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GFA The Growth Fund of America
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED FEBRUARY 29, 1996
[The American Funds Group(R)]
THE GROWTH FUND OF AMERICA(R) invests in a wide range of companies that appear
to offer superior opportunities for growth of capital.
ON OUR COVER: Buck Rock lookout in California's Sequoia National Forest.
<TABLE>
<CAPTION>
<S> <C> <C>
Results at a glance (through 2/29/96)
Total Average annual
returns compound returns
6 months +4.9% -
12 months +28.7% -
5 years +93.5% +14.1%
10 years +280.8% +14.3%
Lifetime* +3,016.3% +16.7%
</TABLE>
All figures assume reinvested distributions.
*Since 12/1/73, when Capital Research and Management Company became the fund's
investment adviser.
Fund results in this report were computed without a sales charge, unless
otherwise indicated. Here are the fund's average annual compound returns, with
all distributions reinvested, through March 31, 1996 (the most recent calendar
quarter), assuming payment of the 5.75% maximum sales charge at the beginning
of the stated periods:
10 years: +12.92%
5 years: +12.09%
1 year: +16.00%
Sales charges are lower for accounts of $50,000 or more.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
Fellow Shareholders:
Over the six months through February, the value of your investment in The
Growth Fund of America rose 4.9% if you reinvested the dividend of 29 cents a
share and the capital gain distribution of $2.27 a share, both paid in
December. In absolute terms, this was a reasonably satisfactory return.
However, the stock market as a whole, as measured by the unmanaged Standard &
Poor's 500 Composite Index, was up 15.4% for the period on the same reinvested
basis. By comparison, during the previous six-month period (through August
1995), the fund gained 22.7% while the market rose 16.8%.
Much of the difference between the results for the fund and the index over the
most recent period was due to the fund's heavy concentration in electronic
technology companies, which have also been responsible for much of our
long-term success. Even as the overall market appeared to head for the moon,
the stocks of many computer and component companies which helped launch it
began coming back to earth. We reduced several holdings in this area, often
taking considerable profits. For example, we sold some of our position in
Intel, the fund's largest holding at the end of fiscal 1995.
Some electronic technology companies did just fine during the period. Our most
rewarding holding, in fact, was computer maker Digital Equipment, up 72%.
Meanwhile, the share price of our least successful holding, interactive
software publisher Acclaim Entertainment, was down 50%.
The computer industry's bout of indigestion is, we believe, temporary and
selective. Every day, more people go online to send messages, locate
information and entertain themselves. The business world continues to emphasize
linking computers through networks and to de-emphasize mainframes. Declining
microchip prices mean computer users can afford to upgrade and expand more
quickly. We have maintained and even added to our holdings in several companies
that we feel will benefit from these trends. Our largest purchase during the
period was America Online, the leading online service provider.
Broadcasting and publishing companies remain our largest area of concentration,
accounting for nearly 16% of the fund's assets at the end of February. We
believe many of these companies will continue to experience significant growth
as they benefit from the deregulation of cable television and fewer
restrictions on station ownership here in the United States. Moreover, the
global potential for media companies is still largely untapped, and audiences
overseas are increasingly hungry for commercial entertainment.
Recent months have seen a remarkable surge in the amount of money invested in
mutual funds. The Investment Company Institute, the trade association for
mutual funds, says that January set a new record and February was not far
behind. The Growth Fund of America also enjoyed strong inflows in January, and
during the first half of fiscal 1996 we added more than 80,000 new shareholder
accounts. If you are among our new shareholders, we want to remind you of
something long-time investors know: Stock prices go up and down, and past
results are no guarantee of the future. A six-month period when the stock
market posts a double-digit gain is not the norm.
