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Washington Mutual Investors Fund
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Semi-Annual Report for the period ended October 31, 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 American Funds, 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 September 30,
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 +16.29% +15.09% - 1.72%
Class B Shares<F1>
reflecting 5% maximum
contingent deferred sales
charge (CDSC) _ _ + 6.35%
not reflecting the CDSC _ _ +11.35%
[FN]
<F1>Not offered before March 15, 2000. Results are not annualized.
</FN>
Please see inside back cover for important information about Class A and B
shares.
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.
Fellow Shareholders:
The first half of our fiscal year _ the six months ended October 31 _ saw an
interesting change in the stock market. Internet and other high-technology
issues _ many of which lack a history of earnings and dividends _ continued a
decline that began shortly before the start of the period. The drop was steep,
demonstrating once again that what goes up in spectacular fashion often comes
down the same way.
Meanwhile, investors began turning their attention toward more attractively
valued stocks in less exotic industries. In this environment, Washington Mutual
Investors Fund fared comparatively well. The value of an investment in the Fund
rose 6.5% during this six-month period with dividends reinvested. The unmanaged
Standard & Poor's 500 Composite Index, which includes a number of the stocks
that fell out of favor during this period, recorded a small decline of 1.0%.
(The index tracks 500 relatively large companies listed on U.S. exchanges.) A
half-year is too short a time in which to arrive at firm conclusions. However,
the shift in the market comes as no great surprise. We believe that the events
of the past several months confirm the soundness of the value-oriented
investment strategy employed by the Fund's adviser, Capital Research and
Management Company.
We also take encouragement from recent developments on the economic scene. There
are indications that the Federal Reserve may be having some success at reducing
the economy's rate of growth to a more sustainable level. This would mean that
the expansion could continue without an acceleration of inflation, which would
be positive news for the financial markets.
It is worth noting that the Fund was over-weighted relative to the S&P 500 in
three industries that did particularly well during the May-October period _
energy, banks, and utilities _ and underweighted in technology, which did
poorly.
On October 31, your Fund's portfolio reflected ownership of 153 companies in 41
industries. Twenty-three companies, or 15% of all firms represented in the
portfolio, increased their dividends during the six months.
Companies appearing in the portfolio since April 30 are BP Amoco, Circuit City
Stores, Disney, Freddie Mac, Lockheed Martin, Microsoft, and Associates First
Capital (which Citigroup has announced plans to acquire). Names that have been
eliminated since April 30 are American Greetings, Baxter International,
Bestfoods, CenturyTel, Cinergy, Coca-Cola, Colgate-Palmolive, Entergy,
Halliburton, Hercules, Mallinckrodt, MBNA, McKesson HBOC, PE Biosystems Group,
PECO Energy, Reliant Energy, Union Carbide, and Wisconsin Energy.
Your questions and comments are always welcome. We look forward to reporting to
you again in another six months.
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, 2000
Investment Portfolio October 31, 2000 Unaudited
Five Largest Industries Ten Largest Individual Holdings
Percent of Percent of
Net Assets Net Assets
Banks 12.46% Verizon Communications 3.10%
Oil & Gas 8.80 Bank of America 2.87
Diversified Telecom- Texaco 2.46
munication Services 8.67 Allstate 2.13
Pharmaceuticals 7.16 Household International 2.04
Electric Utilities 6.88 BANK ONE 2.00
Pharmacia 1.98
AT&T 1.96
Wells Fargo 1.91
Chevron 1.88
Equity Securities (common stocks) Shares Market Percent of
