THE GROWTH FUND OF AMERICA
Semi-Annual Report for the six months ended February 28, 1997
DIFFERENT PERSPECTIVES
[Cover: Photo: magnifying glass, photo: eyeglasses, photo: binoculars.]
[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: Tools associated with looking at things in different ways. The
Growth Fund of America is managed by six portfolio counselors, each
contributing a unique perspective.
Results at a glance (through 2/28/97)
<TABLE>
<CAPTION>
Total Average annual
returns compound returns
<S> <C> <C>
6 months +18.5% -
12 months +14.0 -
5 years +86.2 +13.2%
10 years +234.3 +12.8
Lifetime* +3,453.7 +16.6
</TABLE>
All figures assume reinvestment of 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, for periods ended March 31, 1997 (the most recent
calendar quarter), assuming payment of the 5.75% maximum sales charge at the
beginning of the stated periods:
10 years: +11.88%
5 years: +12.00
12 months: +5.30
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.
AVERAGE ANNUAL COMPOUND RETURNS OVER FUND'S LIFETIME (12/1/73 - 2/28/97)
[chart]
+5.5%
Inflation
+13.9%
Stock Market
+16.6%
The Growth Fund of America
Inflation is represented by the Consumer Price Index. The stock market is
represented by Standard & Poor's 500 Composite Index, which is unmanaged.
[end chart]
FELLOW SHAREHOLDERS:
We are pleased to report that The Growth Fund of America gained considerable
ground during the six months through February 28.
Over this period, which marked the first half of the fund's 1997 fiscal year,
the value of your shares increased 18.5% if you reinvested the dividend of 11
cents a share and the capital gain distribution of 86 cents a share paid in
December.
This unusually large six-month increase occurred during a period when the stock
market as a whole did even better. Standard & Poor's 500 Composite Index rose
22.6% with dividends reinvested. The primary reason for the difference was our
cautious invested position: We have continued to hold approximately 15% of the
fund's assets in cash and equivalents as a cushion against a stock market that
appears to be expensive by many measures.
As we discussed in our 1996 annual report, two areas that have held the fund
back in recent years are technology and media/entertainment stocks. During the
first half of fiscal 1997, technology stocks generally did well while
media/entertainment stocks continued to drift.
Our 10 most rewarding holdings during the period were all manufacturers of
computer components. We took advantage of this opportunity to reduce our
exposure to certain technology stocks. Looking ahead, we continue to feel that
many technology companies will provide tools that will play a critical role in
an increasingly competitive global economy. Most countries are less
technologically advanced than the United States, and rapidly rising exports of
computers and related equipment are evidence of increasing global
opportunities. During the period, however, some of these stocks seemed to get
ahead of themselves.
A number of media/entertainment companies are suffering indigestion from that
industry's recent high-profile merger frenzy. Some companies are attempting to
trim away peripheral businesses and reduce debt burden. We feel they will
benefit greatly from this selective pruning. As a result, we have added
carefully to our media/entertainment holdings where we are enthusiastic about
their potential.
Lastly, we increased our holdings in energy stocks, including oil drilling
equipment manufacturers and several exploration companies based outside the
United States. We believe that global supplies of deep-water drilling rigs are
low and that demand is rising. Meanwhile, non-OPEC production of oil is
growing. We feel that these companies will benefit even with some crude oil
price weakness.
In closing, we want to emphasize that the recent rate of growth in the stock
market is unlikely to be sustained. It has been more than six years since the
last significant market decline - notwithstanding recent turbulence. Over time,
a well-managed portfolio of growth stocks typically has proved to be among the
most rewarding of all securities investments, but it is important to remember
that results can vary considerably from period to period.
We look forward to updating you six months from now, in the fund's annual
report.
Cordially,
/s/Walter P. Stern
Walter P. Stern
Chairman of the Board
/s/James F. Rothenberg
James F. Rothenberg
President
April 15, 1997
[pull quote]
The fund's advance was unusually large for a six-month period.
