price variations from the previous trading session. "We even have
backup generators in case power goes down, and we go through quarterly drills on
how to overcome a breakdown."
The effort then shifts to a separate group headed by Bob Simmer, a Capital
Research vice president. That group takes all those individual prices and, with
only an hour to work, calculates the net asset value for a Washington Mutual
share and for shares of the other American Funds. That involves more checking
and rechecking to be certain the overall figure fairly reflects the share price
that day, based on the total value of all the investments in the portfolio.
(graphic; two woman at a looseleaf binder)
(caption:)
Marketing Statistics
Deborah Eppolito and Esther Paradero are two of the eight associates who
calculate investment results for Washington Mutual and the other American Funds.
(graphic; illustration of CD)
(illustration)
(graphic; people around a table)
(caption:)
Fund Accounting
Three members of Capital Research's Fund Accounting department check statistics
with Howard Kitzmiller (second from right) of Washington Management Corporation.
The three are Keith Piper, Bob Simmer, and Wendy Rowe.
Trading: The Science and the Art
Considering the long-term nature of the Fund's investment approach, you may
wonder whether our Securities Order department is like the Maytag repairman,
always waiting for something to do. That's far from the case. For a fund like
Washington Mutual, building a significant position in a stock - or winding down
a major holding - is not something done by one press of a computer key. It is
often a long process, with experienced associates watching bounces in the
market, looking intently for opportunities, such as signs of who might be out
there anxious to sell or buy a big block of stock.
Doreen Gee, who heads Capital Research's Los Angeles equity trading department,
explains, "We try to have as little impact on the market as possible. Say we
want to build a holding of 3 million or 4 million shares in a company. We may
spend a substantial amount of time achieving that objective. We're very
patient." The result has been better prices for the Fund than might have been
the case with a less well-organized and experienced approach.
The portfolio counselors and analysts who make the investment decisions
naturally work closely with the trading room associates to set price parameters
and other objectives to guide the buying or selling effort. We make every
attempt to keep Washington Mutual's turnover very low by industry standards. It
should be pointed out that a shift involving even 25% of its $47 billion
portfolio is a substantial movement of assets and potential for cost savings in
any year.
(photo of American Funds Service Center)
(caption:)
The American Funds Service Center in Norfolk, Virginia
(graphic; trading room)
(caption:)
Buy Low, Sell High
Nowhere is that guiding principle more relevant than in the trading room, where
Doreen Gee oversees individual stock market transactions. At her side is Matt
Lyons.
(illustation of Data)
Overseeing the Objectives
Another important activity involves oversight to ensure that the investment
activity stays within the Fund's objectives.
While the Fund's portfolio counselors make independent decisions about the
portion of the portfolio they manage, their decisions require coordination.
Catherine Ward serves as chairman of Capital Research's investment committee,
whose responsibility includes recommending stocks for the Fund's Eligible List.
Additions to and deletions from the List are approved by the Fund's Board of
Directors.
Investment Administration, headed by Cathy Michero, monitors the Fund's Eligible
List. Her group watches for various changes in a company's business activities
that might affect its appro-priateness for Washington Mutual's portfolio. "All
orders to buy or sell go through our department to be certain they comply with
the Fund's prospectus," Cathy explains.
(photo; Catherine Ward)
(caption:)
Sticking to Objectives
Catherine Ward chairs Capital Research's investment committee, which is charged
with making sure investments are within the Fund's objectives.
"All orders to buy or sell go through Investment Administration to be certain
they comply with the Fund's prospectus."
(photo four women)
(caption)
Maintaining the List
Left to right: Cathy Michero, Brandy Baker, Katelyn O'Burke (seated) and Susan
Countess keep close tabs on mergers and other corporate actions that can affect
which stocks fall within the Fund's investment universe.
(illustration)
(photo; legal)
(caption:)
Administrative and Legal
Above, Ashley Shaw, Michael Stockton, and Jeffrey Steele of Washington
Management Corporation review legal documents.
Below, Lanier Frank and Lois Erhard oversee final revisions in a report to
Washington Mutual shareholders.
Finding the Investments
Finding the right investments takes a great deal of thoughtful research.
Washington Mutual and the rest of the American Funds draw on the services of
more than 100 analysts and portfolio counselors. They make more than 7,500
visits a year to companies, their suppliers, customers and competitors around
the world.
Their goal is to be the best-informed investment professionals in the business
about the companies in the Fund's portfolio and those that might be included in
the future.
At Capital Research, analysts, who are specialists based on industry or
geographic regions, also have direct investment responsibility within their area
of expertise. Some 20 of them participate in what's called Washington Mutual's
research portfolio, accounting for approximately 22% of the Fund's assets under
management.
That direct involvement promotes interaction between them and the portfolio
counselors, who base many of their investment decisions on the convictions
displayed by the analysts about stocks they have chosen for the research
portfolio.
For their part, the portfolio counselors, who are generalists with a broad view
of the investment landscape, make up Capital's unique multiple portfolio
counselor system, adopted more than 40 years ago.
(photo; two people)
"The goal is to be the best-informed investment professionals in
the business."