The stock market may be somewhat volatile in coming months, as it often is
during presidential campaigns. Our relatively conservative invested position --
approximately 81% of the fund's assets were in stocks at the beginning of
fiscal 1996 -- means we have not fully participated in the market's recent
advances. Our purchases over recent months have raised the fund's invested
position to 83%, but this is still a cautious level which we believe will serve
the fund well when and if the market sees some rough spots. It provides both a
cushion against such downturns and a buying reserve to take advantage of
bargains that may develop.
We look forward to updating you six months from now in the fund's annual
report.
Cordially,
Walter P. Stern James F. Rothenberg
Chairman of the Board President
April 8, 1996
Average annual compound returns
over fund's lifetime (12/1/73 - 2/29/96)
+5.6%
Inflation
+13.4%
Stock Market
+16.7%
The Growth Fund of America
Inflation is represented by the Consumer Price Index, computed from data
supplied by the U.S. Department of Labor, Bureau of Labor Statistics.The stock
market is represented by Standard & Poor's 500 Composite Index.
[Sidebar]
The stock market may be somewhat volatile in coming months, as it often is
during presidential campaigns.
[End Sidebar]
<PAGE>
THE GROWTH FUND OF AMERICA
INVESTMENT PORTFOLIO,
February 29, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ----------------------------- ----- ----------------------------- -----
Percent Percent
of Net of Net
Largest Industry Holdings Assets Largest Individual Holdings Assets
- ----------------------------- ----- ------------------------------- -----
Broadcasting & Publishing 15.81% Federal National Mortgage Assn. 3.15%
Business & Public Services 11.59% Time Warner 2.69
Electronic Components 9.31% Walt Disney 2.34
Data Processing & Reproduction 7.47% Viacom 2.15
Leisure & Tourism 5.80% Intel 2.08
Other Industries 32.63% News Corp. 2.07
Cash & Equivalents 17.39% Tele-Communications, TCI Group 1.99
United Healthcare 1.96
America Online 1.74
Philip Morris 1.60
</TABLE>
- ----------
THE GROWTH FUND OF AMERICA
INVESTMENT PORTFOLIO, February 29, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Unaudited
Market Percent
EQUITY-TYPE SECURITIES Value of Net
(Common & Preferred Stocks) Shares (000) Assets
- ------------------------------------- -------- -------- ------
Broadcasting & Publishing- 15.81%
Time Warner Inc. 5,352,000 $228,798 2.69
Viacom Inc., Class B/1/ 4,650,000 182,513 2.15
News Corp. Ltd. (American Depositary
Receipts)(Australia) 5,400,000 122,175
News Corp. Ltd., preferred
(American Depositary Receipts) 2,675,000 53,500 2.07
Tele-Communications, Inc., Series A, TCI Group/1/ 8,039,300 168,825 1.99
Capital Cities/ABC, Inc. 965,000 125,933 1.48
Comcast Corp., Class A Special Stock 4,210,000 82,621
Comcast Corp., Class A 1,680,000 32,340 1.35
Turner Broadcasting System, Inc., Class B 3,625,000 105,125 1.24
Tele-Communications, Inc., Series A, Liberty Media Group/1/ 2,537,325 70,094 .82
E.W. Scripps Co., Class A 1,650,000 69,300 .82
Chris-Craft Industries, Inc./1/ 950,000 40,256 .47
LIN Television Corp./1/ 565,800 19,379 .23
New World Communications Group Inc., Class A/1/ 870,000 16,313 .19
Marvel Entertainment Group, Inc./1/ 877,800 10,095 .12
Century Communications Corp., Class A/1/ 1,002,550 9,963 .12
BHC Communications, Inc., Class A/1/ 62,840 5,805 .07