Value (000) Net Assets
Energy 8.80%
Oil & Gas 8.80%
Ashland Inc.<F1> 3,680,000 $ 120,520 .26%
BP Amoco PLC (ADR)
(United Kingdom) 1,230,000 62,653 .13
Chevron Corp. 10,712,000 879,723 1.88
Conoco Inc., Class A 2,000,000 51,625 .34
Conoco Inc., Class B 3,913,692 106,403
Exxon Mobil Corp. 9,321,514 831,363 1.77
Kerr-McGee Corp. 1,750,000 114,297 .24
Phillips Petroleum Co. 9,595,600 592,528 1.26
Texaco Inc. 19,500,000 1,151,719 2.46
Unocal Corp. 6,296,500 214,868 .46
4,125,699 8.80
Materials 5.48%
Chemicals 1.70%
Air Products and Chemicals, Inc. 2,690,000 100,370 .21
Crompton Corp. (formerly
CK Witco Corp.)<F1> 5,800,001 46,400 .10
Dow Chemical Co. 9,474,700 290,163 .62
International Flavors &
Fragrances Inc. 410,800 6,881 .02
PPG Industries, Inc. 7,925,000 353,653 .75
797,467 1.70
Metals & Mining 1.12%
Alcoa Inc. 13,100,000 375,806 .80
Phelps Dodge Corp. 3,220,000 150,535 .32
526,341 1.12
Paper & Forest Products 2.66%
International Paper Co. 16,372,000 $ 599,625 1.28%
Westvaco Corp. 4,999,800 142,494 .30
Weyerhaeuser Co. 8,900,000 417,744 .89
Willamette Industries, Inc. 2,475,000 89,873 .19
1,249,736 2.66
2,573,544 5.48
Capital Goods 8.22%
Aerospace & Defense 4.98%
Boeing Co. 3,550,000 240,734 .51
Honeywell International Inc. 11,800,000 634,987 1.35
Lockheed Martin Corp. 12,089,000 433,391 .93
Raytheon Co., Class A 2,750,000 88,000 .35
Raytheon Co., Class B 2,250,000 76,922
United Technologies Corp. 12,332,700 860,977 1.84
2,335,011 4.98
Construction & Engineering .28%
Fluor Corp. 3,700,000 129,500 .28
Electrical Equipment .56%
Emerson Electric Co. 3,200,000 235,000 .50
Thomas & Betts Corp. 1,720,000 26,015 .06
261,015 .56
Industrial Conglomerates .06%
Minnesota Mining and
Manufacturing Co. 300,000 28,987 .06
Machinery 1.94%
Caterpillar Inc. 1,700,000 59,606 .13
Deere & Co. 6,240,000 229,710 .49
Dover Corp. 4,000,000 169,750 .36
Eaton Corp. 2,362,900 160,825 .34
Illinois Tool Works Inc. 1,200,000 66,675 .14
Ingersoll-Rand Co. 2,512,500 94,847 .20
Pall Corp. 6,100,000 131,531 .28
912,944 1.94
Trading Companies & Distributors .40%
Genuine Parts Co.<F1> 8,765,800 186,821 .40
3,854,278 8.22
Commercial Services & Supplies 1.79%
Commercial Services &
Supplies 1.79%
Deluxe Corp. 2,200,000 $ 49,638 .11%
Equifax Inc. 4,769,000 164,531 .35
First Data Corp. 3,300,000 165,412 .35
Moody's Corp. (formerly
Dun & Bradstreet Corp.) 2,800,000 73,675 .16
Pitney Bowes Inc. 12,500,000 371,094 .79
ServiceMaster Co. 1,700,000 15,512 .03
839,862 1.79
Transportation 1.93%
Airlines .30%
Southwest Airlines Co. 5,000,000 142,500 .30
Road & Rail 1.63%
Burlington Northern
Santa Fe Corp. 5,452,900 144,843 .31
CSX Corp. 10,300,000 260,719 .55
Norfolk Southern Corp. 17,150,000 242,244 .52
Union Pacific Corp. 2,500,000 117,187 .25
764,993 1.63
907,493 1.93
Automobiles & Components 1.68%
Auto Components 1.44%
Dana Corp. 6,926,600 153,684 .33
Goodyear Tire & Rubber Co. 3,000,000 55,500 .12
Johnson Controls, Inc. 4,197,600 250,282 .53
TRW Inc. 5,150,000 216,300 .46
675,766 1.44
Automobiles .24%
Ford Motor Co. 4,370,438 114,178 .24
789,944 1.68
Consumer Durables & Apparel 2.11%
Household Durables .75%
Newell Rubbermaid Inc. 12,275,000 $ 235,526 .50%
Stanley Works<F1> 4,350,000 115,819 .25
351,345 .75
Leisure Equipment & Products .41%
Eastman Kodak Co. 4,275,000 191,841 .41
Textiles & Apparel .95%
NIKE, Inc., Class B 8,810,425 351,866 .75
VF Corp. 3,500,000 95,594 .20
447,460 .95
990,646 2.11
Hotels, Restaurants & Leisure .33%
Hotels, Restaurants & Leisure .33%
McDonald's Corp. 5,000,000 155,000 .33
155,000 .33
Media .89%
Media .89%
Gannett Co., Inc. 1,300,000 75,400 .16
Interpublic Group of Companies, Inc. 4,575,000 196,439 .42
Knight-Ridder, Inc. 1,100,000 55,275 .12
Walt Disney Co. 2,500,000 89,531 .19
416,645 .89
Retailing 3.03%
Multiline Retail 1.29%
Dillard's, Inc., Class A 3,950,500 $ 41,480 .09%
Dollar General Corp. 3,250,000 50,375 .11
J.C. Penney Co., Inc. 11,215,800 131,085 .28
May Department Stores Co. 14,550,000 381,937 .81
604,877 1.29
Specialty Retail 1.74%
Circuit City Stores, Inc.
