THE BOND FUND OF AMERICA
SEMI-ANNUAL REPORT
For the six months ended June 30, 1996
[The American Funds Group(R)]
THE BOND FUND OF AMERICA(SM)
Seeks as high a level of current income as is consistent with preservation of
capital through a diversified portfolio of bonds and other fixed-income
obligations.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the total returns and average annual compound
returns with all distributions reinvested for periods ended June 30, 1996,
assuming payment of the 4.75% maximum sales charge at the beginning of the
stated periods - 10 years: +122.33%, or +8.32% a year; 5 years: +52.32%, or
+8.78% a year; 12 months: +2.33%. The fund's 30-day yield as of July 31, 1996,
calculated in accordance with the Securities and Exchange Commission formula,
was 7.03%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
FELLOW SHAREHOLDERS:
Interest rates continued to demonstrate their cyclical nature in the first half
of our fiscal year. Longer term interest rates rose over the period. Bond
prices, which move inversely to interest rates, moved lower. However, the
decline in The Bond Fund of America's share value was fully offset by the
income you received from the fund. If, like most shareholders, you reinvested
the 47 1/2 cents a share in dividends paid during the six months ended June 30,
your holdings rose 0.5% in value.
[Sidebar]
The Bond Fund of America provided shareholders with good relative stability.
[End Sidebar]
By comparison, the Salomon Brothers Broad Investment-Grade (BIG) Bond
Index and the Lehman Brothers Aggregate Bond Index declined 1.3% and 1.2%,
respectively, on a reinvested basis (the indexes are unmanaged and have no
expenses). The 119 comparable corporate bond funds tracked by Lipper Analytical
Services declined 2.3% on average, also with dividends reinvested.
The Bond Fund of America's small advance brings the fund's total return
over the past 12 months to +7.4% and its lifetime total return (since May 28,
1974) to +793.0%, an average compound return of +10.4% a year.
During the past six months, bond yields rose following reports that
economic activity was growing at a faster pace than many investors had
anticipated. In particular, reports of a significant pickup in the rate of job
creation last spring dashed hopes of further cuts in short-term interest rates
by the Federal Reserve Board and led many market observers to factor in the
possibility of rate increases.
At midyear, 42% of the fund's assets were invested in corporate bonds. A
similar amount was held in a combination of U.S. Treasury and mortgage-related
securities. With strong business activity producing improvements in corporate
profits and balance sheets, the market prices of many of the corporate bond
issues in the portfolio held up better than the market as a whole. Our
mortgage- and asset-backed securities, which generally have relatively short
effective maturities, also added to the fund's stable results.
We would like to emphasize, as we did in our annual report, our dedication
to research in making investment decisions on your behalf. This includes
research into the global economic outlook, ongoing developments in individual
sectors of the bond market, along with analysis of the creditworthiness of
specific issuers and the characteristics of individual issues.
Crosscurrents will, no doubt, continue to sweep the financial markets. We
encourage you to maintain a long-term perspective. And we look forward to
providing you with more detail on your portfolio in our annual report six
months hence.
Cordially,
Paul G. Haaga, Jr.
Chairman of the Board
Abner D. Goldstine
President
August 15, 1996
<TABLE>
THE BOND FUND OF AMERICA Principal Market Percent of
INVESTMENT PORTFOLIO JUNE 30, 1996 Amount Value Net Assets
(000) (000)
<S> <C> <C> <C>
ELECTRICAL & GAS UTILITIES
Utilities: Electrical & Gas
Big Rivers Electric Corp. 10.70% 2017 $17,000 $18,686 .29%
CEZ Finance BV 8.875% 1999 /1/ 7,000 7,437 .12
CMS Energy 0%/9.50% 1997 /2/ 2,000 2,030 .03
Columbia Gas System, Inc.:
Series A 6.39% 2000 10,000 9,797
Series C 6.80% 2005 7,000 6,697 1.05
Series F 7.42% 2015 35,000 32,628
Series G 7.62% 2025 20,500 19,273
El Paso Electric Co. Series D, 8.90% 2006 2,500 2,456 .04
Long Island Lighting Co.:
8.90% 2019 5,000 4,537 .24
8.20% 2023 12,500 10,978
United Illuminating Co. 9.76% 2006 5,044 5,253 .08
-------------- ----------
119,772 1.85
-------------- ----------
INDUSTRIAL & SERVICE
Appliances & Household Goods
Knoll Group, Inc. 10.875% 2006 4,000 4,100 .06
-------------- ----------
Automobiles
Exide Corp. 10.00% 2005 1,000 976 .02
General Motors Corp.:
9.45% 2011 20,000 22,984
8.80% 2021 52,000 58,276 1.25
-------------- ----------
82,236 1.27
-------------- ----------
Beverages & Tobacco
Canandaigua Wine Co., Inc. 8.75% 2003 3,000 2,940 .04
Dr Pepper Bottling Co. of Texas 10.25% 2000 7,500 7,650 .12
-------------- ----------
10,590 .16
-------------- ----------
Broadcasting & Publishing
American Media Operations, Inc. 11.625% 2004 11,500 11,730 .18
Chancellor Broadcasting Co.:
9.375% 2004 12,500 11,812 .21
12.50% 2004 2,000 2,200
EZ Communications, Inc. 9.75% 2005 250 239 .00
Grupo Televisa, S.A. :
11.375% 2003 5,000 5,075 .16
0%/13.25% 2008 /2/ 9,250 4,995
Infinity Broadcasting Corp. 10.375% 2002 4,500 4,793 .08
Marvel Holdings Inc. 0% 1998 18,750 15,000 .23
Newsquest Capital PLC 11.00% 2006 4,750 4,726 .07
Univision Televistion Group, Inc. 11.75% 2001 5,500 5,858 .09
Young Broadcasting Inc. 10.125% 2005 3,500 3,343 .05
-------------- ----------
69,771 1.07
-------------- ----------
Construction & Housing
Del Webb Corp. 9.75% 2003 10,000 9,500 .15
Kaufman and Broad Home Corp. 10.375% 1999 7,500 7,688 .12
M.D.C. Holdings, Inc. 11.125% 2003 14,000 13,370 .20
-------------- ----------
30,558 .47
-------------- ----------
Data Processing & Reproductions
Apple Computer, Inc. 6.50% 2004 19,000 15,675 .24
