<PAGE>
PROSPECTUS AMCAP FUND, INC.
333 South Hope Street
AMCAP Los Angeles, California 90071
FUND(R)
The fund's investment objective
is to provide shareholders with
long-term growth of capital.
Whatever current income is
generated by the fund is likely
to be incidental to the objective
of capital growth. Normally, the
fund will invest primarily in
common stocks.
This prospectus presents
information you should know
before investing in the fund. It
should be retained for future
reference.
You may obtain the statement of
additional information, dated May
1, 1995, which contains the
fund's financial statements,
without charge, by writing to the
Secretary of the fund at the
above address or telephoning
800/421-0180. These requests will
be honored within three business
days of receipt.
SHARES OF THE FUND 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.
THE PURCHASE OF FUND SHARES
INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS
An opportunity for long-term PROSPECTUS. ANY REPRESENTATION TO
growth of capital THE CONTRARY IS A CRIMINAL
OFFENSE.
02-010-0595
[LOGO OF THE AMERICAN FUNDS]
May 1, 1995
<PAGE>
TABLE OF CONTENTS
Summary of Expenses.............. 3
Financial Highlights............. 4
Investment Objective and
Policies........................ 4
Investment Techniques............ 5
Investment Results............... 6
Dividends, Distributions and
Taxes........................... 7
Fund Organization and
Management...................... 8
The American Funds Shareholder
Guide........................ 11-19
Purchasing Shares............... 11
Reducing Your Sales Charge...... 14
Shareholder Services............ 15
Redeeming Shares................ 17
Retirement Plans................ 19
IMPORTANT PHONE NUMBERS
Shareholder Services... 800/421-0180
ext. 1
Dealer Services........ 800/421-9900
ext. 11
American FundsLine(R)...800/325-3590
(24-hour information)
<PAGE>
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SUMMARY OF This table is designed to help you understand costs of
EXPENSES investing in the fund. These are historical expenses;
your actual expenses may vary.
Average annual
expenses paid over
a 10-year period
would be
approximately $14
per year, assuming
a $1,000
investment and a
5% annual return.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge on purchases
(as a percentage of offering price).................... 5.75%/1/
</TABLE>
The fund has no sales charge on reinvested dividends,
deferred sales charge,/2/ redemption fees or exchange
fees.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES (as a percentage of
average net assets)
Management fees......................................... 0.41%
12b-1 expenses.......................................... 0.18%/3/
Other expenses (including audit, legal, shareholder
services, transfer agent and custodian expenses)....... 0.12%
Total fund operating expenses........................... 0.71%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following
cumulative expenses on a $1,000
investment, assuming a 5% annual
return./4/ $64 $79 $95 $141
</TABLE>
/1/ Sales charges are reduced for certain large
purchases. (See "The American Funds Shareholder
Guide: Purchasing Shares--Sales Charges.")
/2/ Any defined contribution plan qualified under Section
401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or
any other purchaser investing at least $1 million in
shares of the fund (or in combination with shares of
other funds in The American Funds Group other than
the money market funds) may purchase shares at net
asset value; however, a contingent deferred sales
charge of 1% applies on certain redemptions within 12
months following such purchases. (See "The American
Funds Shareholder Guide: Redeeming Shares--Contingent
Deferred Sales Charge.")
/3/ These expenses may not exceed 0.25% of the fund's
average net assets annually. (See "Fund Organization
and Management--Plan of Distribution.") Due to these
distribution expenses, long-term shareholders may pay
more than the economic equivalent of the maximum
front-end sales charge permitted by the National
Association of Securities Dealers.
/4/ Use of this assumed 5% return is required by the
Securities and Exchange Commission; it is not an
illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL
EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
3
<PAGE>
[
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FINANCIAL The following information has been audited by Deloitte
HIGHLIGHTS & Touche LLP, independent accountants, whose unquali-
(For a share fied report covering each of the most recent five years
outstanding is included in the statement of additional information.
throughout the This information should be read in conjunction with the
fiscal year) financial statements and accompanying notes which are
also included in the statement of additional informa-
tion.
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28/29
------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year...... $12.98 $13.52 $13.23 $11.57 $10.87 $10.63 $10.37 $11.72 $10.35 $ 8.86
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income. .14 .12 .13 .17 .22 .27 .23 .21 .18 .19
Net realized and
unrealized gain
(loss) on
investments.......... .24 1.28 .63 2.10 1.44 1.22 .71 (.57) 2.63 1.73
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
Operations.......... .38 1.40 .76 2.27 1.66 1.49 .94 (.36) 2.81 1.92
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends (from net
investment income)... (.13) (.12) (.15) (.15) (.25) (.27) (.29) (.30) (.19) (.19)
Distributions (from
capital gains)....... (.95) (1.82) (.32) (.46) (.71) (.98) (.39) (.69) (1.25) (.24)
Returns of capital.... -- -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions.. (1.08) (1.94) (.47) (.61) (.96) (1.25) (.68) (.99) (1.44) (.43)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of
Year................... $12.28 $12.98 $13.52 $13.23 $11.57 $10.87 $10.63 $10.37 $11.72 $10.35
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return/1/......... 3.41% 11.31% 5.94% 20.41% 16.76% 14.00% 9.63% (3.14)% 30.34% 22.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)......... $2,970 $3,063 $3,016 $2,796 $2,205 $1,928 $1,722 $1,691 $1,791 $1,419
Ratio of expenses to
average net assets.... .71% .72% .73% .75% .79% .72% .70% .63% .51% .54%
Ratio of net income to
average net assets.... 1.16% .89% 1.02% 1.37% 2.08% 2.33% 2.16% 1.90% 1.85% 2.18%
Portfolio turnover
rate.................. 17.92% 22.18% 14.72% 7.74% 16.32% 18.15% 14.46% 12.00% 16.62% 27.38%
</TABLE>
- ----------
/1/ This was calculated without deducting a sales charge. The maximum
sales charge is 5.75% of the fund's offering price.
INVESTMENT The fund's investment objective is to provide share-
OBJECTIVE AND holders with long-term growth of capital. Whatever cur-
POLICIES rent income is generated by the fund is likely to be
incidental to the objective of capital growth. Normal-
The fund's goal is ly, the fund will invest primarily in common stocks.
to provide you However, assets may also be held in securities convert-
with long-term ible into common stocks, straight debt securities (it
growth of capital. is the fund's current intention to restrict these in-
vestments to those rated in the top three quality cate-
gories by Moody's Investors Service, Inc. or Standard &
Poor's Corporation or determined to be of equivalent
quality by Capital Research and Management Company),
cash or cash equivalents, U.S. Government securities,
or nonconvertible preferred stocks. (See the statement
of additional information for a description of cash
equivalents.)
4
<PAGE>
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The fund's investment restrictions (which are described
in the statement of additional information) and
objective cannot be changed without shareholder
approval. All other investment practices may be changed
by the fund's board.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES.
INVESTMENT RISKS OF INVESTING Because the fund invests in common
TECHNIQUES stocks, the fund's portfolio is subject to market
risks, including, for example, the possibility that
Investing in stock prices in general may decline over short or even
stocks and extended periods.
bonds involves
certain risks. The fund may also invest in fixed-income securities,
including bonds, which have market values which tend to
vary inversely with the level of interest rates--when
interest rates rise, their values will tend to decline
and vice versa. Although under normal market conditions
longer term securities yield more than shorter term
securities of similar quality, they are subject to
greater price fluctuations. These fluctuations in the
value of the fund's investments will be reflected in
its net asset value per share.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic
investment philosophy of Capital Research and
Management Company is to seek fundamental values at
reasonable prices, using a system of multiple portfolio
counselors in managing mutual fund assets. Under this
system the portfolio of the fund is divided into
segments which are managed by individual counselors.
Each counselor decides how the segment will be invested
(within the limits provided by the fund's objective and
policies and by Capital Research and Management
Company's investment committee). In addition, Capital
Research and Management Company's research
professionals make investment decisions with respect to
a portion of the fund's portfolio. The primary
individual portfolio counselors for the fund are listed
on the next page.
5
<PAGE>
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<TABLE>
<CAPTION>
YEARS OF EXPERIENCE
AS
INVESTMENT PROFESSIONAL
(APPROXIMATE)
YEARS OF EXPERIENCE AS
PORTFOLIO COUNSELOR WITH CAPITAL
(AND RESEARCH RESEARCH AND
PORTFOLIO PROFESSIONAL, MANAGEMENT
COUNSELORS IF APPLICABLE) FOR COMPANY OR
FOR AMCAP FUND, INC. ITS TOTAL
AMCAP FUND, INC. PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gordon Crawford Senior Vice President 5 years, (plus 10 24 years 24 years
of the Fund. Senior years as a research
Vice President and professional prior to
Director, Capital becoming a portfolio
Research Company* counselor for the
fund)
- -------------------------------------------------------------------------------------------
James E. Drasdo Senior Vice President 10 years, (plus 7 18 years 23 years
and Director, Capital years as a research
Research and professional prior to
Management Company becoming a portfolio
counselor for the
fund)
- -------------------------------------------------------------------------------------------
James B. Lovelace Vice President, 1 year, (plus 6 years 13 years 13 years
Capital Research and as a research
Management Company professional prior to
becoming a portfolio
counselor for the
fund)
- -------------------------------------------------------------------------------------------
William C. Newton Senior Partner, The Since the fund began 36 years 42 years
Capital Group operations in 1967
Partners, L.P.*
- -------------------------------------------------------------------------------------------
James F. Rothenberg President and 1 year 25 years 25 years
Director, Capital
Research and
Management Company
- -------------------------------------------------------------------------------------------
R. Michael Shanahan President and 9 years 30 years 30 years
Director of the fund.
Chairman of the Board
and Principal
Executive Officer,
Capital Research and
Management Company
</TABLE>
- -------------------------------------------------------------------------------
The fund began operations on May 1, 1967.
* Company affiliated with Capital Research and Management Company.
INVESTMENT RESULTS The fund may from time to time compare its investment
results to various unmanaged indices or other mutual
The fund has funds in reports to shareholders, sales literature and
averaged a total advertisements. The results may be calculated on a to-
return of 12.11% a tal return and/or yield basis for various periods, with
year (assuming the or without sales charges. Results calculated without a
maximum sales sales charge will be higher. Total returnsassume the
charge was paid) reinvestment of all dividends and capital gain distri-
over its lifetime butions.
(May 1, 1967
through March 31, The fund's average annual total returns are calculated
1995) in accordance with Securities and Exchange Commission
requirements which provide that the maximum sales
charge be reflected. The fund's total return over the
past 12 months and average annual total returns over
the past five-year and ten-year periods as of March 31,
1995 were 3.01%, 9.73% and 12.54%, respectively. Of
course, past results are not an indication of future
results. Further information regarding the fund's in-
vestment results is contained in the fund's annual re-
port which may be obtained without charge by writing to
the Secretary of the fund at the address indicated on
the cover of this prospectus.
6
<PAGE>
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DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS AND twice each year. All capital gains, if any, are dis-
TAXES tributed annually. When a dividend or capital gain is
distributed, the net asset value per share is reduced
by the amount of the payment.
Income distributions FEDERAL TAXES The fund intends to operate as a "regu-
are usually made lated investment company" under the Internal Revenue
twice each year. Code. In any fiscal year in which the fund so qualifies
and distributes to shareholders all of its net invest-
ment income and net capital gains, the fund itself is
relieved of federal income tax.
All dividends and capital gains are taxable whether
they are reinvested or received in cash--unless you are
exempt from taxation or entitled to tax deferral. Early
each year, you will be notified as to the amount and
federal tax status of all dividends and capital gains
paid during the prior year. Such dividends and capital
gains may also be subject to state or local taxes.
IF YOU HAVE NOT FURNISHED A CERTIFIED CORRECT TAXPAYER
IDENTIFICATION NUMBER (GENERALLY YOUR SOCIAL SECURITY
NUMBER) AND HAVE NOT CERTIFIED THAT WITHHOLDING DOES
NOT APPLY, OR IF THE INTERNAL REVENUE SERVICE HAS
NOTIFIED THE FUND THAT THE TAXPAYER IDENTIFICATION
NUMBER LISTED ON YOUR ACCOUNT IS INCORRECT ACCORDING TO
THEIR RECORDS OR THAT YOU ARE SUBJECT TO BACKUP
WITHHOLDING, FEDERAL LAW GENERALLY REQUIRES THE FUND TO
WITHHOLD 31% FROM ANY DIVIDENDS AND/OR REDEMPTIONS
(INCLUDING EXCHANGE REDEMPTIONS). Amounts withheld are
applied to your federal tax liability; a refund may be
obtained from the Service if withholding results in
overpayment of taxes. Federal law also requires the
fund to withhold 30% or the applicable tax treaty rate
from dividends paid to certain nonresident alien, non-
U.S. partnership and non-U.S. corporation shareholder
accounts.
THIS IS A BRIEF SUMMARY OF SOME OF THE TAX LAWS THAT
AFFECT YOUR INVESTMENT IN THE FUND. PLEASE SEE THE
STATEMENT OF ADDITIONAL INFORMATION AND YOUR TAX AD-
VISER FOR FURTHER INFORMATION.
7
<PAGE>
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FUND ORGANIZATION FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
AND MANAGEMENT end diversified management investment company, was
organized as a Delaware corporation in 1966 and
The fund is a reorganized as a Maryland corporation in 1990. The
member of The fund's board supervises fund operations and performs
American Funds duties required by applicable state and federal law.
Group, which is Members of the board who are not employed by Capital
managed by one of Research and Management Company or its affiliates are
the largest and paid certain fees for services rendered to the fund as
most experienced described in the statement of additional information.
investment They may elect to defer all or a portion of these fees
advisers. through a deferred compensation plan in effect for the
fund. Shareholders have one vote per share owned and,
at the request of the holders of at least 10% of the
shares, the fund will hold a meeting at which any
member of the board could be removed by a majority
vote. There will not usually be a shareholder meeting
in any year except, for example, when the election of
the board is required to be acted upon by shareholders
under the Investment Company Act of 1940.
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071 and at 135 South State College Boulevard,
Brea, CA 92621. (See "The American Funds Shareholder
Guide: Purchasing Shares--Investment Minimums and Fund
Numbers" for a listing of funds in The American Funds
Group.) Capital Research and Management Company manages
the investment portfolio and business affairs of the
fund and receives a fee at the annual rate of 0.485%
per annum on the first $1 billion of the fund's average
net assets; plus 0.385% per annum on the portion of
such net assets in excess of $1 billion but less than
$2 billion; plus 0.355% per annum on the portion of
such net assets in excess of $2 billion but less than
$3 billion; plus 0.335% per annum on the portion of
such net assets in excess of $3 billion but less than
$5 billion; plus 0.32% per annum on the portion of such
net assets in excess of $5 billion but less than $8
billion; plus 0.31% per annum on the portion of such
net assets in excess of $8 billion.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc.") , which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
8
<PAGE>
[
- -------------------------------------------------------------------------------
Capital Research and Management Company and its
affiliated companies have adopted a personal investing
policy that is consistent with the recommendations
contained in the report dated May 9, 1994 issued by the
Investment Company Institute's Advisory Group on
Personal Investing. (See the statement of additional
information.)
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter mar-
ket, purchases and sales are transacted directly with
principal market-makers except in those circumstances
where it appears better prices and executions are
available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and execu-
tions, preference may be given to brokers that have
sold shares of the fund or have provided investment re-
search, statistical, and other related services for the
benefit of the fund and/or of other funds served by
Capital Research and Management Company.
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors is located
at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92621, 8000 IH-
10 West, San Antonio, TX 78230, 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 46240 and 5300 Robin Hood
Road, Norfolk, VA 23513. Telephone conversations with
American Funds Distributors may be recorded or
monitored for verification, recordkeeping and quality
assurance purposes.
PLAN OF DISTRIBUTION The fund has a plan of distribu-
tion or "12b-1 Plan" under which it may finance activi-
ties primarily intended to sell shares, provided the
categories of expenses are approved in advance by the
board and the expenses paid under the plan were in-
curred within the last 12 months and accrued while the
plan is in effect. Expenditures by the fund under the
plan may not exceed 0.25% of its average net assets an-
nually (all of which may be for service fees). See
"Purchasing Shares--Sales Charges" below.