_ Circuit City Group 10,000,000 132,500 .29
Limited Inc. 16,750,000 422,938 .90
Lowe's Companies, Inc. 5,658,800 258,536 .55
813,974 1.74
1,418,851 3.03
Food & Drug Retailing 1.42%
Food & Drug Retailing 1.42%
Albertson's, Inc. 18,260,940 432,556 .92
Walgreen Co. 5,125,000 233,828 .50
666,384 1.42
Food & Beverage 4.80%
Beverages 1.17%
PepsiCo, Inc. 11,300,000 547,344 1.17
Food Products 3.63%
Campbell Soup Co. 2,700,000 78,975 .17
ConAgra, Inc. 9,000,000 192,375 .41
General Mills, Inc. 11,520,000 480,960 1.02
H.J. Heinz Co. 4,300,000 180,331 .38
Kellogg Co. 3,100,000 78,662 .17
Sara Lee Corp. 32,097,000 692,092 1.48
1,703,395 3.63
2,250,739 4.80
Household & Personal Products 1.91%
Household Products 1.56%
Kimberly-Clark Corp. 11,079,800 $ 731,267 1.56%
Personal Products .35%
Avon Products, Inc. 3,430,000 166,355 .35
897,622 1.91
Health Care Equipment & Services 2.36%
Health Care Equipment & Supplies .41%
Becton, Dickinson and Co. 5,700,000 190,950 .41
Health Care Providers & Services 1.95%
Aetna Inc. 6,900,000 398,907 .85
Cardinal Health, Inc. 5,435,000 514,966 1.10
913,873 1.95
1,104,823 2.36
Pharmaceuticals & Biotechnology 7.16%
Pharmaceuticals 7.16%
Abbott Laboratories 3,500,000 184,844 .39
American Home Products Corp. 2,000,000 127,000 .27
Bristol-Myers Squibb Co. 12,688,600 773,211 1.65
Eli Lilly and Co. 2,630,900 235,137 .50
Merck & Co., Inc. 1,600,000 143,900 .31
Pfizer Inc (merged with
Warner-Lambert Co.) 19,271,850 832,303 1.78
Pharmacia Corp. 16,934,000 931,370 1.98
Schering-Plough Corp. 2,500,000 129,219 .28
3,356,984 7.16
Banks 12.46%
Banks 12.46%
Bank of America Corp. 28,000,000 $ 1,345,750 2.87%
Bank of New York Co., Inc. 8,950,000 515,185 1.10
BANK ONE CORP. 25,638,400 935,802 2.00
Chase Manhattan Corp. 9,900,000 450,450 .96
First Union Corp. 23,885,900 724,041 1.54
FleetBoston Financial Corp. 6,049,473 229,880 .49
J.P. Morgan & Co. Inc. 450,000 74,475 .16
KeyCorp 3,700,000 91,344 .19
National City Corp. 3,400,000 72,675 .15
SunTrust Banks, Inc. 2,500,000 122,031 .26
Wachovia Corp. 850,000 45,900 .10
Washington Mutual, Inc. 7,781,300 342,377 .73
Wells Fargo & Co. 19,341,500 895,753 1.91
5,845,663 12.46
Diversified Financials 4.73%
Diversified Financials 4.73%
Associates First Capital
Corp., Class A 1,679,600 62,355 .13
Citigroup Inc. 5,600,000 294,700 .63
Fannie Mae 5,000,000 385,000 .82
Freddie Mac 3,100,000 186,000 .40
Household International, Inc. 19,000,000 955,937 2.04
Providian Financial Corp. 1,947,400 202,530 .43
USA Education Inc. (formerly
SLM Holding Corp.) 2,370,000 132,424 .28
2,218,946 4.73
Insurance 6.01%
Insurance 6.01%
Allstate Corp. 24,862,500 1,000,716 2.13
American General Corp. 8,405,000 676,602 1.44
Aon Corp. 8,281,000 343,144 .73
Jefferson-Pilot Corp. 3,700,000 254,375 .54
Lincoln National Corp. 5,854,800 283,226 .61
Marsh & McLennan
Companies, Inc. 1,200,000 156,900 .34
St. Paul Companies, Inc. 2,000,000 102,500 .22
2,817,463 6.01
Software & Services .36%
Software .36%
Computer Associates International, Inc. 1,000,000 $ 31,875 .07%