AST Research, Inc. convertable notes 0% 2013 31,500 10,080 .16
Data General Corp.:
7.75% convertible debentures 2001 7,000 6,860 .13
8.375% 2002 1,250 1,169
Maxtor Corp. 5.75% convertible debentures 2012 2,000 1,380 .02
Neodata Services, Inc. 0%/12.00% 2003 /2/ 12,000 12,000 .18
Unisys Corp. 10.625% 1999 2,500 2,500 .04
-------------- ----------
49,664 .77
-------------- ----------
Diversified Media & Cable Television
Bell Cablemedia PLC 0%/11.95% 2004 /2/ 42,500 29,856 .46
Cablevision Industries Corp.:
10.75% 2004 1,000 1,030 .09
9.875% 2013 5,000 4,637
Century Communications Corp.:
9.50% 2000 3,500 3,482 .12
9.75% 2002 4,550 4,527
Comcast Corp.:
10.25% 2001 13,000 13,553
9.375% 2005 3,000 2,887 .45
1.125% convertible debentures 2007 25,000 12,125
Comcast UK Cable Partners Ltd. 0%/11.20% 2007 /2/ 25,000 14,750 .23
Continental Cablevision, Inc.:
8.50% 2001 22,050 23,085
10.625% 2002 1,500 1,605
8.625% 2003 4,000 4,217
8.875% 2005 10,000 10,698 .84
11.00% 2007 3,000 3,368
9.00% 2008 7,000 7,608
9.50% 2013 3,000 3,240
Heartland Wireless Communications, Inc. Units, 13.00% 2003 4,024 4,500 .07
Insight Communications Co.,LP 8.25% 2000 /4/ 11,250 11,138 .17
International CableTel Inc.:
0%/10.875% 2003 /2/ 9,500 6,911 .28
0%/12.75% 2005 /2/ 17,750 11,227
Multicanal Participacoes SA 12.625% 2004 9,250 9,574 .15
News America Holdings Inc.:
10.125% 2012 26,000 29,237
8.625% 2014 A$3,250 2,140 .64
8.45% 2034 $10,000 10,613
People's Choice TV Corp. Units, 0%/13.125% 2004 /2/ 1,000 568 .01
Rogers Communications Inc.:
10.875% 2004 3,500 3,561 .20
0% convertible debentures 2004 25,000 9,125
Storer Communications, Inc. 10.00% 2003 11,087 10,976 .17
TCI Communications, Inc. 8.75% 2015 10,000 9,829 .15
Tele-Communications, Inc. 9.25% 2023 7,500 7,393 .11
Tele West PLC:
9.625% 2006 4,700 4,594 .22
0%/11.00% 2007 /2/ 16,000 9,440
Time Warner Entertainment Co., LP.:
9.625% 2002 15,000 16,531 .56
10.15% 2012 17,500 20,157
Time Warner Inc.:
0% convertible debentures 2013 57,500 24,006 .77
9.125% 2013 25,000 26,110
TKR Cable I, Inc. 10.50% 2007 27,500 30,147 .46
Turner Broadcasting System, Inc. 0% convertible debentures 15,000 7,088 .11
U S WEST, Inc. 0% convertible debentures 2011 70,000 24,588 .38
Vanguard Cellular Systems, Inc. 9.375% 2006 6,000 5,805 .09
Viacom International Inc.:
9.125% 1999 5,000 5,100 .18
10.25% 2001 6,100 6,527
Videotron Holdings PLC 0%/11.125% 2004 /2/ 20,500 15,068 .23
-------------- ----------
462,621 7.14
-------------- ----------
Electrical & Electronics
General Electric Co. 8.625% 2008 3,000 3,333 .05
MagneTek, Inc. 10.75% 1998 7,500 7,350 .11
Phillips Electronics NV 7.20% 2026 5,500 5,466 .08
Samsung Electronics Co., Ltd. 8.50% 2002 /1/ 4,000 4,200 .07
VLSI Technology, Inc. 8.25% convertible debentures 2005 4,000 3,550 .06
-------------- ----------
23,899 .37
-------------- ----------
Energy & Related Companies
BP America Inc. 10.00% 2018 4,000 4,394 .07
Benton Oil and Gas Co. 11.625% 2003 /1/ 4,000 4,120 .06
California Energy Co., Inc.:
9.875% 2003 14,000 14,280 .81
0%/10.25% 2004 /2/ 39,600 38,016
Chesapeake Energy Corp. 9.125% 2006 4,000 3,900 .06
Cliffs Drilling Co. 10.25% 2003 15,750 15,592 .24
Falcon Drilling Co., Inc.:
9.75% 2001 2,500 2,550 .12
8.875% 2003 5,750 5,549
Flores & Rucks, Inc. 13.50% 2004 4,300 4,967 .08
Global Marine, Inc. 12.75% 1999 4,250 4,601 .07
McDermott Inc. 9.375% 2002 3,000 3,226 .05
Mesa Capital Corp. 12.75% 1998 6,500 6,565 .10
Mesa Operating Co. 10.625% 2006 1,000 1,015 .01
Midland Cogeneration Venture LP:
10.33% 2002 7,726 8,141 .21
secured lease obligation bonds, 10.33% 2002 5,555 5,853
Mobil Corp. 8.00% 2032 10,000 10,130 .16
Occidental Petroleum Corp. 9.25% 2019 12,000 14,007 .22
Oil Co. Ltd. 8.90% 2000 /1/ 20,000 20,288 .31
OXYMAR 7.50% 2016 8,500 7,756 .12
Parker & Parsley Petroleum 8.25% 2007 6,000 6,257 .10
Subic Power Corp. 9.50% 2008 /1/ 5,603 5,568 .08
TransTexas Gas Corp. 11.50% 2002 4,000 3,980 .06
-------------- ----------
190,755 2.94
-------------- ----------
Food Retailing
Allied Supermarkets Inc. 6.625% 1998 2,872 2,757 .04
Bruno's Inc. 10.50% 2005 6,000 5,917 .09
Carr-Gottstein Co. 12.00% 2005 10,000 10,250 .16
Safeway Inc. 10.00% 2002 1,500 1,650 .03
Smith's Food & Drug Centers, Inc., Series 94A2,
0%/8.64% 2012 /2/ /4/ 14,000 11,218 .17
Star Markets Co., Inc. 13.00% 2004 1,500 1,560 .03
Stater Bros. Holdings Inc. 11.00% 2001 9,500 9,880 .15
-------------- ----------
43,232 .67
-------------- ----------
Forest Products & Paper
Container Corp. of America:
10.75% 2002 4,800 4,944
9.75% 2003 31,500 30,949 .65
11.25% 2004 6,000 6,195
Fort Howard Corp.:
9.25% 2001 7,000 7,000 .17
11.00% 2002 3,635 3,744
Fort Howard Paper Co.:
8.25% 2002 3,000 2,880 .09
9.00% 2006 3,250 3,120
Grupo Industrial Durango, SA de CV 12.00% 2001 6,000 6,000 .09
PT Indah Kiat Pulp & Paper Corp. 11.875% 2002 5,500 5,844 .09
Pacific Lumber Co. 10.50% 2003 500 485 .01
Repap Wisconsin 9.875% 2006 6,375 5,674 .09
Tjiwi Kimia International Finance Co. 13.25% 2001 7,500 8,400 .13
-------------- ----------
85,235 1.32
-------------- ----------
General Retailing & Merchandising
Ann Taylor, Inc. 8.75% 2000 4,500 4,230 .07
Barnes & Noble, Inc. 11.875% 2003 6,000 6,435 .10
Dayton Hudson Corp.:
10.00% 2010 10,000 10,045 .25
8.50% 2022 5,000 5,844
Loehmann's Inc. 11.875% 2003 5,250 5,460 .08
Thrifty PayLess, Inc. 12.25% 2004 6,227 7,357 .11
-------------- ----------
39,371 .61
-------------- ----------
Health & Personal Care
Integrated Health Services, Inc.:
10.75% 2004 2,250 2,306 .18
10.25% 2006 /1/ 9,350 9,257
Mariner Health Group, Inc. 9.50% 2006 5,500 5,335 .08
Merit Behaviorial Care Corp. 11.50% 2005 3,000 3,150 .05
Universal Health Services, Inc. 8.75% 2005 2,300 2,248 .03
-------------- ----------
22,296 .34
-------------- ----------
Leisure & Tourism
AMF Group Inc.:
10.875% 2006 /1/ 4,750 4,679 .13
0%/12.25% 2006 /1/ /2/ 6,500 3,534