TRANSFER AGENT American Funds Service Company, a wholly
owned subsidiary of Capital Research and Management
Company, is the transfer agent and performs shareholder
service functions. It was paid a fee of $2,430,000 for
the year ended February 28, 1995. Telephone conversa-
tions with American Funds Service Company may be re-
corded or monitored for verification, recordkeeping and
quality assurance purposes.
9
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
SERVICE
AREA ADDRESS AREAS SERVED
--------------------------------------------------------
WEST P.O. Box 2205 AK, AZ, CA, HI, ID,
Brea, CA 92622-2205 MT, NV, OR, UT, WA and
Fax: 714/671-7080 outside the U.S.
--------------------------------------------------------
CENTRAL- P.O. Box 659522 AR, CO, IA, KS, LA,
WEST San Antonio, TX 78265-9522 MN, MO, ND, NE, NM,
Fax: 210/530-4050 OK, SD, TX, and WY
--------------------------------------------------------
CENTRAL- P.O. Box 6007 AL, IL, IN, KY, MI,
EAST Indianapolis, IN 46206-6007 MS, OH, TNand WI
Fax: 317/735-6620
--------------------------------------------------------
EAST P.O. Box 2280 CT, DE, FL, GA, MA,
Norfolk, VA 23501-2280 MD, ME, NC, NH, NJ,
Fax: 804/670-4773 NY, PA, RI, SC, VA,
VT, WV and Washington,
D.C.
--------------------------------------------------------
ALL SHAREHOLDERS MAY CALL AMERICAN FUNDS SERVICE
COMPANY AT 800/421-0180 FOR SERVICE.
--------------------------------------------------------
[UNITED STATES MAP APPEARS HERE]
--------------------------------------------------------
West (light grey); Central-West (white); Central-East
(dark grey), East (red)
10
<PAGE>
[LOGO OF THE AMERICAN FUNDS SHAREHOLDER GUIDE]
PURCHASING SHARES METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
---------------------------------------------------------
Your investment See "Investment $50 minimum (except
dealer can help Minimums and Fund where a lower
you establish your Numbers" for minimum is noted
account--and help initial under "Investment
you add to it investment Minimums and Fund
whenever you like. minimums. Numbers").
---------------------------------------------------------
By Visit any Mail directly to
contacting investment dealer your investment
your who is registered dealer's address
investment in the state printed on your
dealer where the account statement.
purchase is made
and who has a
sales agreement
with American
Funds
Distributors.
---------------------------------------------------------
By mail Make your check Fill out the account
payable to the additions form at the
fund and mail to bottom of a recent
the address account statement,
indicated on the make your check
account payable to the fund,
application. write your account
Please indicate number on your check,
an investment and mail the check
dealer on the and form in the
account envelope provided
application. with your account
statement.
---------------------------------------------------------
By wire Call 800/421-0180 Your bank should wire
to obtain your your additional
account investments in the
number(s), if same manner as
necessary. Please described under
indicate an "Initial Investment."
investment dealer
on the account.
Instruct your
bank to wire
funds to:
Wells Fargo Bank
155 Fifth Street
Sixth Floor
San Francisco,
CA 94106
(ABA #121000248)
For credit to the
account of:
American Funds
Service Company
a/c #4600-076178
(fund name)
(your fund acct.
no.)
---------------------------------------------------------
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE
THE RIGHT TO REJECT ANY PURCHASE ORDER.
SHARE PRICE Shares are purchased at the next offering
price after the order is received by the fund or
American Funds Service Company. In the case of orders
sent directly to the fund or American Funds Service
Company, an investment dealer MUST be indicated. This
price is the net asset value plus a sales charge, if
applicable. Dealers are responsible for promptly
transmitting orders. (See the statement of additional
information under "Purchase of Shares--Price of
Shares.")
The net asset value per share is determined as of the
close of trading (currently 4:00 p.m., New York time) on
each day the New York Stock Exchange is open. The
current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share. The net asset value
per share of the money market funds normally will remain
constant at $1.00 based on the funds' current practice
of valuing their shares on the basis of the penny-
rounding method in accordance with rules of the
Securities and Exchange Commission.
SHARE CERTIFICATES Shares are credited to your account
and certificates are not issued unless specifically
requested. This eliminates the costly problem of lost or
destroyed certificates.
11
<PAGE>
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If you would like certificates issued, please request
them by writing to American Funds Service Company.
There is usually no charge for issuing certificates in
reasonable denominations. CERTIFICATES ARE NOT
AVAILABLE FOR THE MONEY MARKET FUNDS.
INVESTMENT MINIMUMS AND FUND NUMBERS Here are the
minimum initial investments required by the funds in
The American Funds Group along with fund numbers for
use with our automated phone line, American
FundsLine(R) (see description below):
<TABLE>
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
---- ---------- ------
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund(R)......... $1,000 02
American Balanced
Fund(R).............. 500 11
American Mutual
Fund(R).............. 250 03
Capital Income
Builder(R)........... 1,000 12
Capital World Growth
and Income Fund(SM).. 1,000 33
EuroPacific Growth
Fund(R).............. 250 16
Fundamental
Investors(SM)........ 250 10
The Growth Fund of
America(R)........... 1,000 05
The Income Fund of
America(R)........... 1,000 06
The Investment Company
of America(R)........ 250 04
The New Economy
Fund(R).............. 1,000 14
New Perspective
Fund(R).............. 250 07
SMALLCAP World
Fund(SM)............. 1,000 35
Washington Mutual
Investors Fund(SM)... 250 01
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
---- ---------- ------
<S> <C> <C>
BOND FUNDS
American High-Income
Municipal Bond Fund(SM). $1,000 40
American High-Income
Trust(R)................. 1,000 21
The Bond Fund of
America(SM).............. 1,000 08
Capital World Bond
Fund(R).................. 1,000 31
Intermediate Bond Fund
of America(R)............ 1,000 23
Limited Term Tax-Exempt
Bond Fund of America(SM). 1,000 43
The Tax-Exempt Bond Fund
of America(SM)........... 1,000 19
The Tax-Exempt Fund of
California(R)*........... 1,000 20
The Tax-Exempt Fund of
Maryland(R)*............. 1,000 24
The Tax-Exempt Fund of
Virginia(R)*............. 1,000 25
U.S. Government
Securities Fund(SM)..... 1,000 22
MONEY MARKET FUNDS
The Cash Management
Trust of America(R)...... 2,500 09
The Tax-Exempt Money
Fund of America(SM)...... 2,500 39
The U.S. Treasury Money
Fund of America(SM)...... 2,500 49
</TABLE>
--------
*Available only in certain states.
For retirement plan investments, the minimum is $250,
except that the money market funds have a minimum of
$1,000 for individual retirement accounts (IRAs).
Minimums are reduced to $50 for purchases through
"Automatic Investment Plans" (except for the money
market funds) or to $25 for purchases by retirement
plans through payroll deductions and may be reduced or
waived for shareholders of other funds in The American
Funds Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS
RETIREMENT PLAN INVESTMENTS. The minimum is $50 for
additional investments (except as noted above).
SALES CHARGES The sales charges you pay when purchasing
the stock, stock/bond, and bond funds of The American
Funds Group are set forth below. The money market funds
of The American Funds Group are offered at net asset
value. (See "Investment Minimums and Fund Numbers" for
a listing of the funds.)
12
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEALER
SALES CHARGE AS CONCESSION
PERCENTAGE OF THE: AS PERCENTAGE
------------------ OF THE
AMOUNT OF PURCHASE NET AMOUNT OFFERING OFFERING
AT THE OFFERING PRICE INVESTED PRICE PRICE
--------------------- ---------- -------- -------------
<S> <C> <C> <C>
STOCK AND STOCK/BOND FUNDS
Less than $50,000................. 6.10% 5.75% 5.00%
$50,000 but less than $100,000.... 4.71 4.50 3.75
BOND FUNDS
Less than $25,000................. 4.99 4.75 4.00
$25,000 but less than $50,000..... 4.71 4.50 3.75
$50,000 but less than $100,000.... 4.17 4.00 3.25
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000... 3.63 3.50 2.75
$250,000 but less than $500,000... 2.56 2.50 2.00
$500,000 but less than $1,000,000. 2.04 2.00 1.60
$1,000,000 or more................ none none (see below)
</TABLE>
Commissions of up to 1% will be paid to dealers who
initiate and are responsible for purchases of $1
million or more, for purchases by any defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees (paid pursuant to the
fund's plan of distribution), and for purchases made at
net asset value by certain retirement plans of
organizations with collective retirement plan assets of
$100 million or more as set forth in the statement of
additional information (paid by American Funds
Distributors).
American Funds Distributors, at its expense (from a
designated percentage of its income), will provide
additional promotional incentives to dealers. Currently
these incentives are limited to the top one hundred
dealers who have sold shares of the fund or other funds
in The American Funds Group. These incentive payments
will be based on a pro rata share of a qualifying
dealer's sales.
Any defined contribution plan qualified under Section
401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or
any other purchaser investing at least $1 million in
shares of the fund (or in combination with shares of
other funds in The American Funds Group other than the
money market funds) may purchase shares at net asset
value; however, a contingent deferred sales charge of
1% is imposed on certain redemptions within one year of
the purchase. (See "Redeeming Shares--Contingent
Deferred Sales Charge.")
Qualified dealers currently are paid a continuing
service fee not to exceed 0.25% of average net assets
(0.15% in the case of the money market funds) annually
in order to promote selling efforts and to compensate
them for providing certain services. (See "Fund
Organization and Management--
13
<PAGE>
- -------------------------------------------------------------------------------
Plan of Distribution.") These services include
processing purchase and redemption transactions,
establishing shareholder accounts and providing certain
information and assistance with respect to the fund.
NET ASSET VALUE PURCHASES The stock, stock/bond and
bond funds may sell shares at net asset value to: (1)
current or retired directors, trustees, officers and
advisory board members of the funds managed by Capital
Research and Management Company, employees of
Washington Management Corporation, employees and
partners of The Capital Group Companies, Inc. and its
affiliated companies, certain family members of the
above persons, and trusts or plans primarily for such
persons; (2) current or retired registered
representatives or full-time employees and their
spouses and minor children of dealers having sales
agreements with American Funds Distributors and plans
for such persons; (3) companies exchanging securities
with the fund through a merger, acquisition or exchange
offer; (4) trustees or other fiduciaries purchasing
shares for certain retirement plans of organizations
with retirement plan assets of $100 million or more;
(5) insurance company separate accounts; (6) accounts
managed by subsidiaries of The Capital Group Companies,
Inc.; and (7) The Capital Group Companies, Inc., its
affiliated companies and Washington Management
Corporation. Shares are offered at net asset value to
these persons and organizations due to anticipated
economies in sales effort and expense.
REDUCING AGGREGATION Sales charge discounts are available for
YOUR SALES certain aggregated investments. Qualifying investments
CHARGE include those by you, your spouse and your children
under the age of 21, if all parties are purchasing
You and your shares for their own account(s), which may include
immediate family purchases through employee benefit plan(s) such as an
may combine IRA, individual-type 403(b) plan or single-participant
investments to Keogh-type plan or by a business solely controlled by
reduce your costs. these individuals (for example, the individuals own the
entire business) or by a trust (or other fiduciary
arrangement) solely for the benefit of these
individuals. Individual purchases by a trustee(s) or
other fiduciary(ies) may also be aggregated if the
investments are (1) for a single trust estate or
fiduciary account, including an employee benefit plan
other than those described above or (2) made for two or
more employee benefit plans of a single employer or of
affiliated employers as defined in the Investment
Company Act of 1940, again excluding employee benefit
plans described above, or (3) for a diversified common
trust fund or other diversified pooled account not
specifically formed for the purpose of accumulating
fund shares. Purchases made for nominee or street name
accounts (securities held in the name of an investment
dealer or another nominee such as a bank trust
department instead of the customer) may not be
aggregated with those made for other accounts and may
not be aggregated with other nominee or street name
accounts unless otherwise qualified as described above.
14
<PAGE>
- -------------------------------------------------------------------------------
CONCURRENT PURCHASES To qualify for a reduced sales
charge, you may combine concurrent purchases of two or
more funds in The American Funds Group, except direct
purchases of the money market funds. (Shares of the
money market funds purchased through an exchange,
reinvestment or cross-reinvestment from a fund having a
sales charge do qualify.) For example, if you
concurrently invest $25,000 in one fund and $25,000 in
another, the sales charge would be reduced to reflect a
$50,000 purchase.
RIGHT OF ACCUMULATION The sales charge for your invest-
ment may also be reduced by taking into account the
current value of your existing holdings in The American
Funds Group. Direct purchases of the money market funds
are excluded. (See account application.)
STATEMENT OF INTENTION You may reduce sales charges on
all investments by meeting the terms of a statement of
intention, a non-binding commitment to invest a certain
amount in fund shares subject to a commission within a
13-month period. Five percent of the statement amount
will be held in escrow to cover additional sales
charges which may be due if your total investments over
the statement period are insufficient to qualify for a
sales charge reduction. (See account application and
the statement of additional information under "Purchase
of Shares--Statement of Intention.")
YOU MUST LET YOUR INVESTMENT DEALER OR AMERICAN FUNDS
SERVICE COMPANY KNOW IF YOU QUALIFY FOR A REDUCTION IN
YOUR SALES CHARGE USING ONE OR ANY COMBINATION OF THE
METHODS DESCRIBED ABOVE.
SHAREHOLDER AUTOMATIC INVESTMENT PLAN You may make regular monthly
SERVICES or quarterly investments through automatic charges to
your bank account. Once a plan is established, your ac-
The fund offers count will normally be charged by the 10th day of the
you a valuable month during which an investment is made (or by the
array of services 15th day of the month in the case of any retirement
designed to plan for which Capital Guardian Trust Company--another
increase the affiliate of The Capital Group Companies, Inc.--acts as
convenience and trustee or custodian).
flexibility of
your investment-- AUTOMATIC REINVESTMENT Dividends and capital gain dis-
services you can tributions are reinvested in additional shares at no
use to alter your sales charge unless you indicate otherwise on the
investment program account application. You also may elect to have divi-
as your needs and dends and/or capital gain distributions paid in cash by
circumstances informing the fund, American Funds Service Company or
change. your investment dealer.
CROSS-REINVESTMENT You may cross-reinvest dividends or
dividends and capital gain distributions paid by one
fund into another fund in The American Funds Group,
subject to conditions outlined in the statement of ad-
ditional information. Generally, to use this service
the value of your account in the paying fund must equal
at least $5,000.
EXCHANGE PRIVILEGE You may exchange shares into other
funds in The American Funds Group. Exchange purchases
are subject to the minimum investment requirements of
the fund purchased and no sales
15
<PAGE>
- -------------------------------------------------------------------------------
charge generally applies. However, exchanges of shares
from the money market funds are subject to applicable
sales charges on the fund being purchased, unless the
money market fund shares were acquired by an exchange
from a fund having a sales charge, or by reinvestment
or cross-reinvestment of dividends or capital gain
distributions.
You may exchange shares by writing to American Funds
Service Company (see "Redeeming Shares"), by contacting
your investment dealer, by using American FundsLine(R)
(see "Shareholder Services--American FundsLine(R)" be-
low), or by telephoning 800/421-0180 toll-free, faxing
(see "Transfer Agent" above for the appropriate fax
numbers) or telegraphing American Funds Service Compa-
ny. (See "Telephone Redemptions and Exchanges" below.)
Shares held in corporate-type retirement plans for
which Capital Guardian Trust Company serves as trustee
may not be exchanged by telephone, fax or telegraph.
Exchange redemptions and purchases are processed simul-
taneously at the share prices next determined after the
exchange order is received. (See "Purchasing Shares--
Share Price.") THESE TRANSACTIONS HAVE THE SAME TAX
CONSEQUENCES AS ORDINARY SALES AND PURCHASES.
AUTOMATIC EXCHANGES You may automatically exchange
shares (in amounts of $50 or more) among any of the
funds in The American Funds Group on any day (or pre-
ceding business day if the day falls on a non-business
day) of each month you designate. You must either meet
the minimum initial investment requirement for the re-
ceiving fund OR the originating fund's balance must be
at least $5,000 and the receiving fund's minimum must
be met within one year.