It's a Collaborative Effort
Investment management is the most written-about aspect of the mutual fund
business. As we've illustrated here, however, it by no means encompasses the
whole cast of associates who support your investment in the Fund and do so while
making every effort to hold expenses far below industry standards. Each role is
essential to commanding your confidence and ensuring the quality of service
provided by Washington Mutual.
(photo; man walking with breif case)
(caption:)
Portfolio Counselor
James K. Dunton is one of the investment professionals who manage Washington
Mutual's portfolio.
(photo; laptop computer)
What Makes the American Funds Different?
As a shareholder in Washington Mutual Investors Fund, you are also a member of
The American Funds Group, the nation's third-largest mutual fund family. You
won't find us advertised, yet thousands of financial advisers recommend the
American Funds for their clients' serious money - money set aside for
education, a home, retirement, and other important dreams.
What the 29 funds in our group have in common is a commitment to your best
interests and the proven approach of our investment adviser, Capital Research
and Management Company. In business since 1931, Capital's calling cards include:
A long-term, value-oriented approach: Rather than follow short-term fads, we
rely on our own intensive research to find well-managed companies with
reasonably priced securities and solid, long-term potential. Despite our size,
we offer relatively few funds compared with many large fund families, allowing
us to maintain a careful focus on our objectives and enabling you to benefit
from economies of scale.
An unparalleled global research effort: We opened our first overseas office in
1962, well before most mutual funds began investing internationally. Today, the
American Funds draw on one of the industry's most globally integrated research
networks. Capital Research spends substantial resources getting to know
companies and industries around the world.
A multiple portfolio counselor system: More than 40 years ago, we developed a
unique strategy for managing investments that blends teamwork with individual
accountability. Every American Fund is divided among a number of portfolio
counselors, each of whom manages his or her portion independently, within each
fund's objectives; in most cases, research analysts manage a portion as well.
Over time, this method has contributed to consistency of results and continuity
of management.
Experienced investment professionals: More than 75% of the portfolio counselors
who serve the American Funds were in the investment business before the sharp
stock market decline in October 1987. Long tenure and experience through a
variety of market conditions mean we aren't "practicing" with your money.
A commitment to low operating expenses: You can't control market returns, but
you can control what you invest in and how much you pay to own it. American
Funds provide exceptional value for shareholders, with operating expenses that
are among the lowest in the mutual fund industry. Our portfolio turnover rates
are low as well, keeping transaction costs and tax consequences contained.
(illustration; two men walking)
(illustration; graphs)
A Portfolio for Every Investor
Most financial advisers suggest that investors balance their portfolios by
investing across several types of investments. Which mix is right for you? That
depends on a number of things - including your risk tolerance, investment time
horizon and financial goals. The American Funds Group offers 29 funds with an
array of investment objectives to help you and your financial adviser build a
portfolio specifically tailored to your needs.
Growth Funds
Emphasis on long-term growth through stocks
AMCAP Fund(R)
EuroPacific Growth Fund(R)
The Growth Fund of America(R)
The New Economy Fund(R)
New Perspective Fund(R)
New World Fund(SM)
SMALLCAP World Fund(R)
Growth-and-Income Funds
Emphasis on long-term growth and dividends through stocks
American Mutual Fund(R)
Capital World Growth and Income Fund(SM)
Fundamental Investors(SM)
The Investment Company of America(R)
Washington Mutual Investors Fund(SM)
Equity-Income Funds
Emphasis on above-average income and growth through stocks and/or bonds
Capital Income Builder(R)
The Income Fund of America(R)
Balanced Fund
Emphasis on long-term growth and current income through stocks and bonds
American Balanced Fund(R)
Income Funds
Emphasis on current income through bonds
American High-Income Trust(SM)
The Bond Fund of America(SM)
Capital World Bond Fund(R)
Intermediate Bond Fund of America(R)
U.S. Government Securities Fund(SM)
Tax-Exempt Income Funds
Emphasis on tax-free current income through municipal bonds
American High-Income Municipal Bond Fund(R)
Limited Term Tax-Exempt Bond Fund of America(SM)
The Tax-Exempt Bond Fund of America(R)
State-specific tax-exempt funds:
The Tax-Exempt Fund of California(R)
The Tax-Exempt Fund of Maryland(R)
The Tax-Exempt Fund of Virginia(R)
Money Market Funds
Seek stable monthly income through money market instruments
The Cash Management Trust of America(R)
The Tax-Exempt Money Fund of America(SM)
The U.S. Treasury Money Fund of America(SM)
We also offer a full line of retirement plans and variable annuities.
For more complete information about any of the funds, including charges and
expenses, please obtain a prospectus from your financial adviser, download one
from our Web site at www.americanfunds.com, or phone the funds' transfer agent,
American Funds Service Company at 800/421-0180. Please read the prospectus
carefully before you invest or send money. For more information, ask your
financial adviser for a copy of our brochure "A Portfolio for Every Investor."