Business & Public Services- 11.59%
United HealthCare Corp. 2,555,000 166,714 1.96
America Online, Inc./1/ 3,015,400 148,131 1.74
Columbia/HCA Healthcare Corp. 2,352,500 128,799 1.52
CUC International Inc./1/ 2,325,000 75,271 .89
Manpower Inc. 2,398,000 75,237 .89
ADT Ltd./1/ 4,720,000 69,620 .82
Federal Express Corp./1/ 930,000 68,820 .81
General Motors Corp., Class E 1,000,000 57,125 .67
Pitney Bowes Inc. 1,075,000 51,869 .61
U.S. Healthcare, Inc. 500,000 24,375 .29
Olsten Corp. 500,000 22,875 .27
USA Waste Services, Inc./1/ 1,000,000 21,375 .25
Apria Healthcare Group Inc./1/ 500,000 15,625 .18
Value Health, Inc./1/ 570,000 14,749 .17
WMX Technologies, Inc. 500,000 14,250 .17
Dun & Bradstreet Corp. 140,000 8,855 .10
Ecolab Inc. 250,000 7,594 .09
Oxford Health Plans, Inc./1/ 79,800 6,569 .08
FHP International Corp./1/ 185,000 6,059 .07
Coram Healthcare Corp./1/ 24,900 121 .01
Electronic Components- 9.31%
Intel Corp. 3,004,000 176,673 2.08
LSI Logic Corp./1/ 4,450,000 122,931 1.45
National Semiconductor Corp./1/ 5,647,930 88,249 1.04
Texas Instruments Inc. 1,710,000 85,286 1.00
Advanced Micro Devices, Inc./1/ 4,238,000 82,111 .97
Seagate Technology/1/ 1,200,000 78,300 .92
Quantum Corp./1/ 1,919,400 32,869 .39
Analog Devices, Inc./1/ 1,125,000 30,234 .36
Bay Networks, Inc./1/ 600,000 26,775 .32
Newbridge Networks Corp. (Canada)/1/ 513,200 25,082 .30
AMP Inc. 400,000 17,050 .20
Tellabs, Inc./1/ 235,000 11,104 .13
ADC Telecommunications, Inc./1/ 211,400 8,403 .10
Cyrix Corp./1/ 200,000 4,625 .05
Data Processing & Reproduction- 7.47%
Digital Equipment Corp./1/ 1,600,000 115,200 1.36
Silicon Graphics, Inc./1/ 3,790,000 94,750 1.12
International Business Machines Corp. 580,000 71,122 .84
Adobe Systems Inc. 1,720,000 57,620 .68
Hewlett-Packard Co. 400,000 40,300 .47
Sybase, Inc./1/ 1,129,000 35,422 .42
Dell Computer Corp./1/ 1,000,000 34,375 .40
Compuware Corp./1/ 1,055,000 24,265 .28
Oracle Corp./1/ 420,000 21,840 .26
Compaq Computer Corp./1/ 400,000 20,250 .24
Electronic Arts/1/ 800,000 20,000 .24
Cisco Systems, Inc./1/ 400,000 19,000 .22
Solectron Corp./1/ 376,100 18,241 .21
Acclaim Entertainment, Inc./1/ 1,325,000 16,645 .19
Tandem Computers Inc./1/ 1,540,000 14,822 .17
Autodesk, Inc. 350,000 12,381 .15
Mentor Graphics Corp./1/ 715,000 10,189 .12
Apple Computer, Inc. 300,000 8,250 .10
Leisure & Tourism- 5.80%
Walt Disney Co. 3,035,000 198,793 2.34
Mirage Resorts, Inc./1/ 1,700,000 78,838 .93
Harrah's Entertainment, Inc./1/ 2,265,000 61,438 .72
MGM Grand, Inc./1/ 1,715,000 57,023 .67
Grand Casinos, Inc./1/ 900,000 28,687 .34
Circus Circus Enterprises, Inc./1/ 650,000 20,719 .24
Carnival Corp., Class A 725,000 20,391 .24
Promus Hotel Corp./1/ 735,800 19,131 .23
Marriott International, Inc. 150,000 7,369 .09
Financial Services- 4.29%
Federal National Mortgage Assn. 8,450,000 267,231 3.15
Capital One Financial Corp. 1,640,000 43,870 .51
Student Loan Marketing Assn. 450,000 37,181 .44
Federal Home Loan Mortgage Corp. 200,000 16,500 .19
Telecommunications- 3.80%
MCI Communications Corp. 3,275,000 95,794 1.13
AirTouch Communications/1/ 2,550,000 79,050 .93
Cellular Communications, Inc., preference shares/1/ 972,763 50,097 .59
Vodafone Group PLC (American Depositary Receipts)
(United Kingdom) 1,220,000 43,157 .51
AT&T Corp. 500,000 31,813 .37
Telefonos de Mexico, SA de CV, Class L (American
Depositary Receipts) (Mexico) 412,000 12,566 .15