[end pull quote]
<TABLE>
THE GROWTH FUND OF AMERICA
INVESTMENT PORTFOLIO, February 28, 1997
Unaudited
Percent
of Net
Assets
----------
Largest Industry Holdings
- -----------------------------
<S> <C> <C> <C>
Electronic Components 13.91%
Broadcasting & Publishing 12.31%
Business & Public Services 9.76%
Data Processing & Reproduction 7.83%
Leisure & Tourism 4.92%
Other Industries 36.76%
Cash & Equivalents 14.51%
Largest Individual Holdings
- -------------------------------------
Time Warner 3.40%
Federal National Mortgage Assn. 3.24
Philip Morris 3.21
Walt Disney 2.86
Intel 2.76
Columbia/HCA Healthcare 2.00
Viacom 1.83
National Semiconductor 1.80
News Corp. 1.75
America Online 1.73
THE GROWTH FUND OF AMERICA
INVESTMENT PORTFOLIO, February 28, 1997
Market Percent
EQUITY-TYPE SECURITIES Value of Net
(Common & Preferred Stocks) Shares (000) Assets
- ------------------------------------- ----------- -------- ----------
Electronic Components - 13.91%
Intel Corp. 1,949,000 $276,514 2.76
National Semiconductor Corp. /1/ 6,902,930 180,339 1.80
Texas Instruments Inc. 1,710,000 131,884 1.32
Advanced Micro Devices, Inc. /1/ 3,628,600 130,176 1.30
Seagate Technology /1/ 2,400,000 113,400 1.13
Adaptec, Inc. /1/ 2,623,600 99,861 1.00
Analog Devices, Inc. /1/ 3,633,333 84,475 .84
LSI Logic Corp. /1/ 2,025,000 69,862 .70
Bay Networks, Inc. /1/ 3,552,500 67,498 .67
Quantum Corp. /1/ 1,550,000 61,612 .62
ASM Lithography Holding NV (Netherlands) /1/ 750,000 49,924 .50
Linear Technology Corp. 1,000,000 45,500 .46
ADC Telecommunications, Inc. /1/ 1,356,000 36,612 .37
Newbridge Networks Corp. (Canada) /1/ 1,100,000 35,062 .35
Tellabs, Inc. /1/ 235,000 9,371 .09
Broadcasting & Publishing - 12.31%
Time Warner Inc. 8,294,500 340,075 3.40
Viacom Inc., Class B /1/ 5,200,000 183,300 1.83
News Corp. Ltd. (American Depositary Receipts) (Australia) 5,400,000 114,750
News Corp. Ltd., preferred (American Depositary Receipts) 3,363,750 60,127 1.75
Comcast Corp., Class A special stock 6,339,762 113,323
Comcast Corp., Class A 1,680,000 29,295 1.42
Tele-Communications, Inc., Series A, Liberty Media Group /1/ 5,887,237 123,632 1.24
Tele-Communications, Inc., Series A, TCI Group /1/ 7,739,300 91,904 .92
E.W. Scripps Co., Class A 1,700,000 61,200 .61
Chris-Craft Industries, Inc. /1/ 1,019,500 41,927 .42
HSN, Inc. /1/ 1,260,000 32,445 .32
US WEST Media Group /1/ 1,400,000 25,725 .26
BHC Communications, Inc., Class A /1/ 62,840 6,410 .06
Century Communications Corp., Class A /1/ 1,002,550 5,075 .05
TCI Satellite Entertainment, Inc., Series A /1/ 356,700 2,854 .03
Business & Public Services - 9.76%
Columbia/HCA Healthcare Corp. 4,767,590 200,239 2.00
America Online, Inc. /1/ 4,605,400 172,703 1.73
United HealthCare Corp. 2,350,000 117,206 1.17
Federal Express Corp. /1/ 1,560,000 80,340 .80
Republic Industries, Inc. /1/ /2/ 1,200,000 42,600
Republic Industries, Inc. /1/ 1,050,000 37,275 .80
Manpower Inc. 1,835,700 69,298 .69
Electronic Data Systems Corp. 1,350,000 60,919 .61
CUC International Inc. /1/ 2,212,500 52,823 .53
USA Waste Services, Inc. /1/ 1,050,000 37,800 .38
Shared Medical Systems Corp. 685,000 37,418 .37
WMX Technologies, Inc. 550,000 17,394 .17