(photo; 2 bicycle riders)
Investment Portfolio April 30, 2000
(graphic; pie chart showing the following)
The Fund's Investment Categories
Percent of
Net Assets
Finance 20.54%
Consumer Goods 19.20
Services 18.42
Energy 17.02
Capital Equipment 12.05
Cash and Other 7.47
Materials 5.30
Ten Largest Individual Holdings
Percent of
Net Assets
Bank of America 3.01%
Pharmacia 2.53
Sprint 2.49
AT&T 2.44
Household International 2.12
Texaco 1.90
Kimberly-Clark 1.74
GTE 1.74
Wells Fargo 1.68
U S WEST 1.65
Market Percent
Value of Net
Equity Securities (common stocks) Shares (000) Assets
Energy
Energy Source 7.84%
Ashland Inc. 3,680,000 $ 125,580 .26%
Chevron Corp. 9,052,000 770,552 1.63
Conoco Inc., Class A 8,450,000 201,216 .74
Conoco Inc., Class B 5,913,692 147,103
Exxon Mobil Corp.
(merger of Exxon Corp. and Mobil Corp.) 9,421,514 731,934 1.55
Kerr-McGee Corp. 2,750,000 142,312 .30
Phillips Petroleum Co. 10,310,600 489,109 1.03
Texaco Inc. 18,200,000 900,900 1.90
Unocal Corp. 6,296,500 203,456 .43
3,712,162 7.84
Utilities: Electric & Gas 9.18%
Ameren Corp. 6,727,400 246,811 .52
American Electric Power Co., Inc. 6,870,000 251,614 .53
Carolina Power & Light Co. 7,800,000 285,188 .60
Central and South West Corp. 8,650,800 187,614 .40
Cinergy Corp. (formerly CINergy Corp.) 2,250,000 60,188 .13
Conectiv 3,400,000 60,350 .13
Consolidated Edison, Inc. 5,671,700 199,573 .42
Constellation Energy Group, Inc. 6,450,000 213,253 .45
Dominion Resources, Inc. 4,966,061 223,473 .47
DTE Energy Co. 3,869,400 126,239 .27
Duke Energy Corp. 5,050,000 290,375 .61
Edison International 3,135,000 59,761 .13
Entergy Corp. 2,400,000 61,050 .13
Florida Progress Corp. 4,725,000 231,525 .49
FPL Group, Inc. 2,746,100 124,089 .26
GPU, Inc. 4,125,000 115,758 .24
New Century Energies, Inc. 3,050,000 99,506 .21
PECO Energy Co. 2,724,400 113,573 .24
PPL Corp. (formerly PP&L Resources, Inc.) 3,035,319 72,468 .15
Public Service Enterprise Group Inc. 2,020,000 72,468 .15
Puget Sound Energy, Inc. 3,800,000 90,250 .19%
Reliant Energy, Inc. 1,800,000 47,925 .10
Southern Co. 24,400,000 608,475 1.28
TECO Energy, Inc. 1,000,000 21,875 .05
Williams Companies, Inc. 12,500,000 466,406 .99
Wisconsin Energy Corp. 800,000 17,100 .04
4,346,907 9.18
Total Energy 8,059,069 17.02
Materials
Chemicals 1.87%
Air Products and Chemicals, Inc. 2,690,000 83,558 .18
CK Witco Corp. 5,800,000 68,150 .14
Dow Chemical Co. 1,050,000 118,650 .25
Hercules Inc. 5,220,000 81,236 .17
International Flavors & Fragrances Inc. 2,000,000 68,875 .15
PPG Industries, Inc. 7,925,000 430,922 .91
Union Carbide Corp. 604,500 35,666 .07
887,057 1.87
Forest Products & Paper 2.55%
International Paper Co. 13,172,000 484,071 1.02
Westvaco Corp. 4,999,800 154,369 .33
Weyerhaeuser Co. 8,900,000 475,594 1.00
Willamette Industries, Inc. 2,475,000 94,514 .20
1,208,548 2.55
Metals: Nonferrous .88%
Alcoa Inc. 4,300,000 278,962 .59
Phelps Dodge Corp. 2,920,000 135,050 .29
414,012 .88
Total Materials 2,509,617 5.30
Capital Equipment
Aerospace & Military Technology 1.91%
Boeing Co. 3,550,000 140,891 .30
Raytheon Co., Class A 1,000,000 22,937 .12
Raytheon Co., Class B 1,500,000 33,281
United Technologies Corp. 11,383,300 707,899 1.49
905,008 1.91
Data Processing & Reproduction 3.36%
Computer Associates International, Inc. 4,250,000 237,203 .50
Hewlett-Packard Co. 3,000,000 405,000 .86
International Business Machines Corp. 1,800,000 200,925 .42
Xerox Corp. 28,289,400 747,901 1.58
1,591,029 3.36
Electrical & Electronics .59%
Emerson Electric Co. 4,172,400 228,961 .48
Harris Corp. 1,550,000 50,084 .11
279,045 .59
Electronic Components 1.27%
Motorola, Inc. 1,000,000 119,062 .25%
Texas Instruments Inc. 2,450,000 399,044 .84
Thomas & Betts Corp. 2,720,000 83,810 .18
601,916 1.27
Electronic Instruments .68%
PE Biosystems Group 5,363,800 321,828 .68
Energy Equipment .11%
Halliburton Co. 1,200,000 53,025 .11
Industrial Components 2.84%
Dana Corp. 6,926,600 210,395 .44
Eaton Corp. 2,362,900 198,484 .42
Genuine Parts Co. 8,765,800 230,102 .49
Goodyear Tire & Rubber Co. 3,250,000 89,781 .19