Microsoft Corp.<F2> 2,000,000 137,750 .29
169,625 .36
Technology Hardware & Equipment 2.40%
Communications Equipment .32%
Harris Corp. 1,550,000 49,116 .11
Motorola, Inc. 4,000,000 99,750 .21
148,866 .32
Computers & Peripherals .99%
Hewlett-Packard Co. 6,000,000 278,625 .59
International Business Machines Corp. 1,900,000 187,150 .40
465,775 .99
Office Electronics .39%
IKON Office Solutions, Inc. 7,285,000 23,676 .05
Xerox Corp. 18,972,900 160,084 .34
183,760 .39
Semiconductor Equipment & Products .70%
Texas Instruments Inc. 6,650,000 326,266 .70
1,124,667 2.40
Telecommunication Services 8.67%
Diversified Telecommunication
Services 8.67%
AT&T Corp. 39,550,000 917,066 1.96
Qwest Communications
International Inc. (formerly
U S WEST, Inc.)<F2> 6,850,000 333,081 .71
SBC Communications Inc. 15,204,683 877,120 1.87
Sprint FON Group 18,970,000 483,735 1.03
Verizon Communications
(formed by the merger of Bell
Atlantic Corp. and GTE Corp.) 25,146,526 1,453,784 3.10
4,064,786 8.67
Utilities 8.24%
Electric Utilities 6.88%
Ameren Corp. 3,577,400 $ 142,202 .30%
American Electric
Power Co., Inc. (merged with
Central and South West Corp.) 11,457,580 475,489 1.01
Conectiv 2,500,000 44,844 .09
Consolidated Edison, Inc. 6,605,800 232,442 .50
Constellation Energy Group, Inc. 6,012,100 250,629 .53
CP&L Energy, Inc. (formerly
Carolina Power & Light Co.) 7,100,000 286,219 .61
Dominion Resources, Inc. 4,487,020 267,258 .57
DTE Energy Co. 3,550,000 128,244 .27
Duke Energy Corp. 2,200,000 190,162 .41
Edison International 3,135,000 74,848 .16
Florida Progress Corp. 2,700,000 143,606 .31
FPL Group, Inc. 782,100 51,619 .11
GPU, Inc. 4,125,000 136,383 .29
PPL Corp. 2,000,000 82,375 .18
Public Service Enterprise Group Inc. 2,020,000 83,830 .18
Puget Sound Energy, Inc. 3,800,000 93,337 .20
Southern Co. 17,609,600 517,282 1.10
TECO Energy, Inc. 1,000,000 27,875 .06
3,228,644 6.88
Multi-Utilities 1.36%
Williams Companies, Inc. 12,500,000 522,656 1.11
Xcel Energy Inc. (formerly New
Century Energies, Inc.) 4,515,000 115,415 .25
638,071 1.36
3,866,715 8.24
Miscellaneous 1.40%
Miscellaneous 1.40%
Equity securities in initial
period of acquisition 658,920 1.40
TOTAL EQUITY SECURITIES
(cost $36,039,456,000) 45,115,299 96.18
U.S. Treasuries and Other Federal Agencies 3.80%
U.S. Treasuries and Other
Federal Agencies 3.80%
Federal Home Loan Bank
6.32% - 6.43%
due 11/3 - 1/24/01 $890,400 $ 881,176 1.88%
United States Treasury bills
5.91% - 6.15%
due 12/7 - 1/18/01 909,407 901,717 1.92
TOTAL SHORT-TERM SECURITIES
(cost: $1,782,719,000) 1,782,893 3.80
TOTAL INVESTMENT SECURITIES
(cost $37,822,175,000) 46,898,192 99.98
Excess of cash and receivables
over payables 10,157 .02
NET ASSETS $46,908,349 100.00%
[FN]
<F1>The Fund owns 5.26%, 5.09%, 5.06%, and 5.04% of the outstanding voting
securities of Ashland, Crompton, Genuine Parts, and Stanley Works, respectively,
and therefore, each is considered an "affiliated company" of the Fund under the
Investment Company Act of 1940.