Value Health, Inc. /1/ 570,000 13,680 .14
Oxford Health Plans, Inc. /1/ 215,000 11,986 .12
Ecolab Inc. 250,000 9,469 .09
PacifiCare Health Systems, Inc., Class B /1/ 100,000 8,375 .08
Pittston Brink's Group 300,000 7,725 .08
Data Processing & Reproduction - 7.83%
Oracle Corp./1/ 3,464,550 135,984 1.36
Silicon Graphics, Inc. /1/ 4,640,000 111,940 1.12
Solectron Corp. /1/ 1,556,400 82,295 .82
International Business Machines Corp. 400,000 57,500 .57
Adobe Systems Inc. 1,445,000 52,743 .53
Computer Associates International, Inc. 1,150,000 50,025 .50
Digital Equipment Corp. /1/ 1,500,000 49,125 .49
Hewlett-Packard Co. 800,000 44,800 .45
Sybase, Inc. /1/ 2,215,000 36,271 .36
Compaq Computer Corp. /1/ 400,000 31,700 .32
Sequent Computer Systems, Inc. /1/ 1,500,000 25,781 .26
Cisco Systems, Inc. /1/ 400,000 22,250 .22
Intuit Inc. /1/ 978,600 22,141 .22
Data General Corp. /1/ 1,000,000 19,375 .19
Tandem Computers Inc. /1/ 1,540,000 19,250 .19
3Com Corp. /1/ 450,000 14,899 .15
Mentor Graphics Corp. /1/ 515,000 4,925 .05
CompuServe Corp. /1/ 281,700 2,852 .03
Leisure & Tourism - 4.92%
Walt Disney Co. 3,852,466 286,046 2.86
MGM Grand, Inc. /1/ 2,400,000 84,300 .84
King World Productions, Inc. /1/ 1,450,000 53,831 .54
Carnival Corp., Class A 900,000 31,725 .32
Harrah's Entertainment, Inc. /1/ 1,537,300 28,440 .28
Marriott International, Inc. 150,000 7,950 .08
Financial Services - 4.68%
Federal National Mortgage Assn. 8,100,000 324,000 3.24
Capital One Financial Corp. 1,791,800 71,224 .71
Student Loan Marketing Assn. 450,000 47,644 .48
Federal Home Loan Mortgage Corp. 850,400 25,299 .25
Beverages & Tobacco - 3.34%
Philip Morris Companies Inc. 2,375,000 320,922 3.21
PepsiCo, Inc. 400,000 13,150 .13
Health & Personal Care - 3.08%
Nellcor Puritan Bennett Inc. /1/ 2,700,000 46,913 .47
Gilead Sciences, Inc. /1/ 1,415,000 43,158 .43
Guidant Corp. 600,000 40,200 .40
Forest Laboratories, Inc. /1/ 1,000,000 38,125 .38
AB Astra, Class A (American Depositary Receipts) (Sweden) 450,000 21,656 .22
Kimberly-Clark Corp. 175,000 18,550 .19
Pfizer Inc 200,000 18,325 .18
NexStar Pharmaceuticals, Inc. /1/ /2/ 1,000,000 14,875
NexStar Pharmaceuticals, Inc. /1/ 200,000 2,975 .18
MedImmune, Inc. /1/ 1,064,000 15,428 .15
Alza Corp. /1/ 500,000 14,187 .14
Pharmacia & Upjohn, Inc. 290,000 10,694 .11
Omnicare, Inc. 360,000 9,540 .10
Gillette Co. 90,400 7,153 .07
Gensia Pharmaceuticals, Inc. /1/ 1,332,202 6,411 .06
Telecommunications - 2.85%
MCI Communications Corp. 3,375,000 120,656 1.20
Vodafone Group PLC (American Depositary Receipts)
(United Kingdom) 1,220,000 57,950 .58
AirTouch Communications /1/ 1,900,000 51,775 .52
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts) (Mexico) 900,000 34,987 .35
AT&T Corp. 500,000 19,937 .20
Energy Equipment - 2.03%
Transocean Offshore Inc. 1,235,967 69,060 .69
Diamond Offshore Drilling, Inc. /1/ 1,090,000 64,310 .64
Schlumberger Ltd. (Netherlands Antilles) 541,000 54,438 .55
Dresser Industries, Inc. 500,000 15,187 .15
Transportation: Airlines - 1.78%
Southwest Airlines Co. 2,956,450 69,477 .69
AMR Corp. /1/ 860,000 67,617 .68
Delta Air Lines, Inc. 515,000 41,457 .41
Banking - 1.78%
Citicorp 800,000 93,400 .93