AUTOMATIC WITHDRAWALS You may make automatic
withdrawals of $50 or more as follows: five or more
times per year if you have an account of $10,000 or
more, or four or fewer times per year if you have an
account of $5,000 or more. Withdrawals are made on or
about the 15th day of each month you designate, and
checks will be sent within seven days. (See "Other
Important Things to Remember.") Additional investments
in a withdrawal account must not be less than one
year's scheduled withdrawals or $1,200, whichever is
greater. However, additional investments in a
withdrawal account may be inadvisable due to sales
charges and tax liabilities.
THESE SERVICES ARE AVAILABLE ONLY IN STATES WHERE THE
FUND TO BE PURCHASED MAY BE LEGALLY OFFERED AND MAY BE
TERMINATED OR MODIFIED AT ANY TIME UPON 60 DAYS'
WRITTEN NOTICE.
ACCOUNT STATEMENTS Your account is opened in accordance
with your registration instructions. Transactions in
the account, such as additional investments and
dividend reinvestments, will be reflected on regular
confirmation statements from American Funds Service
Company.
16
<PAGE>
- -------------------------------------------------------------------------------
AMERICAN FUNDSLINE(R) You may check your share balance,
the price of your shares, or your most recent account
transaction, redeem shares (up to $10,000 per fund, per
account each day), or exchange shares around the clock
with American FundsLine(R). To use this service, call
800/325-3590 from a TouchTone(TM) telephone.
Redemptions and exchanges through American FundsLine(R)
are subject to the conditions noted above and in
"Redeeming Shares--Telephone Redemptions and Exchanges"
below. You will need your fund number (see the list of
funds in The American Funds Group under "Purchasing
Shares--Investment Minimums and Fund Numbers"),
personal identification number (the last four digits of
your Social Security number or other tax identification
number associated with your account) and account
number.
REDEEMING By writing to Send a letter of instruction
SHARES American specifying the name of the fund, the
Funds Service number of shares or dollar amount to
You may take money Company (at be sold, your name and account
out of your the number. You should also enclose any
account whenever appropriate share certificates you wish to
you please. address redeem. For redemptions over $50,000
indicated and for certain redemptions of
under "Fund $50,000 or less (see below), your
Organization signature must be guaranteed by a
and bank, savings association, credit
Management-- union, or member firm of a domestic
Transfer stock exchange or the National
Agent") Association of Securities Dealers,
Inc., that is an eligible guarantor
institution. You should verify with
the institution that it is an
eligible guarantor prior to signing.
Additional documentation may be
required for redemption of shares
held in corporate, partnership or
fiduciary accounts. Notarization by a
Notary Public is not an acceptable
signature guarantee.
--------------------------------------------------------
By contacting If you redeem shares through your
your investment dealer, you may be charged
investment for this service. SHARES HELD FOR YOU
dealer IN YOUR INVESTMENT DEALER'S STREET
NAME MUST BE REDEEMED THROUGH THE
DEALER.
--------------------------------------------------------
You may have You may use this option, provided the
a redemption account is registered in the name of
check sent to an individual(s), a UGMA/UTMA
you by using custodian, or a non-retirement plan
American trust. These redemptions may not
FundsLine(R) exceed $10,000 per day, per fund
or by account and the check must be made
telephoning, payable to the shareholder(s) of
faxing, or record and be sent to the address of
telegraphing record provided the address has been
American used with the account for at least 10
Funds Service days. See "Transfer Agent" and
Company "Exchange Privilege" above for the
(subject to appropriate telephone or fax number.
the
conditions
noted in this
section and
in "Telephone
Redemptions
and
Exchanges"
below)
--------------------------------------------------------
In the case Upon request (use the account
of the money application for the money market
market funds, funds) you may establish telephone
you may have redemption privileges (which will
redemptions enable you to have a redemption sent
wired to your to your bank account) and/or check
bank by writing privileges. If you request
telephoning check writing privileges, you will be
American provided with checks that you may use
Funds Service to draw against your account. These
Company checks may be made payable to anyone
($1,000 or you designate and must be signed by
more) or by the authorized number of registered
writing a shareholders exactly as indicated on
check ($250 your checking account signature card.
or more)
--------------------------------------------------------
A SIGNATURE GUARANTEE IS NOT CURRENTLY REQUIRED FOR ANY
REDEMPTION OF $50,000 OR LESS PROVIDED THE REDEMPTION
CHECK IS MADE PAYABLE TO THE REGISTERED SHAREHOLDER(S)
AND IS MAILED TO THE ADDRESS OF RECORD, PROVIDED THE
ADDRESS HAS BEEN USED WITH THE ACCOUNT FOR AT LEAST 10
DAYS.
17
<PAGE>
- -------------------------------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND
ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
TELEPHONE REDEMPTIONS AND EXCHANGES By using the
telephone (including American FundsLine(R)), fax or
telegraph redemption and/or exchange options, you agree
to hold the fund, American Funds Service Company, any
of its affiliates or mutual funds managed by such
affiliates, and each of their respective directors,
trustees, officers, employees and agents harmless from
any losses, expenses, costs or liability (including
attorney fees) which may be incurred in connection with
the exercise of these privileges. Generally, all
shareholders are automatically eligible to use these
options. However, you may elect to opt out of these
options by writing American Funds Service Company (you
may reinstate them at any time also by writing American
Funds Service Company). If American Funds Service
Company does not employ reasonable procedures to
confirm that the instructions received from any person
with appropriate account information are genuine, the
fund may be liable for losses due to unauthorized or
fraudulent instructions. In the event that shareholders
are unable to reach the fund by telephone because of
technical difficulties, market conditions, or a natural
disaster, redemption and exchange requests may be made
in writing only.
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions
within the first year on investments of $1 million or
more and on any investment made with no initial sales
charge by any defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees. The
charge is 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares.
Shares held for the longest period are assumed to be
redeemed first for purposes of calculating this charge.
The charge is waived for exchanges (except if shares
acquired by exchange were then redeemed within 12
months of the initial purchase); for distributions from
qualified retirement plans and other employee benefit
plans; for distributions from 403(b) plans or IRAs due
to death, disability or attainment of age 59 1/2; for
tax-free returns of excess contributions to IRAs; for
redemptions through certain automatic withdrawals not
exceeding 10% of the amount that would otherwise be
subject to the charge; and for redemptions in
connection with loans made by qualified retirement
plans.
REINSTATEMENT PRIVILEGE You may reinvest proceeds from
a redemption or a dividend or capital gain distribution
without sales charge (any contingent deferred sales
charge paid will be credited to your account) in any
fund in The American Funds Group. Send a written
18
<PAGE>
- -------------------------------------------------------------------------------
request and a check to American Funds Service Company
within 90 days after the date of the redemption or
distribution. Reinvestment will be at the next
calculated net asset value after receipt. The tax
status of a gain realized on a redemption will not be
affected by exercise of the reinstatement privilege,
but a loss may be nullified if you reinvest in the same
fund within 30 days. If you redeem your shares within
90 days after purchase and the sales charge on the
purchase of other shares is waived under the
reinstatement privilege, the sales charge you
previously paid for the shares may not be taken into
account when you calculate your gain or loss on that
redemption.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because each stock,
stock/bond and bond fund's net asset value fluctuates,
reflecting the market value of the fund's portfolio,
the amount a shareholder receives for shares redeemed
may be more or less than the amount paid for them.
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
A fund may, with 60 days' written notice, close your
account if, due to a redemption, the account has a
value of less than the minimum required initial
investment. (For example, a fund may close an account
if a redemption is made shortly after a minimum initial
investment is made.)
RETIREMENT You may invest in the funds through various retirement
PLANS plans including the following plans for which Capital
Guardian Trust Company acts as trustee or custodian:
IRAs, Simplified Employee Pension plans, 403(b) plans
and Keogh- and corporate-type business retirement
plans. For further information about any of the plans,
agreements, applications and annual fees, contact
American Funds Distributors or your investment dealer.
To determine which retirement plan is appropriate for
you, please consult your tax adviser. TAX-EXEMPT FUNDS
SHOULD NOT SERVE AS INVESTMENTS FOR RETIREMENT PLANS.
FOR MORE INFORMATION, PLEASE REFER TO THE ACCOUNT
APPLICATION OR THE STATEMENT OF ADDITIONAL INFORMATION.
IF YOU HAVE ANY QUESTIONS ABOUT ANY OF THE SHAREHOLDER
SERVICES DESCRIBED HEREIN OR YOUR ACCOUNT, PLEASE
CONTACT YOUR INVESTMENT DEALER OR AMERICAN FUNDS
SERVICE COMPANY.
[LOGO OF This prospectus has been printed on
RECYLED PAPER] recycled paper that meets the
guidelines of the United States
Environmental Protection Agency
19
<PAGE>
Prospectus
for Retirement Plans AMCAP FUND, INC.
Amcap Fund(R) 333 South Hope Street
- -------------------------------------- Los Angeles, California 90071
The fund's investment objective
is to provide shareholders with
long-term growth of capital.
Whatever current income is
generated by the fund is likely
to be incidental to the objective
of capital growth. Normally, the
fund will invest primarily in
common stocks.
This prospectus relates only to
shares of the fund offered
without a sales charge to
eligible retirement plans. For a
prospectus regarding shares of
the fund to be acquired
otherwise, contact the Secretary
of the fund at the address
indicated above.
This prospectus presents
information you should know
before investing in the fund. It
should be retained for future
reference.
You may obtain the statement of
additional information, dated May
1, 1995, which contains the
fund's financial statements,
without charge, by writing to the
Secretary of the fund at the
above address or telephoning
800/421-0180. These requests will
be honored within three business
days of receipt.
SHARES OF THE FUND 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.
THE PURCHASE OF FUND SHARES
INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE
An opportunity for long-term COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON
growth of capital THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL
OFFENSE.
02-010-0595
[LOGO of THE AMERICAN FUNDS GROUP]
MAY 1, 1995
<PAGE>
TABLE OF CONTENTS
Summary of Expenses.............. 3
Financial Highlights............. 4
Investment Objective and
Policies........................ 4
Investment Techniques............ 5
Investment Results............... 6
Dividends, Distributions and
Taxes........................... 7
Fund Organization and
Management...................... 7
Purchasing Shares................. 9
Shareholder Services............. 10
Redeeming Shares................. 11
<PAGE>
[
- -------------------------------------------------------------------------------
SUMMARY OF This table is designed to help you understand costs of
EXPENSES investing in the fund. These are historical expenses;
your actual expenses may vary.
SHAREHOLDER TRANSACTION EXPENSES
Average annual Certain retirement plans may purchase shares of the
expenses paid over fund with no sales charge./1/ The fund also has no
a 10-year period sales charge on reinvested dividends, deferred sales
would be charge, redemption fees or exchange fees.
approximately $9
per year, assuming
a $1,000
investment and a
5% annual return.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES (as a percentage of
average net assets)
Management fees......................................... 0.41%
12b-1 expenses.......................................... 0.18%/2/
Other expenses (including audit, legal, shareholder
services, transfer agent and custodian expenses)....... 0.12%
Total fund operating expenses........................... 0.71%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following
cumulative expenses on a $1,000 $7 $23 $40 $88
investment, assuming a 5% annual
return./3/
</TABLE>
/1/ Retirement plans of organizations with $100 million
or more in collective retirement plan assets may
purchase shares of the fund with no sales charge. In
addition, any defined contribution plan qualified
under Section 401(a) of the Internal Revenue Code
including a "401(k)" plan with 200 or more eligible
employees or any other plan that invests at least $1
million in shares of the fund (or in combination with
shares of other funds in The American Funds Group
other than the money market funds) may purchase
shares at net asset value; however, a contingent
deferred sales charge of 1% applies on certain
redemptions within 12 months following such
purchases. (See "Redeeming Shares--Contingent
Deferred Sales Charge.")
/2/ These expenses may not exceed 0.25% of the fund's
average net assets annually. (See "Fund Organization
and Management--Plan of Distribution.") Due to these
distribution expenses, long-term shareholders may pay
more than the economic equivalent of the maximum
front-end sales charge permitted by the National
Association of Securities Dealers.
/3/ Use of this assumed 5% return is required by the
Securities and Exchange Commission; it is not an
illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL
EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
3
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL The following information has been audited by Deloitte
HIGHLIGHTS & Touche LLP, independent accountants, whose unquali-
(For a share fied report covering each of the most recent five years
outstanding is included in the statement of additional information.
throughout the This information should be read in conjunction with the
fiscal year) financial statements and accompanying notes which are
also included in the statement of additional informa-
tion.
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28/29
-------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year...... $12.98 $13.52 $13.23 $11.57 $10.87 $10.63 $10.37 $11.72 $10.35 $ 8.86
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income. .14 .12 .13 .17 .22 .27 .23 .21 .18 .19
Net realized and
unrealized gain
(loss) on
investments.......... .24 1.28 .63 2.10 1.44 1.22 .71 (.57) 2.63 1.73
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from Investment
Operations.......... .38 1.40 .76 2.27 1.66 1.49 .94 (.36) 2.81 1.92
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends (from net
investment
income).............. (.13) (.12) (.15) (.15) (.25) (.27) (.29) (.30) (.19) (.19)
Distributions (from
capital gains)....... (.95) (1.82) (.32) (.46) (.71) (.98) (.39) (.69) (1.25) (.24)
Returns of capital.... -- -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions.. (1.08) (1.94) (.47) (.61) (.96) (1.25) (.68) (.99) (1.44) (.43)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of
Year................... $12.28 $12.98 $13.52 $13.23 $11.57 $10.87 $10.63 $10.37 $11.72 $10.35
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return/1/......... 3.41% 11.31% 5.94% 20.41% 16.76% 14.00% 9.63% (3.14)% 30.34% 22.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in millions)......... $2,970 $3,063 $3,016 $2,796 $2,205 $1,928 $1,722 $1,691 $1,791 $1,419
Ratio of expenses to
average net assets.... .71% .72% .73% .75% .79% .72% .70% .63% .51% .54%
Ratio of net income to
average net assets.... 1.16% .89% 1.02% 1.37% 2.08% 2.33% 2.16% 1.90% 1.85% 2.18%
Portfolio turnover
rate.................. 17.92% 22.18% 14.72% 7.74% 16.32% 18.15% 14.46% 12.00% 16.62% 27.38%
</TABLE>
--------
/1/ Calculated with no sales charge.
INVESTMENT The fund's investment objective is to provide share-
OBJECTIVE AND holders with long-term growth of capital. Whatever cur-
POLICIES rent income is generated by the fund is likely to be
incidental to the objective of capital growth. Normal-
The fund's goal is ly, the fund will invest primarily in common stocks.
to provide you However, assets may also be held in securities convert-
with long-term ible into common stocks, straight debt securities (it
growth of capital. is the fund's current intention to restrict these in-
vestments to those rated in the top three quality cate-
gories by Moody's Investors Service, Inc. or Standard &
Poor's Corporation or determined to be of equivalent
quality by Capital Research and Management Company),
cash or cash equivalents, U.S. Government securities,
or nonconvertible preferred stocks. (See the statement
of additional information for a description of cash
equivalents.)
4
<PAGE>
- -------------------------------------------------------------------------------
The fund's investment restrictions (which are described
in the statement of additional information) and
objective cannot be changed without shareholder
approval. All other investment practices may be changed
by the fund's board.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES.
INVESTMENT RISKS OF INVESTING Because the fund invests in common
TECHNIQUES stocks, the fund's portfolio is subject to market
risks, including, for example, the possibility that
Investing in stock prices in general may decline over short or even
stocks and bonds extended periods.
involves certain
risks. The fund may also invest in fixed-income securities,
including bonds, which have market values which tend to
vary inversely with the level of interest rates--when
interest rates rise, their values will tend to decline
and vice versa. Although under normal market conditions
longer term securities yield more than shorter term
securities of similar quality, they are subject to
greater price fluctuations. These fluctuations in the
value of the fund's investments will be reflected in
its net asset value per share.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic
investment philosophy of Capital Research and
Management Company is to seek fundamental values at
reasonable prices, using a system of multiple portfolio
counselors in managing mutual fund assets. Under this
system the portfolio of the fund is divided into
segments which are managed by individual counselors.
Each counselor decides how the segment will be invested
(within the limits provided by the fund's objective and
policies and by Capital Research and Management
Company's investment committee). In addition, Capital
Research and Management Company's research
professionals make investment decisions with respect to
a portion of the fund's portfolio. The primary
individual portfolio counselors for the fund are listed
on the next page.