Illinois Tool Works Inc. 1,200,000 76,875 .16
Johnson Controls, Inc. 4,052,400 256,568 .54
TRW Inc. 4,840,800 283,187 .60
1,345,392 2.84
Machinery & Engineering 1.29%
Caterpillar Inc. 1,200,000 47,325 .10
Deere & Co. 6,240,000 251,940 .53
Fluor Corp. 3,700,000 124,182 .26
Ingersoll-Rand Co. 1,068,100 50,134 .11
Pall Corp. 6,100,000 136,106 .29
609,687 1.29
Total Capital Equipment 5,706,930 12.05
Consumer Goods
Appliances & Household Durables .72%
Newell Rubbermaid Inc. 13,605,500 342,689 .72
Automobiles .48%
Ford Motor Co. 4,160,500 227,527 .48
Beverages 1.17%
Coca-Cola Co. 425,000 20,001 .04
PepsiCo, Inc. 14,500,000 531,969 1.13
551,970 1.17
Food & Household Products 3.34%
Bestfoods 2,000,000 100,500 .21
Campbell Soup Co. 2,250,000 58,500 .12
Colgate-Palmolive Co. 400,000 22,850 .05
ConAgra, Inc. 8,200,000 154,775 .33
General Mills, Inc. 9,920,000 360,840 .76
H.J. Heinz Co. 3,600,000 122,400 .26
Kellogg Co. 4,177,600 102,090 .22
Sara Lee Corp. 44,050,000 660,750 1.39
1,582,705 3.34
Health & Personal Care 11.60%
Abbott Laboratories 5,000,000$ 192,187 .41%
American Home Products Corp. 2,000,000 112,375 .24
Avon Products, Inc. 5,430,000 225,345 .48
Baxter International Inc. 1,150,000 74,894 .16
Becton, Dickinson and Co. 4,700,000 120,437 .25
Bristol-Myers Squibb Co. 12,488,600 654,871 1.38
Cardinal Health, Inc. 7,485,000 412,143 .87
Eli Lilly and Co. 4,250,000 328,578 .69
Kimberly-Clark Corp. 14,200,000 824,488 1.74
Mallinckrodt Inc. 3,585,000 96,347 .20
McKesson HBOC, Inc. (formerly McKesson Corp.) 1,000,000 16,875 .04
Merck & Co., Inc. 1,600,000 111,200 .24
Pfizer Inc 6,990,000 294,454 .62
Pharmacia Corp.
(merger of Pharmacia & Upjohn, Inc.
and Monsanto Co.) 24,034,000 1,200,198 2.53
Schering-Plough Corp. 2,500,000 100,781 .21
Warner-Lambert Co. 6,400,000 728,400 1.54
5,493,573 11.60
Recreation & Other Consumer Products .87%
American Greetings Corp., Class A 1,550,000 28,094 .06
Eastman Kodak Co. 4,569,700 255,617 .54
Stanley Works 4,350,000 128,325 .27
412,036 .87
Textiles & Apparel 1.02%
NIKE, Inc., Class B 8,810,425 382,703 .81
VF Corp. 3,500,000 98,875 .21
481,578 1.02
Total Consumer Goods 9,092,078 19.20
Broadcasting & Publishing .25
Gannett Co., Inc. 1,000,000 63,875 .13
Knight-Ridder, Inc. 1,148,000 56,324 .12
120,199 .25
Business Services 1.79%
Deluxe Corp. 2,200,000 55,413 .12
Dun & Bradstreet Corp. 2,800,000 84,350 .18
Equifax Inc. 4,000,000 97,750 .21
First Data Corp. 3,143,400 153,044 .32
IKON Office Solutions, Inc. 7,285,000 42,799 .09
Interpublic Group of Companies, Inc. 2,772,900 113,689 .24
Pitney Bowes Inc. 6,800,000 277,950 .59
ServiceMaster Co. 1,500,000 20,438 .04
845,433 1.79
Leisure & Tourism .40%
McDonald's Corp. 5,000,000 190,625 .40
Merchandising 4.28%
Albertson's, Inc. 20,694,440$ 673,863 1.42%
Dillard's Inc., Class A 3,950,500 55,060 .12
Dollar General Corp. 1,000,000 22,875 .05
J.C. Penney Co., Inc. 12,750,000 176,109 .37
Limited Inc. 8,250,000 372,797 .79
Lowe's Companies, Inc. 3,258,800 161,311 .34
May Department Stores Co. 15,800,000 434,500 .92
Walgreen Co. 4,625,000 130,078 .27
2,026,593 4.28
Diversified Telecommunication Servies 9.83%
AT&T Corp. 24,737,500 1,154,932 2.44
Bell Atlantic Corp. 200,000 11,850 .03
CenturyTel, Inc. 670,000 16,415 .03
GTE Corp. 12,142,300 822,641 1.74
SBC Communications Inc. 15,704,682 688,061 1.45
Sprint FON Group 19,195,000 1,180,493 2.49
U S WEST, Inc. 10,950,000 779,503 1.65
4,653,895 9.83
Transportation: Airlines .23%
Southwest Airlines Co. 5,000,000 108,437 .23
Transportation: Rail 1.64%
Burlington Northern Santa Fe Corp. 4,750,000 114,594 .24
CSX Corp. 10,800,000 226,125 .48
Norfolk Southern Corp. 18,850,000 332,231 .70
Union Pacific Corp. 2,500,000 105,312 .22
778,262 1.64
Total Services 8,723,444 18.42
Finance
Banking 12.41%
Bank of America Corp. 29,050,000 1,423,450 3.01
Bank of New York Co., Inc. 11,250,000 461,953 .98
BANK ONE CORP. 21,638,400 659,971 1.39
Chase Manhattan Corp. 6,600,000 475,613 1.00
Citigroup Inc. 5,859,500 348,274 .74
First Union Corp. 20,787,000 662,586 1.40
FleetBoston Financial Corp.
