MARKED TO SHOW CHANGES
SEC File Nos. 2-26516
811-1435
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
Registration Statement
Under
the Securities Act of 1933
Post-Effective Amendment No. 62
and
Registration Statement
Under
The Investment Company Act of 1940
Amendment No. 30
AMCAP FUND, INC.
(Exact Name of Registrant as specified in charter)
333 South Hope Street
Los Angeles, California 90071
(Address of principal executive offices)
Registrant's telephone number, including area code:
(213) 486-9200
Vincent P. Corti
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(name and address of agent for service)
Copies to:
ERIC A.S. RICHARDS, ESQ.
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071
(Counsel for the Registrant)
Approximate date of proposed public offering:
It is proposed that this filing become effective on April 1, 1999, pursuant to
paragraph (a)(1) of rule 485.
<PAGE>
AMCAP Fund
Prospectus
MAY 1, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AMCAP FUND
333 South Hope Street
Los Angeles, CA 90071
TICKER SYMBOL: AMCPX NEWSPAPER ABBREV.: Amcp FUND NO.: 02
TABLE OF CONTENTS
Risk/Return Summary ...............................................
Fees and Expenses of the Fund......................................
Investment Objective, Strategies and Risks.........................
Year 2000..........................................................
Management and Organization........................................
Shareholder Information............................................
Purchase and Exchange of Shares ...................................
Distribution Arrangements..........................................
Financial Highlights...............................................
RISK/RETURN SUMMARY
The fund seeks to make your investment grow over time by investing primarily in
stocks of U.S. companies expected to provide strong, steady progress in
earnings and dividends.
The fund is designed for investors seeking greater capital appreciation through
investments in stocks. Investors in the fund should have a long-term
perspective and be able to tolerate potentially wide price fluctuations. An
investment in the fund is subject to risks, including the possibility that the
fund may decline in value in response to economic, political or social events
in the U.S. or abroad. The prices of equity securities will be affected by
events involving the companies whose securities are owned in the fund.
You may lose money by investing in the fund. The likelihood of loss is greater
if you invest for a shorter period of time.
Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
INVESTMENT RESULTS
The following information illustrates how the fund's results may fluctuate.
Past results are not an indication of future results.
Here are the fund's results calculated without a sales charge on a CALENDAR
YEAR basis. (If a sales charge were included, results would be lower.)
[begin bar chart]
1989 27.11
1990 -3.98
1991 36.88
1992 7.19
1993 11.01
1994 -0.24
1995 28.71
1996 14.16
1997 30.55
1998
[end bar chart]
THE FUND'S YEAR-TO-DATE RETURN FOR THE THREE MONTHS ENDED MARCH 31 , 1999 IS
X.XX%.
The fund's highest/lowest QUARTERLY RESULTS during this time period were:
- - HIGHEST xx.xx% (quarter ended xx, 19xx)
- - LOWEST xx.xx% (quarter ended xx, 19xx)
For periods ended December 31, 1998:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average The fund with S&P 500 /2/ CPI /3/
Annual maximum sales
Total Return charge
deducted /1/
One Year xx.xx% xx.xx% xx.xx%
Five Years xx.xx% xx.xx% xx.xx%
Ten Years XX.XX% XX.XX% XX.XX%
Lifetime /4/ XX.XX% XX.XX% XX.XX%
</TABLE>
/1/ THESE FUND RESULTS WERE CALCULATED ACCORDING TO A FORMULA WHICH REQUIRES
THAT THE MAXIMUM SALES CHARGE OF 5.7% BE DEDUCTED AND INCLUDE THE REINVESTMENT
OF DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS. RESULTS WOULD BE HIGHER IF THEY
WERE CALCULATED AT NET ASSET VALUE.
/2/ THE STANDARD & POOR'S 500 COMPOSITE INDEX REPRESENTS PRIMARILY U.S. STOCKS.
THIS INDEX IS UNMANAGED AND DOES NOT REFLECT SALES CHARGES, COMMISSIONS OR
EXPENSES.
/3/ CONSUMER PRICE INDEX IS A MEASURE OF INFLATION AND IS COMPUTED FROM DATA
SUPPLIED BY THE U.S. DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS.
/4/ THE FUND BEGAN INVESTMENT OPERATIONS ON MAY 1, 1967.
FEES AND EXPENSES OF THE FUND
THE FOLLOWING DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<CAPTION>
<S> <C>
Maximum sales charge imposed on purchases 5.75% /1/
(AS A PERCENTAGE OF OFFERING PRICE)
Maximum sales charge imposed on reinvested 0%
dividends
Maximum deferred sales charge 0% /2/
Redemption or exchange fees 0%
</TABLE>
/1/ SALES CHARGES ARE REDUCED OR ELIMINATED FOR LARGER PURCHASES.
/2/ A CONTINGENT DEFERRED SALES CHARGE OF 1% APPLIES ON CERTAIN REDEMPTIONS
MADE WITHIN 12 MONTHS FOLLOWING ANY PURCHASES YOU MADE WITHOUT A SALES CHARGE.
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
<S> <C>
Management Fees x.xx%
Service (12b-1) Fees x.xx%*
Other Expenses x.xx%
</TABLE>
Total Annual Fund Operating Expenses x.xx%
*12B-1 EXPENSES MAY NOT EXCEED 0.25% OF THE FUND'S AVERAGE NET ASSETS ANNUALLY.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
<S> <C>
One Year $xx
Three Years $xx
Five Years $xx
Ten Years $xx
</TABLE>
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to provide you with long-term growth of
capital. It invests primarily in common stocks of issuers located in the U.S.
The prices of equity securities will decline in response to certain events,
including those directly involving the companies whose securities are owned in
the fund, adverse conditions affecting the general economy, or overall market
declines. The value of debt securities held by the fund may be affected by
factors such as changing interest rates, credit ratings, and effective
maturities. For example, the value of bonds in the fund's portfolio generally
will decline when interest rates rise and vice versa.
The fund may also invest in cash and cash equivalents of any issuer to any
extent deemed appropriate. The extent of the fund's cash position will depend
on market conditions, fund purchases and redemptions, and other factors. For
example, in response to abnormal market conditions, the fund may invest
substantially in cash or cash equivalents. This may detract from the
achievement of the fund's objective over the short-term, or may protect the
fund during a market downturn.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic investment philosophy of Capital Research and Management
Company is to seek undervalued securities that represent good long-term
investment opportunities. Securities may be sold when they are judged to no
longer represent good long-term value.
The following chart illustrates the asset mix of the fund's investment
portfolio as of the end of the fund's fiscal year, February 28, 1999.
Asset Mix [pie chart]
Largest Industry Holdings [table]
Largest Individual Equity Holdings [table]
BECAUSE THE FUND IS ACTIVELY MANAGED, ITS HOLDINGS WILL CHANGE FROM TIME TO
TIME.
YEAR 2000
The date-related computer issue known as the "Year 2000 problem" could have an
adverse impact on the quality of services provided to the fund and its
shareholders. However, the fund understands that its key service
providers--including the investment adviser and its affiliates--are taking
steps to address the issue. In addition, the Year 2000 problem may adversely
affect the issuers in which the fund invests. For example, issuers may incur
substantial costs to address the problem. They may also suffer losses caused
by corporate and governmental data processing errors. The fund and its
investment adviser will continue to monitor developments relating to this
issue.
MANAGEMENT AND ORGANIZATION
INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and
other funds, including those in The American Funds Group. Capital Research and
Management Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071.
Capital Research and Management Company manages the investment portfolio and
business affairs of the fund. The total management fee paid by the fund, as a
percentage of average net assets, for the previous fiscal year is discussed
earlier under "Fees and Expenses of the Fund."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company
Institute's Advisory Group on Personal Investing. This policy has also been
incorporated into the fund's code of ethics.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach the portfolio of
a fund is divided into segments which are managed by individual counselors.
Counselors decide how their respective segments will be invested, within the
limits provided by a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee. In addition, Capital Research
and Management Company's research professionals may make investment decisions
with respect to a portion of a fund's portfolio. The primary individual
portfolio counselors for AMCAP Fund are listed on the following page.
<TABLE>
<CAPTION>
Approximate Years of
Experience as an Investment
Professional (Including the
last five year)
PORTFOLIO PRIMARY TITLE(S) YEARS OF WITH CAPITAL TOTAL YEARS
COUNSELORS EXPERIENCE AS RESEARCH AND
FOR AMCAP PORTFOLIO MANAGEMENT
FUND COUNSELOR (AND COMPANY OR
RESEARCH AFFILIATES
PROFESSIONAL, IF
APPLICABLE) FOR
AMCAP FUND
(APPROXIMATE)
<S> <C> <C> <C> <C>
R. Michael Chairman of the Board 13 years 34 years 34 years
Shanahan and Principal
Executive Officer of
the fund. Chairman of
the Board and
Principal Executive
Officer, Capital
Research and
Management Company
Claudia P. President and Director 3 years (plus 14 21 years 23 years
Huntington of the fund. Senior years as a
Vice President, research
Capital Research and professional
Management Company prior to becoming a portfolio
counselor for the
fund)
Timothy D. Senior Vice President 3 years (plus 8 16 years 16 years
Armour of the fund. years as a
Director, Capital research
Research and professional
Management Company. prior to becoming
Chairman of the Board, a portfolio
Capital Research counselor for the
Company* fund)
William C. Senior Partner, The 32 years (since 40 years 46 years
Newton Capital Group the fund began
Partners, L.P.* operations)
</TABLE>
The fund began operations on May 1, 1967.