Cellular Communications of Puerto Rico, Inc./1/ 256,698 6,706 .08
Telephone and Data Systems, Inc. 81,200 3,745 .04
Health & Personal Care- 2.65%
Nellcor Puritan Bennett Inc./1/ 850,000 56,950 .67
Forest Laboratories, Inc./1/ 1,000,000 52,000 .61
Guidant Corp. 1,050,000 49,744 .58
MedImmune, Inc./1/ 704,100 13,202 .16
Pfizer Inc 200,000 13,175 .16
Pharmacia & Upjohn, Inc. 290,000 12,144 .14
Pyxis Corp./1/ 400,000 9,400 .11
Gensia Pharmaceuticals, Inc./1/ 1,325,000 6,956 .08
Kimberly-Clark Corp. 63,000 4,812 .06
Bausch & Lomb Inc. 100,000 3,888 .05
Perrigo Co./1/ 175,000 2,450 .03
Insurance- 2.64%
EXEL Ltd. (Incorporated in Bermuda) 1,240,000 86,490 1.02
Progressive Corp. 800,000 36,800 .43
Mercury General Corp. 700,000 30,625 .36
TIG Holdings, Inc. 675,000 21,347 .25
CNA Financial Corp./1/ 159,800 18,577 .22
AMBAC Inc. 250,000 12,063 .14
NAC Re Corp. 350,000 11,769 .14
Prudential Reinsurance Holdings Ltd. 284,600 6,973 .08
Transportation: Airlines- 2.32%
Southwest Airlines Co. 2,653,450 81,593 .96
AMR Corp./1/ 860,000 75,465 .89
Delta Air Lines, Inc. 515,000 40,170 .47
Recreation & Consumer Products- 1.88%
Mattel, Inc. 3,437,500 114,297 1.34
Nintendo Co., Ltd. (Japan) 265,000 17,899 .21
Duracell International Inc. 300,000 15,488 .18
Hasbro, Inc. 265,000 9,143 .11
WMS Industries Inc./1/ 170,100 3,062 .04
Beverages & Tobacco- 1.75%
Philip Morris Companies Inc. 1,375,000 136,125 1.60
PepsiCo, Inc. 200,000 12,650 .15
Banking- 1.55%
Citicorp 800,000 62,400 .73
PNC Bank Corp. 600,000 18,375 .22
BankAmerica Corp. 220,000 15,675 .19
First Security Corp. 543,750 14,613 .17
Commerce Bancshares, Inc. 303,187 10,953 .13
Northern Trust Corp. 180,000 9,495 .11
Machinery & Engineering- 1.47%
Thermo Electron Corp./1/ 1,450,000 79,386 .93
Caterpillar Inc. 680,000 45,475 .54
Energy Equipment- 1.14%
Schlumberger Ltd. (Netherlands Antilles) 575,000 41,903 .49
Transocean Drilling AS (Norway) 1,279,000 28,393 .34
Sonat Offshore Drilling Inc. 600,000 26,100 .31
Chemicals- 1.12%
A. Schulman, Inc. 1,522,500 34,637 .41
Great Lakes Chemical Corp. 445,000 31,818 .37
H.B. Fuller Co. 500,000 18,000 .21
Loctite Corp. 150,000 7,950 .09
Air Products and Chemicals, Inc. 58,200 3,099 .04
Merchandising- 0.91%
Wal-Mart Stores, Inc. 1,750,000 37,187 .44
Home Shopping Network, Inc./1/ 2,500,000 26,250 .31
Toys "R" Us, Inc./1/ 350,000 8,356 .10
Michaels Stores, Inc./1/ 445,000 5,396 .06
Electrical & Electronic Instruments- 0.85%
Telefonaktiebolaget LM Ericsson, Class B
(American Depositary Receipts) (Sweden) 2,112,500 46,211 .54
Nokia Corp., Class A
(American Depositary Receipts) (Finland) 750,000 26,156 .31
Multi-Industry- 0.36%
U.S. Industries, Inc./1/ 1,475,000 28,578 .34
Tenneco Inc. 30,000 1,676 .02
Textiles & Apparel- 0.32%
Fruit of the Loom, Inc./1/ 1,080,000 27,405 .32
Transportation: Rail- 0.28%
Conrail, Inc. 180,000 12,983 .15
Southern Pacific Rail Corp./1/ 467,198 11,096 .13
Energy Sources- 0.14%
Noble Affiliates, Inc. 377,600 11,564 .14
Miscellaneous Materials & Commodities- 0.09%
Potash Corp. of Saskatchewan Inc. (Canada) 100,000 7,425 .09
Transportation: Shipping- 0.04%
Overseas Shipholding Group, Inc. 200,000 3,750 .04
Aerospace & Military Technology- 0.02%
Litton Industries, Inc./1/ 40,000 2,020 .02
Forest Products & Paper- 0.01%
Rayonier Inc. 12,500 428 .01
-------- --------
Other equity-type securities in initial period of
acquisition 424,850 5.00
-------- ------