Discovery Zone 0% convertible debentures 2013 28,500 1,211 .02
Embassy Suites, Inc. 10.875% 2002 2,000 2,145 .03
Euro Disney SCA 6.75% convertible debentures 2001 FF108,780 20,628 .32
Foodmaker, Inc.:
9.25% 1999 9,700 9,652 .22
9.75% 2002 4,405 4,207
Four Seasons Hotels Inc. 9.125% 2000 6,000 6,008 .09
Harrah's Jazz Co. 8.75% 2000 2,000 2,010 .03
Plitt Theatres, Inc. 10.875% 2004 2,100 2,121 .03
Station Casinos, Inc. 9.625% 2003 5,000 4,800 .07
Trump Atlantic City Assoc. 11.25% 2006 6,500 6,533 .10
Wyndham Hotel Corp. 10.50% 2006 4,000 4,000 .06
-------------- ----------
71,528 1.10
-------------- ----------
Machinery & Engineering
AGCO Corp. 8.50% 2006 /1/ 3,000 2,940 .04
Coltec Industries Inc.:
9.75% 1999 7,000 7,140 .25
9.75% 2000 8,619 8,791
John Deere Capital Corp. 8.625% 2019 9,150 9,733 .15
Northrop Grumman 9.375% 2024 5,000 5,376 .08
Westinghouse Air Brake Co. 9.375% 2005 1,500 1,485 .02
-------------- ----------
35,465 .55
-------------- ----------
Metals
Acme Metals Inc.:
12.50% 2002 4,500 4,601 .20
0%/13.50% 2004 /2/ 9,000 8,190
AK Steel Corp. 10.75% 2004 4,750 5,118 .08
INCO Ltd.:
9.875% 2019 7,500 8,116 .38
9.60% 2022 16,000 16,774
ISPAT Mexicana:
(Euro) 10.375% 2001 4,650 4,505 .10
10.375% 2001 /1/ 2,000 1,938
Kaiser Aluminum and Chemical Corp.:
9.875% 2002 1,400 1,372 .32
12.75% 2003 18,500 19,518
Oregon Steel Mills, Inc. 11.00% 2003 5,250 5,408 .08
Tubos de Acero de Mexico, SA 13.750% 1999 /1/ 2,500 2,731 .04
UCAR Global Enterprises Inc. 12.00% 2005 3,430 3,893 .06
USX Corp. 9.125% 2013 7,500 8,139 .13
-------------- ----------
90,303 1.39
-------------- ----------
Miscellaneous Materials & Commodities
A.P.S., 11.875% 2006 /1/ 3,000 3,112 .05
Building Materials Corp. of America 0%/11.75% 2004 /2/ 6,000 4,470 .07
NL Industries 11.75% 2003 1,000 1,020 .01
Owens-Illinois, Inc. 11.00% 2003 5,000 5,375 .08
Tolmex, SA de CV 8.375% 2003 1,500 1,254 .02
-------------- ----------
15,231 .23
-------------- ----------
Multi-Industry
Hanson America, Inc. 144A 2.39% convertible
debentures 2001 /1/ 20,000 17,000 .26
Swire Pacific Ltd. 8.50% 2004 /1/ 20,000 20,811 .32
Tenneco Inc. 7.875% 2002 3,000 3,088 .05
-------------- ----------
40,899 .63
-------------- ----------
Protection Services
ADT Operations 9.25% 2003 2,500 2,581 .04
ASH Capital Finance, Ltd. convertible debentures 9.50% 2004,500 pounds 6,477 .10
Protection One Alarm Monitoring, Inc. Units, 0%/13.625% 20 $17,054 15,306 .24
-------------- ----------
24,364 .38
-------------- ----------
Telecommunications
360/0/ Communications Co.:
7.125% 2003 30,000 28,688 .62
7.50% 2006 12,000 11,385
Brooks Fiber Properties, Inc. 0%/10.875% 2006 /1/ /2/ 7,500 3,994 .06
CellNet Data Systems, Inc. Units, 0%/13.00% 2005 /1/ /2/ / 49,750 35,571 .55
Cellular, Inc. 0%/11.75% 2003 /2/ 10,500 8,557 .13
Cellular Communications International, Inc. Units 0% 2000 15,071 9,344 .15
Centennial Cellular Corp.:
8.875% 2001 19,000 17,575 .71
10.125% 2005 5,000 4,800
Series A, 0% 2000 20,500 13,991
Series B, 0% 2000 14,400 9,864
Commnet Cellular Inc. 11.25% 2005 5,500 5,858 .09
Comunicacion Celular S.A. Units, 0%/13.125% 2003 /1/ /2/ 17,550 11,320 .17
Geotek Communications, Inc. 0%/15.00% 2005 /2/ 9,013 7,678 .12
Horizon Cellular Telephone Co., LP 0%/11.375% 2000 /2/ 15,500 14,570 .23
IntelCom Group, Inc.:
0%/13.50% 2005 /2/ 11,298 7,276 .20
0%/12.50% 2006 /1/ /2/ 10,500 5,723
MFS Communications Co., Inc.
0%/9.375% 2004 /2/ 65,750 49,313 .99
0%/8.875% 2006 /2/ 25,000 15,125
MobileMedia Communications, Inc. 0%/10.50% 2003 /2/ 8,600 6,106 .10
New York Telephone Co. 9.375% 2031 /1/ 5,000 5,463 .08
NEXTEL Communications, Inc.:
0%/11.50% 2003 /2/ 30,000 20,550 1.28
0%/9.75% 2004 /2/ 44,750 26,291
0%/10.125% 2004 /2/ (CenCall) 33,000 20,048
0%/12.25% 2004 /2/ (DialCall) 24,750 15,840
Northern Telecom Ltd. 8.75% 2001 3,500 3,758 .06
Omnipoint Corp. Units, 6.00%/12.00% 2000 /3/ /4/ 12,500 18,516 .29
Paging Network, Inc. 11.75% 2002 10,275 11,046 .17
PanAmSat, LP PanAmSat Capital Corp. 9.75% 2000 9,800 10,131 .16
PriCellular Wireless Corp.:
0%/14.00% 2001 /2/ 6,000 5,430 .29
0%/12.25% 2003 /2/ 17,750 13,934
Rogers Cantel Communications Inc. 9.375% 2008 3,000 2,910 .04
Telecom Argentina STET - France Telecom S. A. 12.00% 1999 5,500 5,899 .09
Teleport Communications 9.875% 2006 5,000 5,013 .08
-------------- ----------
431,567 6.66
-------------- ----------
Textiles & Apparel
Tultex Corp. 10.625% 2005 2,750 2,846 .04
WestPoint Stevens Inc. 8.75% 2001 2,500 2,469 .04
-------------- ----------
5,315 .08
-------------- ----------
Transportation
Air Wis Services, Inc. 7.75% convertible debentures 2010 4,000 3,660 .06
Airplanes Pass Through Trust, pass-through certificates:
Series 1, Class B, 6.59609% 2019 /5/ 7,418 7,459 1.00
Series 1, Class C, 8.15% 2019 /5/ 45,000 44,831
Series 1, Class D, 10.875% 2019 /5/ 11,800 12,257
Alaska Airlines:
Series A, 9.50% 2010 2,397 2,432 .22
Series B, 9.50% 2010 3,024 3,071
Series C, 9.50% 2010 2,927 2,975
Series D, 9.50% 2012 4,889 4,971
American Airlines, Inc.:
1991-C2, mortgage pass-through certificates, 9.73% 2014 6,000 6,755 .19
1991-A, mortgage pass-through certificates, 9.71% 2007 /5 4,481 4,947
Atlas Air,Inc., pass-through certificates, 12.25% 2002 11,000 11,962 .18
Continental Airlines, Inc.:
6.75% convertible debentures 2006 /1/ 7,500 8,925 .59
pass-through certificates:
Series 1996-A 6.94% 2015 /1/ /5/ 4,000 3,860
Series 1996-B 7.82% 2015 /1/ /5/ 13,500 13,635
Series 1996-B 9.50% 2015 /1/ /5/ 5,000 5,338
Series 1996-2B 8.56% 2014 /1/ /5/ 2,000 2,125
Series 1996-2D 11.50% 2008 /1/ /5/ 4,500 4,631
Delta Air Lines, Inc.:
9.875% 2000 2,000 2,185 1.16
pass-through certificates:
Series 1992-A2, 9.20% 2014 /5/ 11,750 12,884
Series 1992-B1, 9.375% 2007 /5/ 9,102 9,819
Series 1993-A2, 10.50% 2016 /5/ 15,000 17,822
Series 1993-B2, 10.06% 2016 /5/ 3,700 4,260
Series 1993-C2, 9.59% 2017 /5/ 5,000 5,575