5
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE
AS INVESTMENT PROFESSIONAL
(APPROXIMATE)
YEARS OF EXPERIENCE AS
(AND RESEARCH WITH CAPITAL
PROFESSIONAL IF RESEARCH AND
PORTFOLIO APPLICABLE) PORTFOLIO MANAGEMENT
COUNSELORS COUNSELOR COMPANY OR
FOR FOR AMCAP FUND, INC. ITS TOTAL
AMCAP FUND, INC. PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gordon Crawford Senior Vice President 5 years, (plus 10 24 years 24 years
of the fund. Senior years as a research
Vice President and professional prior to
Director, Capital becoming a portfolio
Research Company* counselor for the
fund)
- ---------------------------------------------------------------------------------------------
James E. Drasdo Senior Vice President 10 years, (plus 7 18 years 23 years
and Director, Capital years as a research
Research and professional prior to
Management Company becoming a portfolio
counselor for the
fund)
- ---------------------------------------------------------------------------------------------
James B. Lovelace Vice President, 1 year, (plus 6 years 13 years 13 years
Capital Research and as a research
Management Company professional prior to
becoming a portfolio
counselor for the
fund)
- ---------------------------------------------------------------------------------------------
William C. Newton Senior Partner, The Since the fund began 36 years 42 years
Capital Group operations in 1967
Partners, L.P.*
- ---------------------------------------------------------------------------------------------
James F. Rothenberg President and 1 year 25 years 25 years
Director, Capital
Research and
Management Company
- ---------------------------------------------------------------------------------------------
R. Michael Shanahan President and 9 years 30 years 30 years
Director of the fund.
Chairman of the Board
and Principal
Executive Officer,
Capital Research and
Management Company
</TABLE>
- -------------------------------------------------------------------------------
The fund began operations on May 1, 1967.
* Company affiliated with Capital Research and Management Company.
INVESTMENT RESULTS The fund may from time to time compare its investment
results to various unmanaged indices or other mutual
The fund has funds in reports to shareholders, sales literature and
averaged a total advertisements. The results may be calculated on a to-
return (at no tal return and/or yield basis for various periods, with
sales charge) of or without sales charges. Results calculated without a
12.35% a year over sales charge will be higher. Total returns assume the
its lifetime (May reinvestment of all dividends and capital gain distri-
1, 1967 through butions.
March 31, 1995).
The fund's average annual total returns are calculated
in accordance with Securities and Exchange Commission
requirements which provide that the maximum sales
charge be reflected. The fund's total return over the
past 12 months and average annual total returns over
the past five-year and ten-year periods as of March 31,
1995 were 9.30%, 11.03% and 13.21%, respectively. Of
course, past results are not an indication of future
results. Further information regarding the fund's in-
vestment results is contained in the fund's annual re-
port which may be obtained without charge by writing to
the Secretary of the fund at the address indicated on
the cover of this prospectus.
6
<PAGE>
- -------------------------------------------------------------------------------
DIVIDENS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS AND twice each year. All capital gains, if any, are dis-
TAXES tributed annually. When a dividend or capital gain is
distributed, the net asset value per share is reduced
by the amount of the payment.
Income distributions The terms of your plan will govern how your plan may
are usually made receive distributions from the fund. Generally, peri-
twice each year. odic distributions from the fund to your plan are rein-
vested in additional fund shares, although your plan
may permit fund distributions from net investment in-
come to be received by you in cash while reinvesting
capital gains distributions in additional shares or all
fund distributions to be received in cash. Unless you
select another option, all distributions will be rein-
vested in additional fund shares.
FEDERAL TAXES The fund intends to operate as a "regu-
lated investment company" under the Internal Revenue
Code. In any fiscal year in which the fund so qualifies
and distributes to shareholders all of its net invest-
ment income and net capital gains, the fund itself is
relieved of federal income tax. The tax treatment of
redemptions from a retirement plan may differ from re-
demptions from an ordinary shareholder account.
Please see the statement of additional information and
your tax adviser for further information.
FUND ORGANIZATION FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
AND MANAGEMENT end diversified management investment company, was
organized as a Delaware corporation in 1966 and
The fund is a reorganized as a Maryland corporation in 1990. The
member of The fund's board supervises fund operations and performs
American Funds duties required by applicable state and federal law.
Group, which is Members of the board who are not employed by Capital
managed by one of Research and Management Company or its affiliates are
the largest and paid certain fees for services rendered to the fund as
most experienced described in the statement of additional information.
investment They may elect to defer all or a portion of these fees
advisers. through a deferred compensation plan in effect for the
fund. Shareholders have one vote per share owned and,
at the request of the holders of at least 10% of the
shares, the fund will hold a meeting at which any
member of the board could be removed by a majority
vote. There will not usually be a shareholder meeting
in any year except, for example, when the election of
the board is required to be acted upon by shareholders
under the Investment Company Act of 1940.
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071 and at 135 South State College Boulevard,
Brea, CA 92621. Capital Research and Management Company
manages the investment portfolio and business affairs
of the fund and receives a fee at the annual
7
<PAGE>
- -------------------------------------------------------------------------------
rate of 0.485% per annum on the first $1 billion of the
fund's average net assets; plus 0.385% per annum on the
portion of such net assets in excess of $1 billion but
less than $2 billion; plus 0.355% per annum on the por-
tion of such net assets in excess of $2 billion but
less than $3 billion; plus 0.335% per annum on the por-
tion of such net assets in excess of $3 billion but
less than $5 billion; plus 0.32% per annum on the por-
tion of such net assets in excess of $5 billion but
less than $8 billion; plus 0.31% per annum on the por-
tion of such net assets in excess of $8 billion.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
Capital Research and Management Company and its
affiliated companies have adopted a personal investing
policy that is consistent with the recommendation
contained in the report dated May 9, 1994 issued by the
Investment Company Institute's Advisory Group on
Personal Investing. (See the statement of additional
information.)
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter mar-
ket, purchases and sales are transacted directly with
principal market-makers except in those circumstances
where it appears better prices and executions are
available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers that
have sold shares of the fund or have provided
investment research, statistical, and other related
services for the benefit of the fund and/or of other
funds served by Capital Research and Management
Company.
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors is located
at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92621, 8000 IH-
10 West, San Antonio, TX 78230, 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 46240 and 5300 Robin Hood
Road, Norfolk, VA 23513. Telephone conversations with
American Funds Distributors may be recorded or
monitored for verification, recordkeeping and quality
assurance purposes.
8
<PAGE>
- -------------------------------------------------------------------------------
PLAN OF DISTRIBUTION The fund has a plan of distribu-
tion or "12b-1 Plan" under which it may finance activi-
ties primarily intended to sell shares, provided the
categories of expenses are approved in advance by the
board and the expenses paid under the plan were in-
curred within the last 12 months and accrued while the
plan is in effect. Expenditures by the fund under the
plan may not exceed 0.25% of its average net assets an-
nually (all of which may be for service fees).
TRANSFER AGENT American Funds Service Company, 800/421-
0180, a wholly owned subsidiary of Capital Research and
Management Company, is the transfer agent and performs
shareholder service functions. American Funds Service
Company is located at 333 South Hope Street, Los
Angeles, CA 90071, 135 South State College Boulevard,
Brea, CA 92621, 8000 IH-10 West, San Antonio, TX 78230,
5300 Robin Hood Road, Norfolk, VA 23513 and 8332
Woodfield Crossing Boulevard, Indianapolis, IN 46240.
It was paid a fee of $2,430,000 for the fiscal year
ended February 28, 1995. Telephone conversations with
American Funds Service Company may be recorded or
monitored for verification, recordkeeping and quality
assurance purposes.
PURCHASING SHARES ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR
RETIREMENT PLAN. FOR MORE INFORMATION ABOUT HOW TO
PURCHASE SHARES OF THE FUND THROUGH YOUR PLAN OR
LIMITATIONS ON THE AMOUNT THAT MAY BE PURCHASED, PLEASE
CONSULT WITH YOUR EMPLOYER. Shares are sold to eligible
retirement plans at the net asset value per share next
determined after receipt of an order by the fund or
American Funds Service Company. Orders must be received
before the close of regular trading on the New York
Stock Exchange in order to receive that day's net asset
value. Plans of organizations with collective
retirement plan assets of $100 million or more may
purchase shares at net asset value. In addition, any
defined contribution plan qualified under Section
401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or
any other plan that invests at least $1 million in
shares of the fund (or in combination with shares of
other funds in The American Funds Group other than the
money market funds) may purchase shares at net asset
value; however, a contingent deferred sales charge of
1% is imposed on certain redemptions within one year of
such purchase. (See "Redeeming Shares--Contingent
Deferred Sales Charge.") Plans may also qualify to
purchase shares at net asset value by completing a
statement of intention to purchase $1 million in fund
shares subject to a commission over a maximum of 13
consecutive months. Certain redemptions of such shares
may also be subject to a contingent deferred sales
charge as described above. (See the statement of
additional information.)
9
<PAGE>
- -------------------------------------------------------------------------------
American Funds Distributors, at its expense (from a
designated percentage of its income), will provide ad-
ditional promotional incentives to dealers. Currently
these incentives are limited to the top one hundred
dealers who have sold shares of the fund or other funds
in The American Funds Group. Such incentive payments
will be based on a pro rata share of a qualifying deal-
er's sales.
Qualified dealers currently are paid a continuing serv-
ice fee not to exceed 0.25% of average net assets
(0.15% in the case of the money market funds) annually
in order to promote selling efforts and to compensate
them for providing certain services. (See "Fund Organi-
zation and Management--Plan of Distribution.") These
services include processing purchase and redemption
transactions, establishing shareholder accounts and
providing certain information and assistance with re-
spect to the fund.
Shares of the fund are offered to other shareholders
pursuant to another prospectus at public offering
prices that may include an initial sales charge.
SHARE PRICE Shares are offered to eligible retirement
plans at the net asset value after the order is re-
ceived by the fund or American Funds Service Company.
In the case of orders sent directly to the fund or
American Funds Service Company, an investment dealer
must be indicated. Dealers are responsible for promptly
transmitting orders. (See the statement of additional
information under "Purchase of Shares--Price of
Shares.")
The fund's net asset value per share is determined as
of the close of trading (currently 4:00 p.m., New York
time) on each day the New York Stock Exchange is open.
The current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share.
SHAREHOLDER Subject to any restrictions contained in your plan, you
SERVICES can exchange your shares for shares of other funds in
The American Funds Group which are offered through the
plan at net asset value. In addition, again depending
on your plan, you may be able to exchange shares auto-
matically or cross-reinvest dividends in shares of
other funds. Contact your plan administrator/trustee
regarding how to use these services. Also, see the
fund's statement of additional information for a de-
scription of these and other services that may be
available through your plan. These services are avail-
able only in states where the fund to be purchased may
be legally offered and may be terminated or modified at
any time upon 60 days' written notice.
10
<PAGE>
- -------------------------------------------------------------------------------
REDEEMING Subject to any restrictions imposed by your plan, you
SHARES can sell your shares through the plan to the fund any
day the New York Stock Exchange is open. For more in-
formation about how to sell shares of the fund through
your retirement plan, including any charges that may be
imposed by the plan, please consult with your employer.
By contacting Your plan administrator/trustee must
your plan send a letter of instruction
administrator/ specifying the name of the fund, the
trustee number of shares or dollar amount to
be sold, and, if applicable, your
name and account number. You should
also enclose any certificates you
wish to redeem. For your protection,
if you redeem more than $50,000, the
signatures of the registered owners
or their legal representatives must
be guaranteed by a bank, savings
association, credit union, or member
firm of a domestic stock exchange or
the National Association of
Securities Dealers, Inc., that is an
eligible guarantor institution. Your
plan administrator/trustee should
verify with the institution that it
is an eligible guarantor prior to
signing. Additional documentation may
be required to redeem shares from
certain accounts. Notarization by a
Notary Public is not an acceptable
signature.
By contacting Shares may also be redeemed through
an investment an investment dealer; however, you or
dealer your plan may be charged for this
service. SHARES HELD FOR YOU IN AN
INVESTMENT DEALER'S STREET NAME MUST
BE REDEEMED THROUGH THE DEALER.
--------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND
ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions
within the first year on investments of $1 million or
more and on any investment made with no initial sales
charge by any defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees. The
charge is 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares.
Shares held for the longest period are assumed to be
redeemed first for purposes of calculating this charge.
The charge is waived for exchanges (except if shares
acquired by exchange were then redeemed within 12
months of the initial purchase); for distributions from
qualified retirement plans and other employee benefit
plans; and for redemptions in connection with loans
made by qualified retirement plans.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because the fund's
net asset value fluctuates, reflecting the market value
of the portfolio, the amount you receive for shares
redeemed may be more or less than the amount paid for
them.
11
<PAGE>
- -------------------------------------------------------------------------------
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
[LOGO OF This prospectus has been printed on
RECYLED PAPER] recycled paper that meets the
guidelines of the United States
Environmental Protection Agency
THIS PROSPECTUS RELATES ONLY TO SHARES OF THE FUND
OFFERED WITHOUT A SALES CHARGE TO ELIGIBLE
RETIREMENT PLANS. FOR A PROSPECTUS REGARDING SHARES
OF THE FUND TO BE ACQUIRED OTHERWISE, CONTACT THE
SECRETARY OF THE FUND AT THE ADDRESS INDICATED ON
THE FRONT.
12
<PAGE>
AMCAP FUND, INC.
Part B
Statement of Additional Information
May 1, 1995
This document is not a prospectus but should be read in conjunction with the
current Prospectus of AMCAP Fund, Inc. (the "fund") dated May 1, 1995. The
prospectus may be obtained from your investment dealer or financial planner or
by writing to the fund at the following address:
AMCAP Fund, Inc.
Attention: Secretary
333 South Hope Street
Los Angeles, CA 90071
(213) 486-9200
The fund has two forms of prospectuses. Each reference to the prospectus in
this Statement of Additional Information includes both of the fund's
prospectuses. Shareholders who purchase shares at net asset value through
eligible retirement plans should note that not all of the services or features
described below may be available to them, and they should contact their
employer for details.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page No.
<S> <C>
Investment Philosophy 1
Description of Certain Securities 2
Description of Bond Ratings 3
Investment Restrictions 3
Fund Directors and Officers 6
Director Compensation 6
Management 10
Dividends, Distributions and Federal Taxes 13
Purchase of Shares 14
Shareholder Account Services and Privileges 16
Redemption of Shares 17
Execution of Portfolio Transactions 17
General Information. 18
Investment Results 19
Financial Statements Attached
</TABLE>
INVESTMENT PHILOSOPHY
The Investment Adviser strives for a broad and flexible approach to investing.
In managing the portfolio of the fund, which has the objective of long-term
growth of capital, investment consideration is given to companies whose
earnings are expected to show rapid or consistent growth or are cyclically
depressed, but have good potential for recovery.
Good companies are not always good investments. At times even the strongest,
best-managed companies can become overvalued in the marketplace; and the key to
investment problem-solving is in the correct appraisal of the relationship
between fundamental value and market price. When a stock appears to have
become overpriced relative to other available investments, it may be sold by
the fund -- no matter how highly the company itself is regarded -- and the
money is put to work elsewhere. Although it is not the fund's practice to
trade actively in securities for short-term profits, securities may be disposed
of without regard for the length of time held -- if such sales appear to the
Investment Adviser to further the investment objective of the fund.
DESCRIPTION OF CERTAIN SECURITIES
Subsequent to its purchase by the fund, an issue of straight debt securities
may cease to be rated or its rating may be reduced below the minimum rating
required for its purchase. Neither event requires the elimination of such
obligation from the fund's portfolio, but the Investment Adviser will consider
such an event in its determination of whether the fund should continue to hold
such obligation in its portfolio. If, as a result of a downgrade or otherwise,
the fund holds more than 5% of its net assets in securities rated Ba or BB or
below (also known as "high-yield, high-risk securities"), the fund will dispose
of the excess as expeditiously as possible.
U.S. GOVERNMENT SECURITIES - Securities guaranteed by the U.S. Government
include: (1) direct obligations of the U.S. Treasury (such as Treasury bills,
notes and bonds) and (2) federal agency obligations guaranteed as to principal
and interest by the U.S. Treasury. In these securities, the payment of
principal and interest is unconditionally guaranteed by the U.S. Government,
and thus they are of the highest possible credit quality. Such securities are
subject to variations in market value due to fluctuations in interest rates,
but, if held to maturity, will be paid in full.