*Company affiliated with Capital Research and Management Company.
SHAREHOLDER INFORMATION
SHAREHOLDER SERVICES
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your
needs and circumstances change. These services are available only in states
where they may be legally offered and may be terminated or modified at any time
upon 60 days' written notice. For your convenience, American Funds Service
Company has four service centers across the country.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
CALL TOLL-FREE FROM ANYWHERE IN THE U.S.
(8 a.m. to 8 p.m. ET):
800/421-0180
(Service Center Map)
<TABLE>
<CAPTION>
<S> <C>
WESTERN SERVICE CENTER EASTERN CENTRAL SERVICE CENTER
American Funds Service American Funds Service Company
Company P.O. Box 6007
P.O. Box 2205 Indianapolis, Indiana
Brea, California 46206-6007
92822-2205 Fax: 317/735-6620
Fax: 714/671-7080
WESTERN CENTRAL SERVICE EASTERN SERVICE CENTER
CENTER American Funds Service Company
American Funds Service P.O. Box 2280
Company Norfolk, Virginia
P.O. Box 659522 23501-2280
San Antonio, Texas Fax: 757/670-4773
78265-9522
Fax: 210/474-4050
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS DESCRIBED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION. In addition, an easy-to-read guide to
owning a fund in The American Funds Group titled "Welcome to the Family" is
sent to new shareholders and is available by writing or calling American Funds
Service Company.
You may invest in the fund through various retirement plans. However, some
retirement plans or accounts held by investment dealers may not offer certain
services. If you have any questions, please contact your plan
administrator/trustee or dealer.
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
EXCHANGE
You may exchange your shares into other funds in The American Funds Group
generally without a sales charge. Exchange of shares from the money market
funds initially purchased without a sales charge generally will be subject to
the appropriate sales charge. Exchanges have the same tax consequences as
ordinary sales and purchases. See "Transactions by Telephone..." for
information regarding electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE
IS CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A
PERIOD OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO
REJECT ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY
INVESTOR WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES
ACTUAL OR POTENTIAL HARM TO THE FUND.
INVESTMENT MINIMUMS
To establish an account $ 1,000
For a retirement plan account $ 250
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account through payroll deduction $ 25
SHARE PRICE
The fund calculates its share price, also called net asset value, as of 4:00
p.m. New York time which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value,
market prices are used when available. If a market price for a particular
security is not available, the fund will determine the appropriate price for
the security.
Your shares will be purchased at the offering price, or sold at the net asset
value, next determined after American Funds Service Company receives and
accepts your request. The offering price is the net asset value plus a sales
charge, if applicable.
SALES CHARGE
A sales charge may apply to your purchase. Your sales charge may be reduced
for larger purchases as indicated below.
SALES CHARGE AS A PERCENTAGE OF
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT OFFERING NET DEALER
PRICE AMOUNT CONCESSION
INVESTED AS % OF
OFFERING
PRICE
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than 4.50% 4.71% 3.75%
$100,000
$100,000 but less than 3.50% 3.63% 2.75%
$250,000
$250,000 but less than 2.50% 2.56% 2.00%
$500,000
$500,000 but less $1 2.00% 2.04% 1.60%
million
$1 million or more and see below see below see below
certain other investments
described below
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGE
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 100 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE
IMPOSED ON CERTAIN REDEMPTIONS BY ACCOUNTS THAT INVEST WITH NO INITIAL SALES
CHARGE (OTHER THAN EMPLOYER-SPONSORED PLANS), IF REDEMPTIONS ARE MADE WITHIN
ONE YEAR OF PURCHASE. A dealer concession of up to 1% may be paid by the fund
under its Plan of Distribution and/or by American funds Distributors on
investments made with no initial sales charge.
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your sales
charge. 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 in the statement of additional information
and "Welcome to the Family."
PLAN OF DISTRIBUTION
The fund has a Plan of Distribution or "12b-1 Plan" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of directors. Up to 0.25%
of average net assets is paid annually to qualified dealers for providing
certain services pursuant to the fund's Plan of Distribution. The 12b-1 fee
paid by the fund, as a percentage of average net assets, for the previous
fiscal year is indicated earlier under "Fees and Expenses of the Fund." Since
these fees are paid out of the fund's assets on an ongoing basis, over time
they will increase the cost of an investment and may cost you more than paying
higher initial sales charges.
OTHER COMPENSATION TO DEALERS
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for dealers as described in the statement of additional
information.
HOW TO SELL SHARES
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
Through Your Dealer (certain charges may apply)
- - Shares held for you in your dealer's name must be sold through the dealer.
Writing to American Funds Service Company
- - Requests must be signed by the registered shareholder(s)
- - A signature guarantee is required if the redemption is:
- --- Over $50,000;
- --- Made payable to someone other than the registered shareholder(s); or
- --- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
- - Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
Telephoning or Faxing American Funds Service Company, or by using American
FundsLine(r) or American FundsLine OnLine(r):
- - Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day
- - Checks must be made payable to the registered shareholder
- - Checks must be mailed to an address of record that has been used with the
account for at least 10 days
TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE, OR AMERICAN FUNDSLINE
ONLINE
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all
of these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your
account(s), 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 liabilities (including attorney fees) which may
be incurred in connection with the exercise of these privileges, provided
American Funds Service Company employs reasonable procedures to confirm that
the instructions received from any person with appropriate account information
are genuine. If reasonable procedures are not employed, the fund may be liable
for losses due to unauthorized or fraudulent instructions.
DISTRIBUTION ARRANGEMENTS
DIVIDENDS AND DISTRIBUTIONS
The fund usually pays dividends, which may fluctuate, twice a year. Capital
gains, if any, are also usually distributed twice a year. When a dividend or
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.
You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash.
TAX CONSEQUENCES
Dividends and capital gains are generally taxable whether they are reinvested
or received in cash -- unless you are exempt from taxation or entitled to tax
deferral. Capital gains may be taxed at different rates depending on the
length of time the fund holds its assets.
The tax treatment of redemptions from a retirement plan account may differ from
redemptions from an ordinary shareholder account.
You must provide the fund with a certified correct taxpayer identification
number (generally your Social Security Number) and certify that you are not
subject to backup withholding. If you fail to do so, the IRS can require the
fund to withhold 31% of your taxable distributions and redemptions. 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.
Please see the statement of additional information, "Welcome to the Family,"
and your tax adviser for further information.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
results for the past five years. Certain information reflects financial
results for a single fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment in the fund
(assuming reinvestment of all dividends and distributions). This information
has been audited by Deloitte & Touche LLP, whose report, along with the fund's
financial statements, are included in the statement of additional information,
which is available upon request.
SELECTED PER-SHARE DATA
YEAR ENDED FEBRUARY 28/29
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.60 $14.40 $12.28 $12.98
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .10 .12 .16 .14
Net Gains or Losses on Securities (both
realized and
unrealized) 4.80 1.51 3.32 .24
Total from investment operations 4.90 1.63 3.48 .38
LESS DISTRIBUTIONS:
Dividends (from net investment income) (.10) (.12) (.17) (.13)
Distributions (from capital gains) (2.47) (1.31) (1.19) (.95)
Total distributions (2.57) (1.43) (1.36) (1.08)
Net asset value, end of period $16.93 $14.60 $14.40 $12.28
Total return 36.97% 11.74% 29.29% 3.41%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in millions) $4,891 $3,807 $3,693 $2,970
Ratio of expenses to average net assets .68% .69% .71% .71%
Ratio of net income to average net assets .62% .81% 1.16% 1.16%
Portfolio turnover rate 31.42% 24.14% 35.16% 17.92%
</TABLE>
<TABLE>
<CAPTION>
FOR SHAREHOLDER FOR RETIREMENT PLAN FOR DEALER
SERVICES SERVICES SERVICES
<S> <C> <C>
AMERICAN FUNDS CALL YOUR EMPLOYER OR AMERICAN FUNDS
SERVICE COMPANY PLAN ADMINISTRATOR DISTRIBUTORS
800/421-0180 800/421-9900 EXT.11
</TABLE>
FOR 24-HOUR INFORMATION
American American Funds
FundsLine(r) Internet Web site
800/325-3590 http://www.americanfunds.com
Telephone conversations may be recorded or monitored for verification,
recordkeeping and quality assurance purposes.
MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. In the event of any
inconsistencies or ambiguity as to the meaning of any word or phrase in a
translation, the English text will prevail.
OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Contains additional information about the fund including financial statements,
investments results, portfolio holdings, a statement from portfolio management
discussing market conditions and the fund's investment strategies, and the
independent auditors' report (in the annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more detailed information on all aspects of the fund, including the
fund's financial statements.
A current SAI has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference into this prospectus. The SAI and
other related materials about the fund are available for review or to be copied
at the SEC's Public Reference Room in Washington, D.C. (1-800-SEC-0330) or on
the SEC's Internet Web site at http://www.sec.gov.
CODE OF ETHICS
Includes a description of the fund's personal investing policy.