1990 Equipment trust certificates:
Series J, 10.00% 2014 /1/ 10,000 11,419
Series I, 10.00% 2014 /1/ 8,000 9,136
Series F, 10.79% 2014 /1/ 1,700 2,058
Epic 1996-1 Trust, Equipment pass-through
certificates, Class b, 7.55% 2009 5,500 5,500 .08
Federal Express Corp.:
8.40% 2010 10,000 10,297 .24
1996 pass through certificates, Series A1, 7.85% 2015 /5/ 5,000 5,063
Jet Equipment Trust:
Series 1994-A, 10.91% 2006 /1/ 6,965 7,966 1.07
Series 1994-A, 11.79% 2006 /1/ 4,000 4,620
Series 1995B-Certificates, 10.91% 2014 5,000 5,413
Series 1995-A, 11.44% 2014 /1/ 10,000 11,263
Series 1995-A, 10.69% 2015 /1/ 10,500 12,338
Series 1995B-A, 7.63% 2015 /1/ 23,081 22,903
Series 1995B-C, 9.71% 2015 /1/ 5,500 5,988
MC-Cuernavaca Trust 9.25% 2001 /1/ 4,938 3,395 .05
Northwest Airlines, Inc. 12.0916% 2000 7,569 7,721 .12
Teekay Shipping Corp. 8.32% 2008 6,000 5,625 .09
TNT Transport (Euro) PLC/TNT (USA) Inc. 11.50% 2004 4,750 4,869 .08
United Air Lines, Inc., pass-through certificates:
Series 1993-A3, 8.39% 2011 /5/ 7,500 7,650 .58
Series 1995-A1, 9.02% 2012 /5/ 11,065 11,722
Series 1995-A2, 9.56% 2018 /5/ 8,000 8,787
Series 1996-A1, 7.27% 2013 /5/ 5,000 4,734
Series 1996-A2, 7.87% 2019 /5/ 5,000 4,750
USAir, Inc.:
1990 Equipment Trust Certificates:
Series A, 10.28% 2001 754 747 .73
Series B, 10.28% 2001 754 747
Series C, 10.28% 2001 530 525
9.625% 2003 1,796 1,688
10.00% 2003 6,500 6,126
pass-through trust:
Series 1989-A1, 9.33% 2006 /5/ 3,849 3,714
Series 1993-A2, 9.625% 2003 /5/ 4,625 4,509
Series 1993-A3, 10.375% 2013 /5/ 7,250 7,259
Class A, 6.76% 2008 /1/ /5/ 5,000 4,756
Class B, 7.50% 2008 /1/ /5/ 8,500 8,383
Class C, 8.93% 2008 /1/ /5/ 9,000 9,304
-------------- ----------
417,354 6.44
-------------- ----------
FINANCE
Banking & Thrifts
Bank of Scotland 8.80% 2004 /1/ 16,000 17,292 .27
Berkeley Federal Bank & Trust 12.00% 2005 1,500 1,556 .02
Capital One Bank 7.35% 2000 5,000 5,031 .08
Den Danske Bank AS 7.25% 2005 /1/ 14,025 13,870 .21
First Nationwide 12.25% 2001 9,000 9,810 .15
First Nationwide Holdings Inc.:
9.125% 2003 /1/ 6,000 5,700 .09
12.5% 2003 /1/ 6,000 6,270 .10
Kansallis-Osak:-Pankki:
9.75% 1998 5,000 5,338 .08
10.00% 2002 1,000 1,128 .02
Midland American Capital 12.75% 2003 12,150 13,726 .21
New American Capital, Inc. 9.60% 1999 /1/ 15,000 15,056 .23
Skandinaviska Enskilda Banken (N.Y. City) 6.875% 2009 5,500 5,163 .08
State Bank of New South Wales Euronotes 10.375% 1999 3,000 3,266 .05
-------------- ----------
103,206 1.59
-------------- ----------
Finanxial Services
Beneficial Corp. 12.875% 2013 3,800 4,408 .07
Credit Foncier de France 8.00% 2002 18,100 18,292 .28
Ford Motor Credit Co. 9.50% 2000 7,350 7,973 .12
General Electric Capital Corp. 8.875% 2009 8,000 9,218 .14
General Motors Acceptance Corp.:
7.00% 2000 5,000 5,025 .08
8.75% 2005 10,000 10,836 .17
-------------- ----------
55,752 .86
-------------- ----------
Insurance
American Re Corp. 10.875% 2004 10,000 10,874 .17
CIGNA Corp. 6.375% 2006 5,000 4,600 .07
Equitable Life Assurance Society of the United States 7.70 10,000 9,669 .15
Fairfax Financial Holdings Ltd., 8.25% 2015 14,000 13,989 .22
Fidelity National Financial 0% 2009 20,000 8,750 .13
Metropolitan Life Insurance Co. 7.45% 2023 /1/ 10,000 9,068 .14
New York Life Insurance Co. 7.50% 2023 /1/ 15,000 13,999 .22
Terra Nova Insurance (UK) Holdings PLC 10.75% 2005 2,500 2,775 .04
-------------- ----------
73,724 1.14
-------------- ----------
Real Estate
B.F. Saul REIT 11.625% 2002 20,000 20,500 .32
Beverly Finance Corp. 8.36% 2004 /1/ 15,000 15,436 .24
Corporate Property Investors:
9.00% 2002 /1/ 2,000 2,149 .03
7.75% 2004 /1/ 4,250 4,281 .07
ERP Operating Limited Partnership 7.95% 2002 6,750 6,837 .10
Irvine Co. 7.46% 2006 /1/ /4/ 17,000 15,916 .24
Price REIT, Inc. 7.25% 2000 5,000 4,909 .07
Security Capital Industrial Trust:
7.25% 2002 1,000 998 .02
7.95% 2008 5,000 4,966 .08
7.875% 2009 6,250 6,152 .09
Security Capital Pacific Trust:
7.15% 2010 2,000 1,913 .03
7.90% 2016 2,000 1,923 .03
Shopping Center Associates 6.75% 2004 /1/ 12,000 11,340 .17
Taubman Realty Group 7.00% 2003 2,000 1,857 .03
Wellsford Residential Property Trust:
7.25% 2000 1,000 991 .02
7.75% 2005 1,000 1,005 .02
Wharf Capital International, Ltd. 8.875% 2004 15,000 15,401 .24
-------------- ----------
116,574 1.80
-------------- ----------
COLLATERALIZED MORTGAGE/ASSET-BACKED OBLIGATIONS /5/
(Excluding Those Issued by Federal Agencies)
Banco Nacional de Mexico 0% 2002 /1/ 19,759 15,066 .23
Capstead Securities Corp. IV, collateralized mortgage
obligations, Series 1992-4, Class J, 19.6067% 2022 /6/ 8,750 9,013 .14
Chase Manhattan Bank, N.A.:
Series 96-1 Class A1, 7.60% 2006 5,000 5,058 .08
Series 93-I Class 2A5, 7.60% 2024 10,000 9,488 .15
Countrywide Funding Corp., Series 94-2, Class A-12,
6.3985% 2009 /6/ 5,206 3,117 .05
CSFB Finance Co. Ltd., Series 1995-A, 5.00%/7.00% 2005 /3/ 30,000 28,995 .45
CS First Boston Mortgage Securities Corp., mortgage
pass-through certificates:
Series 1995-AEW1, 6.665% 2027 901 891 .01
Series 1995-MBL1, 6.425% 2030 17,079 16,925 .26
Electronic Transfer Master Trust 9.35% 2002 /1/ 18,000 18,068 .28
GCC Home Equity Trust, asset-backed certificates, Series
1990-1, 10.00% 2005 3,284 3,343 .05
G E Capital Mortgage Services:
Series 1994-9, Class A9, 6.50% 2024 3,938 3,259 .05
Series 1994-15, Class A10, 6.00% 2009 16,376 14,022 .22
Series 1995-1, Class A8, 8.40% 2025 21,785 22,183 .34
Green Tree Financial Corp., pass-through certificates:
Series 1994-A, Class NIM, 6.90% 2004 2,974 2,944 .05
Series 1995-A, Class NIM, 7.25% 2005 3,152 3,145 .05
Series 1993-2, Class B, 8.00% 2018 2,250 2,254 .03
Series 1995-9, Class A-5, 6.80% 2027 8,000 7,720 .12
J.P. Morgan Commercial Mortgage Finance Corp.,pass-
through certificates:
Series 1995-C1, Class A-2, 7.3985% 2010 /3/ 1,000 978 .02
Series 1996-C3, Class A-1, 7.33% 2028 /3/ 1,000 988 .02
Merrill Lynch Mortgage Investors, Inc.:
Series 1995-C2, Class D, 8.2657% 2021 /3/ 964 964 .01
Series 1995-C3, Class A1, 6.7885% 2025 /3/ 2,918 2,866 .04
Morgan Stanley Capital Inc., Series 1995-GA1, Class A1,
7.00% 2002 /1/ 17,514 17,470 .27
Prudential Home Mortgage Securities Co., Inc.:
Series 1993-7, Class A-4, 8.00% 2003 9,323 9,474 .15
Series 1993-7, Class A-5, 8.00% 2003 3,079 3,082 .05
Series 1993-48, Class A-6, 6.25% 2008 4,466 4,035 .06
Series 1992-37, Class A-6, 7.00% 2022 1,922 1,919 .03
Series 1993-34, Class A-1, 7.00% 2023 15,974 15,879 .24
Residential Funding Mortgage Securities I, Inc., Series
1992-S6, Class A-10, 12.102% 2022 /6/ 10,124 9,061 .14
Resolution Trust Corp.:
Series 1991-M5, Class B, 9.00% 2017 2,532 2,586 .04
Series 1992-6, Class A-2B, 8.40% 2024 7,602 7,651 .12
Series 1993-C1, Class D, 9.45% 2024 9,352 9,574 .15
Series 1993-C1, Class E, 9.50% 2024 612 607 .01
Series 1993-C2, Class C, 8.00% 2025 3,000 3,011 .05
Series 1993-C2, Class D, 8.50% 2025 3,290 3,308 .05
Series 1993-C2, Class E, 8.50% 2025 564 555 .01
Ryland Mortgage Securities Corp., Series 1991-14,
Class F, 21.528% 2021 /6/ 1,070 1,160 .02
SKW II Real Estate LP 6.90% 2002 /1/ 4,618 4,618 .07
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1994-2A, 7.25% 2008 5,000 4,998 .08
Standard Credit Card Trust, credit card participation
certificates:
Series 1990-3A, 9.50% 1998 5,000 5,138 .08
Series 1990-6A, 9.375% 1998 4,000 4,120 .06
Series 1991-3A, 8.875% 1999 11,000 11,505 .18
Structured Asset Securities Corp., pass-through certificates,
Series 1995-C1, Class A1A, 7.375% 2024 842 842 .01
Series 1996-CFL, Class D, 7.034% 2028 2,950 2,804 .04
Series 1996-CFL, Class E, 7.034% 2028 1,947 1,964 .03
UCFC Acceptance Corp. pass-through certificates:
Series 1995-A1, Class A1, 7.55% 2004 279 279 .00
Series 1996-B1, Class A2, 7.075% 2010 10,000 10,008 .15
-------------- ----------
306,935 4.73
-------------- ----------
GOVERNMENTAL
Governments (Excluding U.S. Government)
Argentina (Republic of):
8.375% 2003 10,000 8,700 .13
Eurobond 6.8125% 2005 /3/ 30,893 24,174 .37
Eurobond 5.00% 2023 /3/ 6,500 3,575 .05
British Columbia Hydro & Power Authority:
15.50% 2011 17,000 18,230 .28
15.50% 2011 4,467 4,914 .08
12.50% 2013 4,000 4,607 .07
12.50% 2014 7,000 8,174 .13
Canadian Government:
10.50% 2001 C$5,000 4,169 .06
6.50% 2004 34,500 23,787 .37
9.00% 2004 37,750 30,155 .47
8.75% 2005 C$15,000 11,836 .18
4.524% 2021 /3/ 2,000 1,443 .02
Deutschland Republic:
6.25% 2024 DM6,000 3,471 .05
8.00% 2002 34,050 24,655 .38
Israel (State of) 6.375% 2005 $10,00 9,293 .14
Italian Government National:
10.50% 2005 ITL30,000,00 21,079 .33
Italy (Republic of) 6.875% 2023 $33,0 29,757 .46
New Zealand Government 4.50% 2016 MZ$33,000 5,722 .09
Nova Scotia (Province of) 11.50% 2013 $2,2 2,482 .04
Ontario (Province of):
7.75% 2002 3,500 3,652 .06
7.375% 2003 1,250 1,278 .02
7.625% 2004 5,000 5,137 .08
7.00% 2005 10,750 10,596 .16
17.00% 2011 11,250 12,386 .19
15.25% 2012 6,985 8,039 .12
Panama Interest Reduction Bond 3.50% 2014 9,000 4,995 .08
Poland (Republic of):
Discount Bond 7.125% 2024 /3/ 750 703 .01
Past Due Interest Bond 3.75% 2014 /3/ 21,000 16,144 .25
Past Due Interest Bond 3.75% 2014 /3/ 7,000 5,381 .08
Treasury Bill 1997 16,200 5,023 .08
Quebec (Province of):
8.625% 2005 6,750 7,267 .11
13.25% 2014 5,500 6,683 .10
South Africa (Republic of) 13.00% 2010 ZAR117,000 23,890 .37
United Mexican States Government Eurobonds:
Global 11.50% 2026 $1,1 1,071 .02
Series A, 6.25% 2019 1,000 649 .01
Series B, 6.25% 2019 4,875 3,163 .05
Venezuela (Republic of) 6.625% 2007 /3/ 10,000 7,063 .11
-------------- ----------
363,343 5.60
-------------- ----------
Development Authorities
European Investment Bank 10.125% 2000 2,000 2,238 .03
Inter-American Development Bank 8.875% 2009 10,000 11,465 .18
International Bank for Reconstruction & Development
14.90% 1997 2,500 2,694 .04
-------------- ----------
16,397 .25
-------------- ----------
Federal Agency Obligations - Mortgage Pass-Throughs /5/
Federal Home Loan Mortgage Corp.:
8.00% 2003-2010 6,277 6,386 .99
8.25% 2007 3,084 3,169
8.50% 2002-2020 38,744 39,971
8.75% 2008 3,928 4,095
9.00% 2021 1,156 1,215
10.00% 2011-2019 518 558
10.50% 2020 3,167 3,489
10.75% 2010 141 155
11.50% 2000 45 47
12.00% 2011-2015 1,775 2,001
12.50% 2009-2014 2,044 2,370
12.75% 2015-2019 723 831
13.00% 2014 77 90
13.50% 2018 14 17
13.75% 2014 26 31
Federal National Mortgage Assn.:
6.50% 2025 1,353 1,266 1.45
7.00% 2009-2010 8,727 8,634
7.50% 2009-2024 17,882 17,826
8.00% 2023 3,400 3,441
8.50% 2009-2023 14,063 14,564
9.00% 2018-2025 7,820 8,199
9.50% 2009-2025 7,108 7,598
10.00% 2018-2025 20,126 21,928
10.50% 2012-2019 5,567 6,098
11.00% 2015-2020 3,777 4,193
11.25% 2014 72 80
11.50% 2010-2014 329 371
12.00% 2015-2019 163 186
12.50% 2015 361 418
13.00% 2014 65 76
15.00% 2013 84 100
Government National Mortgage Assn.:
5.00% 2024 /3/ 1,968 1,899 9.19
5.50% 2023-2024 /3/ 143,198 143,579
6.00% 2022-2024 /3/ 62,570 63,326
6.125% 2022 /3/ 9,085 9,210
6.50% 2008-2026 /3/ 40,999 38,804
7.00% 2008-2024 /3/ 117,279 114,747
7.50% 2008-2024 82,953 82,422
8.00% 2023-2025 20,925 21,224
8.50% 2020-2026 70,186 72,312
9.00% 2016-2025 19,971 20,998
9.50% 2009-2020 17,414 18,722
10.00% 2017-2019 2,763 3,008
10.50% 2015-2019 913 1,008
11.00% 2013-2016 1,527 1,709
11.50% 2015 62 70
12.00% 2014 156 180
12.50% 2010-2015 1,097 1,275
13.25% 2014 85 100
-------------- ----------
753,996 11.63
-------------- ----------
Federal Agency Obligation - Other
Federal Home Loan Bank Bonds:
6.16% 2004 24,000 22,732 1.34
6.27% 2004 5,000 4,747
6.38% 2003 3,000 2,890
6.41% 2003 18,580 17,816
7.00% 2005 35,000 33,873
8.23% 2004 5,000 4,987
Federal Home Loan Mortgage Notes:
5.74% 2003 6,500 6,058 1.82
5.78% 2003 14,520 13,492
6.185% 2003 19,845 18,819
6.19% 2004 11,000 10,374
6.24% 2003 2,900 2,761
6.27% 2004 2,500 2,375
6.28% 2003 3,000 2,872
6.30% 2003 2,000 1,926
6.375% 2003 5,820 5,580