PNC Bank Corp. 600,000 25,425 .26
BankAmerica Corp. 220,000 25,025 .25
First Security Corp. 543,750 18,963 .19
Commerce Bancshares, Inc. 318,346 15,121 .15
Merchandising - 1.52%
Limited Inc. 3,400,000 64,600 .64
Circuit City Stores, Inc. 900,000 28,125 .28
Wal-Mart Stores, Inc. 600,000 15,825 .16
Intimate Brands, Inc., Class A 800,000 15,600 .16
Sports Authority, Inc. /1/ 725,000 13,866 .14
Cardinal Health, Inc., Class A 225,000 13,837 .14
Insurance - 1.45%
EXEL Ltd. (Incorporated in Bermuda) 2,480,000 109,430 1.09
CNA Financial Corp. /1/ 120,000 13,350 .14
Everest Reinsurance Holdings, Inc. 350,000 11,025 .11
NAC Re Corp. 300,000 11,025 .11
Recreation & Consumer Products - 1.32%
Mattel, Inc. 4,296,875 106,885 1.07
Hasbro, Inc. 265,000 11,329 .11
Electronic Arts /1/ 231,700 7,241 .07
Acclaim Entertainment, Inc. /1/ 1,325,000 7,039 .07
Miscellaneous Materials & Commodities - 1.16%
Pioneer Hi-Bred International, Inc. 1,450,000 98,781 .98
Potash Corp. of Saskatchewan Inc. (Canada) 225,000 17,691 .18
Electrical & Electronic Instruments - 1.14%
Telefonaktiebolaget LM Ericsson, Class B
(American Depositary Receipts) (Sweden) 1,462,500 46,137 .46
Nokia Corp., Class A (American Depositary Receipts) (Finland) 750,000 43,875 .44
General Instrument Corp. /1/ 534,000 12,682 .12
Lucent Technologies Inc. 217,042 11,693 .12
Machinery & Engineering - 1.13%
Thermo Electron Corp. /1/ 2,175,000 74,222 .74
Caterpillar Inc. 500,000 39,187 .39
Electronic Instruments - 0.99%
Applied Materials, Inc. /1/ 700,000 35,437 .35
KLA Instruments Corp. /1/ 850,000 35,434 .35
Teradyne, Inc. /1/ 1,050,000 28,612 .29
Utilities: Electric & Gas - 0.98%
Columbia Gas System, Inc. 756,400 44,438 .44
K N Energy, Inc. 800,000 31,600 .32
PanEnergy Corp. 525,600 22,404 .22
Transportation: Rail & Road - 0.88%
Wisconsin Central Transportation Corp. /1/ 2,457,600 88,166 .88
Energy Sources - 0.63%
Enterprise Oil PLC (United Kingdom) 4,500,000 45,582 .45
Norsk Hydro AS (American Depositary Receipts) (Norway) 200,000 10,000 .10
NGC Corp. 400,000 7,900 .08
Chemicals - 0.56%
A. Schulman, Inc. 1,522,500 29,498 .30
Air Products and Chemicals, Inc. 225,000 16,678 .17
H.B. Fuller Co. 192,000 9,360 .09
Multi-Industry - 0.54%
U.S. Industries, Inc. /1/ 1,475,000 54,022 .54
Textiles & Apparel - 0.34%
Nine West Group Inc. /1/ 725,000 34,075 .34
Industrial Components - 0.11%
Danaher Corp. 250,000 10,812 .11
Transportation: Shipping - 0.03%
Overseas Shipholding Group, Inc. 200,000 3,475 .03
Other equity-type securities in initial period of 444,909 4.44
acquisition ----------- --------
TOTAL EQUITY-TYPE SECURITIES (cost: $5,547,262,000) 8,558,591 85.49
----------- --------
Principal
Amount
SHORT-TERM SECURITIES (000)
- ------------------------------------- --------
Corporate Short-Term Notes - 9.71%
Gannett Co., Inc. 5.25%-5.29% due 3/7-4/11/97 /2/ 87,768 87,334 .87
IBM Credit Corp. 5.23%-5.31% due 3/17-5/16/97 84,800 84,315 .84
Lucent Technologies Inc. 5.27%-5.32% due 3/10-5/27/97 81,150 80,498 .80
Coca-Cola Co. 5.28% due 4/1-4/2/97 78,100 77,724 .78
Warner-Lambert Co. 5.28%-5.30% due 5/1-6/2/97 /2/ 66,300 65,522 .65
National Rural Utilities Cooperative Finance Corp.