To request a free copy of any of the documents above:
Call American Funds or Write to the Secretary of the fund
Service Company 333 South Hope Street
800/421-0180 ext.1 Los Angeles, CA 90071
Investment Company File No. 811-1435
<PAGE>
AMCAP FUND, INC.
Part B
Statement of Additional Information
MAY 1, 1999
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, 1999. 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
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
Item Page No.
Certain Investment Limitations and Guidelines 2
Description of Certain Securities 2
Fundamental Policies and Investment Restrictions 4
Fund Organization 6
Fund Directors and Officers 7
Management 11
Dividends, Distributions and Federal Taxes 13
Purchase of Shares 16
Selling Shares 22
Shareholder Account Services and Privileges 24
Execution of Portfolio Transactions 26
General Information. 26
Investment Results and Related Statistics 28
Financial Statements Attached
CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES
The following limitations and guidelines are considered at the time of
purchase, under normal market conditions, and are based on a percentage of the
fund's net assets unless otherwise noted. This summary is not intended to
reflect all of the fund's investment limitations.
GENERAL GUIDELINE
- - The fund will invest primarily in common stocks of companies domiciled in the
U.S. In determining whether a company is domiciled in the U.S., the fund's
investment adviser takes into account such factors as where the company is
legally organized and/or maintains principal corporate offices and/or conducts
its principal operations. The fund will generally only invest in U.S.
securities that are traded in U.S. markets and that are substantially subject
to the laws of the U.S.
- - The fund may also invest in securities convertible into common stocks,
straight debt securities, cash or cash equivalents, U.S. Government securities
or nonconvertible preferred stocks.
DEBT SECURITIES
- - The fund may invest in straight debt securities rated A or better by Standard
& Poor's Corporation or Moody's Investors Service Inc (or unrated but
considered to be of equivalent quality).
DESCRIPTION OF CERTAIN SECURITIES
The fund may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.
The descriptions below are intended to supplement the material in the
Prospectus under "Investment Objective, Strategies and Risks."
EQUITY SECURITIES -- Equity securities represent an ownership position in a
company. The prices of equity securities fluctuate based on changes in the
financial condition of their issuers and on market and economic conditions. The
fund's results will be related to the overall market for these securities. The
growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss.
DEBT SECURITIES -- Bonds and other debt securities are used by issuers to
borrow money. Issuers pay investors interest and generally must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon bonds,
do not pay current interest, but are purchased at a discount from their face
value. The prices of debt securities fluctuate depending on such factors as
interest rates, credit quality and maturity. In general their prices decline
when interest rates rise and vice versa.
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 Capital Research and Management
Company (the "Investment Adviser") will consider such an event in its
determination of whether the fund should continue to hold such obligation in
its portfolio. The fund has no current intention (at least during the next 12
months) to invest more than 5% of its assets in convertible securities rated
below A by Moody's Investors Service Inc. or Standard & Poor's Corporation. 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.
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 rates 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."
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. Certain 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; and others are supported only by
the credit of the issuing government agency or instrumentality.
CASH EQUIVALENTS -- The fund invests in various high-quality money market
instruments that mature, or may be redeemed or resold, generally in 13 months
or less (25 months in the case of U.S. government securities). These include:
(1) commercial paper (notes issued by corporations or governmental bodies); (2)
certificates of deposit and bankers' acceptances (time drafts on a commercial
bank where the bank accepts an irrevocable obligation to pay at maturity); (3)
savings association and bank obligations; (4) securities of the U.S.
Government, its agencies or instrumentalities; and (5) corporate bonds and
notes.
OTHER SECURITIES -- The fund may also invest in securities that have equity
and debt characteristics such as non-convertible preferred stocks and
convertible securities. These securities may at times resemble equity more
than debt and vice versa. Non-convertible preferred stocks are similar to debt
in that they have a stated dividend rate akin to the coupon of a bond or note
even though they are often classified as equity securities. The prices and
yields of non-convertible preferred stocks generally move with changes in
interest rates and the issuer's credit quality, similar to the factors
affecting debt securities.
Bonds, preferred stocks, and other securities may sometimes be converted into
common stock or other securities at a stated exchange ratio. These securities
prior to conversion pay a fixed rate of interest or a dividend. Because
convertible securities have both debt and equity characteristics, their value
varies in response to may factors, including the value of the underlying
equity, general market and economic conditions, convertible market valuations,
as well as changes in interest rates, credit spreads, and the issuer's credit
quality.
FUNDAMENTAL POLICIES AND 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. Investment limitations expressed in the following restrictions are
considered at the time securities are purchased and are based on the fund's net
assets unless otherwise indicated. 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.)
The following policies are non-fundamental policies which may be changed by
action of the Board of Directors, without shareholder approval.
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.
Notwithstanding investment restriction #5, the fund has no current intention
(at least during the next 12 months) to leverage its assets.
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 5% 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.
FUND ORGANIZATION
The fund, an open-end, diversified management investment company, was organized
as a Delaware corporation in 1966 and reorganized as a Maryland corporation on
May 10, 1990.
All fund operations are supervised by the fund's Board of Directors. The Board
meets periodically and performs duties required by applicable state and federal
laws. Members of the board who are not employed by the Investment Adviser or
its affiliates are paid certain fees for services rendered to the fund as
described in "Fund Directors and Officers - Directors and Director
Compensation" below. They may elect to defer all or a portion of these fees
through a deferred compensation plan in effect for the fund.
FUND OFFICERS AND DIRECTORS
Directors and Director Compensation
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION PRINCIPAL AGGREGATE TOTAL TOTAL
AND AGE WITH OCCUPATION(S) COMPENSATION COMPENSATION NUMBER
REGISTRANT DURING (INCLUDING (INCLUDING OF FUND
PAST 5 YEARS VOLUNTARILY VOLUNTARILY BOARDS
DEFERRED DEFERRED ON WHICH
COMPENSATION/1/) COMPENSATION/1/) DIRECTOR
FROM THE FUND FROM ALL FUNDS SERVES
DURING FISCAL MANAGED BY /2/
YEAR ENDED CAPITAL RESEARCH
2/28/99 AND
MANAGEMENT
COMPANY OR ITS
AFFILIATES/2/ FOR
THE YEAR ENDED
2/28/99
<S> <C> <C> <C> <C> <C>
H. Frederick Director Private $/3/ $ 19
Christie investor;
P.O. Box 144 former
Palos Verdes President and
Estates, CA Chief
90274 Executive
Age: 65 Officer, The
Mission Group
(non-utility
holding
company,
subsidiary of
Southern
California
Edison
Company)
Mary Anne Director Founder and $ $ 2
Dolan President,
1033 Gayley M.A.D., Inc.
Avenue (a
Los Angeles, communications company)
CA 90024
Age: 51
Martin Fenton Director Chairman, $/3/ $ 15
4660 La Jolla Senior
Village Drive Resource
Suite 725 Group, Inc.
San Diego, CA (management
92121 of senior
Age: 63 living
centers)
Herbert Director Private $ $ 13
Hoover III Investor
1520 Circle
Drive
San Marino,
CA 91108
Age: 71
+Claudia P. President Senior Vice none/4/ none/4/ 1
Huntington and President,
333 South Director Capital
Hope Street Research and
Los Angeles, Management
CA 90071 Company
Age: 47
Mary Myers Director Private $/3/ $ 5
Kauppila Investor;
Energy former Owner
Investment and
Inc. President,
One Winthrop Energy
Square Investment,
Boston, MA Inc.
02110
Age: 44
Kirk P. Director Chairman/CEO, $/3/ $ 5
Pendleton Cairnwood,
75 James Way Inc. (venture
Southampton, capital
PA 18966 investment)
Age: 59
+James W. Director Senior none/4/ none/4/ 7
Ratzlaff Partner, The
P.O. Box 7650 Capital Group
San Partners,
Francisco, CA L.P.
94120
Age: 62
Olin C. Director President of $/3/ $ 3
Robinson the Salzburg
The Marble Seminar;
Works Professor and
P.O. Box 886 former
Middlebury, President
VT 05753 Emeritus,
Age: 62 Middlebury
College
+R. Michael Chairman Chairman of none/4/ none/4/ 2
Shanahan of the the Board and
333 South Board and Principal
Hope Street Principal Executive
Los Angeles, Executive Officer,
CA 90071 Officer Capital
Age: 60 Research and
Management
Company
</TABLE>
+ Directors who are considered "interested persons" of the fund as defined in
the 1940 Act, on the basis of their affiliation with the fund's Investment
Adviser, Capital Research and Management Company.
/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: AMCAP Fund, Inc., 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 serve as the underlying investment vehicle for certain
variable insurance contracts; and Endowments, Inc. whose shareholders are
limited to (i) any entity exempt from taxation under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended ("501(c)(3) organization"); (ii) any
trust, the present or future beneficiary of which is a 501(c)(3) organization;
and (iii) any other entity formed for the primary purpose of benefiting a
501(c)(3) organization. An affiliate of Capital Research and Management
Company, Capital International, Inc., manages Emerging Markets Growth Fund,
Inc.
/3/ Since the deferred compensation plan's adoption, the total amount of
deferred compensation accrued by the fund (plus earnings thereon) for the
fiscal year ended February 28, 1999 for participating Directors is as follows:
H. Frederick Christie ($ ), Martin Fenton ($ ),
Mary Myers Kauppila ($ ), Kirk P. Pendleton ($ )
and Olin C. Robison ($ ). Amounts deferred and accumulated
earnings thereon are not funded and are general unsecured liabilities of the
fund until paid to the Director.