6.39% 2003 10,330 9,931
6.50% 2003 6,200 5,937
6.555% 2006 7,500 7,123
7.00% 2002 25,000 24,570
7.29% 2004 6,000 5,927
Federal National Mortgage Assoc. Notes:
7.70% 2004 12,500 12,617 .84
medium-term notes
6.14% 2004 13,000 12,303
7.43% 2005 30,000 29,527
FNSM Callable Principal STRIPS 0%/8.25% 2022 /2/ 4,500 3,641 .06
-------------- ----------
262,878 4.06
-------------- ----------
Collateralized Mortgage Obligations - Federal Agencies /5/
Federal Home Loan Mortgage Corp.:
Series 1712, Class D, 6.00% 2009 7,500 6,621 .34
Series 1716, Class A, 6.50% 2009 4,750 4,460
Series 1574, Class AB, 6.50% 2023 5,002 3,703
Series 1657, Class SA, 6.7659% 2023 /6/ 7,520 3,812
Series 1673, Class SA, 5.0784% 2024 /6/ 7,879 3,413
Federal National Mortgage Assn.:
Series 90-142, Class J, 9.25% 2003 292 291 .50
Series 91-146, Class Z, 8.00% 2006 6,528 6,594
Series 91-65, Class X, 6.50% 2019 20,360 19,024
Series 90-93, Class G, 5.50% 2020 1,500 1,354
Series 93-138, Class SA, 7.8532% 2023 /6/ 3,758 2,358
Series 93-247, Class Z, 7.00% 2023 3,553 3,016
-------------- ----------
54,646 .84
-------------- ----------
U.S. Treasury Obligations
8.125% February 1998 120,750 124,523 1.92
5.875% April 1998 5,000 4,980 .08
9.25% August 1998 227,250 240,921 3.72
8.875% February 1999 43,500 46,212 .71
9.125% May 1999 20,750 22,258 .34
6.875% July 1999 62,000 62,882 .97
8.875% May 2000 30,000 32,494 .50
8.750% August 2000 25,000 27,074 .42
8.50% November 2000 63,000 67,912 1.05
7.75% February 2001 33,000 34,681 .53
8.00% May 2001 7,000 7,442 .11
13.125% May 2001 21,500 27,449 .42
14.25% February 2002 7,000 9,533 .15
6.375% August 2002 1,500 1,488 .02
11.625% November 2002 92,000 115,977 1.79
5.75% August 2003 8,000 7,619 .12
7.25% May 2004 74,375 77,059 1.19
7.875% November 2004 6,000 6,449 .10
11.625% November 2004 79,000 103,601 1.60
6.50% May 2005 30,000 29,606 .45
10.375% November 2009 49,500 60,537 .93
10.00% May 2010 7,500 9,055 .14
12.75% November 2010 10,500 14,744 .23
10.375% November 2012 29,000 36,816 .57
12.00% August 2013 10,000 14,097 .22
8.875% August 2017 164,250 197,202 3.04
8.125% May 2021 27,000 30,409 .47
6.25% August 2023 1,500 1,360 .02
-------------- ----------
1,414,380 21.81
-------------- ----------
Floating Rare Eurodollar Notes (Undated) /3/
Allied Irish Banks Ltd. 6.4375% 10,000 8,981 .14
Bank of Nova Scotia 6.00% 10,000 8,250 .13
Bergen Bank 6.00% 5,000 4,091 .06
Canadian Imperial Bank of Commerce 6.125% 25,000 20,625 .32
Christiana Bank Og Kreditkasse 6.0625% 6,000 5,010 .08
Hongkong and Shanghai Banking Corp. 6.25% 10,000 8,461 .13
Lloyds Bank (#2) 6.062% 5,000 4,315 .07
Midland Bank 5.8125% 5,000 4,283 .06
National Bank of Canada 3.03125% 5,000 3,645 .06
Standard Chartered Bank:
5.78% 5,000 4,094 .06
5.81% 15,000 12,226 .19
-------------- ----------
83,981 1.30
-------------- ----------
EQUITY-TYPE SECURITIES & MISCELLANEOUS
Equity-Type Securities /7/
Dial Page, Inc., warrants /4/ 39 0 .00
-------------- ----------
MISCELLANEOUS
Investment securities in the initial period of
acquisition 11,168 .17
-------------- ----------
TOTAL BONDS, NOTES AND EQUITY-TYPE SECURITIES ---------- ----------
(cost: $6,029,864,000) 5,983,106 92.28
---------- ----------
SHORT-TERM SECURITIES
Commercial Paper
ARCO Coal Australia Inc.:
5.34% due 7/19/96 11,800 11,767 .18
5.38% due 7/22/96 15,979 15,927 .25
5.38% due 7/26/96 13,000 12,950 .20
American Express Credit Corp.:
5.35% due 7/26/96 17,000 16,935 .26
5.34% due 7/30/96 25,000 24,890 .38
Ameritech Capital Funding Corp.:
5.32% due 7/19/96 10,000 9,972 .15
5.39% due 8/19/96 25,000 24,812 .38
Coca-Cola Co.:
5.28% due 7/9/96 2,100 2,097 .03
5.35% due 7/16/96 25,000 24,941 .39
Ford Motor Credit Co.:
5.33% due 7/10/96 20,000 19,971 .31
5.33% due 7/15/96 8,250 8,232 .13
5.43% due 8/26/96 18,700 18,541 .29
Lucent Technologies:
5.29% due 7/18/96 10,000 9,974 .15
5.38% due 7/24/96 20,000 19,929 .31
Monsanto Co.:
5.38% due 7/11/96 15,000 14,975 .23
5.31% due 7/22/96 12,000 11,961 .18
5.42% due 8/6/96 13,100 13,028 .20
Raytheon Co.:
5.36% due 7/8/96 15,000 14,982 .23
5.37% due 7/24/96 5,000 4,982 .08
UBS Finance (Delaware) 5.58% due 7/1/96 50,000 49,992 .77
Weyerhaeuser Co.:
5.32% due 7/2/96 14,250 14,246 .22
5.44% due 9/6/96 15,000 14,847 .23
Xerox Corp.:
5.39% due 8/2/96 10,000 9,951 .15
5.40% due 8/9/96 10,000 9,941 .15
5.40% due 8/14/96 20,000 19,865 .31
5.42% due 8/16/96 20,000 19,859 .31
-------------- ----------
419,567 6.47
-------------- ----------
Federal Agency Discount Notes
Federal Home Loan Mortgage Corp. 5.35% due 8/12/96 25,000 24,842 .38
-------------- ----------
TOTAL SHORT-TERM SECURITIES (Cost $444,417,000) 444,409 6.85
-------------- ----------
TOTAL INVESTMENT SECURITIES (cost $6,474,281,000) 6,427,515 99.13
Excess of cash and receivables over payables 56,244 .87
-------------- ----------
NET ASSETS 6,483,759 100.00%
============== ==========
/1/ Private placement transaction; resale
may be made to qualified institutional buyers.
/2/ Zero coupon bond which will convert to an
interest-bearing security at a later date.
/3/ Coupon rates may change periodically.
/4/ Valued under procedures established by the Board of
Directors
/5/ Pass-through securities backed by a pool of
mortgages or other loans on which principal payments
are periodically made. Therefore, the effective
maturity of these securities is shorter than the stated
maturity.
/6/ Inverse floater, which is a floating
rate note whose interest rate moves in the opposite
direction of prevailing interest rates.
/7/ Non-income-producing security.
See Notes to Financial Statements
</TABLE>
<TABLE>
The Bond Fund of America
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES Unaudited
June 30, 1996 (dollars in thousands)
<S> <C> <C>
Assets:
Investment securities at market
(cost: $6,474,281) $6,427,515
Cash 1,328
Prepaid expense ....................
Receivables for--
Sales of investments $34,400