(formerly Fleet Boston Corp.) 9,149,473 324,234 .68
J.P. Morgan & Co. Inc. 1,764,000 226,454 .48
KeyCorp 3,700,000 68,450 .14
National City Corp. 3,100,000 52,700 .11
SunTrust Banks, Inc. 2,500,000 126,875 .27
Wachovia Corp. 850,000 53,284 .11
Washington Mutual, Inc. 7,781,300 198,910 .42
Wells Fargo & Co. 19,341,500 794,210 1.68
5,876,964 12.41
Financial Services 3.31%
Fannie Mae 4,925,000$ 297,039 .63%
Household International, Inc. 24,047,482 1,003,982 2.12
MBNA Corp. 751,200 19,954 .04
Providian Financial Corp. 1,947,400 171,493 .36
SLM Holding Corp. 2,370,000 74,211 .16
1,566,679 3.31
Insurance 4.82%
Aetna Inc. 5,250,005 303,844 .64
Allstate Corp. 27,425,000 647,916 1.37
American General Corp. 8,405,000 470,680 .99
Aon Corp. 9,181,000 248,461 .52
Jefferson-Pilot Corp. 3,700,000 246,281 .52
Lincoln National Corp. 6,050,000 210,615 .45
Marsh & McLennan Companies, Inc. 1,200,000 118,275 .25
St. Paul Companies, Inc. 1,000,000 35,625 .08
2,281,697 4.82
Total Finance 9,725,340 20.54
Multi-Industry
Multi-Industry 1.58%
Dover Corp. 4,000,000 203,250 .43
Honeywell International Inc. 9,300,000 520,800 1.10
Minnesota Mining and Manufacturing Co. 300,000 25,950 .05
Total Multi-Industry 750,000 1.58
Miscellaneous .99%
Equity securities in initial period of acquisition19,197 467,443 .99
TOTAL EQUITY SECURITIES
(cost: $37,338,455,000) 45,033,921 95.10
Short-Term Securities Principal Amount
U. S. Treasuries and Other Federal Agencies
U. S. Treasuries and Other Federal Agencies 4.85%
Federal Farm Credit Banks
5.85% due 5/4/00 $ 18,000 17,988 .04
Federal Home Loan Bank
5.64%-6.10% due 5/5-7/21/00 1,133,739 1,124,592 2.38
United States Treasury bills
5.47%-5.73% due 5/11-7/27/00 1,162,645 1,151,963 2.43
TOTAL SHORT-TERM SECURITIES
(cost: $2,294,829,000) 2,294,543 4.85
TOTAL INVESTMENT SECURITIES
(cost: $39,633,284,000) 47,328,464 99.95
Excess of cash and receivables over payables 24,605 .05
NET ASSETS $47,353,069 100.00%
See Notes to Financial Statements
Financial Statements
Statement of Assets and Liabilities
April 30, 2000 (dollars in thousands)
Assets:
Investment securities at market
(cost: $39,633,284) $47,328,464
Cash 284
Receivables for -
Sales of investments $98,871
Sales of Fund's shares 38,245
Dividends 79,821 216,937
47,545,685
Liabilities:
Payables for -
Purchases of investments 74,452
Repurchases of Fund's shares 75,444
Management services 11,422
Other expenses 31,298 192,616
Net Assets at April 30, 2000 $47,353,069
Class A shares, $1.00 par value
(authorized capital stock -
3,000,000,000 shares)
Net assets $47,318,790
Shares outstanding 1,623,868,453
Net asset value per share $29.14
Class B shares, $1.00 par value
(authorized capital stock -
1,000,000,000 shares)
Net Assets $34,279
Shares outstanding 1,177,415
Net asset value per share $29.11
Statement of Operations
for the year ended April 30, 2000 (dollars in thousands)
Investment Income:
Income:
Dividends $ 1,257,914
Interest 91,368 $1,349,282
Expenses:
Investment adviser fee 105,889
Business management fee 47,107
Distribution expenses - Class A 125,719
Distribution expenses - Class B 24
Transfer agent fee - Class A 43,061
Transfer agent fee - Class B 2
Reports to shareholders 1,278
Registration statement and prospectus 3,629
Postage, stationery and supplies 6,732
Directors' and Advisory Board fees 485
Auditing and legal fees 158
Custodian fee 415
Other expenses 170 334,669
Net investment income 1,014,613
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 5,370,939
Net unrealized appreciation:
Beginning of year 18,414,413
End of year 7,695,180
Net change in unrealized
appreciation (10,719,233)
Net realized gain and change
in unrealized appreciation (5,348,294)
Net Decrease in Net Assets
Resulting from Operations $(4,333,681)
Statement of Changes in Net Assets
Year ended April 30
(dollars in thousands) 2000 1999
Operations:
Net investment income $ 1,014,613 $ 897,215
Net realized gain on investments 5,370,939 5,230,170
Net change in unrealized
appreciation on investments (10,719,233) 1,076,341
Net (Decrease) Increase in Net
Assets Resulting from Operations (4,333,681) 7,203,726
Dividends and Distributions Paid
to Shareholders:
Dividends from net investment income:
Class A (952,846) (890,284)
Class B - -
Distributions from net realized gain
on investments:
Class A (5,085,575) (3,760,550)
Class B - -
Total Dividends and Distributions (6,038,421) (4,650,834)
Capital Share Transactions
Proceeds from shares sold 8,330,952 11,104,242