5.24%-5.35% due 3/14-4/25/97 62,513 62,235 .62
Weyerhaeuser Co. 5.25%-5.30% due 3/12-4/23/97 56,900 56,650 .57
Proctor & Gamble Co. 5.22%-5.28% due 3/13-4/23/97 54,900 54,650 .55
Sara Lee Corp. 5.30% due 3/26/97 50,000 49,808 .50
International Lease Finance Corp. 5.25% due 5/6/97 50,000 49,503 .49
SAFECO Credit Co. Inc. 5.27%-5.30% due 4/3-5/14/97 47,500 47,145 .47
General Electric Capital Corp. 5.30%-5.34% due 4/3-4/14/97 43,900 43,640 .44
Hershey Foods Corp. 5.28% due 3/13-3/21/97 39,000 38,887 .39
American Brands, Inc. 5.26%-5.33% due 3/11-5/19/97 38,900 38,543 .39
Minnesota Mining & Manufacturing Co. 5.20%-5.32% due 4/10-4/25/97 38,700 38,439 .38
Pfizer Inc 5.30%-5.31% due 3/3/97 /2/ 36,100 36,084 .36
H.J. Heinz Co. 5.25%-5.37% due 3/4-4/1/97 34,100 34,015 .34
American Express Credit Corp. 5.32% due 4/4/97 17,400 17,310 .17
Walt Disney Co. 5.30% due 4/21/97 10,000 9,924 .10
----------- --------
972,226 9.71
----------- --------
Federal Agency Short-Term Obligations - 3.69%
Federal Home Loan Bank 5.20%-5.25% due 4/10-5/29/97 125,860 124,435 1.24
Federal National Mortgage Assn. 5.18%-5.34% due 3/27-5/20/97 125,200 124,067 1.24
Federal Home Loan Mortgage Corp. 5.25%-5.34% due 3/25-4/9/97 121,625 121,063 1.21
----------- --------
369,565 3.69
Certificates of Deposit - 0.47%
Morgan Guaranty Trust Co. of New York 5.40% due 4/28/97 47,000 47,002 .47
----------- --------
Federal Agency Obligations - Other - 0.46%
Student Loan Marketing Assn. 5.15%-5.24% due 3/25-3/27/97 46,415 46,238 .46
----------- --------
TOTAL SHORT-TERM SECURITIES (cost: $1,435,116,000) 1,435,031 14.33
----------- --------
TOTAL INVESTMENT SECURITIES (cost: $6,982,378,000) 9,993,622 99.82
Excess of cash and receivables over payables 18,124 .18
----------- --------
NET ASSETS 10,011,746 100.00%
=========== ========
/1/ Non-income-producing securities.
/2/ Purchased in a private placement transaction; resale to the
public may require registration or sale only to qualified
institutional investors.