Sales of Fund's shares 16,093
Dividends and accrued interest 101,528 152,021
------------ ---------------
6,580,864
Liabilities:
Payables for--
Purchases of investments 80,182
Repurchases of fund's shares 8,636
Forward currency contracts 881
Dividends on Fund's shares 3,965
Management services 1,822
Accrued expenses 1,619 97,105
1,658 $98,763
------------ ---------------
Net Assets at July 30, 1996--
Equivalent to $13.47 per share on
481,480,197 shares of $1 par value
capital stock outstanding (authorized
capital stock - 1,000,000,000 shares) $6,483,759
===============
STATEMENT OF OPERATIONS
for the six months ended June 30, 1996 (dollars in thousands)
Investment Income:
Income:
Interest $263,742
Dividends from investment in stocks 0 $0
Expenses:
Management services fee $11,233
Distribution expenses 7,901
Transfer agent fee 2,427
Reports to shareholders 369
Registration statement and prospectus 616
Postage, stationery and supplies 864
Directors' fees 17
Auditing and legal fees 43
Custodian fee 143
Taxes other than federal income tax 102
Other expenses 42 23,757
------------ ---------------
Net investment income $239,985
===============
Realized Loss and Unrealized
Depreciation on Investments:
Net realized loss (2,551)
Net unrealized appreciation
(depreciation) on:
Investments (205,153)
Open forward currency contracts 984
------------
Net unrealized depreciation (204,169)
---------------
Net realized loss and
unrealized depreciation
on investments (206,720)
---------------
Net Increase in Net Assets Resulting $33,265
from Operations ===============
STATEMENT OF CHANGES IN NET ASSETS (dollars in thousands)
Six Months Year ended
Ended December 31,
June 30, 1995
1996*
Operations:
Net investment income $239,985 $442,418
Net realized loss on investments (2,551) (13,362)
Net unrealized (depreciation) appreciation
on investments (204,169) 506,227
------------ ---------------
Net increase in net assets
resulting from operations 33,265 935,283
------------ ---------------
Dividends Paid to Shareholders:
Dividends from net
investment income (226,154) (438,147)
------------ ---------------
Total dividends and distributions (226,154) (438,147)
------------ ---------------
Capital Share Transactions:
Proceeds from shares sold:
71,722,652 and 119,215,625
shares, respectively 977,179 1,591,640
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
10,719,410 and 23,407,092 shares,
respectively 146,241 312,925
Cost of shares repurchased:
54,177,054 and 78,844,004
shares, respectively (736,948) (1,052,675)
------------ ---------------
Net increase in net assets
resulting from capital share
transactions 386,472 851,890
------------ ---------------
Total Increase (Decrease) in Net Assets 193,583 1,349,026
Net Assets:
Beginning of period 6,290,176 4,941,150
------------ ---------------
End of period (including
undistributed net investment
income: $21,589 and $7,758
respectively) 6,483,759 $6,290,176
============ ===============
*Unaudited
See Notes to Financial Statements
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. The Bond Fund of America, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks as high a level of current income as is
consistent with preservation of capital through a diversified portfolio of
bonds and other fixed-income obligations. The following paragraphs summarize
the significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
Long-term fixed income obligations are valued at prices obtained for the
day of valuation from a bond-pricing service; however, where prices are not
available from a pricing service and in circumstances where the investment
adviser deems it appropriate to do so, such securities are valued at the mean
of representative quoted bid and asked prices for such securities or, if such
prices are not available, at prices for securities of comparable maturity,
quality and type. Securities denominated in non-U.S. currencies are generally
valued on the basis of bid quotations. Short-term securities with 60 days or
less remaining to maturity are amortized to maturity based on their cost to the
fund, if acquired within 60 days of maturity or, if already held by the fund on
the 60th day, based on the value determined on the 61st day. The value of each
security denominated in a currency other than U.S. dollars is translated into
U.S. dollars at the prevailing market rate as provided by a pricing service in
accordance with procedures established by the fund's officers. Forward currency
contracts are valued at prices obtained from a pricing service. Stocks and
convertible bonds are valued at closing sales prices reported on recognized
securities exchanges on the day of valuation or, for listed stocks and
convertible bonds having no sales reported and for unlisted stocks and
convertible bonds, upon last-reported bid prices on that date. Securities
traded in the over-the-counter market are valued at the last available sale
prior to the time of valuation, or, lacking any sales, at the last reported bid
price. Where pricing service or market quotations are not readily available,
securities will be valued at fair value by the Board of Directors or a
committee thereof. The maturities of variable or floating rate instruments are
deemed to be the time remaining until the next interest rate adjustment date.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed-delivery or "when-issued" basis, it
will segregate with its custodian liquid assets in an amount sufficient to meet
its payment obligations in these transactions. Realized gains and losses from
securities transactions are reported on an identified cost basis. Interest
income is reported on the accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective securities. Dividends
to shareholders are declared daily after determination of the fund's net asset
value and paid to shareholders monthly.