<F2>Non-income-producing security.
ADR = American Depositary Receipts
See Notes to Financial Statements
</FN>
Financial Statements Statement of Assets and Liabilities
October 31, 2000
Unaudited (dollars in thousands)
Assets:
Investment securities at market
(cost: $37,822,175) $46,898,192
Cash 437
Receivables for _
Sales of investments $58,950
Sales of Fund's shares 31,452
Dividends 69,072 159,474 47,058,103
Liabilities:
Payables for _
Purchases of investments 44,140
Repurchases of Fund's shares 70,162
Management services 11,106
Other expenses 24,346 149,754
Net Assets at October 31, 2000 $46,908,349
Class A shares, $1.00 par value
(authorized capital stock _
3,000,000,000 shares)
Net assets $46,780,381
Shares outstanding 1,522,224,873
Net asset value per share $30.73
Class B shares, $1.00 par value
(authorized capital stock _
1,000,000,000 shares)
Net assets $127,968
Shares outstanding 4,172,946
Net asset value per share $30.67
See Notes to Financial Statements
Statement of Operations
for the six months ended October 31, 2000
Unaudited (dollars in thousands)
Investment Income:
Income:
Dividends $581,086
Interest 57,465 $ 638,551
Expenses:
Investment adviser fee 46,382
Business management fee 21,504
Distribution expenses _ Class A 55,934
Distribution expenses _ Class B 414
Transfer agent fee _ Class A 23,028
Transfer agent fee _ Class B 46
Reports to shareholders 183
Registration statement and prospectus 962
Postage, stationery and supplies 3,647
Directors' and Advisory Board fees 227
Auditing and legal fees 112
Custodian fee 183
Other expenses 64 152,686
Net investment income 485,865
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 1,038,665
Net change in unrealized
appreciation 1,380,837
Net realized gain and change
in unrealized appreciation
on investments 2,419,502
Net Increase in Net Assets
Resulting from Operations $2,905,367
See Notes to Financial Statements
Statement of Changes in Net Assets
Six months Year
ended ended
October 31, April 30,
(dollars in thousands) 2000<F1> 2000
Operations:
Net investment income $ 485,865 $ 1,014,613
Net realized gain on investments 1,038,665 5,370,939
Net change in unrealized appreciation
on investments 1,380,837 (10,719,233)
Net Increase (Decrease) in Net
Assets Resulting from Operations 2,905,367 (4,333,681)
Dividends and Distributions Paid
to Shareholders:
Dividends from net investment income:
Class A (455,205) (952,846)
Class B (612) --
Distributions from net realized gain
on investments:
Class A -- (5,085,575)
Class B -- --
Total Dividends and Distributions (455,817) (6,038,421)
Capital Share Transactions:
Proceeds from shares sold 2,037,002 8,330,952
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments 423,202 5,726,003
Cost of shares repurchased (5,354,474) (13,350,009)
Net (Decrease) Increase in Net
Assets Resulting from Capital
Share Transactions (2,894,270) 706,946
Total Decrease in Net Assets (444,720) (9,665,156)
Net Assets:
Beginning of period 47,353,069 57,018,225
End of period (including undistributed
net investment income: $204,456
and $174,408, respectively) $46,908,349 $47,353,069
[FN]
<F1>Unaudited
</FN>
See Notes to Financial Statements
Notes to Financial Statements 2000 Semi-Annual Report
Unaudited
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 are 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
after eight years. Holders of both classes of shares have equal pro rata rights
to assets, and identical voting, dividend, 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 accounting principles generally accepted in the United States
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, including depositary receipts, are
valued at the last reported sale price on the exchange or market on which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available
bid price. In cases where equity securities are traded on more than one
exchange, the securities are valued on the exchange or market determined by
the investment adviser to be the broadest and most representative market,
which may be either a securities exchange or the over-the-counter market.
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.