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments 5,726,003 4,421,141
Cost of shares repurchased (13,350,009) (6,823,584)
Net Increase in Net Assets Resulting
from Capital Share Transactions 706,946 8,701,799
Total (Decrease) Increase in Net Assets (9,665,156) 11,254,691
Net Assets:
Beginning of year 57,018,225 45,763,534
End of year (including undistributed
net investment income: $174,408
and $112,641, respectively) $47,353,069 $57,018,225
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.
The Fund offers Class A and Class B shares. Class A shares are sold with an
initial sales charge of up to 5.75%. Class B shares are sold without an initial
sales charge but subject to a contingent deferred sales charge paid upon
redemption. This charge declines from 5% to zero over a period of six years.
Class B shares have higher distribution expenses and transfer agent fees than
Class A shares. Class B shares are automatically converted to Class A shares
eight years after the date of purchase. Holders of both classes of shares have
pro rata rights to assets and dividends, and identical voting, liquidation and
other rights, except that each class bears different distribution and transfer
agent expenses, and each class shall have exclusive rights to vote on matters
affecting only their class.
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.
Common Expenses - Income, expenses other than class-specific expenses and
realized and unrealized gains and losses are allocated daily between the classes
based on their relative net asset values. Distribution expenses, transfer agent
fees, and other class-specific expenses, if any, are accrued daily and charged
to the applicable share class.
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 April 30, 2000, net unrealized appreciation on investments for book and
federal income tax purposes aggregated $7,695,180,000, of which $10,334,155,000
related to appreciated securities and $2,638,975,000 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the year ended April 30, 2000. The cost of portfolio
securities for book and federal income tax purposes was $39,633,284,000 at April
30, 2000.
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 $47,107,000 was
incurred for business management services pursuant to the business management
agreement with WMC. The agreement 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 $942,000 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 $105,889,000 was incurred for investment advisory services pursuant to
an agreement with Capital Research and Management Company. 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., the principal
underwriter of the Fund's shares, received $26,981,000 (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 for Class A shares, the Fund may expend up to
0.25% of Class A average daily 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. Pursuant to a Plan of Distribution for
Class B shares, the Fund may expend up to 1.00% of Class B average daily net
assets annually to compensate dealers for their selling and servicing efforts.
During the year ended April 30, 2000, distribution expenses under the Plans of
Distribution for Class A and Class B were $125,719,000 and $24,000,
respectively. As of April 30, 2000, accrued and unpaid distribution expenses for
Class A and Class B were $18,392,000 and $20,000, respectively.
Transfer Agent Fee - American Funds Service Company, the transfer agent for the
Fund, was paid a fee of $43,063,000.
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, 2000, aggregate deferred compensation and earnings thereon
since the deferred compensation plan's adoption (1994), net of any payments to
Directors and Advisory Board Members, were $550,000.
Affiliated Directors and Officers - WMC and JLC are both wholly owned
subsidiaries of The Johnston-Lemon Group, Incorporated (JLG). 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 $13,500,838,000 and $18,510,861,000, respectively, during the
year ended April 30, 2000.
As of April 30, 2000, net assets consist of the following (000):
Capital paid in on shares of capital stock $36,724,104
Undistributed net investment income 174,408
Accumulated net realized gain 2,759,377
Net unrealized appreciation 7,695,180
Net Assets $47,353,069
The Fund reclassified $733,990,000 from undistributed net realized gains to
additional paid-in capital for the year ended April 30, 2000.