TOTAL EQUITY-TYPE SECURITIES (cost: $4,450,527,000) 7,016,391 82.61
-------- ------
Principal
Amount
SHORT-TERM SECURITIES (000)
- ------------------------------------- --------
Corporate Short-Term Notes- 14.42%
J.C. Penney Funding Corp. 5.12%-5.58% due 3/6-4/18/96 $111,700 111,234 1.31
Ford Motor Credit Corp. 5.13%-5.53% due 3/1-4/12/96 105,850 105,489 1.24
AT&T Corp. 5.17%-5.52% due 3/11-4/8/96 81,700 81,390 .96
John Deere Capital Corp 5.34%-5.43% due 3/7-3/13/96 74,500 74,382 .88
PepsiCo, Inc. 5.17%-5.20% due 3/12-3/28/96 66,100 65,925 .78
Pitney Bowes Credit Corp. 5.11%-5.34% due 3/8-4/9/96 65,600 65,314 .77
Gannett Co., Inc. 5.23%-5.32% due 4/2-4/18/96/2/ 62,700 62,331 .73
Bell Atlantic Network Funding Corp. 5.18%-5.22%
due 3/11-3/14/96 55,000 54,905 .65
CIT Group Holdings, Inc. 5.14%-5.54% due 3/15-4/8/96 55,000 54,793 .65
Motorola, Inc. 5.16%-5.20% due 3/18-4/3/96 54,600 54,440 .64
Southwestern Bell Telephone Co. 5.15%-5.45% due 3/13-4/4/96 48,650 48,453 .57
Raytheon Co. 5.18% due 3/26/96 48,000 47,826 .56
Coca-Cola Co. 5.11%-5.15% due 3/29-4/11/96/2/ 46,500 46,268 .54
American Express Credit Corp. 5.53% due 3/12-3/18/96 43,100 42,996 .51
E.I. du Pont de Nemours and Co. 5.15%-5.20% due 3/8-3/21/96 38,100 38,005 .45
U S WEST Communications, Inc. 5.37% due 3/5/96 36,500 36,473 .43
Home Depot, Inc. 5.42% due 3/11/96 35,000 34,942 .41
IBM Credit Corp. 5.19% due 3/22/96 34,200 34,092 .40
BellSouth Telecommmunications, Inc. 5.16%-5.18%
due 3/12-3/21/96 33,500 33,424 .39
Hershey Foods Corp. 5.17%-5.32% due 3/4-3/14/96 32,015 31,975 .38
Procter & Gamble Co. 5.09%-5.10% due 4/8-4/22/96 28,600 28,415 .33
Hewlett-Packard Co. 5.31% due 3/26/96 26,000 25,900 .30
Harvard University 5.37% due 3/25/96 23,200 23,113 .27
Vermont American Corp. 5.20%-5.35% due 3/4/96-3/15/96/2/ 23,100 23,072 .27
-------- ------
1,225,157 14.42
-------- ------
Federal Agency Short-Term Obligations- 3.78%
Federal Home Loan Mortgage Corp. 4.99%-5.34%
due 3/5-5/20/96 124,405 123,993 1.46
Federal Home Loan Bank 5.00%-5.33% due 3/1-5/22/96 98,850 98,343 1.15
Federal National Mortgage Assn. 5.00%-5.08%
due 4/15-5/30/96 79,000 78,226 .92
Federal Farm Credit Bank 5.20% due 4/1/96 21,000 20,904 .25
-------- ------
321,466 3.78
-------- ------
Federal Agency Obligations- Other - 0.24%
Student Loan Marketing Assn. 5.24% due 5/9/96/3/ 20,000 19,997 .24
-------- ------
TOTAL SHORT-TERM SECURITIES (cost: $1,566,634,000) 1,566,620 18.44
-------- ------
TOTAL INVESTMENT SECURITIES (cost: $6,017,161,000) 8,583,011 101.05
-------- ------
Excess of payables over cash and receivables 89,489 1.05
-------- ------
NET ASSETS $8,493,522 100.00%
========== =======
/1/ Non-income-producing securities.
/2/ Purchased in a private placement transaction; resale to
the public may require registration or may extend only
to qualified institutional buyers.
/3/ Coupon rates may change periodically.
</TABLE>
See Notes to Financial Statements
<PAGE>
The Growth Fund of America
<TABLE>
<CAPTION>
<S> <C> <C>
Financial Statements Unaudited
- ---------------------------------------------- ---------------- ----------------
Statement of Assets and Liabilities (dollars in
at February 29, 1996 thousands)
- ---------------------------------------------- ---------------- ----------------
Assets:
Investment securities at market
(cost: $6,017,161) $8,583,011
Cash 170
Receivables for-
Sales of investments $ 6,813