Securities issued by U.S. Government instrumentalities and certain federal
agencies are neither direct obligations of, nor guaranteed by, the Treasury.
However, they generally involve federal sponsorship in one way or another; some
are backed by specific types of collateral; some are supported by the issuer's
right to borrow from the Treasury; some are supported by the discretionary
authority of the Treasury to purchase certain obligations of the issuer; others
are supported only by the credit of the issuing government agency or
instrumentality. These agencies and instrumentalities include, but are not
limited to, Federal Land Banks, Farmers Home Administration, Central Bank for
Cooperatives, and Federal Intermediate Credit Banks.
CASH EQUIVALENTS - These securities include (1) commercial paper (short-term
notes up to 9 months in maturity issued by corporations or governmental
bodies), (2) commercial bank obligations (certificates of deposit, bankers'
acceptances (time drafts on a commercial bank where the bank accepts an
irrevocable obligation to pay at maturity) and documented discount notes
(corporate promissory discount notes accompanied by a commercial bank guarantee
to pay at maturity)), (3) savings association and savings bank obligations
(e.g., certificates of deposit issued by savings banks or savings and loan
associations), (4) securities of the U.S. Government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (5)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.
DESCRIPTION OF BOND RATINGS
Moody's Investors Service, Inc. rates the long-term debt securities issued by
various entities from "Aaa" to "C." Moody's applies the numerical modifiers 1,
2, and 3 in each generic rating classification from AA through B in its
corporate bond rating system. The modifier 1 indicates that the security ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category. The top three rating categories are
described as follows:
"Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as 'gilt
edge.' Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues."
"Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities."
"Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future."
Standard & Poor's Corporation rate the long-term securities debt of various
entities in categories ranging from "AAA" to "D" according to quality. The
ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories.
The top three rating categories are described as follows:
"Debt rated 'AAA' has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong."
"Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree."
"Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."
INVESTMENT RESTRICTIONS
The fund has adopted certain investment restrictions which may not be
changed without a majority vote of its outstanding shares. Such majority is
defined by the Investment Company Act of 1940 (the "1940 Act") as the vote of
the lesser of (i) 67% or more of the outstanding voting securities present at a
meeting, if the holders of more than 50% of the outstanding voting securities
are present in person or by proxy, or (ii) more than 50% of the outstanding
voting securities. These restrictions provide that:
1. The fund may not invest in:
(a) real estate (although it has not been the practice of the fund to make
such investments, the fund may invest in the securities of real estate
investment trusts);
(b) commodities or commodity contracts;
(c) companies for the purpose of exercising control or management;
(d) the securities of companies which, with their predecessors, have a record
of less than three years' continuing operation, if such purchase at the time
thereof would cause more than 5% of the value of the fund's total assets to be
invested in the securities of such companies;
(e) securities which would subject the fund to unlimited liability (such as
assessable shares or partnership interests);
(f) any securities of another issuer if immediately after and as a result of
such purchase (1) the market value of the securities of such other issuer shall
exceed 5% of the market value of the total assets of the fund or (2) the fund
shall own more than 10% of any class of securities or of the outstanding voting
securities of such issuer; or
(g) any securities if immediately after and as a result of such purchase more
than 25% of the market value of the total assets of the fund are invested in
securities of companies in any one industry.
2. The fund may not engage in short sales or margin purchases.
3. The fund may not lend money or securities. The making of deposits with
banks and the purchase of a portion of the issue of bonds, debentures, or other
debt securities which are publicly distributed or of a type generally purchased
by institutional investors, are not regarded as loans.
4. The fund may not invest more than 10% of the value of its total assets in
securities that are illiquid, nor may it engage in the business of underwriting
securities of other issuers.
5. The fund may not borrow in excess of 10% of its total assets taken at cost
or pledge its assets taken at market value to an extent greater than 15% of
total assets taken at cost. Asset coverage of at least 300% taken at market
value must be maintained. No borrowing may be undertaken except as a temporary
measure for extraordinary or emergency purposes. (The fund may borrow only
from banks. The fund, however, has never borrowed and does not currently
anticipate borrowing.)
Property acquired through merger, consolidation, or acquisition of
substantially all of the assets of any other corporation is not considered an
investment within the terms of the investment restrictions of the fund if
disposed of within a reasonable time and in no event more than six months after
acquisition. It is not the fund's current practice or present intent to
purchase securities that are not readily marketable although up to 10% of the
value of its total assets may be invested in illiquid securities. If, in the
future, the fund increases this 10% limit on investing in illiquid securities,
the fund has agreed that it will invest no more than 15% of its net assets in
securities which are not readily marketable in compliance with Texas Securities
Law.
Investment restriction #1 does not apply to deposits in banks or to the
purchase of securities issued or fully guaranteed by the U.S. Government (or
its agencies or instrumentalities). For purposes of investment restriction
#1(g), the fund will not invest 25% or more (rather than "more than 25%") of
its total assets in the securities of issuers in the same industry.
In addition to the foregoing policies, it is also the policy of the fund not
to invest in securities of open-end investment companies except in connection
with a merger, consolidation or acquisition of assets, but the fund may invest
in securities of closed-end investment companies within the limitations imposed
by the 1940 Act. (Notwithstanding this restriction, the fund may invest in
securities of other investment companies if deemed advisable by its officers in
connection with the administration of a deferred compensation plan adopted by
Directors pursuant to an exemptive order granted by the Securities and Exchange
Commission.) In general, this means (i) that the fund will not own more than
3% of the outstanding voting stock of a closed-end investment company, (ii)
that the fund will not invest more than an aggregate of 10% of its total assets
in securities issued by closed-end investment companies, and (iii) that the
fund, together with all other investment companies served by the Investment
Adviser, will not own more than 10% of the outstanding voting stock of a
closed-end investment company. Any such purchases will be made only in the
open market or as a part of a merger, consolidation, or acquisition of assets,
and will not involve commissions or profits to a sponsor or dealer other than
customary brokerage commissions.
The fund will not purchase or retain the securities of any issuer if those
officers and directors of the fund or the Investment Adviser who own
beneficially more than one-half of one percent of such issuer together own more
than five percent of the securities of such issuer. The fund will not make
investments in puts, calls, straddles, spreads, or any combination thereof, nor
will it purchase partnership interests in oil, gas, or mineral exploration,
drilling or mining ventures or leases. The fund will not invest more than 5%
of its net assets, valued at the lower of cost or market at the time of
purchase, in warrants including not more than 2% of such net assets in warrants
that are not listed on either the New York Stock Exchange or the American Stock
Exchange; however, warrants acquired in units or attached to securities may be
deemed to be without value for the purpose of this restriction. Changes in the
policies described in the foregoing two paragraphs do not require shareholder
approval.
FUND OFFICERS AND DIRECTORS
Directors and Director Compensation
(with their principal occupations during the past five years)#
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH PRINCIPAL OCCUPATION(S) DURING AGGREGATE TOTAL COMPENSATION TOTAL NUMBER
REGISTRANT PAST 5 YEARS (POSITIONS WITHIN THE COMPENSATION FROM ALL FUNDS OF FUND
BOARDS
ORGANIZATIONS LISTED MAY HAVE (INCLUDING MANAGED BY CAPITAL ON
CHANGED DURING THIS PERIOD) VOLUNTARILY DEFERRED RESEARCH AND WHICH
COMPENSATION/1/) FROM MANAGEMENT COMPANY/2/ DIRECTOR
FUND DURING FISCAL SERVES/2/
YEAR ENDED 2/28/95
<S> <C> <C> <C> <C> <C>
Guilford C. Babcock Director Associate Professor of Finance,
1575 Circle Drive School of Business Administration, $13,100/3/ $23,400 2
San Marino, CA 91108 University of Southern California
Age: 63
Charles H. Black Director Private investor and consultant;
525 Alma Real Drive former Executive Vice President $12,850 $100,150 4
Pacific Palisades, CA and Director, KaiserSteel
90272 Corporation
Age: 68
Martin Fenton, Jr. Director Chairman, Senior Resource Group
Senior Resource Group (management of senior living $13,871/3/ $91,721 15
4350 Executive Drive centers)
Suite 101
San Diego, CA 92123
Age: 59
James D. Fullerton Chairman Retired; former Vice Chairman of
595 E. Colorado Emeritus the Board, The Capital Group, Inc. $6,100 $6,100 1
Boulevard
Suite 323
Pasadena, CA 91101
Age: 78
Herbert Hoover III Director Private Investor
200 S. Los Robles $12,676 $59,426 14
Avenue
Suite 520
Pasadena, CA
91101-2431
Age: 57
Gail L. Neale Director Executive Vice President, Salzburg
Salzburg Seminar Seminar; former Director of $12,850/3/ $50,950 4
P.O. Box 886 Development and the Capital
The Marbleworks Campaign, Hampshire College;
Middlebury, VT 05753 Special Advisor, The
Age: 60 Commonwealth Fund and Mount
Holyoke College
Kirk P. Pendleton Director President, Cairnwood, Inc.
Box 546 $13,100/3/ $24,500 2
Bryn Athyn, PA 19009
Age: 55
+* James W. Ratzlaff Director Vice Chairman of the Board,
Age: 58 Capital Research and Management none/4/ none/4/ 8
Company; Chairman of the Board,
American Funds Service Company;
Senior Partner, The Capital Group
Partners, L.P.
Henry E. Riggs Director President and Professor of
Kingston Hall 201 Engineering, Harvey Mudd $12,800/3/ $65,200 5
Harvey Mudd College College; former Thomas W. and Joan
Claremont, CA 91711 B. Ford Professor of Engineering and
Age: 60 Vice President of Development,
Stanford University
+* R. Michael Shanahan Director Chairman of the Board and
Age: 56 Principal Executive Officer, Capital none/4/ none/4/ 2
Research and Management
Company; Director, The Capital
Group Companies, Inc.; Director,
Capital Group Research, Inc.
+ Walter P. Stern Chairman of Chairman, Capital Group
Capital Research the Board International, Inc.; Vice Chairman, none/4/ none/4/ 8
Company Capital Research International;
630 Fifth Avenue Director, The Capital Group
New York, NY 10111 Companies, Inc.; Chairman,
Age: 66 Capital International, Inc.; Director,
Temple-Inland, Inc.
Charles Wolf, Jr. Director Dean, The RAND Graduate
The RAND Graduate School; $12,050/3/ $49,850 4
School Director, International Economic
1700 Main Street Studies, The RAND Corporation
Santa Monica, CA 90406
Age: 70
</TABLE>
# Positions within the organizations listed may have changed during this
period.
+ Directors who are considered "interested persons as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), on the basis of their
affiliation with the fund's Investment Adviser, Capital Research and Management
Company.
* Address is 333 South Hope Street, Los Angeles, CA 90071//
/1/ Amounts may be deferred by eligible directors under a non-qualified
deferred compensation plan adopted by the Fund in 1993. Deferred amounts
accumulate at an earnings rate determined by the total return of one or more
funds in The American Funds Group as designated by the Director.
/2/ Capital Research and Management Company manages The American Funds Group
consisting of 28 funds: American Balanced Fund, Inc., American High-Income
Municipal Bond Fund, Inc., American High-Income Trust, American Mutual Fund,
Inc., The Bond Fund of America, Inc., The Cash Management Trust of America,
Capital Income Builder, Inc., Capital World Growth and Income Fund, Inc.,
Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental Investors,
Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc.,
Intermediate Bond Fund of America, The Investment Company of America, Limited
Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective
Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America,
Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The
Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S.
Treasury Money Fund of America, U.S. Government Securities Fund and Washington
Mutual Investors Fund, Inc. Capital Research and Management Company also
manages American Variable Insurance Series and Anchor Pathway Fund which serves
as the underlying investment vehicle for certain variable insurance contracts;
and Bond Portfolio for Endowments, Inc. and Endowments, Inc. whose shares may
be owned only by tax-exempt organizations. These amounts reflect the aggregate
compensation paid during the most recent fiscal year of the funds involved.
/3/ Since the plan's adoption, the total amount of deferred compensation
accrued by the fund (plus earnings thereon) for participating Directors is as
follows: Guilford C. Babcock ($15,617), Martin Fenton, Jr. ($14,992), Gail L.
Neale ($5,365), Kirk P. Pendleton ($14,476), Henry E. Riggs ($15,211) and
Charles Wolf, Jr. ($13,685). Amounts deferred and accumulated earnings thereon
are not funded and are general unsecured liabilities of the fund until paid to
the Director.
/4/ James W. Ratzlaff, R. Michael Shanahan and Walter P. Stern are affiliated
with the Investment Adviser and, accordingly, receive no compensation from the
Fund.
OFFICERS
* GORDON CRAWFORD, Senior Vice President. Capital Research Company, Senior
Vice President
* PAUL G. HAAGA, JR., Senior Vice President. Capital Research and Management
Company,
Director and Senior Vice President
* JULIE F. WILLIAMS, Secretary. Capital Research and Management Company, Vice
President -
Fund Business Management Group
** STEVEN N. KEARSLEY, Treasurer. Capital Research and Management Company,
Vice President and Treasurer
* DAVID E. CARTER, Assistant Secretary. Capital Research and Management
Company, Associate
** MARY C. CREMIN, Assistant Treasurer. Capital Research and Management
Company, Senior
Vice President - Fund Business Management Group
** ROBERT P. SIMMER, Assistant Treasurer. Capital Research and Management
Company, Vice President - Fund Business Management Group
# Positions within the organizations listed may have changed during this
period.
* Address is 333 South Hope Street, Los Angeles, CA 90071.
** Address is 135 South State College Boulevard, Brea, CA 92621.
No compensation is paid by the fund to any officer or director who is a
director or officer of the Investment Adviser. The fund pays annual fees of
$9,000 to directors who are not affiliated with the Investment Adviser, plus
$800 for each Board of Directors meeting attended, plus $400 for each meeting
attended as a member of a committee of the Board of Directors. No pension or
retirement benefits are accrued as part of fund expenses. The Directors may
elect, on a voluntary basis, to defer all or a portion of their fees through a
deferred compensation plan in effect for the fund. The fund also reimburses
certain expenses of the Directors who are not affiliated with the Investment
Adviser. The total compensation paid by the fund to directors who are not
affiliated with the Investment Adviser during the fiscal year ended February
28, 1995 was $109,000. As of April 1, 1995, the officers and directors of the
fund and their families as a group owned beneficially or of record less than 1%
of the outstanding shares of the fund.
MANAGEMENT
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains
research facilities in the U.S. and abroad, with a staff of professionals, many
of whom have a number of years of investment experience. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world.
The Investment Adviser believes that it is able to attract and retain quality
personnel.
An affiliate of the Investment Adviser compiles indices for major stock
markets around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The Investment Adviser is responsible for approximately $100 billion of
stocks, bonds and money market instruments and serves over five million
investors of all types throughout the world. These investors include privately
owned businesses and large corporations, as well as schools, colleges,
foundations and other non-profit and tax-exempt organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and
Service Agreement (the "Agreement") between the fund and the Investment
Adviser, unless sooner terminated, will continue until March 31, 1996 and may
be renewed from year to year thereafter, provided that any such renewal has
been specifically approved at least annually by (i) the Board of Directors, or
by the vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities, and (ii) the vote of a majority of directors who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement provides that the Investment Adviser has no
liability to the fund for its acts or omissions in the performance of its
obligations to the fund not involving willful misconduct, bad faith, gross
negligence or reckless disregard of its obligations under the Agreement. The
Agreement also provides that either party has the right to terminate it,
without penalty, upon 60 days' written notice to the other party and that the
Agreement automatically terminates in the event of its assignment (as defined
in the 1940 Act).
The Investment Adviser, in addition to providing investment advisory
services, furnishes the services and pays the compensation and travel expenses
of qualified persons to perform executive, administrative, clerical and
bookkeeping functions of the fund; provides suitable office space and
utilities; and furnishes necessary small office equipment and general purpose
accounting forms, supplies, and postage used at the offices of the fund
relating to the services furnished by the Investment Adviser.