/4/ Claudia P. Huntington, James W. Ratzlaff and R. Michael Shanahan are
affiliated with the Investment Adviser and, accordingly, receive no
compensation from the fund.
OFFICERS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NAME AND ADDRESS AGE POSITION(S) PRINCIPAL
WITH OCCUPATION(S) DURING
REGISTRANT PAST 5 YEARS
R. Michael Shanahan
(see above)
Claudia P.
Huntington
(see above)
Timothy D. Armour 38 Senior Vice Director, Capital
333 South Hope President Research and
Street Management Company;
Los Angeles, CA Chairman of the Board,
90071 Capital Research
Company
Paul G. Haaga, Jr. 50 Senior Vice Director and Executive
333 South Hope President Vice President,
Street Capital Research and
Los Angeles, CA Management Company
90071
Joanna F. Jonsson 35 Vice Vice President and
P.O. Box 7650 President Director,
San Francisco, CA Capital Research
94120 Company
Vincent P. Corti 42 Secretary Vice President - Fund
333 South Hope Business Management
Street Group, Capital
Los Angeles, CA Research and
90071 Management Company
Sheryl F. Johnson 30 Treasurer Vice President - Fund
5300 Robin Hood Business Management
Road Group, Capital
Norfolk, VA 23513 Research and
Management Company
Robert P. Simmer 38 Assistant Vice President - Fund
5300 Robin Hood Treasurer Business Management
Road Group, Capital
Norfolk, VA 23513 Research and
Management Company
</TABLE>
All of the officers listed are officers or employees of the Investment Adviser
or affiliated companies. No compensation is paid by the fund to any Director or
officer who is a director or officer or employee of the Investment Adviser or
affiliated companies. Each unaffiliated Director is paid a fee of $10,000 per
annum, plus $1,000 for each Board of Directors meeting attended, plus $500 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. As of
February 28, 1999, 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 (Los Angeles, San Francisco, New
York, Washington, D.C., London, Geneva, Singapore, Hong Kong and Tokyo), with a
staff of professionals, many of whom have a number of years of investment
experience. The Investment Adviser is located at 333 South Hope Street, Los
Angeles, CA 90071, and at 135 South State College Boulevard, Brea, CA 92821.
The Investment Adviser's 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. The Investment Adviser is a wholly owned subsidiary of The
Capital Group Companies, Inc.
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 managing more than $200 billion of
stocks, bonds and money market instruments and serves over eight million
investors of all types. 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
is dated July 1, 1993. The Agreement will continue in effect until March 31,
2000, unless sooner terminated, 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 of the fund, or by the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the fund, 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.
As compensation for its services, the Investment Adviser receives a management
fee at the annual rates of 0.485% on the first $1 billion of the fund's net
assets, 0.385% on net assets in excess of $1 billion but not exceeding $2
billion, 0.355% on net assets in excess of $2 billion but not exceeding $3
billion, 0.335% on net assets in excess of $3 billion but not exceeding $5
billion, 0.32% on net assets in excess of $5 billion but not exceeding $8
billion, and 0.31% on net assets in excess of $8 billion.
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, 1999, 1998 and 1997, the Investment
Adviser's fees amounted to $ , $16,324,000 and $14,491,000,
respectively.
PRINCIPAL UNDERWRITER -- American Funds Distributors, Inc. (the "Principal
Underwriter") is the principal underwriter of the fund's shares. The Principal
Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92821, 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240,
and 5300 Robin Hood Road, Norfolk, VA 23513. The fund has adopted a Plan of
Distribution (the "Plan"), pursuant to rule 12b-1 under the 1940 Act . 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 for the fiscal year ended
February 28, 1999 amounted to $ after allowance of $
to dealers. During the fiscal years ended February 28, 1998 and 1997, the
Principal Underwriter retained $671,000 and $638,000, after an allowance of
$3,213,000 and $3,121,000, respectively.
As required by rule 12b-1 and the 1940 Act, 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. Plan expenditures are reviewed quarterly and
the Plan 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 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 employer-sponsored
403(b) plan, any defined contribution plan qualified under Section 401(a) of
the Internal Revenue Code including a "401(k)" plan with 100 or more eligible
employees or a community foundation).
Commissions on sales of shares exceeding $1 million (including purchases by any
employer-sponsored 403(b) plan or purchases by any defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code, including any
"401(k)" plan with 100 or more eligible employees) in excess of the Plan
limitation not reimbursed during the most recent fiscal quarter are recoverable
for five quarters, provided that such commissions do not exceed the annual
expense limit. After five quarters, commissions are not recoverable. During
the fiscal year ended February 28, 1999 the fund paid or accrued $
under the Plan.
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
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, as amended (the "Code"). Under Subchapter M, if
the fund distributes within specified times at least 90% of the sumd of its
investment company taxable 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 generally will be taxed only on the portion of its
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; and (b) diversify its holdings so that at the end of
each fiscal quarter, (i) at least 50% of the value of the fund's total assets
is represented by cash, cash items, U.S. Government securities, securities of
other regulated investment companies, and other securities (but such other
securities must be limited, in respect of any one issuer, to an amount not
greater than 5% of the fund's total assets and to not more than 10% of the
outstanding voting securities of such issuer), and (ii) not more than 25% of
the value of its total 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 gains (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
net capital gain income and (ii) any amount on which the fund pays income tax
for the year. The fund intends to distribute net investment income and net
capital gains so as to minimize or avoid the excise tax liability.
Distributions of investment company taxable income, including short-term
capital gains, generally are taxable to the shareholder as ordinary income,
regardless of whether such distributions are paid in cash or invested in
additional shares of the fund. A capital gain distribution, whether paid in
cash or reinvested in shares, is taxable to shareholders as long-term capital
gains, regardless of the length of time a shareholder has held the shares or
whether such gain was realized by the fund before the shareholder acquired such
shares and was reflected in the price paid for the shares.
The fund also intends to continue distributing 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.
Dividends and capital gain distributions generally are taxable to shareholders
at the time they are paid. However, such dividends and distributions 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 and/or capital gain distributions 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 in The American Funds Group, 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 substantially
identical shares are reacquired within the 61-day period beginning 30 days
before and ending 30 days after the shares are disposed of.
Under the Code, distributions of net investment income by the fund to a
shareholder who, as to the U.S., is a nonresident alien individual, foreign
trust or estate, non-U.S. corporation or non-U.S. partnership (a "non-U.S.
shareholder") will be subject to U.S. withholding tax (at a rate of 30% or
lower treaty rate). Withholding will not apply if a dividend paid by the fund
to a non-U.S. shareholder is "effectively connected" with a U.S. trade or
business, in which case the reporting and withholding requirements applicable
to U.S. citizens, U.S. residents or domestic corporations will apply. However,
if the distribution is effectively connected with the conduct of the non-U.S.
shareholder's trade or business within the U.S., the distribution would be
included in the net income of the shareholder and subject to U.S. income tax at
the applicable marginal rate. Distributions of net long- term capital gains
are not subject to tax withholding, but in the case of a non-U.S. shareholder
who is a nonresident alien individual, such distributions ordinarily will be
subject to U.S. income tax at a rate of 30% if the individual is physically
present in the U.S. for more than 182 days during the taxable year.
As of the date of this statement of additional information, the maximum federal
individual stated 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 gains on assets held more than on year is 20%; and the maximum
corporate tax applicable to ordinary income and net capital gain is 35%.
However, to eliminate the benefit of lower marginal corporate income tax rates,
corporations which have taxable income in excess of $100,000 for a taxable year
will be required to pay an additional amount of 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 shareholder with respect
to either distributions from the fund or disposition of fund shares 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 Individual Retirement Account ("IRA")
each year (prior to the tax return filing deadline for that year) whereby
earnings on investments are tax-deferred. The maximum amount that an
individual may contribute to all IRA's (deductible, nondeductible and Roth
IRA's) per year is the lesser of $2,000 or the individual's compensation for
the year. In some cases, the IRA contribution itself may be deductible.
The foregoing is 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 capital gain distributions may also be subject to
state or local taxes. Investors should consult their own tax advisers for
additional details as to their particular own tax status.
PURCHASE OF SHARES
<TABLE>
<CAPTION>
METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
<S> <C> <C>
See "Investment $50 minimum (except where a
Minimums and Fund lower minimum is noted under
Numbers" for initial "Investment Minimums and
investment minimums. Fund Numbers").
By Visit any investment Mail directly to your
contacting dealer who is investment dealer's address
your registered in the printed on your account
investment state where the statement.
dealer 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 fund additions form at the bottom
and mail to the of a recent account
address indicated on statement, make your check
the account payable to the fund, write
application. Please your account number on your
indicate an check, and mail the check
investment dealer on and form in the envelope
the account provided with your account
application. statement.
By Please contact your Complete the "Investments by
telephone investment dealer to Phone" section on the
open account, then account application or
follow the procedures American FundsLink
for additional Authorization Form. Once
investments. you establish the privilege,
you, your financial advisor
or any person with your
account information can call
American FundsLine(r) and
make investments by
telephone (subject to
conditions noted in
"Shareholder Account
Services and Privileges -
Telephone and Computer
Purchases, Redemptions and
Exchanges" below).