Sales of fund's shares 21,784
Dividends and accrued interest 3,049 31,646
---------------- ----------------
8,614,827
Liabilities:
Payables for-
Purchases of investments 109,083
Repurchases of fund's shares 5,897
Management services 2,492
Accrued expenses 3,833 121,305
---------------- ----------------
Net Assets at February 29, 1996-
Equivalent to $31.98 per share on
265,554,536 shares of $0.10 par value
capital stock outstanding (authorized
capital stock--400,000,000 shares) $8,493,522
================
- ---------------------------------------------- ---------------- ----------------
Statement of Operations (dollars in
for the six months ended February 29, 1996 thousands)
- ---------------------------------------------- ---------------- ----------------
Investment Income:
Income:
Dividends $ 22,012
Interest 45,935 $ 67,947
----------------
Expenses:
Management services fee 14,601
Distribution expenses 9,629
Transfer agent fee 3,717
Reports to shareholders 410
Registration statement and prospectus 300
Postage, stationery and supplies 520
Directors' fees 61
Auditing and legal fees 42
Custodian fee 102
Taxes other than Federal income tax 2
Other expenses 17 29,401
---------------- ----------------
Net investment income 38,546
----------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 300,845
Net unrealized appreciation:
Beginning of period 2,516,141
End of period 2,565,850 49,709
---------------- ----------------
Net realized gain and unrealized appreciation
on investments 350,554
----------------
Net Increase in Net Assets Resulting
from Operations $389,100
================
- ---------------------------------------------- ---------------- ----------------
Statement of Changes in Net Assets Six months ended Year ended
February 29, August 31,
(dollars in thousands) 1996* 1995
- ---------------------------------------------- ---------------- ----------------
Operations:
Net investment income $ 38,546 $ 54,090
Net realized gain on investments 300,845 353,525
Net unrealized appreciation
on investments 49,709 1,054,869
---------------- ----------------
Net increase in net assets
resulting from operations 389,100 1,462,484
---------------- ----------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (68,664) (33,653)
Distributions from net realized gain on
investments (537,426) (205,865)
---------------- ----------------
Total dividends and distributions (606,090) (239,518)
---------------- ----------------
Capital Share Transactions:
Proceeds from shares sold: 44,443,068
and 69,486,188 shares, respectively 1,428,262 1,994,344
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 19,284,225 and 9,099,784 shares,
respectively 580,427 229,196
Cost of shares repurchased: 25,567,441
and 47,721,869 shares, respectively (823,067) (1,349,094)
---------------- ----------------
Net increase in net assets resulting from
capital share transactions 1,185,622 874,446
---------------- ----------------
Total Increase in Net Assets 968,632 2,097,412
Net Assets:
Beginning of period 7,524,890 5,427,478
---------------- ----------------
End of period (including undistributed
net investment income: $9,353
and $39,471 respectively) $8,493,522 $7,524,890
================ ================
</TABLE>
* Unaudited
See Notes to Financial Statements
<PAGE>
Notes to Financial Statements
Unaudited