See Notes to Financial Statements
- -----------------------------
Equity-type securities
appearing in the portfolio
since August 31, 1996
- -----------------------------
ASM Lithography Holding
AB Astra
Computer Associates International
Danaher
Data General
Diamond Offshore Drilling
Enterprise Oil
Gilead Sciences
Intuit
KLA Instruments
Nine West Group
Norsk Hydro
Pioneer Hi-Bred International
Pittston Brink's Group
Republic Industries
Sequent Computer Systems
Shared Medical Systems
Teradyne
Wisconsin Central Transportation
- -------------------------------
Equity-type securities
eliminated from the portfolio
since August 31, 1996
- -------------------------------
ADT
Altera
AMP
Apple Computer
Apria Healthcare Group
Autodesk
Compuware
Conrail
Dell Computer
Dun & Bradstreet
EMC
Genetics Institute
Great Lakes Chemical
Informix
LIN Television
Loctite
Marvel Entertainment Group
Maxim Integrated Products
MFS Communications
Mirage Resorts
New World Communications Group
Pitney Bowes
Promus Hotel
Toys "R" Us
Vencor
Western Digital
Xilinx
</TABLE>
<TABLE>
The Growth Fund of America
Financial Statements Unaudited
- ---------------------------------------------- ---------------- ----------------
Statement of Assets and Liabilities (dollars in
at February 28, 1997 thousands)
- ---------------------------------------------- ---------------- ----------------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $6,982,378) $9,993,622
Cash 597
Receivables for-
Sales of investments $38,531
Sales of fund's shares 15,144
Dividends and accrued interest 3,088 56,763
---------------- ----------------
10,050,982
Liabilities:
Payables for-
Purchases of investments 17,651
Repurchases of fund's shares 13,477
Management services 2,830
Accrued expenses 5,278 39,236
---------------- ----------------
Net Assets at February 28, 1997-
Equivalent to $17.23 per share on
581,030,888 shares of $0.10 par value
capital stock outstanding (authorized
capital stock--800,000,000 shares) $10,011,746
================
- ---------------------------------------------- ---------------- ----------------
Statement of Operations (dollars in
for the six months ended February 28, 1997 thousands)
- ---------------------------------------------- ---------------- ----------------
Investment Income:
Income:
Dividends $ 28,349
Interest 39,109 $ 67,458
----------------
Expenses:
Management services fee 17,220
Distribution expenses 11,028
Transfer agent fee 4,423
Reports to shareholders 495
Registration statement and prospectus 623
Postage, stationery and supplies 644
Directors' fees 66
Auditing and legal fees 45
Custodian fee 124
Taxes other than federal income tax 4
Other expenses 68 34,740
---------------- ----------------
Net investment income 32,718
----------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 444,651
Net increase in unrealized appreciation:
on investments
Beginning of period 1,913,178
End of period 3,011,245 1,098,067
---------------- ----------------
Net realized gain and unrealized appreciation
on investments 1,542,718
----------------
Net Increase in Net Assets Resulting
from Operations $ 1,575,436
================
See Notes to Financial Statements
(dollars in
thousands)
- ---------------------------------------------- ---------------- ----------------
Six months ended Year ended
Statement of Changes in Net Assets February 28, 1997* August 31, 1996
- ---------------------------------------------- ---------------- ----------------
Operations:
Net investment income $ 32,718 $ 67,802
Net realized gain on investments 444,651 583,665
Net change in unrealized appreciation
on investments 1,098,067 (602,963)
---------------- ----------------
Net increase in net assets
resulting from operations 1,575,436 48,504
---------------- ----------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (60,737) (68,664)
Distributions from net realized gain on
investments (474,857) (537,427)
---------------- ----------------
Total dividends and distributions (535,594) (606,091)
---------------- ----------------
Capital Share Transactions:
Proceeds from shares sold: 44,825,126
and 88,063,294 shares, respectively 1,058,408 2,814,262
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 30,970,137 and 19,284,224 shares,
respectively 515,288 580,427
Cost of shares repurchased: 47,436,970
and 58,145,510 shares, respectively (1,112,504) (1,851,280)
---------------- ----------------
Net increase in net assets resulting from
capital share transactions 461,192 1,543,409
---------------- ----------------
Total Increase in Net Assets 1,501,034 985,822
Net Assets:
Beginning of period 8,510,712 7,524,890
---------------- ----------------
End of period (including undistributed
net investment income: $10,590
and $38,609, respectively) $ 10,011,746 $8,510,712
================ ================
*Unaudited
See Notes to Financial Statements
</TABLE>
NOTES TO FINANCIAL STATEMENTS
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 fund 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 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 by the Board of Directors or a committee thereof.