The fund pays all expenses not specifically assumed by the Investment Adviser,
including, but not limited to, custodian, registrar, stock transfer and
dividend disbursing fees and expenses; expenses pursuant to the fund's Plan of
Distribution (see below); costs of designing, printing and mailing reports,
prospectuses, proxy statements and notices to shareholders; taxes; expenses of
the issuance, sale, redemption, or repurchase of shares of the fund (including
stock certificates, registration and qualification fees and expenses); legal
and auditing fees and expenses; compensation, fees, and expenses paid to
Directors not affiliated with the Investment Adviser; association dues; and
costs of stationery and forms prepared exclusively for the fund.
The Investment Adviser has agreed to pay to the fund annually, immediately
after the fiscal year end the amount by which the total expenses of the fund
for any particular fiscal year, except taxes and interest, exceed an amount
equal to 1% of the average of the total net assets of the fund for the year.
During the fiscal years ended February 28, 1995, 1994 and 1993, the Investment
Adviser's fees amounted to $11,954,000, $12,301,000, and $11,656,000,
respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal
Underwriter") is the principal underwriter of the fund's shares. The fund has
adopted a Plan of Distribution (the "Plan"), pursuant to rule 12b-1 under the
1940 Act (see "Principal Underwriter" in the Prospectus). The Principal
Underwriter receives amounts payable pursuant to the Plan (see below) and
commissions consisting of that portion of the sales charge remaining after the
discounts which it allows to investment dealers. Commissions retained by the
Principal Underwriter on sales of fund shares during the fiscal year ended
February 28, 1995 amounted to $639,000 after allowance of $3,249,000 to
dealers. During the fiscal years ended February 28, 1994 and 1993, the
Principal Underwriter retained $922,000 and $1,502,000, respectively.
As required by rule 12b-1, the Plan (together with the Principal Underwriting
Agreement) has been approved by the full Board of Directors and separately by a
majority of the Directors who are not "interested persons" of the fund and who
have no direct or indirect financial interest in the operation of the Plan or
the Principal Underwriting Agreement, and the Plan has been approved by the
vote of a majority of the outstanding voting securities of the fund. The
officers and Directors who are "interested persons" of the fund may be
considered to have a direct or indirect financial interest in the operation of
the Plan due to present or past affiliations with the Investment Adviser and
related companies. Potential benefits of the Plan to the fund include improved
shareholder services, savings to the fund in transfer agency costs, savings to
the fund in advisory fees and other expenses, benefits to the investment
process from growth or stability of assets and maintenance of a financially
healthy management organization. The selection and nomination of Directors who
are not "interested persons" of the fund are committed to the discretion of the
Directors who are not "interested persons" during the existence of the Plan.
The Plan is reviewed quarterly and must be renewed annually by the Board of
Directors.
Under the Plan the fund may expend up to 0.25% of its average net assets
annually to finance any activity which is primarily intended to result in the
sale of fund shares, provided the fund's Board of Directors has approved the
category of expenses for which payment is being made. These include service
fees for qualified dealers and dealer commissions and wholesaler compensation
on sales of shares exceeding $1 million (including purchases by any defined
contribution plan qualified under Section 401(a) of the Internal Revenue Code
including a "401(k)" plan with 200 or more eligible employees). Only expenses
incurred during the preceding 12 months and accrued while the Plan is in effect
may be paid by the fund. During the fiscal year ended February 28, 1995 the
fund paid $5,181,000 under the Plan. As of February 28, 1995, accrued and
unpaid distribution expenses were $1,218,000.
The Glass-Steagall Act and other applicable laws, among other things,
generally prohibit commercial banks from engaging in the business of
underwriting, selling or distributing securities, but permit banks to make
shares of mutual funds available to their customers and to perform
administrative and shareholder servicing functions. However, judicial or
administrative decisions or interpretations of such laws, as well as changes in
either federal or state statutes or regulations relating to the permissible
activities of banks or their subsidiaries of affiliates, could prevent a bank
from continuing to perform all or a part of its servicing activities. If a
bank were prohibited from so acting, shareholder clients of such bank would be
permitted to remain shareholders of the fund and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the fund might occur and shareholders serviced by such bank
might no longer be able to avail themselves of any automatic investment or
other services then being provided by such bank. It is not expected that
shareholders would suffer with adverse financial consequences as a result of
any of these occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and certain banks and financial
institutions may be required to be registered as dealers pursuant to state law.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
The fund intends to meet all the requirements and has elected the tax status
of a "regulated investment company" under the provisions of Subchapter M of the
Internal Revenue Code of 1986 (the "Code"). Under Subchapter M, if the fund
distributes within specified times at least 90% of its investment company
taxable investment income (net investment income and the excess of net
short-term capital gains over net long-term capital losses) and its tax-exempt
interest, if any, it will be taxed only on the portion of the investment
company taxable income that it retains.
To qualify, the fund must (a) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and
gains from the sale or other disposition of stock, securities, currencies or
other income derived with respect to its business of investing in such stock,
securities or currencies; (b) derive less than 30% of its gross income from the
sale or other disposition of stock or securities held for less than three
months; and (c) diversify its holdings so that at the end of each fiscal
quarter, (i) at least 50% of the market value of the fund's assets is
represented by cash, U.S. Government securities and other securities which must
be limited, in respect of any one issuer, to an amount not greater than 5% of
the fund's assets and 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies), or in two or more issuers
which the fund controls and which are engaged in the same or similar trades or
businesses or related trades or businesses.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gain (both long-term and short-term)
for the one-year period ending on October 31 (as though the one-year period
ending on October 31 were the regulated investment company's taxable year), and
(iii) the sum of any untaxed, undistributed net investment income and net
capital gains of the regulated investment company for prior periods. The term
"distributed amount" generally means the sum of (i) amounts actually
distributed by the fund from its current year's ordinary income and capital
gain and (ii) any amount on which the fund pays income tax during the periods
described above. The fund intends to distribute net investment income and net
capital gains so as to minimize or avoid the excise tax liability.
The fund also intends to distribute to shareholders all of the excess of net
long-term capital gain over net short-term capital loss on sales of securities.
If the net asset value of shares of the fund should, by reason of a
distribution of realized capital gains, be reduced below a shareholder's cost,
such distribution would to that extent be a return of capital to that
shareholder even though taxable to the shareholder, and a sale of shares by a
shareholder at net asset value at that time would establish a capital loss for
federal tax purposes. In particular, investors should consider the tax
implications of purchasing shares just prior to a dividend or distribution
record date. Those investors purchasing shares just prior to such a date will
then receive a partial return of capital upon the dividend or distribution,
which will nevertheless be taxable to them as an ordinary or capital gains
dividend.
Dividends generally are taxable to shareholders at the time they are paid.
However, dividends declared in October, November and December and made payable
to shareholders of record in such a month are treated as paid and are thereby
taxable as of December 31, provided that the fund pays the dividend no later
than the end of January of the following year.
If a shareholder exchanges or otherwise disposes of shares of the fund within
90 days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund, the sales charge previously
incurred in acquiring the fund's shares shall not be taken into account (to the
extent such previous sales charges do not exceed the reduction in sales
charges) for the purpose of determining the amount of gain or loss on the
exchange, but will be treated as having been incurred in the acquisition of
such other shares. Also, any loss realized on a redemption or exchange of
shares of a fund will be disallowed to the extent shares are reacquired within
the 61-day period beginning 30 days before and ending 30 days after the shares
are disposed of.
As of the date of this statement of additional information, the maximum
individual tax rate applicable to ordinary income is 39.6% (effective tax rates
may be higher for some individuals due to phase out of exemptions and
elimination of deductions); the maximum individual rate applicable to net
capital gain is 28%; and the maximum corporate tax rate applicable to ordinary
income and net capital gain is 35% (except that corporations with income in
excess of $100,000 for a taxable year will be required to pay an additional
income tax liability of up to $11,750 and corporations which have taxable
income in excess of $15,000,000 for a taxable year will be required to pay an
additional amount of tax of up to $100,000). Naturally, the amount of tax
payable by a taxpayer will be affected by a combination of tax law rules
covering, E.G., deductions, credits, deferrals, exemptions, sources of income
and other matters. Under the Code, an individual is entitled to establish an
IRA each year (prior to the tax return filing deadline for that year) whereby
earnings on investments are tax-deferred. In addition, in some cases, the IRA
contribution itself may be deductible.
The foregoing is limited to a summary discussion of federal taxation and
should not be viewed as a comprehensive discussion of all provisions of the
Code relevant to investors. Dividends and distributions may also be subject to
state or local taxes. Investors should consult their own tax advisers for
additional details as to their particular tax status.
PURCHASE OF SHARES
PRICE OF SHARES - Purchases of shares are made at the offering price next
determined after the purchase order is received by the fund or American Funds
Service Company; this offering price is effective for orders received prior to
the time of determination of the net asset value and, in the case of orders
placed with dealers, accepted by the Principal Underwriter prior to its close
of business. The dealer is responsible for promptly transmitting purchase
orders to the Principal Underwriter. Orders received by the investment dealer,
the Transfer Agent, or the fund after the time of the determination of the net
asset value will be entered at the next calculated offering price. Prices
which appear in the newspaper are not always indicative of prices at which you
will be purchasing and redeeming shares of the fund, since such prices
generally reflect the previous day's closing price whereas purchases and
redemptions are made at the next calculated price.
The price you pay for shares, the offering price, is based on the net asset
value per share which is calculated once daily at the close of trading
(currently 4:00 p.m., New York Time) each day the New York Stock Exchange is
open. The New York Stock Exchange is currently closed on weekends and on the
following holidays: New Year's Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The net
asset value per share is determined as follows:
1. Stocks, and convertible bonds and debentures, traded on the New York Stock
Exchange are valued at the last sale price on such exchange on the day of
valuation, or if there is no sale on the day of valuation, at the last-reported
bid price. Non-convertible bonds and debentures, and other long-term debt
securities and U.S. Treasury notes normally are valued at prices obtained for
the day of valuation from a bond pricing service, when such prices are
available; however, in circumstances where the Investment Adviser deems it
appropriate to do so, an over-the-counter or exchange quotation may be used.
U.S. Treasury bills, and other short-term obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, certificates of deposit
issued by banks, corporate short-term notes and other short-term investments
with original or remaining maturities in excess of 60 days are valued at the
mean of representative quoted bid and asked prices for such securities or, if
such prices are not available, for securities of comparable maturity, quality
and type. Short-term securities with 60 days or less 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. Other securities are valued on the basis of last
sale or bid prices in what is, in the opinion of the Investment Adviser, the
broadest and most representative market, which may be either a securities
exchange or the over-the-counter market. Where quotations are not readily
available, securities are valued at fair value as determined in good faith by
the Board of Directors. The fair value of all other assets is added to the
value of securities to arrive at the total assets;
2. There are deducted from the total assets, thus determined, the liabilities,
including accruals of taxes and other expense items; and
3. The net assets so obtained are then divided by the total number of shares
outstanding and the result, rounded to the nearer cent, is the net asset value
per share.
Any purchase order may be rejected by the Principal Underwriter or by the
fund. The fund will not knowingly sell shares (other than for the reinvestment
of dividends or capital gain distributions) directly or indirectly or through a
unit investment trust to any other investment company, person or entity, where,
after the sale, such investment company, person, or entity would own
beneficially directly, indirectly, or through a unit investment trust more than
3% of the outstanding shares of the fund without the consent of a majority of
the Board of Directors.
STATEMENT OF INTENTION - The reduced sales charges and offering prices set
forth in the Prospectus apply to purchases of $50,000 or more made within a
13-month period pursuant to the terms of a written statement of intention (the
"Statement") in the form provided by the Principal Underwriter and signed by
the purchaser. The Statement is not a binding obligation to purchase the
indicated amount. When a shareholder signs a Statement in order to qualify for
a reduced sales charge, shares equal to 5% of the dollar amount specified in
the Statement will be held in escrow in the shareholder's account out of the
initial purchase (or subsequent purchases, if necessary) by the Transfer Agent.
All dividends and capital gain distributions on shares held in escrow will be
credited to the shareholder's account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified
13-month period, the purchaser will remit to the Principal Underwriter the
difference between the sales charge actually paid and the sales charge which
would have been paid if the total of such purchases had been made at a single
time. If the difference is not paid within 20 days after written request by
the Principal Underwriter or the securities dealer, the appropriate number of
escrowed shares will be redeemed to pay such difference. If the proceeds from
this redemption are inadequate, the purchaser will be liable to the Principal
Underwriter for the balance still outstanding. The Statement may be revised
upward at any time during the 13-month period, and such a revision will be
treated as a new Statement, except that the 13-month period during which the
purchase must be made will remain unchanged and there will be no retroactive
reduction of the sales charges paid on prior purchases.
In the case of purchase orders by the trustees of certain retirement plans by
payroll deduction, the sales charge for the investments made during the
13-month period will be handled as follows: The investment made the first
month of the 13-month period will be multiplied by 13 and then multiplied by
1.5. On the first investment and all other investments made pursuant to the
statement of intention, a sales charge will be assessed according to the sales
charge breakpoint thus determined. There will be no retroactive adjustments in
sales charges on investments previously made during the 13-month period.
DEALER COMMISSIONS - The following commissions will be paid to dealers who
initiate and are responsible for purchases of $1 million or more, for purchases
by any defined contribution plan qualified under Section 401(a) of the Internal
Revenue Code including a "401(k)" plan with 200 or more eligible employees, and
for purchases made at net asset value by certain retirement plans of
organizations with collective retirement plan assets of $100 million or more:
1.00% on amounts of $1 million to $2 million, 0.80% on amounts over $2 million
to $3 million, 0.50% on amounts over $3 million to $50 million, 0.25% on
amounts over $50 million to $100 million, and 0.15% on amounts over $100
million. The level of dealer commissions will be determined based on sales
made over a 12-month period commencing from the date of the first sale at net
asset value. See "The American Funds Shareholder Guide" in the fund's
Prospectus for more information.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - The automatic investment plan enables shareholders
to make regular monthly or quarterly investments in shares through automatic
charges to their bank accounts. With shareholder authorization and bank
approval, the Transfer Agent will automatically charge the bank account for the
amount specified ($50 minimum), which will be automatically invested in shares
at the offering price on or about the 10th day of the month (or on or about the
15th day of the month in the case of accounts for retirement plans where
Capital Guardian Trust Company serves as trustee or custodian.) Bank accounts
will be charged on the day or a few days before investments are credited,
depending on the bank's capabilities, and shareholders will receive a
confirmation statement showing the current transaction. Participation in the
plan will begin within 30 days after receipt of the account application. If
the shareholder's bank account cannot be charged due to insufficient funds, a
stop-payment order or closing of your account, the plan may be terminated and
the related investment reversed. The shareholder may change the amount of the
investment or discontinue the plan at any time by writing the Transfer Agent.
AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - A shareholder in one fund
may elect to cross-reinvest dividends or dividends and capital gain
distributions paid by that fund (the "paying fund") into any other fund in The
American Funds Group (the "receiving fund") subject to the following
conditions: (i) the aggregate value of the shareholder's account(s) in the
paying fund(s) must equal or exceed $5,000 (this condition is waived if the
value of the account in the receiving fund equals or exceeds that fund's
minimum initial investment requirement), (ii) as long as the value of the
account in the receiving fund is below that fund's minimum initial investment
requirement, dividends and capital gain distributions paid by the receiving
fund must be automatically reinvested in the receiving fund, and (iii) if this
privilege is discontinued with respect to a particular receiving fund, the
value of the account in that fund must equal or exceed the fund's minimum
initial investment requirement or the fund shall have the right, if the
shareholder fails to increase the value of the account to such minimum within
90 days after being notified of the deficiency, automatically to redeem the
account and send the proceeds to the shareholder. These cross-reinvestments of
dividends and capital gain distributions will be at net asset value (without
sales charge).
REDEMPTION OF SHARES
The fund's Articles of Incorporation permit the fund to direct the Transfer
Agent to redeem the shares of any shareholder if the value of such shares in
the account of such holder is less than the minimum initial investment amount
applicable to that account as set forth in the fund's current registration
statement under the Investment Company Act of 1940, and subject to such further
terms and conditions as the Board of Directors of the Corporation may from time
to time adopt.
EXECUTION OF PORTFOLIO TRANSACTIONS
There are occasions on which portfolio transactions for the fund may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the fund, they are effected only when the
Investment Adviser believes that to do so is in the interest of the fund. When
such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner. The fund does not intend to pay a mark-up
in exchange for research in connection with principal transactions.