1. The Growth Fund of America, Inc.(the "fund")is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. The Growth Fund of America invests in a wide range of
companies that appear to offer superior opportunities for growth of capital.
The following paragraphs summarize the significant accounting policies
consistently followed by the fund in the preparation of its financial
statements:
Equity-type securities traded on a national securities exchange (or reported
on the NASDAQ national market) and securities traded in the over-the-counter
market are stated at the last-reported sales price on the day of valuation;
other securities, and securities for which no sale was reported on that date,
are stated at the last-quoted bid price.
Short-term securities with original or remaining maturities of in excess of
60 days are valued at the mean of their quoted bid and asked prices. Short-term
securities with 60 days or less to maturity are valued at amortized cost, which
approximates market value. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Valuation Committee of the Board of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis. Discounts
on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities and other assets and liabilities denominated in
non-U.S. currencies are recorded in the financial statements after translation
into U.S. dollars utilizing rates of exchange on the last business day of the
period. Purchases and sales of investment securities, income, and expenses are
calculated using the prevailing exchange rate as accrued. The fund does not
identify the portion of each amount shown in the fund's statement of operations
under the caption "Realized Gain and Unrealized Appreciation on Investments"
that arises from changes in non-U.S. currency exchange rates.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $102,000 includes $59,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of February 29, 1996, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $2,565,850,000, of which
$2,693,247,000 related to appreciated securities and $127,397,000 related to
depreciated securities. There was no difference between book and tax realized
gains on securities transactions for the six months ended February 29, 1996.
The cost of portfolio securities for book and federal income tax purposes was
$6,017,161,000 at February 29, 1996.
3. The fee of $14,601,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.50% of the first $1 billion of net assets; 0.40% of such
assets in excess of $1 billion but not exceeding $2 billion; 0.37% of such
assets in excess of $2 billion but not exceeding $3 billion; 0.35% of such
assets in excess of $3 billion but not exceeding $5 billion; 0.335% of such
assets in excess of $5 billion but not exceeding $8 billion; and 0.325% of such
assets in excess of $8 billion.
Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Directors. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended February 29,
1996, distribution expenses under the Plan were $9,629,000. As of February 29,
1996, accrued and unpaid distribution expenses were $3,664,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $3,717,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $3,881,000 (after
allowances to dealers) as its portion of the sales charges paid by purchasers
of the fund's shares. Such sales charges are not an expense of the fund and,
hence, are not reflected in the accompanying statement of operations.