By Please contact your Complete the American
computer investment dealer to FundsLink Authorization
open account, then Form. Once you establish
follow the procedures the privilege, you, your
for additional financial advisor or any
investments. person with your account
information may access
American FundsLine OnLine(r)
on the Internet and make
investments by computer
(subject to conditions noted
in "Shareholder Account
Services and Privileges -
Telephone and Computer
Purchases, Redemptions and
Exchanges" below).
By wire Call 800/421-0180 to Your bank should wire your
obtain your account additional
number(s), if investments in the same
necessary. Please manner as 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.
</TABLE>
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>
FUND MINIMUM FUND
INITIAL NUMBER
INVESTMENT
<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 1,000 33
Fund(sm)
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(r) 1,000 35
Washington Mutual Investors Fund(sm) 250 01
BOND FUNDS
American High-Income Municipal Bond 1,000 40
Fund(r)
American High-Income Trust(sm) 1,000 21
The Bond Fund of America(sm) 1,000 08
Capital World Bond Fund(r) 1,000 31
Intermediate Bond Fund of 1,000 23
America(sm)
Limited Term Tax-Exempt Bond Fund of 1,000 43
America(sm)
The Tax-Exempt Bond Fund of 1,000 19
America(r)
The Tax-Exempt Fund of 1,000 20
California(r)*
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 2,500 09
America(r)
The Tax-Exempt Money Fund of 2,500 39
America(sm)
The U.S. Treasury Money Fund of 2,500 49
America(sm)
___________
*Available only in certain states.
</TABLE>
For retirement plan investments, the minimum is $250, except that the money
market funds have a minimum of $1,000 for 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.)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNT OF PURCHASE SALES CHARGE AS DEALER
AT THE OFFERING PRICE PERCENTAGE OF THE: CONCESSION
AS PERCENTAGE
OF THE
OFFERING
PRICE
NET AMOUNT OFFERING
INVESTED PRICE
STOCK AND STOCK/BOND FUNDS
Less than $50,000 6.10% 5.75% 5.00%
$50,000 but less than 4.71 4.50 3.75
$100,000
BOND FUNDS
Less than $25,000 4.99 4.75 4.00
$25,000 but less than 4.71 4.50 3.75
$50,000
$50,000 but less than 4.17 4.00 3.25
$100,000
STOCK, STOCK/BOND, AND BOND
FUNDS
$100,000 but less than 3.63 3.50 2.75
$250,000
$250,000 but less than 2.56 2.50 2.00
$500,000
$500,000 but less than 2.04 2.00 1.60
$1,000,000
$1,000,000 or more none none (see below)
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGES -- Investment of $1 million or more and
investments made by employer-sponsored defined contribution-type plans with 100
or more eligible employees are sold with no initial sales charge. A contingent
deferred sales charge may be imposed on certain redemptions by these accounts
made within one year of purchases. Investments by retirement plans,
foundations or endowments with $50 million or more in assets, and
employer-sponsored defined contribution-type plans with 100 or more eligible
employees made with no sales charge are not subject to a contingent deferred
sales charge.
In addition, 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 registered representatives, retired registered representatives
with respect to accounts established while active, or full-time employees (and
their spouses, parents, and children) of dealers who have sales agreements with
American Funds Distributors (or who clear transactions through such dealers)
and plans for such persons or the dealers;
(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 $50 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.
DEALER COMMISSIONS -- 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 employer-sponsored 403(b) plan or purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revue Code including a
"401(k)" plan with 100 or more eligible employees, and for purchases made at
net asset value by certain retirement plans of organizations with collective
retirement plan assets of $50 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.
OTHER COMPENSATION TO DEALERS -- American Funds Distributors, at its expense
(from a designated percentage of its income), currently provides additional
compensation to dealers. Currently these payments are limited to the top 100
dealers who have sold shares of the fund or other funds in The American Funds
Group. These payments will be based principally on a pro rata share of a
qualifying dealer's sales. American Funds Distributors will, on an annual
basis, determine the advisability of continuing these payments.
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. These services include processing purchase and
redemption transactions, establishing shareholder accounts and providing
certain information and assistance with respect to the fund.
REDUCING YOUR SALES CHARGE -- You and your immediate family may combine
investments to reduce your costs. You must let your investment dealer or
American Funds Service Company (the "Transfer Agent") know if you qualify for a
reduction in your sales charge using one or any combination of the methods
described below.
STATEMENT OF INTENTION -- You may enter into a non-binding commitment to
purchase shares of a fund(s) over a 13-month period and receive the same sales
charge as if all shares had been purchased at once. This includes purchases
made during the previous 90 days, but does not include appreciation of your
investment or reinvested distributions. 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 subject to the following statement of intention (the
"Statement"). The Statement is not a binding obligation to purchase the
indicated amount. When a shareholder elects to utilize 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 any 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 45 days after written
request by the Principal Underwriter or the securities dealer, the appropriate
number of shares held in escrow 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.
Existing holdings eligible for rights of accumulation (see the account
application) may be credited toward satisfying the Statement. During the
Statement period reinvested dividends and capital gain distributions,
investments in money market funds, and investments made under a right of
reinstatement will not be credited toward satisfying the Statement.
When the trustees of certain retirement plans purchase shares by payroll
deduction, the sales charge for the investments made during the 13-month period
will be handled as follows: The regular monthly payroll deduction investment
will be multiplied by 13 and then multiplied by 1.5. The current value of
existing American Funds investments (other than money market fund investments)
and any rollovers or transfers reasonably anticipated to be invested in
non-money market American Funds during the 13-month period are added to the
figure determined above. The sum is the Statement amount and applicable
breakpoint level. On the first investment and all other investments made
pursuant to the Statement, 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.
Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms with their first purchase.
AGGREGATION -- Sales charge discounts are available for certain aggregated
investments. Qualifying investments include those by you, your spouse and your
children under the age of 21, if all parties are purchasing shares for their
own account(s), which may include purchases through employee benefit plan(s)
such as an IRA, individual-type 403(b) plan or single-participant Keogh-type
plan, by a business solely controlled by 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.
CONCURRENT PURCHASES -- You may combine purchases of two or more funds in The
American Funds Group, except direct purchases of the money market funds.
Shares of money market funds purchased through an exchange, reinvestment or
cross-reinvestment from a fund having a sales charge do qualify.
RIGHT OF ACCUMULATION -- You may take into account the current value of your
existing holdings in The American Funds Group, as well as your holdings in
Endowments (shares of which may be owned only by tax-exempt organizations), to
determine your sales charge on investments in accounts eligible to be
aggregated, or when making a gift to an individual or charity. Direct
purchases of the money market funds are excluded.
PRICE OF SHARES -- Shares are purchased at the offering price next determined
after the purchase order is received and accepted by the fund or the Transfer
Agent; 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.
In the case of orders sent directly to the fund or the Transfer Agent, an
investment dealer MUST be indicated. 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. For example, if the Exchange closes at 1:00 p.m. on one day and at 4:00
p.m. on the next, the fund's share price would be determined as of 4:00 p.m.
New York time on both days. The New York Stock Exchange is currently closed on
weekends and on the following holidays: New Year's Day, Martin Luther King,
Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas Day.
All portfolio securities of funds managed by Capital Research and Management
Company (other than money market funds) are valued, and the net asset value per
share is determined as follows:
1. Equity securities, including depositary receipts, are valued at the last
reported sale price on the exchange or market on which such securities are
traded, as of the close of business on the day the securities are being valued
or, lacking any sales, at the last available bid price. In cases where equity
securities are traded on more than one exchange, the securities are valued on
the exchange or market determined by the Investment Adviser to be the broadest
and most representative market, which may be either a securities exchange or
the over-the-counter market. Fixed-income securities are valued at prices
obtained from a pricing service, 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 quoted bid and asked prices or at prices
for securities of comparable maturity, quality and type.
Securities with original maturities of one year or less having 60 days or less
to maturity are amortized to maturity based on their cost if acquired within 60
days of maturity or, if already held on the 60th day, based on the value
determined on the 61st day. Forward currency contracts are valued at the mean
of representative quoted bid and asked prices.
Assets or liabilities initially expressed in terms of foreign currencies are
translated prior to the next determination of the net asset value of the fund's
shares into U.S. dollars at the prevailing market rates.
Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith under
policies approved by the fund's Board. The fair value of all other assets is
added to the value of securities to arrive at the total assets;
2. Liabilities, including accruals of taxes and other expense items, are
deducted from total assets; and
3. 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 Principal Underwriter will not knowingly sell shares of the fund directly
or indirectly to any person or entity, where, after the sale, such person or
entity would own beneficially directly or indirectly more than 3% of the
outstanding shares of the fund without the consent of a majority of the Board
of Directors.
SELLING SHARES
Shares are sold at the net asset value next determined after your request is
received in good order by American Funds Service Company. You may sell
(redeem) shares in your account in any of the following ways:
THROUGH YOUR DEALER (certain charges may apply)
- -Shares held for you in your dealer's street name must be sold through the
dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- -Requests must be signed by the registered shareholder(s)
- -A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
Your signature may be guaranteed by a domestic stock exchange or the National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution.