Allocations _ Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses are allocated daily between Class
A and Class B based on their relative net asset values. Distribution
expenses, certain transfer agent fees, and any other applicable
class-specific expenses, are accrued daily and charged to the respective
share class.
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 capital 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, 2000, net unrealized appreciation on investments for book and
federal income tax purposes aggregated $9,076,017,000, of which $12,310,717,000
related to appreciated securities and $3,234,700,000 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the six months ended October 31, 2000. The cost of
portfolio securities for book and federal income tax purposes was
$37,822,175,000 at October 31, 2000.
3. Fees and Transactions with Related Parties
Business Management and Investment Advisory Fees _ A fee of $21,504,000 was
incurred during the six months ended October 31, 2000 for business management
services pursuant to the business management agreement with Washington
Management Corporation (WMC). The agreement provides for monthly fees, accrued
daily, computed at an annual rate of 0.175% of the first $3 billion on 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 $44
billion; and 0.05% of net assets in excess of $44 billion but not exceeding $55
billion, and 0.04% of net assets in excess of $55 billion. Johnston, Lemon & Co.
Incorporated (JLC) earned $378,000 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 $46,382,000 was incurred during the six months ended October 31, 2000
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. (AFD), the principal
underwriter of the Fund's shares, received $6,273,000 (after allowances to
dealers) as its portion of the sales charges paid by purchasers of the Fund's
Class A shares during the six-month period ended October 31, 2000. Such sales
charges are not an expense of the Fund and, hence, are not reflected in the
accompanying Statement of Operations.
The Fund has adopted Plans of Distribution under which it may finance activities
primarily intended to sell Fund shares, provided the categories of expense are
approved in advance by the Fund's Board of Directors. The Plans provide for
aggregate annual expense limits of 0.25% of net assets for Class A shares, and
1.00% of net assets for Class B shares.
For Class A shares, approved categories of expense include dealer service fees
of up to 0.25% of net assets. Also included are monthly reimbursements to AFD
for commisssions paid during the prior 15-month period to dealers and
wholesalers in respect of certain shares sold without a sales charge. These
reimbursements are permitted only to the extent that the Fund's overall 0.25%
annual expense limit is not exceeded. For the six-month period ended October 31,
2000, aggregate distribution expenses were $55,934,000, or 0.23% of net assets
for Class A shares.
For Class B shares, approved categories of expense include fees of 0.75% per
annum payable to AFD. AFD sells the rights to receive such payments (as well as
any contingent deferred sales charges payable in respect of shares sold during
the period) in order to finance the payment of dealer commissions. Also included
are service fees of 0.25% per annum. These fees are paid to AFD to compensate
AFD for paying service fees to qualified dealers. For the six-month period ended
October 31, 2000, aggregate distribution expenses were $414,000, or 1.00% of net
assets for Class B shares.
As of October 31, 2000, accrued and unpaid distribution expenses payable to AFD
for Class A and Class B shares were $16,919,000 and $98,000, respectively.
Transfer Agent Fee _ A fee of $23,074,000 was incurred during the six months
ended October 31, 2000 pursuant to an agreement with American Funds Service
Company (AFS), the transfer agent for the Fund.
Deferred Directors' and Advisory Board 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 October 31, 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
$622,000.
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 and receive no
remuneration directly from the Fund in such capacities.
4. Investment Transactions and Other Disclosures
The Fund made purchases and sales of investment securities, excluding short-term
securities of $6,435,888,000 and $8,773,290,000, respectively, during the six
months ended October 31, 2000.
Pursuant to the custodian agreement, the Fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the six months ended October 31, 2000, the custodian fee of $183,000
includes $14,000 that was paid by these credits rather than in cash.