During the fiscal year ended February 28, 1995, the fund held certain
securities of three of its regular brokers or dealers or their parents,
consisting of notes of American Express Credit Corp., Ford Motor Credit Co.,
and Commercial Credit Co. in the amounts of $56,427, $53,336, and $19,782,
respectively.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, for the fiscal years ended February 28, 1995,
1994 and 1993, amounted to $1,092,000, $1,567,000 and $1,016,000, respectively.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including
proceeds from the sale of shares of the fund and of securities in the fund's
portfolio, are held by The Chase Manhattan Bank, N.A., One Chase Manhattan
Plaza, New York, NY 10081, as Custodian.
INDEPENDENT ACCOUNTANTS - Deloitte & Touche LLP, 1000 Wilshire Boulevard,
15th Floor, Los Angeles, CA 90017, has served as the fund's independent
auditors since its inception, providing audit services, preparation of tax
returns and review of certain documents to be filed with the Securities and
Exchange Commission. The financial statements incorporated in this Statement
of Additional Information by reference from the attached Annual Report, have
been so included in reliance on the independent auditors' report given on the
authority of said firm as experts in accounting and auditing. The selection of
the fund's independent accountant is reviewed and determined annually by the
Board of Directors.
REMOVAL OF DIRECTORS BY SHAREHOLDERS - At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any director or directors from office and may elect a successor
or successors to fill any resulting vacancies for the unexpired terms of
removed directors. The fund has made an undertaking, at the request of the
staff of the Securities and Exchange Commission, to apply the provisions of
section 16(c) of the 1940 Act with respect to the removal of directors, as
though the fund were a common-law trust. Accordingly, the directors of the
fund shall promptly call a meeting of shareholders for the purpose of voting
upon the question of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the outstanding shares.
REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on the last day of
February. Shareholders are provided at least semi-annually with reports
showing the investment portfolio, financial statements and other information.
The fund's annual financial statements are audited by the fund's independent
accountants, Deloitte & Touche LLP.
PERSONAL INVESTING POLICY - Capital Research and Management Company and its
affiliated companies have adopted a personal investing policy consistent with
Investment Company Institute guidelines. This policy includes: a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; pre-clearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the fund; blackout periods on personal investing for certain investment
personnel; ban on short-term trading profits for investment personnel;
limitations on service as a director of publicly traded companies; and
disclosure of personal securities transactions.
The financial statements including the investment portfolio and the report of
Independent Auditors contained in the Annual Report are included in this
Statement of Additional Information. The following information is not included
in the Annual Report:
DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND
MAXIMUM OFFERING PRICE PER SHARE -- FEBRUARY 28, 1995
<TABLE>
<CAPTION>
Net asset value and redemption price per share
<S> <C>
(Net assets divided by shares outstanding) $12.28
Maximum offering price per share $13.03
(100/94.25 of net asset value per share, which takes
into account the fund's current maximum sales charge)
</TABLE>
INVESTMENT RESULTS
The fund's yield is 1.25% based on a 30-day (or one month) period ended
February 28, 1995, computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last
day of the period, according to the following formula:
YIELD = 2[( a-b/cd + 1)/6/ -1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
As of February 28, 1995, the fund's total return over the past twelve months
and average annual total returns over the past 5 and 10-year periods were
- -2.52%, 10.08% and 12.11%, respectively. The average total return ("T") is
computed by equating the value at the end of the period ("ERV") with a
hypothetical initial investment of $1,000 ("P") over a period of years ("n")
according to the following formula as required by the Securities and Exchange
Commission: P(1+T)/n/ = ERV.
The following assumptions will be reflected in computations made in accordance
with the formulas stated above: (1) deduction of the maximum sales load of
5.75% from the $1,000 initial investment; (2) reinvestment of dividends and
distributions at net asset value on the reinvestment date determined by the
Board; and (3) a complete redemption at the end of any period illustrated. The
fund will calculate total return for one-, five- and ten-year periods. In
addition, the fund may provide lifetime average total return figures.
The fund may also, at times, calculate total return based on net asset value
per share (rather than the offering price), in which case the figure would not
reflect the effect of any sales charges which would have been paid if shares
were purchased during the period reflected in the computation. Consequently,
total return calculated in this manner will be higher. These total returns may
be calculated over periods in addition to those described above. Total return
for the unmanaged indices will be calculated assuming reinvestment of dividends
and interest, but will not reflect any deductions for advisory fees, brokerage
costs or administrative expenses.
The fund may include information on its investment results and/or comparisons
of its investment results to various unmanaged indices (such as The Dow Jones
Average of 30 Industrial Stocks and The Standard and Poor's 500 Composite Stock
Index) or results of other mutual funds or investment or savings vehicles in
advertisements or in reports furnished to present or prospective shareholders.
The fund may refer to results compiled by organizations such as CDA Investment
Technologies, Ibbottson Associates, Lipper Analytical Services, Morningstar,
Inc. and Wiesenberger Investment Companies Services. Additionally, the fund
may, from time to time, refer to results published in various periodicals,
including Barrons, Forbes, Fortune, Institutional Investor, Kiplinger's
Personal Finance Magazine, Money, U.S. News and World Report and The Wall
Street Journal.
The fund may from time to time illustrate the benefits of tax-deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans.
The fund may also, from time to time, refer to statistics compiled by the U.S.
Department of Commerce.
The investment results set forth below were calculated as described in the
fund's prospectus. The fund's results will vary from time to time depending
upon market conditions, the composition of the fund's portfolio and operating
expenses of the fund, so that any investment results reported by the fund
should not be considered representative of what an investment in the fund may
earn in any future period. These factors and possible differences in
calculation methods should be considered when comparing the fund's investment
results with those published for other mutual funds, other investment vehicles
and unmanaged indices. The fund's results also should be considered relative
to the risks associated with the fund's investment objective and policies.
EXPERIENCE OF THE INVESTMENT ADVISER - Capital Research and Management Company
manages seven common stock funds that are at least 10 years old. In the
rolling 10-year periods during which those funds were managed by Capital
Research and Management Company since 1962 (104 in all), those funds have had
better total returns than the Standard and Poor's 500 Composite Stock Index in
90 of the 104 periods.
Note that past results are not an indication of future investment results.
Also, the fund has different investment policies than the funds mentioned
above. These results are included solely for the purpose of informing
investors about the experience and history of Capital Research and Management
Company.
IF YOU ARE CONSIDERING AMCAP FOR AN INDIVIDUAL RETIREMENT ACCOUNT . . .
<TABLE>
<CAPTION>
Here's how much you would have if you had invested $2,000 on March 1 of each year in AMCAP
over the past 5, 10, 15 and 20 years:
<S> <C> <C> <C>
5 Years 10 Years 15 years 20 Years
(3/1/90 - 2/28/95) (3/1/85 - 2/28/95) (3/1/80 - 2/28/95) (3/1/75 - 2/28/95)
$12,417 $35,421 $85,457 $243,544
</TABLE>
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
<TABLE>
<CAPTION>
If you had invested Periods ...and taken all
$10,000 in AMCAP 3/1 - 2/28 or 29 distributions in shares,
this many years ago... your investment would
| have been worth this
Number of Years much at Feb. 28, 1995
|
Value
<S> <C> <C>
1 1994-1995 $ 9,748
2 1993-1995 10,852
3 1992-1995 11,491
4 1991-1995 13,834
5 1990-1995 16,162
6 1989-1995 18,417
7 1988-1995 20,199
8 1987-1995 19,553
9 1986-1995 25,499
10 1985-1995 31,353
11 1984-1995 36,405
12 1983-1995 36,834
13 1982-1995 53,050
14 1981-1995 55,805
15 1980-1995 67,477
16 1979-1995 99,465
17 1978-1995 136,145
18 1977-1995 159,578
19 1976-1995 162,866
20 1975-1995 228,440
21 1974-1995 204,779
22 1973-1995 161,912
23 1972-1995 151,798
24 1971-1995 178,911
25 1970-1995 191,206
26 1969-1995 185,342
27 1968-1995 224,806
28 *1967-1995 240,047
</TABLE>
* From May 1, 1967, the date the fund commenced operation.
AMCAP VS. VARIOUS UNMANAGED INDICES
<TABLE>
<CAPTION>
----------------TOTAL RETURN----------------- -----------CAPITAL APPRECIATION-----------
Period
3/1 - 2/28 AMCAP DJIA/1/ S&P 500/2/ Average AMCAP NYSE/4/ ASE/5/ NASDAQ
Savings OTC/6/
Institutions/3/
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1985 - 1995 + 214% + 343% + 274% + 77% + 161% + 152% + 99% + 179%
1984 - 1994 + 252 + 382 + 322 + 89 + 186 + 187 + 124 + 214
1983 - 1993 + 220 + 348 + 331 + 99 + 156 + 186 + 118 + 156
1982 - 1992 + 335 + 505 + 440 + 112 + 242 + 249 + 213 + 253
1981 - 1991 + 280 + 364 + 322 + 122 + 184 + 167 + 104 + 129
1980 - 1990 + 294 + 387 + 347 + 125 + 194 + 182 + 133 + 169
1979 - 1989 + 409 + 356 + 369 + 125 + 282 + 201 + 301 + 226
1978 - 1988 + 535 + 366 + 389 + 125 + 381 + 211 + 370 + 262
1977 - 1987 + 669 + 304 + 360 + 125 + 487 + 199 + 484 + 349
1976 - 1986 + 502 + 201 + 270 + 123 + 361 + 145 + 398 + 298
1975 - 1985 + 587 + 198 + 261 + 119 + 422 + 144 + 489 + 289
1974 - 1984 + 430 + 130 + 165 + 113 + 304 + 75 + 332 + 168
1973 - 1983 + 315 + 98 + 113 + 106 + 219 + 42 + 235 + 118
1972 - 1982 + 170 + 47 + 66 + 95 + 111 + 10 + 99 + 43
1971 - 1981 + 202 + 79 + 108 + 85 + 147 + 41 + 204 + 95
1970 - 1980 + 167 + 76 + 92 + 79 + 120 + 30 + 158 N/A
1969 - 1979 + 76 + 38 + 45 + 75 + 45 - 2 + 8 N/A
1968 - 1978 + 56 + 33 + 41 + 72 + 30 - 3 N/A N/A
1967*- 1977 + 42 + 54 + 50 + 67 + 20 + 5 N/A N/A
</TABLE>
* From May 1, 1967, the date the fund commenced operation. N/A - Data for these
periods not available.
1. The Dow Jones Average of 30 Industrial stocks is comprised of 30 industrial
companies such as General Motors and General Electric.
2. The Standard and Poor's 500 Stock Index is comprised of industrial,
transportation, public utilities and financial stocks and represents a large
portion of the value of issues traded on the New York Stock Exchange. Selected
issues traded on the American Stock Exchange are also included.
3. Based on figures supplied by the U.S. League of Savings Institutions and the
Federal Reserve Board which reflect all kinds of savings deposits, including
longer-term certificates. Savings deposits offer a guaranteed return of
principal and fixed rate of interest, but no opportunity for capital growth.
Maximum allowable rates were imposed by law during a portion of the period.
4. The New York Stock Exchange Composite Index is a capitalization weighted
index of all common stocks listed on the exchange.
5. The American Stock Exchange Index is a capitalization weighted index of all
common stocks listed on the exchange.
6. The National Association of Securities Dealers Automated Quotation Composite
Index of Over-the-Counter Stocks represents all domestic over-the-counter
stocks except those traded on exchanges and those having only one market maker,
covers some 3,500 stocks and is market value weighted.
Illustration of a $10,000 investment in AMCAP with
DIVIDENDS REINVESTED AND CAPITAL GAIN DISTRIBUTIONS TAKEN IN SHARES
(For the lifetime of the Fund May 1, 1967 through February 28, 1995)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
COST OF SHARES VALUE OF SHARES
Fiscal Annual Dividends Total From From From Total
Year End Dividends (cumulative) Investment Initial Capital Gains Dividends Value
Feb. 28 Cost Investment Reinvested Reinvested
1968* -- -- $10,000 $10,056 -- -- $10,056
1969 $ 75 $ 75 10,075 12,128 -- $84 12,212
1970 190 265 10,265 11,149 $ 430 256 11,835
1971 200 465 10,465 11,695 451 497 12,643
1972 244 709 10,709 13,540 522 840 14,902
1973 228 937 10,937 12,109 913 956 13,978
1974 196 1,133 11,133 8,493 1,697 847 11,037
1975 294 1,427 11,427 7,401 1,479 1,023 9,903
1976 328 1,755 11,755 10,075 2,014 1,794 13,883
1977 208 1,963 11,963 10,132 2,025 2,016 14,173
1978 263 2,226 12,226 11,657 2,330 2,625 16,612
1979 335 2,561 12,561 15,650 3,128 3,960 22,738
1980 438 2,999 12,999 22,674 4,531 6,336 33,541
1981 724 3,723 13,723 25,066 7,476 8,006 40,548
1982 2,594 6,317 16,317 22,185 10,812 9,646 42,643
1983 1,231 7,548 17,548 30,546 15,837 15,073 61,456
1984 1,591 9,139 19,139 30,094 15,602 16,432 62,128
1985 1,944 11,083 21,083 33,371 18,301 20,493 72,165
1986 1,548 12,631 22,631 38,983 23,855 25,900 88,738
1987 1,629 14,260 24,260 44,143 40,258 31,263 115,664
1988 3,017 17,277 27,277 39,058 42,406 30,573 112,037
1989 3,167 20,444 30,444 40,038 48,069 34,720 122,827
1990 3,160 23,604 33,604 40,942 60,465 38,620 140,027
1991 3,293 26,897 36,897 43,578 74,977 44,937 163,492
1992 2,156 29,053 39,053 49,831 93,202 53,823 196,856
1993 2,252 31,305 41,305 50,923 100,277 57,356 208,557
1994 1,918 33,223 43,223 48,889 126,209 57,039 232,137
1995 2,399 35,622 45,622 46,252 137,347 56,448 240,047
</TABLE>
The dollar amount of capital gain distributions during the period was $112,647
* From May 1, 1967, the date the fund commenced operations.
AMCAP Fund, Inc.