- -Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
- -You must include any shares you wish to sell that are in certificate form.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE(R) OR AMERICAN FUNDSLINE ONLINE(R)
- -Redemptions by telephone or fax (including American FundsLine(r) and American
FundsLine OnLine(r)) are limited to $50,000 per shareholder each day.
- -Checks must be made payable to the registered shareholder(s).
- -Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
MONEY MARKET FUNDS
- -You may have redemptions of $1,000 or more wired to your bank by writing
American Funds Service Company.
- -You may establish check writing privileges (use the money market funds
application)
-- If you request check writing privileges, you will be provided with checks
that you may use to draw against your account. These checks may be made
payable to anyone you designate and must be signed by the authorized number or
registered shareholders exactly as indicated on your checking account signature
card.
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), sale proceeds will be
paid on or before the seventh day following receipt and acceptance of an order.
Interest will not accrue or be paid on amounts that represent uncashed
distribution or redemption checks.
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution without a sales charge (any contingent deferred sales charge paid
will be credited to your account) in any fund in The American Funds Group
within 90 days after the date of the redemption or distribution. Redemption
proceeds of shares representing direct purchases in the money market funds are
excluded. Proceeds will be reinvested at the next calculated net asset value
after your request is received and accepted by American Funds Service
Company.
CONTINGENT DEFERRED SALES CHARGE -- A contingent deferred sales charge of 1%
applies to certain redemptions from funds other than the money market funds
made within twelve months of purchase on investments of $1 million or more
(other than redemptions by employer-sponsored retirement plans). 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 403(b) plans or IRAs due to
death, disability or attainment of age 591/2; 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.
REDEMPTION OF SHARES -- The fund's Articles of Incorporation permit the fund to
direct the Transfer Agent to redeem your shares if the value of the shares in
your account is less than the minimum initial investment amount applicable to
that account as set forth in the fund's current registration statement under
the 1940 Act, and subject to such further terms and conditions as the Board of
Directors of the fund may from time to time adopt.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN -- An automatic investment plan enables you to make
monthly or quarterly investments into the American Funds through automatic
debits from your bank account. To set up a plan you must fill out an account
application and specify the amount you would like to invest ($50 minimum) and
the date on which you would like your investments to occur. The plan will
begin within 30 days after your account application is received. Your bank
account will be debited on the day or a few days before your investment is
made, depending on the bank's capabilities. American Funds Service Company
will then invest your money into the fund you specified on or around the date
you specified. If your bank account cannot be debited due to insufficient
funds, a stop-payment or closing of the account, the plan may be terminated and
the related investment reversed. You may change the amount of the investment
or discontinue the plan at any time by writing to the Transfer Agent.
AUTOMATIC REINVESTMENT -- Dividends and capital gain distributions are
reinvested in additional shares at no sales charge unless you indicate
otherwise on the account application. You also may elect to have dividends
and/or capital gain distributions paid in cash by informing the fund, American
Funds Service Company or your investment dealer.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -- You may cross-reinvest
dividends and capital gains ("distributions") into any other fund in The
American Funds Group at net asset value, subject to the following conditions:
(a) The aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the
fund receiving the distributions equals or exceeds that fund's minimum initial
investment requirement),
(b) If the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested,
(c) If you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distribution must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.
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 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) and American FundsLine OnLine(r) (See "American FundsLine(r) and
American FundsLine OnLine(r)" below), or by telephoning 800/421-0180 toll-free,
faxing (see "Principal Underwriter and Transfer Agent" in the prospectus for
the appropriate fax numbers) or telegraphing American Funds Service Company.
(See "Telephone and Computer Purchases, 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, computer, fax or
telegraph. Exchange redemptions and purchases are processed simultaneously at
the share prices next determined after the exchange order is received. (See
"Purchase of Shares--Price of Shares.") 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
preceding business day if the day falls on a non-business day of each month you
designate. You must either (a) meet the minimum initial investment requirement
for the receiving fund OR (b) 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 -- 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 company of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
ACCOUNT STATEMENTS -- Your account is opened in accordance with your
registration instructions. Transactions in the account, such as additional
investments will be reflected on regular confirmation statements from American
Funds Service Company. Dividend and capital gain reinvestments and purchases
through automatic investment plans and certain retirement plans will be
confirmed at least quarterly.
AMERICAN FUNDSLINE(R) AND AMERICAN FUNDSLINE ONLINE(R)-- You may check your
share balance, the price of your shares, or your most recent account
transaction, redeem shares (up to $50,000 per shareholder each day), or
exchange shares around the clock with American FundsLine(r) and American
FundsLine OnLine(r). To use these services, call 800/325-3590 from a
TouchTone(tm) telephone or access the American Funds Web site on the Internet
at www.americanfunds.com. Redemptions and exchanges through American
FundsLine(r) and American FundsLine OnLine(r) are subject to the conditions
noted above and in "Shareholder Account Services and Privileges - Telephone and
Computer Purchases, Redemptions and Exchanges" below. You will need your fund
number (see the list of funds in The American Funds Group under "Purchase of
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.
TELEPHONE AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES -- By using the
telephone (including American FundsLine(r)) or computer (including American
FundsLine OnLine(r)), fax or telegraph purchase, 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 also reinstate them at any time 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.
SHARE CERTIFICATES -- Shares are credited to your account and certificates are
not issued unless you request them by writing to the Transfer Agent.
EXECUTION OF PORTFOLIO TRANSACTIONS
Orders for the fund's portfolio securities transactions are placed by the
Investment Adviser. The Investment Adviser strives to obtain the best
available prices in its portfolio transactions taking into account the costs
and promptness of executions. When circumstances relating to a proposed
transaction indicate that a particular broker (either directly or through its
correspondent clearing agent) is in a position to obtain the best price and
execution, the order is placed with that broker. This may or may not be a
broker who has provided investment research, statistical, or other related
services to the Investment Adviser or has sold shares of the fund or other
funds served by the Investment Adviser. The fund does not consider that it has
an obligation to obtain the lowest available commission rate to the exclusion
of price, service and qualitative considerations.
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.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, for the fiscal years ended February 28, 1999,
1998 and 1997, amounted to $ $1,744,000 and $1,648,000,
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, One Chase Manhattan Plaza,
New York, NY 10081, as Custodian.
TRANSFER AGENT -- American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the records of each shareholder's account,
processes purchases and redemptions of the fund's shares, acts as dividend and
capital gains distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee
of $ for the fiscal year ended February 28, 1999.
INDEPENDENT AUDITORS -- Deloitte & Touche LLP, 1000 Wilshire Boulevard, 15th
Floor, Los Angeles, CA 90017, has served as the fund's independent auditors
since the fund's 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 included in this Statement of
Additional Information 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.
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 financial statements are audited annually by the fund's independent
accountants, Deloitte & Touche LLP. In an effort to reduce the volume of mail
shareholders receive from the fund when a household owns more than one account,
the Transfer Agent has taken steps to eliminate duplicate mailings of
shareholder reports. To receive additional copies of a report shareholders
should contact the Transfer Agent.
YEAR 2000 --The fund and its shareholders depend on the proper functioning of
computer systems maintained by the Investment Adviser and its affiliates and
other key service providers. Many computer systems in use today will require
reprogramming or replacement prior to the year 2000 because of the way they
store dates and make date-related calculations. The fund understands that
these service providers are taking steps to address the "Year 2000 problem".
However, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the fund. In addition, the fund's investments could be
adversely affected by the Year 2000 problem. For example, the markets for
securities in which the fund invests could experience settlement problems and
liquidity issues. Corporate and governmental data processing errors may cause
losses for individual companies and overall economic uncertainties. Earnings of
individual issuers are likely to be affected by the costs of addressing the
problem, which may be substantial and may be reported inconsistently.
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; 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.
OTHER INFORMATION -- 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, 1999
<TABLE>
<CAPTION>
Net asset value and redemption price per share
<S> <C>
(Net assets divided by shares outstanding) $
Maximum offering price per share $
(100/94.25 of net asset value per share,
which takes into account the fund's current
maximum sales charge)
</TABLE>
SHAREHOLDER VOTING RIGHTS -- Shareholders have one vote per share owned. At
any meeting of shareholders, duly called and at which a quorum is present, the
shareholders holding a majority of the votes entitled to be cast, may 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 agreed, 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 will 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.
INVESTMENT RESULTS AND RELATED STATISTICS
The fund's yield is % based on a 30-day (or one month) period ended
February 28, 1999, 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.
The fund's one year total return and average annual total returns for the five-
and ten-year periods ended February 28, 1999 were %, % and
%, 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.
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.
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 also, from time
to time, combine its results with those of other funds in The American Funds
Group for purposes of illustrating investment strategies involving multiple
funds.
The fund may refer to results and surveys 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 nine growth and growth-income funds that are at least 10 years old. In
the rolling 10-year periods since January 1, 1969 (138 in all), those funds
have had better total returns than their comparable Lipper indexes in 128 of
the 138 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
(3/1/94 - (3/1/89 - (3/1/84 - (3/1/79 -
2/28/99) 2/28/99) 2/28/99) 2/28/99)
$ $ $ $
</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
this many years ago... shares, your
| investment would
Number of Years have been worth
this much at Feb.