<TABLE>
<CAPTION>
Capital share transactions in the Fund were as follows:
Year ended April 30, 2000 Year ended April 30, 1999
(dollars in thousands) Amount Shares Amount Shares
<S> <C> <C> <C> <C>
Class A shares:
Sold $ 8,296,876 258,447,597 $11,104,242 334,983,835
Reinvestment of dividends and distributions 5,726,003 195,503,827 4,421,141 137,585,488
Repurchased (13,349,916) (444,808,302) (6,823,584) (206,861,783)
Net increase in Class A 672,963 9,143,122 8,701,799 265,707,540
Class B shares:<F1>
Sold 34,076 1,180,562 - -
Reinvestment of dividends and distributions - - - -
Repurchased (93) (3,147) - -
Net increase in Class B 33,983 1,177,415 - -
Total net increase in share transactions $ 706,946 10,320,537 $ 8,701,799 265,707,540
<FN>
<F1>Class B shares offered for sale commencing March 15, 2000.
</FN>
</TABLE>
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 $415,000 includes $203,000 that was paid by these credits
rather than in cash.
The Fund owns 5.2% and 5.1% of the outstanding voting securities of Ashland and
Household International, respectively, which represent investments in
affiliates as defined in the Investment Company Act of 1940.
Per-Share Data and Ratios
(This table has been split into two tables for EDGAR formatting)
(first half of table)
Net gains
Net (losses) on Total
asset securities from Distri-
value, Net (both invest- Dividends butions
Year begin- invest- realized ment (from net (from Total
ended ning ment and un- opera- investment capital distri-
Apr 30 of year income realized) tions income) gains) butions
Class A:
2000 $35.31 $.61<F2> $(3.09)<F2> $(2.48)<F2> $(.58) $(3.11) $(3.69)
1999 33.92 .60 3.99 4.59 (.61) (2.59) (3.20)
1998 25.93 .62 9.65 10.27 (.62) (1.66) (2.28)
1997 22.77 .62 4.36 4.98 (.62) (1.20) (1.82)
1996 18.87 .63 4.98 5.61 (.62) (1.09) (1.71)
Class B3:
2000 26.93 .02<F2> 2.16<F2> 2.18<F2> - - -
(second half of table)
Net Net Ratio of Ratio
asset assets, expenses of net Port-
Year value, end of to average income to folio
ended end Total year (in net average turnover
Apr 30 of year return<F1> millions) assets net assets rate
Class A:
2000 $29.14 (6.96)% $47,319 .63% 1.91% 26.24 %
1999 35.31 14.61 57,018 .61 1.84 27.93
1998 33.92 40.80 45,764 .62 2.08 17.61
1997 25.93 22.43 28,165 .64 2.56 20.41
1996 22.77 30.40 20,689 .66 2.98 23.41
Class B<F3>:
2000 29.11 8.10 34 1.38<F4> .67<F4> 26.24<F5>
[FN]
<F1> Excludes sales charge on Class A shares or contingent deferred sales charge
on Class B shares.
<F2> Based on average shares outstanding.
<F3> Class B shares offered for sale commencing March 15, 2000.
<F4> Annualized.
<F5> Represents portfolio turnover rate for the year ended April 30, 2000.
</FN>
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, 2000, 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 in the United States.
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 auditing standards generally accepted in the United States 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, 2000, by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
(signature Price,Waterhouse and Cooper)
Los Angeles, California
May 31, 2000
Tax Information for the Year Ended April 30, 2000 (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:
Dividends and distributions
per Class A share
From net From net realized
To shareholders of record Payment date investment income long-term gains
June 18, 1999 June 21, 1999 $.145 -
September 17, 1999 September 20, 1999 .145 -
December 17, 1999 December 20, 1999 .145 $3.105
March 15, 2000 March 16, 2000 .145 -
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, 7% 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 retirement plan trusts may need this information for their annual
information reporting.
The Fund also designates as a capital gain distribution a portion of earnings
and profits paid to shareholders in redemption of their shares.
Since the amounts above are reported for the Fund's fiscal year and not the
calendar year, shareholders should refer to their Form 1099-DIV or other tax
information which will be mailed in January 2001 to determine the calendar year
amounts to be included on their 2000 tax returns. Shareholders should consult
their tax advisers.
Shareholder Services
American FundsLine(R) (graphic; phone)
Use our 24-hour automated phone system for fund information and transactions.
FundsLine Online(R) (graphic; computer)
Visit our Web site when you want to access your account, download a prospectus,
or find fund information.
Reduced sales charge (graphic; coins)
Larger purchases may qualify for a reduced sales charge. To help reach a
breakpoint, you may -
- Add your present purchase to the value of all eligible household
accounts and/or
- Add your present purchase to purchases you intend to make over 13
months.
Assets in money market funds generally do not apply when determining sales
charges.
Retirement plans (graphic; signs at crossroads)
A wide range of fund choices for individual and company-sponsored retirement
plans.
American FundsLinkSM (graphic; Bank Building)
Link your fund account to your bank account for direct transfers between the two
and to purchase shares using American FundsLine or FundsLine OnLine.
Automatic transactions (graphic; calendar)
Use this service when you want to purchase, sell and exchange shares on a
regular basis.
Flexible dividend options (graphic; magician)
Use your dividend and capital gain distributions to meet your changing needs.
You may -
- Invest dividends and capital gain distributions back into the fund
- Diversify by investing dividends and capital gain distributions into
another
American Fund
- Take dividends in cash
- Have dividends paid directly to someone else.