Directors of the fund who are unaffiliated with CRMC may elect to defer part
or all of the fees earned for services as members of the Board. Amounts
deferred are not funded and are general unsecured liabilities of the fund. As
of February 29, 1996, aggregate amounts deferred and earnings thereon were
$165,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS, and AFD. No such
persons received any remuneration directly from the fund.
4. As of February 29, 1996, accumulated undistributed net realized gain on
investments was $89,403,000 and additional paid-in capital was $5,802,361,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,410,183,000 and $828,887,000, respectively, during
the six months ended February 29, 1996.
Net realized currency losses on dividends were $1,000 for the six months
ended February 29, 1996.
<PAGE>
Per-Share Data and Ratios
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six months Year
ended ended
February 29, August 31
1996/1/ 1995 1994 1993 1992 1991
------- ------- ------- --------- ------- -------
Net Asset Value, Beginning of Period $33.09 $27.62 $27.15 $22.04 $22.42 $18.43
------- ------- ------- --------- ------- -------
Income from Investment Operations:
Net investment income .15 .25 .13 .13 .23 .43
Net realized and unrealized gain
on investments 1.30 6.43 1.43 5.26 .81 4.86
------- ------- ------- --------- ------- -------
Total income from
investment operations 1.45 6.68 1.56 5.39 1.04 5.29
------- ------- ------- --------- ------- -------
Less Distributions:
Dividends from net investment
income (.29) (.17) (.12) (.19) (.35) (.48)
Distributions from net realized
gains (2.27) (1.04) (.97) (.09) (1.07) (.82)
------- ------- ------- --------- ------- -------
Total distributions (2.56) (1.21) (1.09) (.28) (1.42) (1.30)
------- ------- ------- --------- ------- --------
Net Asset Value, End of Period $31.98 $33.09 $27.62 $27.15 $22.04 $22.42
======= ======= ======= ========= ======== ========
Total Return/2/ 4.87%/3/ 25.56% 5.98% 24.64% 4.91% 30.55%
Ratios/Supplemental Data:
Net assets, end of period (in
millions) $8,494 $7,525 $5,427 $5,018 $3,700 $2,903
Ratio of expenses to average net
assets .37%/3/ .75% .78% .77% .79% .83%
Ratio of net income to average net
assets .49%/3/ .90% .49% .56% 1.11% 2.13%
Average commissions paid/4/ $05.79 $05.94/1/ $06.05/1/ $06.82/1/ $06.94/1/ $07.23/1/
Portfolio turnover rate 13.12%/3/ 26.90% 24.77% 25.23% 10.64% 18.92%
</TABLE>
/1/Unaudited
/2/Calculated without
deducting a sales charge. The
maximum sales charge is 5.75% of
the fund's offering price.
/3/Based on operations
for six months, and, accordingly,
are not representative of a full
year's operations.
/4/Brokerage commissions paid on
portfolio transactions increase
the cost of securities purchased
or reduce the proceeds of securities
sold, and are not reflected in the
fund's statement of operations.
Shares traded on a principal basis
are excluded.
This report is for the information of shareholders of The Growth Fund of
America, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after June 30, 1996, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho In USA TI/AL/2928
Lit. No. GFA-013-0496
Printed on recycled paper
<PAGE>
Office of the fund
Four Embarcadero Center, Suite 1800
Mailing Address: P.O. Box 7650
San Francisco, California 94120-7650
Investment adviser
Capital Research and
Management Company
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
Transfer agent for
shareholder accounts
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
Custodian of assets
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
Counsel
Morrison & Foerster LLP
345 California Street
San Francisco, California 94104-2675
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR SECURITIES DEALER OR FINANCIAL PLANNER, OR CALL THE FUND'S
TRANSFER AGENT, TOLL-FREE, AT 800/421-0180.
[The American Funds Group(R)]
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