28, 1999
|
Value
<S> <C> <C>
1 1998-1999
2 1997-1999
3 1996-1999
4 1995-1999
5 1994-1999
6 1993-1999
1992-1999
7
8 1991-1999
9 1990-1999
10 1989-1999
11 1988-1999
12 1987-1999
13 1986-1999
14 1985-1999
15 1984-1999
16 1983-1999
17 1982-1999
18 1981-1999
19 1980-1999
20 1979-1999
21 1978-1999
22 1977-1999
23 1976-1999
24 1975-1999
25 1974-1999
26 1973-1999
27 1972-1999
28 1971-1999
29 1970-1999
30 1969-1999
31 1968-1999
32 1967-1999
</TABLE>
<TABLE>
<CAPTION>
AMCAP VS. VARIOUS UNMANAGED INDICES
TOTAL RETURN CAPITAL APPRECIATION
Period AMCAP DJIA/1/ S&P Average AMCAP YSE/4/ ASE/5/ NASDAQ
3/1 - 2/28 500/2/ Savings OTC/6/
or 29 Institution/3/
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989 - 1999
1988 - 1998 + 300% + 458% + 422% + 55% + 246% + 62% + 145 +3.83
1987 - 1997 +182 +24 + 276 +57 + 140 + 156 + 85 +208
1986 - 1996 +230 +346 +286 +62 +177 +162 +118 +206
1985 - 1995 +214 +343 +274 +69 +161 +152 +99 +179
1984 - 1994 +252 +382 +322 +81 +186 +187 +124 +214
1983 - 1993 +220 +348 +331 +92 +156 +186 +118 +156
1982 - 1992 +335 +505 +440 +105 +242 +249 +213 +253
1981 - 1991 +280 +364 +322 +116 +184 +167 +104 +129
1980 - 1990 +294 +387 +347 +121 +194 +182 +133 +169
1979 - 1989 +409 +356 +369 +122 +282 +201 +301 +226
1978 - 1988 +535 +366 +389 +124 +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 stocks 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, 1999)
<TABLE>
<CAPTION>
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 or 29 Cost Investment Reinvested Reinvested
<S> <C> <C> <C> <C> <C> <C> <C>
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 57,357 208,557
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
1996 3,363 38,985 48,985 54,237 186,287 69,821 310,345
1997 2,643 41,628 51,628 54,991 218,307 73,485 346,783
1998 2,465 44,093 54,093 63,766 323,194 88,043 475,003
1999
</TABLE>
The dollar amount of capital gain distributions during the period was $
* From May 1, 1967, the date the fund commenced operations.
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Previously filed (see Post-Effective Amendment No. 60 filed 4/23/97).
(b) Previously filed (see Post-Effective Amendment No. 60 filed 4/23/97).
(c) Previously filed (see Post-Effective Amendment No. 60 filed 4/23/97).
(d) Previously filed (see Post-Effective Amendment No. 60 filed 4/23/97).
(e) Previously filed (see Post-Effective Amendment No. 60 filed 4/23/97).
(f) None
(g) Previously filed (see Post-Effective Amendment No. 60 filed 4/23/97).
(h) None
(i) Not applicable to this filing
(j) Consent of Independent Accountants (TO BE FILED BY AMENDMENT)
(k) None
(l) None
(m) Previously filed (see Post-Effective Amendment No. 60 filed 4/23/97).
(n) EX-27 Financial data schedule
(o) None.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 25. INDEMNIFICATION.
The registrant is a joint-insured under Investment Adviser/Mutual Fund Errors
and Omissions Policy written by American International Surplus Lines Insurance
Company, Chubb Custom Insurance Company, and ICI Mutual Insurance Company which
insures its officers and directors against certain liabilities.
ARTICLE VIII (H) AND (I) OF THE ARTICLES OF INCORPORATION OF THE FUND PROVIDES
THAT:
(h) "The Corporation shall indemnify (1) its directors and officers, whether
serving the Corporation or at its request any other entity, to the full extent
provided by the General Laws of the State of Maryland now or hereafter in
force, including the advance of expenses under the procedures and to the full
extent permitted by law; and (2) its other employees and agents to such extent
as shall be authorized by the Board of Directors or the Corporation's By-Laws
and be permitted by law. The foregoing rights of indemnification shall not be
exclusive of any other rights to which those seeking indemnification may be
entitled. The Board of Directors may take such action as is necessary to carry
out these indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such by-laws, resolutions or contracts
implementing such provisions or such further indemnification arrangements as
may be permitted by law. No amendment of this Charter of the Corporation shall
limit or eliminate the right to indemnification provided hereunder with respect
to acts or omissions occurring prior to such amendment or repeal. Nothing
contained herein shall be construed to authorize the Corporation to indemnify
any director or officer of the Corporation against any liability to the
Corporation or to any holders of securities of the Corporation to which he is
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office. Any
indemnification by the Corporation shall be consistent with the requirements of
law, including the Investment Company Act of 1940."
(i) To the fullest extent permitted by Maryland statutory and decisional law
and the 1940 Act, as amended or interpreted, no director or officer of the
Corporation shall be personally liable to the Corporation or its stockholders
for money damages; provided, however, that nothing herein shall be construed to
protect any director or officer of the Corporation against any liability, to
which such director or officer would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. No amendment, modification or repeal of
this Article VIII shall adversely affect any right or protection of a director
or officer that exists at the time of such amendment, modification or repeal."
Subsection (b) of Section 2-418 of the GENERAL CORPORATION LAW OF MARYLAND
empowers a corporation to indemnify any person who was or is party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against reasonable expenses (including attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually incurred by him in connection
with such action, suit or proceeding unless it is proved that: (i) the act or
omission of the person was material to the cause of action adjudicated in the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) the person actually received an improper personal
benefit of money, property or services; or (iii) with respect to any criminal
action or proceeding, the person had reasonable cause to believe his act or
omission was unlawful.
Indemnification under subsection (b) of Section 2-418 may not be made by a
corporation unless authorized for a specific proceeding after a determination
has been made that indemnification is permissible in the circumstances because
the party to be indemnified has met the standard of conduct set forth in
subsection (b). This determination shall be made (i) by the Board of Directors
by a majority vote of a quorum consisting of directors not, at the time,
parties to the proceeding, or, if such quorum cannot be obtained, then by a
majority vote of a committee of the Board consisting solely of two or more
directors not, at the time, parties to such proceeding and who were duly
designated to act in the matter by a majority vote of the full Board in which
the designated directors who are parties may participate; (ii) by special legal
counsel selected by the Board of Directors of a committee of the Board by vote
as set forth in subparagraph (i), or, if the requisite quorum of the full Board
cannot be obtained therefor and the committee cannot be established, by a
majority vote of the full Board in which any director who is a party may
participate; or (iii) by the stockholders (except that shares held by any party
to the specific proceeding may not be voted). A court of appropriate
jurisdiction may also order indemnification if the court determines that a
person seeking indemnification is entitled to reimbursement under subsection
(b).
Section 2-418 further provides that indemnification provided for by Section
2-418 shall not be deemed exclusive of any rights to which the indemnified
party may be entitled; that the scope of indemnification extends to directors,
officers, employees or agents of a constituent corporation absorbedin a
consolidation or merger and persons serving in that capacity at the request of
the constituent corporation for another; and empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against or incurred by
such person in any such capacity or arising out of such person's status as such
whether or not the corporation would have the power to indemnify such person
against such liabilities under Section 2-418.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
None.
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) American Funds Distributors, Inc. is also the Principal Underwriter of
shares of: American Balanced Fund, Inc., The American Funds Income Series, The
American Funds Tax-Exempt Series I, The American Funds Tax-Exempt Series II,
American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
American Mutual Fund, Inc., The Bond Fund of America, Inc., Capital Income
Builder, Inc., Capital World Bond Fund, Inc., Capital World Growth and Income
Fund, Inc., The Cash Management Trust of America, 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 Money Fund of America, The U.S. Treasury Money
Fund of America and Washington Mutual Investors Fund, Inc.