Net assets consisted of the following:
(dollars in thousands)
Capital paid in on shares of capital stock $33,829,834
Undistributed net investment income 204,456
Accumulated net realized gain 3,798,042
Net unrealized appreciation 9,076,017
Net assets $46,908,349
Capital share transactions in the Fund were as follows:
<TABLE>
<CAPTION>
Six months ended October 31, 2000 Year ended April 30, 2000
Amount (000) Shares Amount (000) Shares
<S> <C> <C> <C> <C>
Class A shares:
Sold $ 1,947,311 66,269,261 $ 8,296,876 258,447,597
Reinvestment of dividends and distributions 422,619 14,456,352 5,726,003 195,503,827
Repurchased (5,352,132) (182,369,193) (13,349,916) (444,808,302)
Net increase in Class A (2,982,202) (101,643,580) 672,963 9,143,122
Class B shares:<F1>
Sold 89,691 3,055,563 34,076 1,180,562
Reinvestment of dividends and distributions 583 19,932 _ _
Repurchased (2,342) (79,964) (93) (3,147)
Net increase in Class B 87,932 2,995,531 33,983 1,177,415
Total net (decrease) increase in
capital share transactions $(2,894,270) (98,648,049) $ 706,946 10,320,537
<FN>
<F1>Class B shares were not offered before March 15, 2000.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Per-Share Data and Ratios<F1> (Part 1)
(NOTE: Table split into 2 Tables to Fit EDGAR Format; footnotes duplicated for
each part of table)
Net Gains
Net asset (losses) on Dividends
value, Net securities (both Total from (from net Distributions
Period beginning investment realized and investment investment (from capital
ended of period income unrealized) operations income) gains)
<S> <C> <C> <C> <C> <C> <C>
Class A:
10/31/2000 $29.14 $.31<F2> $ 1.57<F2> $ 1.88 $(.29) _
2000 35.31 .61<F2> (3.09)<F2> (2.48) (.58) $(3.11)
1999 33.92 .60 3.99 4.59 (.61) (2.59)
1998 25.93 .62 9.65 10.27 (.62) (1.66)
1997 22.77 .62 4.36 4.98 (.62) (1.20)
1996 18.87 .63 4.98 5.61 (.62) (1.09)
Class B:
10/31/2000 29.11 .17<F2> 1.60<F2> 1.77 (.21) _
2000<F5> 26.93 .022 2.162 2.18 _ _
<FN>
<F1> The period ended October 31, 2000 represents the six-month period ended
October 31, 2000 (unaudited). The periods 1996 through 2000 represent fiscal
years ended April 30. Total returns for the six-month periods are based on
activity during the period and thus are not representative of a full year. Total
returns exclude all sales charges, including contingent deferred sales charges.
<F2> Based on average shares outstanding.
<F3> Annualized.
<F4> Represents portfolio turnover rate (equivalent for all share classes) for
the six months ended October 31, 2000.
<F5> Class B shares were not offered before March 15, 2000. The period 2000
represents the 46-day fiscal period ended April 30, 2000.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Per-Share Data and Ratios<F1> (Part 2)
(NOTE: Table split into 2 Tables to Fit EDGAR Format; footnotes duplicated for
each part of table)
Ratio of Ratio of
Net asset Net assets, expenses net income Portfolio
Period Total value, end Total end of period to average to average turnover
ended distributions of period return (in millions) net assets net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
Class A:
10/31/2000 (.29) $30.73 6.51% $46,780 .66%<F3> 2.10%<F3> 14.48%<F4>
2000 (3.69) 29.14 (6.96) 47,319 .63 1.91 26.24
1999 (3.20) 35.31 14.61 57,018 .61 1.84 27.93
1998 (2.28) 33.92 40.80 45,764 .62 2.08 17.61
1997 (1.82) 25.93 22.43 28,165 .64 2.56 20.41
1996 (1.71) 22.77 30.40 20,689 .66 2.98 23.41
Class B:
10/31/2000 (.21) 30.67 6.13 128 1.43<F3> 1.17<F3> 14.48<F4>
2000<F5> _ 29.11 8.10 34 1.38<F3> .67<F3> 26.24
<FN>
<F1> The period ended October 31, 2000 represents the six-month period ended
October 31, 2000 (unaudited). The periods 1996 through 2000 represent fiscal
years ended April 30. Total returns for the six-month periods are based on
activity during the period and thus are not representative of a full year. Total
returns exclude all sales charges, including contingent deferred sales charges.
<F2> Based on average shares outstanding.
<F3> Annualized.
<F4> Represents portfolio turnover rate (equivalent for all share classes) for
the six months ended October 31, 2000.
<F5> Class B shares were not offered before March 15, 2000. The period 2000
represents the 46-day fiscal period ended April 30, 2000.
</FN>
</TABLE>
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
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
Jeffrey L. Steele
Executive Vice President of the Fund
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
Ashley L. Shaw
Assistant Secretary 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 Adviser
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
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,
how-ever, 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.
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, 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-013-1200
(graphic: American Funds logo)
(graphic: Washington Mutual Funds logo)
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
202/842-5665