<TABLE>
<CAPTION>
Percent of
Net Assets
<S> <C>
- ---------------------------- ----------------
Largest Industry Holdings
Broadcasting & Publishing 12.71%
Business & Public Services 10.50
Electronic Components 8.43
Data Processing & Reproduction 8.07
Banking 7.59
Other Industries 34.54
Cash & Equivalents 18.16
Largest Individual Holdings
Time Warner 4.18%
Intel 3.62
Comcast 2.86
Federal National Mortgage 2.62
Capital Cities/ABC 2.55
Medtronic 2.42
Tele-Communications 2.08
Golden West Financial 2.06
Loctite 2.01
Motorola 1.86
</TABLE>
- ----------
AMCAP FUND INVESTMENT PORTFOLIO
FEBRUARY 28, 1995
<TABLE>
<CAPTION>
- - - - -
Number Market Value Percent of
COMMON STOCKS of Shares (000) Net Assets
- - - - -
<S> <C> <C> <C>
BROADCASTING & PUBLISHING - 8.53%
Time Warner Inc. 3,216,000 $124,218 4.18%
Comcast Corp., Class A 760,000 11,970
Comcast Corp., Class A special stock 4,685,625 73,213 2.86
Capital Cities/ABC, Inc. 855,000 75,667 2.55
Tele-Communications, Inc., Class A/1/ 2,714,000 61,744 2.08
LIN Television Corp./1/ 560,050 16,241 .55
Infinity Broadcasting Corp., Class A/1/ 415,000 14,629 .49
BUSINESS & PUBLIC SERVICES - 10.50%
Federal Express Corp./1/ 765,000 49,821 1.68
Pitney Bowes Inc. 1,375,000 48,813 1.64
WMX Technologies, Inc. 1,370,000 36,134 1.22
United HealthCare Corp. 795,000 34,185 1.15
U.S. Healthcare, Inc. 725,000 30,994 1.04
CUC International Inc./1/ 727,500 25,644 .86
Bay Networks Inc./1/ 625,625 19,551 .66
Dun & Bradstreet Corp. 325,000 16,778 .56
General Motors Corp., Class E 410,000 15,734 .53
Interpublic Group of Companies, Inc. 400,000 13,650 .46
Avery Dennison Corp. 300,000 11,250 .38
Humana Inc./1/ 400,000 9,500 .32
ELECTRONIC COMPONENTS - 8.43%
Intel Corp. 1,350,000 107,494 3.62
Motorola, Inc. 960,000 55,200 1.86
Analog Devices, Inc./1/ 1,425,000 35,803 1.21
Texas Instruments Inc. 300,000 23,625 .80
AMP Inc. 200,000 15,000 .51
ADC Telecommunications, Inc./1/ 230,000 12,822 .43
DATA PROCESSING & REPRODUCTION - 8.07%
Microsoft Corp./1/ 840,000 52,815 1.78
Oracle Systems Corp./1/ 1,312,500 41,016 1.38
Lotus Development Corp./1/ 850,000 35,275 1.19
International Business Machines Corp. 451,000 33,938 1.14
Tandem Computers Inc./1/ 1,278,900 21,741 .73
Apple Computer, Inc. 481,800 19,031 .64
Sequent Computer Systems, Inc./1/ 679,900 11,643 .39
Electronic Arts/1/ 495,000 10,642 .36
Compaq Computer Corp./1/ 300,000 10,350 .35
Novell, Inc./1/ 150,000 3,131 .11
BANKING - 7.59%
Golden West Financial Corp. 1,596,800 61,078 2.06
Banc One Corp. 1,676,188 49,238 1.66
Norwest Corp. 1,700,000 43,775 1.47
Northern Trust Corp. 850,000 28,900 .97
PNC Bank Corp. 775,000 19,762 .67
Signet Banking Corp. 470,000 17,096 .58
SunTrust Banks, Inc. 100,000 5,388 .18
TELECOMMUNICATIONS - 6.43%
Cellular Communications, Inc.,
preference shares/1/ 1,095,000 54,750 1.84
Telephone and Data Systems, Inc. 1,200,000 54,750 1.84
AirTouch Communications/1/ 1,100,000 29,975 1.01
LIN Broadcasting Corp./1/ 146,100 18,810 .63
MCI Communications Corp. 850,000 17,000 .57
Cellular Communications of Puerto
Rico, Inc./1/ 249,998 8,437 .28
AT&T Corp. 150,000 7,762 .26
FINANCIAL SERVICES - 4.42%
Federal National Mortgage Assn. 1,010,000 77,896 2.62
ADVANTA Corp., Class B 500,000 15,750
ADVANTA Corp., Class A 355,000 11,893 .93
Student Loan Marketing Assn. 700,000 25,813 .87
HEALTH & PERSONAL CARE - 4.11%
Medtronic, Inc. 1,200,000 72,000 2.42
Pyxis Corp./1/ 1,300,000 29,412 .99
Amgen Inc./1/ 200,000 13,775 .46
Upjohn Co. 200,000 7,050 .24
LEISURE & TOURISM - 3.62%
Walt Disney Co. 1,000,000 53,375 1.80
Promus Companies Inc./1/ 750,000 26,812 .90
Marriott International, Inc. 500,000 15,500 .52
Luby's Cafeterias, Inc. 525,000 11,944 .40
CHEMICALS - 2.62%
Loctite Corp. 1,295,000 59,570 2.01
Nalco Chemical Co. 525,000 18,047 .61
BEVERAGES & TOBACCO - 2.07%
PepsiCo, Inc. 600,000 23,475 .79
UST Inc. 700,000 20,825 .70
Philip Morris Companies Inc. 285,000 17,314 .58
INSURANCE - 1.58%
American International Group, Inc. 225,000 23,344 .79
Cincinnati Financial Corp. 300,000 16,725 .56
Arthur J. Gallagher & Co. 195,000 6,825 .23
MERCHANDISING - 1.39%
Toys "R" Us, Inc./1/ 950,000 26,481 .89
Lands' End, Inc./1/ 885,000 14,713 .50
TRANSPORTATION: AIRLINES - 1.34%
AMR Corp./1/ 350,000 21,394 .72
Delta Air Lines, Inc. 210,000 12,180 .41
Southwest Airlines Co. 350,250 6,173 .21
RECREATION & OTHER CONSUMER PRODUCTS - 1.33%
Duracell International Inc. 705,700 29,375 .99
Hasbro, Inc. 320,000 10,080 .34
METALS: STEEL - 0.67%
Worthington Industries, Inc. 1,000,000 19,875 .67
ENERGY SOURCES - 0.53%
Helmerich & Payne, Inc. 600,000 15,600 .53
FOOD & HOUSEHOLD PRODUCTS - 0.43%
Colgate-Palmolive Co. 200,000 12,900 .43
AEROSPACE & MILITARY TECHNOLOGY - 0.19%
General Motors Corp., Class H 150,000 5,644 .19
CONSTRUCTION & HOUSING - 0.10%
Jacobs Engineering Group Inc./1/ 150,000 2,963 .10
MISCELLANEOUS
Other common stocks in initial period of
acquisition 52,220 1.76
- -
TOTAL COMMON STOCKS (cost: $1,599,766,000) 2,372,926 79.89
- -
Principal
Amount
BONDS (000)
- - - - -
INDUSTRIALS - 1.95%
Time Warner Inc. 0% due 2002/2/ $59,812 57,943 1.95
- -
TOTAL BONDS (cost: $49,132,000) 57,943 1.95
- -
SHORT-TERM SECURITIES
- - - - -
CORPORATE SHORT-TERM NOTES - 15.77%
J.C. Penney Funding Corp. 5.80%-5.98% due
3/8-3/23/95 59,400 59,307 2.00
American Express Credit Corp. 5.98%-6.03% due
3/6-4/10/95 56,600 56,427 1.90
Ford Motor Credit Co. 5.92%-6.04% due
3/10-4/24/95 53,600 53,336 1.80
Xerox Corp. 5.90%-6.05% due 3/21-4/4/95 42,000 41,805 1.41
National Rural Utilities Cooperative Finance
Corp. 5.97%-6.02% due 3/17-4/17/95 37,200 36,939 1.24
Pfizer Inc. 5.90%-5.93% due 3/3-3/21/95 30,900 30,847 1.04
Kimberly-Clark Corp. 5.95% due 3/20/95 30,000 29,901 1.01
Beneficial Corp. 6.00%-6.08% due 3/2-4/13/95 27,000 26,877 .90
Commercial Credit Co. 6.00% due 5/4/95 20,000 19,782 .67
Chevron Transport Corp. 5.98% due 3/22/95 19,300 19,229 .65
John Deere Capital Corp. 5.99% due 4/19/95 19,200 19,041 .64
Central and South West Corp. 6.03% due 3/9/95 19,000 18,971 .64
Eli Lilly and Co. 6.00% due 3/9/95 18,000 17,973 .60
PepsiCo, Inc. 5.98% due 3/1-3/24/95 14,900 14,890 .50
Campbell Soup Co. 6.02% due 3/27/95 10,000 9,955 .34
U S WEST Communications, Inc. 6.00% due 4/12/95 9,500 9,431 .32
Associates Corp. of North America 6.10%
due 3/1/95 3,200 3,200 .11
FEDERAL AGENCY SHORT-TERM OBLIGATIONS - 2.15%
Federal Home Loan Mortgage Corp.
5.90% due 3/14-3/20/95 29,800 29,726 1.00
Student Loan Marketing Assn. 6.59% due
3/23/95/3/ 20,000 20,000 .67
Federal Farm Credit Bank 5.86% due 3/13/95 14,400 14,370 .48
- -
TOTAL SHORT-TERM SECURITIES (cost:
$532,012,000) 532,007 17.92
- -
TOTAL INVESTMENT SECURITIES (cost:
$2,180,910,000) 2,962,876 99.76
Excess of cash and receivables over payables 7,239 .24
- -
NET ASSETS $2,970,115 100.00%
= =
1 Non-income producing securities.
2 Represents a zero coupon bond which
will convert to an interest-bearing
security at a later date.
3 Coupon rate may change periodically.
The descirptions of the companies shown in the
portfolio, which were obtained from published
reports and other sources believed to be
reliable, are supplemental and are not covered
by the Independent Auditors' Report.
</TABLE>
See Notes to Financial Statements
Common stocks appearing in the portfolio
since August 31, 1994
ADC Telecommunications
ADVANTA
AT&T
Bay Networks
Electronic Arts
Humana
Infinity Broadcasting
Jacobs Engineering
LIN Television
Promus
Pyxis
Common stocks eliminated from the portfolio
since August 31, 1994
Alaska Air Group
Informix
McCaw Cellular Communications
QVC Network
Safety-Kleen
SynOptics Communications
TJX
Washington Post
AMCAP FUND Financial Statements
<TABLE>
<CAPTION>
- ------------------------------------------- ---------------- ----------------
Statement of Assets and Liabilities
at February 28, 1995 (dollars in thousands)
- ------------------------------------------- ---------------- ----------------
<S> <C> <C>
Assets:
Investment securities at market
(COST: $2,180,910) $2,962,876
Cash 126
Receivables for-
Sales of investments $14,134
Sales of fund's shares 5,969
Dividends and accrued interest 3,424 23,527
------------------ -----------------
2,986,529
Liabilities:
Payables for-
Purchases of investments 10,877
Repurchases of fund's shares 3,295
Management services 927
Accrued expenses 1,315 16,414
------------------ -----------------
Net Assets at February 28, 1995-
EQUIVALENT TO $12.28 PER SHARE ON
241,866,998 SHARES OF $1 PAR VALUE
CAPITAL STOCK OUTSTANDING (AUTHORIZED
CAPITAL STOCK--300,000,000 SHARES) $2,970,115
=================
Statement of Operations
FOR THE YEAR ENDED FEBRUARY 28, 1995
------------------ -----------------
Investment Income:
Income:
Dividends $ 28,733
Interest 25,837 $ 54,570
------------------
Expenses:
Management services fee 11,954
Distribution expenses 5,181
Transfer agent fee 2,430
Reports to shareholders 297
Registration statement and prospectus 128
Postage, stationery and supplies 461
Directors' fees 109
Auditing and legal fees 47
Custodian fee 88
Taxes other than federal income tax 48
Other expenses 43 20,786
------------------ -----------------
Net investment income 33,784
-----------------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
NET REALIZED GAIN 131,656
Net change in unrealized
appreciation on investments:
Beginning of year 854,664
End of year 781,966
------------------
Net unrealized depreciation
on investments (72,698)
-----------------
NET REALIZED GAIN AND UNREALIZED
depreciation on investments 58,958
-----------------
NET INCREASE IN NET ASSETS RESULTING
from Operations $ 92,742
=================
Statement of Changes in Net
Assets
- --------------------------------------------- ------------------ -----------------
Year ended February 28
1995 1994
Operations: ------------------ -----------------
Net investment income $ 33,784 $ 26,934
NET REALIZED GAIN ON INVESTMENTS 131,656 368,911
NET UNREALIZED DEPRECIATION
on investments (72,698) (70,728)
------------------ -----------------
NET INCREASE IN NET ASSETS RESULTING
from operations 92,742 325,117
------------------ -----------------
Dividends and Distributions
Paid to Shareholders:
Dividends from net investment income (30,685) (26,587)
Distributions from net realized
gain on investments (222,989) (402,968)
------------------ -----------------
Total dividends and distributions (253,674) (429,555)
------------------ -----------------
Capital Share Transactions:
Proceeds from shares sold:
35,758,474 AND 47,420,145
shares, respectively 435,956 623,367
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
19,996,561 and 31,645,787 shares,
respectively 237,314 399,494
Cost of shares repurchased:
49,806,739 and 66,170,029
shares, respectively (605,581) (870,615)
------------------ -----------------
NET INCREASE IN NET ASSETS RESULTING
from capital share transactions 67,689 152,246
------------------ -----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (93,243) 47,808
Net Assets:
Beginning of year 3,063,358 3,015,550
------------------ -----------------
End of year (including undistributed
net investment income of $7,659 and
$4,560, RESPECTIVELY) $2,970,115 $3,063,358
================== =================
</TABLE>
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
1. AMCAP Fund, Inc. (the "fund") is registered under the Investment Company Act
of 1940 as an open-end, diversified management investment company. The
following paragraphs summarize the significant accounting policies consistently
followed by the fund in the preparation of its financial statements:
Common stocks are stated at market value based upon closing sales prices
reported on recognized securities exchanges on the last business day of the
year or, for listed securities having no sales reported and for unlisted
securities, upon last-reported bid prices on that date. Bonds are valued at
prices obtained from a bond-pricing service provided by a major dealer in
bonds, when such prices are available; however, in circumstances where the
investment adviser deems it appropriate to do so, such securities will be
valued at the mean of their representative quoted bid and asked prices or, if
such prices are not available, at the mean of such prices for securities of
comparable maturity, quality, and type. Short-term securities with original or
remaining maturities in excess of 60 days are valued at the mean of their
quoted bid and asked prices. Short-term securities with 60 days or less to
maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
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 $88,000 includes $10,000 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 February 28, 1995, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $781,966,000, of which $857,338,000
related to appreciated securities and $75,372,000 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the year ended February 28, 1995. The cost of
portfolio securities for book and federal income tax purposes was
$2,180,910,000 at February 28, 1995.
3. The fee of $11,954,000 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 0.485% of the first $1 billion of average net assets;
0.385% of such assets in excess of $1 billion but not exceeding $2 billion;
0.355% of such assets in excess of $2 billion but not exceeding $3 billion;
0.335% of such assets in excess of $3 billion but not exceeding $5 billion;
0.32% of such assets in excess of $5 billion but not exceeding $8 billion; and
0.31% of such assets in excess of $8 billion.
Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Directors. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the year ended February 28, 1995,
distribution expenses under the Plan were $5,181,000. As of February 28, 1995,
accrued and unpaid distribution expenses were $1,218,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $2,430,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $639,000 (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 February 28,
1995, aggregate amounts deferred were $75,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain 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 February 28, 1995, accumulated undistributed net realized gain on
investments was $40,263,000 and additional paid-in capital was $1,898,360,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $431,864,000 and $655,025,000, respectively, during
the year ended February 28, 1995.
AMCAP FUND
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
Year Ended February 28 or 29
------ -------- -------- -------- --------
1995 1994 1993 1992 1991
------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Year $12.98 $13.52 $13.23 $11.57 $10.87
------ -------- -------- -------- --------
Income from Investment
Operations:
Net investment income .14 .12 .13 .17 .22
Net realized and unrealized
gain on investments .24 1.28 .63 2.10 1.44
------ -------- -------- -------- --------
Total income from investment
operations .38 1.40 .76 2.27 1.66
------ -------- -------- -------- --------
Less Distributions:
Dividends from net investment
income (.13) (.12) (.15) (.15) (.25)
Distributions from net realized
gains (.95) (1.82) (.32) (.46) (.71)
------- -------- -------- -------- --------
Total distributions (1.08) (1.94) (.47) (.61) (.96)
------- -------- -------- -------- --------
Net Asset Value, End of Year $12.28 $12.98 $13.52 $13.23 $11.57
======= ======== ======== ======== ==========
Total Return * 3.41% 11.31% 5.94% 20.41% 16.76%
Ratios/Supplemental Data:
Net assets, end of year (in
millions) $2,970 $3,063 $3,016 $2,796 $2,205
Ratio of expenses to average
net assets .71% .72% .73% .75% .79%
Ratio of net income to
average net assets 1.16% .89% 1.02% 1.37% 2.08%
Portfolio turnover rate 17.92% 22.18% 14.72% 7.74% 16.32%
</TABLE>
*This was calculated without
deducting a sales charge. The
maximum sales charge is 5.75% of
the fund's offering price.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
AMCAP Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
AMCAP Fund, Inc., including the investment portfolio, as of February 28, 1995
and the related statements of operations for the year then ended, the statement
of changes in net assets for each of the two years in the period then ended,
and the related per-share data and ratios for each of the five years in the
period then ended. These financial statements and the per-share data and ratios
are the responsibility of the fund's management. Our responsibility is to
express an opinion on these financial statements and the per-share data and
ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
per-share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of February 28, 1995 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and the per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of AMCAP Fund, Inc., as of February 28, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the per-share data and ratios for
each of the five years in the period then ended, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche
Los Angeles, California
March 24, 1995
Approximately 85% of the distributions paid by the fund from investment income
earned in the year ended February 28,1995 qualifies for the corporate
dividends-received deduction. The fund derived no investment income during the
year from interest on direct U.S. treasury obligations during the year.
Text Box 1