Because certain transactions have restrictions or tax consequences, please
consult your financial adviser before requesting changes.
Would you like more information?
Your financial adviser will be happy to explain these services in greater
detail, or you may contact American Funds Service Company.
To contact American Funds Service Company:
Shareholder Services Representative -
8 a.m. to 8 p.m. Eastern time, Monday- Friday - 800/421-0180
American FundsLine - 24-hour automated telephone system - 800/325-3590
FundsLine OnLine - Web site - www.americanfunds.com
By mail - Write to the service center nearest you.
(If you live outside the United States, please write to the Western service
center.)
Western
(graphic; map, western USA)
American Funds
Service Company
P.O. Box 2205
Brea, CA 92822-2205
West Central
(graphic; map, west central USA)
American Funds
Service Company
P.O. Box 659522
San Antonio, TX 78265-9522
East Central
(graphic; map, east central USA)
American Funds
Service Company
P.O. Box 6007
Indianapolis, IN 46206-6007
Eastern
(graphic; map, East coast of USA)
American Funds
Service Company
P.O. Box 2280
Norfolk, VA 23501-2280
Please obtain the applicable prospectuses from your financial adviser or our Web
site and read them carefully before investing or sending money. American Funds
reserves the right to terminate or modify these services.
Directors
Stephen Hartwell
Chairman of the Board
Chairman, Washington Management Corporation
James H. Lemon, Jr.
Vice Chairman of the Board
Chairman and Chief Executive Officer, The Johnston-Lemon Group, Incorporated
Harry J. Lister
President of the Fund
Director and President, Washington Management Corporation
Cyrus A. Ansary
President, Investment Services International Co. LLC
Fred J. Brinkman
Retired Senior Partner, Arthur Andersen, LLP
Daniel J. Callahan III
Vice Chairman and Treasurer, The Morris and Gwendolyn Cafritz Foundation
James C. Miller III
Counselor, Citizens for a Sound Economy
T. Eugene Smith
President, T. Eugene Smith Inc.
Leonard P. Steuart, II
Vice President, Steuart Investment Company
Margita E. White
President, Association for Maximum Service Television Inc.
We are sad to report that Jean Head Sisco passed away on April 20, 2000. Mrs.
Sisco was a member of the Fund's Board of Directors from 1976 through 1997 and
Director Emeritus since 1998. Her wise counsel and friendship will be missed.
Advisory Board
Charles A. Bowsher
Retired Comptroller General of the United States
Mary K. Bush
President, Bush & Company
Katherine D. Ortega
Former Treasurer of the United States
J. Knox Singleton
President and Chief Executive Officer, INOVA Health Systems
William B. Snyder
General Partner, Merastar Partners Limited Partnership
Robert F. Tardio
Senior Managing Director, GKMG Consulting Services, Inc.
Directors Emeritus
Bernard J. Nees
Chairman Emeritus of the Fund
Charles T. Akre
Of Counsel, Miller & Chevalier, Chartered
Dr. Nathan A. Baily
Management, Marketing and Education Consultant
John A. Beck
Of Counsel, Reed Smith Shaw & McClay
Stephen G. Yeonas
Chairman and Chief Executive Officer, Stephen G. Yeonas Company
Other Officers
Jeffrey L. Steele
Executive Vice President of the Fund
Director and Executive Vice President, Washington Management Corporation
Howard L. Kitzmiller
Senior Vice President, Secretary and Assistant Treasurer of the Fund
Director, Senior Vice President, Secretary and Assistant Treasurer, Washington
Management Corporation
Ralph S. Richard
Vice President and Treasurer of the Fund
Director, Vice President and Treasurer, Washington Management Corporation
Lois A. Erhard
Vice President of the Fund
Vice President, Washington Management Corporation
Michael W. Stockton
Assistant Vice President, Assistant Secretary and Assistant Treasurer of the
Fund
Vice President, Assistant Secretary and Assistant Treasurer, Washington
Management Corporation
J. Lanier Frank
Assistant Vice President of the Fund
Assistant Vice President, Washington Management Corporation
Ashley L. Shaw
Assistant Secretary of the Fund
Assistant Secretary, Washington Management Corporation
Offices of the Fund and of the Business Manager
Washington Management Corporation
1101 Vermont Avenue, NW
Washington, DC 20005-3585
202/842-5665
Custodian of Assets
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081-0001
Investment Adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1443
135 South State College Boulevard
Brea, CA 92821-5823
Counsel
Thompson, O'Donnell,
Markham, Norton & Hannon
805 Fifteenth Street, NW
Washington, DC 20005-2216
Transfer Agent
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
Independent Accountants
PricewaterhouseCoopers LLP
400 South Hope Street
Los Angeles, CA 90071-2889
Principal Underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1462
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 June 30, 2000, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed calendar
quarter.
For information about your account or any of the Fund's services, or for a
prospectus for any of the American Funds, 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. Please read the prospectus
carefully before you invest or send money.
(graphic recycle logo)
Printed on recycled paper
WMIF-011-0600
(graphic; logo: The American Funds Group(R))
(graphic; logo: Washington Mutual Investors fund)
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
202/842-5665