<TABLE>
<CAPTION>
(B) (1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C>
David L. Abzug Regional Vice President None
27304 Park Vista Road
Agoura Hills, CA 91301
John A. Agar Vice President None
1501 N. University Drive, Suite
227A
Little Rock, AR 72207
Robert B. Aprison Regional Vice President None
2983 Bryn Wood Drive
Madison, WI 53711
L William W. Bagnard Vice President None
Steven L. Barnes Vice President None
5400 Mt. Meeker Road, Suite 1
Minneapolis, MN 55438
B Carl R. Bauer Assistant Vice President None
Michelle A. Bergeron Senior Vice President None
4160 Gateswalk Drive
Smyrna, GA 30080
Joseph T. Blair Senior Vice President None
27 Drumlin Road
West Simsbury, CT 06092
John A. Blanchard Vice President None
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior Vice President None
P.O. Box 1665
Brentwood, TN 37024-1665
Michael L. Brethower Senior Vice President None
2320 North Austin Avenue
Georgetown, TX 78626
C. Alan Brown Regional Vice President None
4129 Laclede Avenue
St. Louis, MO 63108
B J. Peter Burns Vice President None
Brian C. Casey Regional Vice President None
9508 Cable Drive
Bethesda, MD 20817
Victor C. Cassato Senior Vice President None
609 W. Littleton Blvd., Suite 310
Littleton, CO 80120
Christopher J. Cassin Senior Vice President None
111 W. Chicago Avenue, Suite G3
Hinsdale, IL 60521
Denise M. Cassin Vice President None
1301 Stoney Creek Drive
San Ramon CA 94538
L Larry P. Clemmensen Director None
L Kevin G. Clifford Director, President and Co-Chief None
Executive Officer
Ruth M. Collier Senior Vice President None
145 West 67th St. Ste. 12K
New York, NY 10023
S David Coolbaugh Assistant Vice President None
Thomas E. Cournoyer Vice President None
2333 Granada Boulevard
Coral Gables, FL 33134
Douglas A. Critchell Senior Vice President None
4116 Woodbine St.
Chevy Chase, MD 20815
L Carl D. Cutting Vice President None
Daniel J. Delianedis Regional Vice President None
8689 Braxton Drive
Eden Prairie, MN 55347
Michael A. Dilella Vice President None
P.O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President None
505 E. Main Street
Jenks, OK 74037
Kirk D. Dodge Senior Vice President None
633 Menlo Avenue, Suite 210
Menlo Park, CA 94025
Peter J. Doran Senior Vice President None
1205 Franklin Avenue
Garden City, NY 11530
L Michael J. Downer Secretary None
Robert W. Durbin Vice President None
74 Sunny Lane
Tiffin, OH 44883
I Lloyd G. Edwards Senior Vice President None
L Paul H. Fieberg Senior Vice President None
John Fodor Vice President None
15 Latisquama Road
Southborough, MA 01772
Clyde E. Gardner Senior Vice President None
Route 2, Box 3162
Osage Beach, MO 65065
B Evelyn K. Glassford Vice President None
Jeffrey J. Greiner Vice President None
12210 Taylor Road
Plain City, OH 43064
L Paul G. Haaga, Jr. Director Senior Vice President
B Mariellen Hamann Assistant Vice President None
David E. Harper Senior Vice President None
R.D. 1, Box 210, Rte 519
Frenchtown, NJ 08825
Ronald R. Hulsey Vice President None
6744 Avalon
Dallas, TX 75214
Robert S. Irish Regional Vice President None
1225 Vista Del Mar Drive
Delray Beach, FL 33843
L Robert L. Johansen Vice President, Controller None
Michael J. Johnston Director None
630 Fifth Ave., 36th Floor
New York, NY 10111-0121
B Damien M. Jordan Vice President None
Arthur J. Levine Vice President None
12558 Highlands Place
Fishers, IN 46038
B Karl A. Lewis Assistant Vice President None
T. Blake Liberty Regional Vice President None
5506 East Mineral Lane
Littleton, CO 80122
Mark J. Lien Regional Vice President None
5570 Beechwood Terrace
West Des Moines, IA 50266
L Lorin E. Liesy Assistant Vice President None
L Susan G. Lindgren Vice President - Institutional None
Investment Services Division
LW Robert W. Lovelace Director None
Stephen A. Malbasa Vice President None
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President None
5241 South Race Street
Littleton, CO 90121
L John C. Massar Senior Vice President None
L E. Lee McClennahan Senior Vice President None
L Jamie R. McCrary Assistant Vice President None
S John V. McLaughlin Senior Vice President None
Terry W. McNabb Vice President None
2002 Barrett Station Road
St. Louis, MO 63131
L R. William Melinat Vice President - Institutional None
Investment Services Division
David R. Murray Regional Vice President None
60 Briant Drive
Sudbury, MA 01776
Stephen S. Nelson Vice President None
P.O. Box 470528
Charlotte, NC 28247-0528
William E. Noe Regional Vice President None
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Vice President None
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Vice President None
62 Park Drive
Glenview, IL 60025
Fredric Phillips Senior Vice President None
175 Highland Avenue, 4th Floor
Needham, MA 02194
B Candance Pilgram Assistant Vice President None
Carl S. Platou Vice President None
4021 96th Avenue, SE
Mercer Island, WA 98040
L John O. Post, Jr. Vice President None
S Richard P. Prior Assistant Vice President None
Steven J. Reitman Senior Vice President None
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Vice President None
11404 Foxhaven Drive
Charlotte, NC 28277
George S. Ross Senior Vice President None
55 Madison Avenue
Morristown, NJ 07962
L Julie D. Roth Vice President None
Douglas F. Rowe Vice President None
30008 Oakland Hills Drive
Georgetown, TX 78628
Christopher Rowey Regional Vice President None
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Senior Vice President None
1080 Bay Pointe Crossing
Alpharetta, GA 30005
Richard R. Samson Senior Vice President None
4604 Glencoe Avenue, No. 4
Marina del Rey, CA 90292
Joe D. Scarpitti Vice President None
31465 St. Andrews
Westlake, OH 44145
L R. Michael Shanahan Director Chairman of the Board
David W. Short Director, Chairman of the None
1000 RIDC Plaza, Ste 212 Board and Co-Chief Executive
Pittsburgh, PA 15238 Officer
William P. Simon, Jr. Senior Vice President None
912 Castlehill Lane
Devon, PA 91333
L John C. Smith Vice President - None
Institutional Investment
Services Division
L Mary E. Smith Vice President - None
Institutional Investment
Services Division
Rodney G. Smith Vice President None
100 N. Central Expressway, Suite 1214
Richardson, TX 75080
Anthony L. Soave Regional Vice President None
8831 Morning Mist Drive
Clarkston, MI 48348
Nicholas D. Spadaccini Regional Vice President None
855 Markley Woods Way
Cincinnati, OH 45230
L Kristen J. Spazafumo Assistant Vice President None
Daniel S. Spradling Senior Vice President None
1400 Southdown Road
Hillsborough, CA 94010
B Max D. Stites Vice President None
Thomas A. Stout Regional Vice President None
3919 Whooping Crane Circle
Virginia Beach, VA 23455
Craig R. Strauser Vice President None
3 Dover Way
Lake Oswego, OR 97034
Francis N. Strazzeri Senior Vice President None
31641 Saddletree Drive
Westlake Village, CA 91361
L Drey W. Taylor Assistant Vice President None
S James P. Toomey Vice President None
I Christopher E. Trede Vice President None
George F. Truesdail Vice President None
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Vice President None
60 Reedland Woods Way
Tiburon, CA 94920
John David Viale Regional Vice President None
Thomas E. Warren Regional Vice President None
119 Faubel Street
Sarasota, FL 34242
L J. Kelly Webb Sr. Vice President, Treasurer None
Gregory J. Weimer Regional Vice President None
206 Hardwood Drive
Venetia, PA 15367
B Timothy W. Weiss Director None
George J. Wenzel Regional Vice President None
3406 Shakespeare Drive
Troy, MI 48084
B Laura L. Wimberly Vice President None
H Marshall D. Wingo Senior Vice President None
L Robert L. Winston Director, Senior Vice None
President
William Yost Vice President None
9320 Overlook Trail
Eden Prairie, MN 55347
Janet M. Young Regional Vice President None
1616 Vermont
Houston, TX 77006
Scott D. Zambon Regional Vice President None
2887 Player Lane
Tustin Ranch, CA 92782
</TABLE>
L Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW Business Address, 11100 Santa Monica Boulevard, 15th Floor, Los Angeles, CA
90025
B Business Address, 135 South State College Boulevard, Brea, CA 928621
S Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78230
H Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
(C) None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended, are maintained and kept in the
offices of the Fund and its investment adviser, Capital Research and Management
Company, 333 South Hope Street, Los Angeles, CA 90071. Certain accounting
records are maintained and kept in the offices of the Fund's accounting
department, 135 South State College Blvd., Brea, CA 92621.
Records covering shareholder accounts are maintained and kept by the transfer
agent, American Funds Service Company, 135 South State College Boulevard, Brea,
CA 92621, 3500 Wiseman Boulevard, San Antonio, TX 78230, 5300 Robin Hood
Road, Norfolk, VA 23514, and 8332 Woodfield Crossing Boulevard, Indianapolis,
Indiana 46240.
Records covering portfolio transactions are also maintained and kept by the
custodian, The Chase Manhattan Bank, N.A., One Chase Manhattan Plaza, New York,
New York, 10081.
ITEM 31. MANAGEMENT SERVICES.
None.
ITEM 32. UNDERTAKINGS.
n/a
<PAGE>
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this amended Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, and State of California, on the 26th
day of February, 1999.
AMCAP FUND, INC.
By /s/ R. Michael Shanahan
R. Michael Shanahan, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this amendment to
Registration Statement has been signed below on February 26, 1999, by the
following persons in the capacities indicated.
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<CAPTION>
SIGNATURE TITLE
<S> <C> <C>
(1) Principal Executive Officer:
/s/ R. Michael Shanahan Chairman of the Board
R. Michael Shanahan
(2) Principal Financial Officer and
Principal Accounting Officer:
/s/ Sheryl F. Johnson Treasurer
Sheryl F. Johnson
(3) Directors:
H. Frederick Christie* Director
Mary Ann Dolan* Director
Martin Fenton* Director
Herbert Hoover III* Director
/s/ Claudia P. Huntington
Claudia P. Huntington President and Director
Mary Myers Kauppila* Director
Kirk P. Pendleton* Director
James W. Ratzlaff* Director
Olin C. Robison* Director
/s/ R. Michael Shanahan
R. Michael Shanahan Chairman of the Board
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*By /s/ Vincent P. Corti
Vincent P. Corti, Attorney-in-Fact