Investment securities and other assets and liabilities, including forward
currency contracts, denominated in non-U.S. currencies are recorded in the
financial statements after translation into U.S. dollars utilizing rates of
exchange on the last business day of the period. Interest income from such
investments is calculated using the approximate exchange rate as accrued or
when received. Purchases and sales of investment securities, income and
expenses are calculated at the rates of exchange prevailing on the respective
dates of such transactions. The fund does not identify the portion of each
amount shown in the fund's statement of operations under the caption "Realized
Loss and Unrealized Depreciation on Investments" that arises from changes in
non-U.S. currency exchange rates.
Pursuant to the custodian agreement, the fund receives credit against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $143,000 includes $19,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of June 30, 1996, net unrealized depreciation on investments, excluding
forward currency contracts, for book and federal income tax purposes aggregated
$46,766,000, of which $110,888,000 related to appreciated securities and
$157,654,000 related to depreciated securities. During the period ended June
30, 1996, the fund realized, on a tax basis, a net capital loss of $2,551,000
on securities transactions. The fund has available at June 30, 1996 a net
capital loss carryforward of $49,027,000 which may be used to offset capital
gains realized during subsequent years through 2002 and thereby relieve the
fund and its shareholders of any federal income tax liability with respect to
the capital gains that are so offset. It is the intention of the fund not to
make distributions from capital gains while there is a capital loss
carryforward. The cost of portfolio securities, excluding foreign currency
contracts, for book and federal income tax purposes was $6,474,281,000 at June
30, 1996.
3. The fee of $11,233,0000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.30% of the first $60 million of average net assets;
0.21% of such assets in excess of $60 million but not exceeding $1 billion;
0.18% of such assets in excess of $1 billion but not exceeding $3 billion;
0.16% of such assets in excess of $3 billion but not exceeding $6 billion; and
0.15% of such assets in excess of $6 billion; plus 3.00% on the first $450,000
of the fund's monthly gross investment income; 2.25% of such income in excess
of $450,000 but not exceeding $833,333 million; and 2.00% of such income in
excess of $833,333 million.
Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Directors. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended June 30, 1996,
distribution expenses under the Plan were $7,901,000. As of June 30, 1996,
accrued and unpaid distribution expenses were $945,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $2,427,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $3,169,000 (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.
Directors who are unaffiliated with CRMC may elect to defer part or all of
the fees earned for services as members of the Board. Amounts deferred are not
funded and are general unsecured liabilities of the fund. As of June 30, 1996,
aggregate amounts deferred and earnings thereon were $49,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain of the Directors and officers of the
fund are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund
4. As of June 30, 1996, accumulated net realized loss on investments was
$44,571,000 and paid-in capital was $6,072,924,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,560,695,000 and $1,130,593,000, respectively,
during the six months ended June 30, 1996.
The fund purchases forward currency contracts in anticipation of, or to
protect itself against, fluctuations in exchange rates. The contracts are
recorded in the statement of assets and liabilities at their net unrealized
value; the fund's maximum potential liability in these contracts is equal to
the full contract amounts. Risks may arise upon entering these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from the possible movements in foreign exchange rates and securities values
underlying these instruments.
<TABLE>
Contract Amount U.S. Valuations at 6/30/96
----------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Unrealized
Appreciation
Non-U.S. Currency Sales Contracts Non-U.S. U.S. Amount (Depreciation)
Deutsche Marks expiring 7/19/96 to 1/8/97 DEM 49,366,000 $33,909,000 $32,806,000 $1,103,000
French Francs expiring 7/26/96 to 9/9/98 FRF 71,259,000 12,337,000 14,245,000 (1,908,000)
Great Britain Pounds expiring 7/26/96 to 3/19/97 pound 2,250,000 3,413,000 3,494,000 (81,000)
Swiss Francs expiring 7/26/96 CHF 312,000 255,000 250,000 5,000
------------ -------------- -----------
$49,914,000 $50,795,000 ($881,000)
============ ============== ===========
</TABLE>
<TABLE>
Per-Share Data and Ratios
Six Months
Ended Year Ended December 31
06/30/96 /1/ 1995 1994 1993 1992 1991
Net asset value, beginning of period $13.88 $12.69 $14.45 $13.99 $13.70 $12.39
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Income from investment operations:
Net investment income 0.51 1.05 1.05 1.09 1.15 1.21
Net realized and unrealized gain(loss) on investments (0.44) 1.18 (1.76) 0.84 0.34 1.28
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.07 2.23 (0.71) 1.93 1.49 2.49
---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.48) (1.04) (1.05) (1.08) (1.16) (1.18)
Distributions from capital gains -- -- -- (0.39) (0.04) --
-- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.48) (1.04) (1.05) (1.47) (1.20) (1.18)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $13.47 $13.88 $12.69 $14.45 $13.99 $13.70
=========== =======================================================
Total Return /2/ 0.49% /2/ 18.25% (5.02%) 14.14% 11.34% 21.04%
Ratios/supplemental data:
Net assets, end of period (in millions) $6,484 $6,290 $4,941 $5,285 $3,917 $2,859
Ratio of expenses to average net assets .37% /3/ .74% .69% .71% .73% .77%
Ratio of net income to average net assets 3.75% /3/ 7.87% 7.77% 7.53% 8.36% 9.28%
Portfolio turnover rate 19.20% /3/ 43.80% 56.98% 44.68% 49.70% 56.47%
/1/ Unaudited
/2/ Calculated without deducting a sales charge.
The maximum sales charge is 4.75% of the fund's
offering price.
/3/ Based on the period shown and, accordingly,
are not representative of a full year's operations.
</TABLE>
OFFICES OF THE FUND AND OF THE INVESTMENT ADVISER,
CAPITAL RESEARCH AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
(Please write to the address closest to you.)
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster LLP
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
For information about your account or any of the fund's services, please
contact your financial adviser or call American Funds Service Company,
toll-free, at 800/421-0180.
This report is for the information of shareholders of The Bond Fund of America,
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
September 30, 1996, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Litho in USA CD/AL/3031
Lit. No. BFA-013-0896
Printed on recycled paper
[The American Funds Group(R)]