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
and premiums on securities purchased are amortized over the life of the
respective securities. 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 effects of
changes in foreign currency exchange rates on investment securities are
included with the net realized and unrealized gain or loss on investment
securities.
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 $124,000 includes $14,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of February 28, 1997, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $3,011,245,000, of which
$3,330,766,000 related to appreciated securities and $319,521,000 related to
depreciated securities. There was no difference between book and tax realized
gains on securities transactions for the six months ended February 28, 1997.
The cost of portfolio securities for book and federal income tax purposes was
$6,982,378,000 at February 28, 1997.
3. The fee of $17,220,000 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 average 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 28,
1997, distribution expenses under the Plan were $11,028,000. As of February
28, 1997, accrued and unpaid distribution expenses were $4,976,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $4,423,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $2,358,000 (after
allowances to dealers) as its portion of the sales charges paid by purchasers
of the fund's shares. Such sales charges are not an expense of the fund and,
hence, are not reflected in the accompanying statement of operations.
Directors who are unaffiliated with CRMC may elect to defer part or all of
the fees earned for services as members of the Board. Amounts deferred are not
funded and are general unsecured liabilities of the fund. As of February 28,
1997, aggregate amounts deferred and earnings thereon were $261,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
4. As of February 28, 1997, accumulated undistributed net realized gain on
investments was $342,007,000 and additional paid-in capital was
$6,589,791,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,384,031,000 and
$1,489,661,000, respectively, during the six months ended February 28, 1997.
Net realized currency gains on dividends were $13,000 for the six months
ended February 28, 1997.
5. Effective at the close of business on December 12, 1996, the Board of
Directors declared a 100% share dividend, which, in effect, is a 2-for-1 share
split, of 276,075,903 shares. Net assets were not affected by this share
dividend.
<TABLE>
Per-Share Data and Ratios /1/ Six months
ended Year ended August 31
Feb. 28,
1997 /2/ 1996 1995 1994 1993 1992
------- ------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.39 $16.55 $13.81 $13.58 $11.02 $11.21
------- ------- ------- ------- --------- -------
Income from Investment Operations:
Net investment income .06 .13 .13 .07 .07 .12
Net realized and unrealized gain (loss)
on investments 2.75 (.01) 3.21 .71 2.63 .40
------- ------- ------- ------- --------- -------
Total income from
investment operations 2.81 .12 3.34 .78 2.70 .52
------- ------- ------- ------- --------- -------
Less Distributions:
Dividends from net investment income (.11) (.14) (.08) (.06) (.09) (.17)
Distributions from net realized gains (.86) (1.14) (.52) (.49) (.05) (.54)
------- ------- ------- ------- --------- -------
Total distributions (.97) (1.28) (.60) (.55) (.14) (.71)
------- ------- ------- ------- --------- -------
Net Asset Value, End of Period $17.23 $15.39 $16.55 $13.81 $13.58 $11.02
======= ======= ======= ======= ========= ========
Total Return /3/ 18.52% /4/ .90% 25.56% 5.98% 24.64% 4.91%
Ratios/Supplemental Data:
Net assets, end of period (in millions) $10,012 $8,511 $7,525 $5,427 $5,018 $3,700
Ratio of expenses to average net
assets .37% /4/ .74% .75% .78% .77% .79%
Ratio of net income to average net
assets .35% /4/ .82% .90% .49% .56% 1.11%
Average commissions paid /5/ 5.35 cents 5.62 cents 5.94 cents 6.05 cents 6.82 cents 6.94 cents
Portfolio turnover rate 17.27% /4/ 27.95% 26.90% 24.77% 25.23% 10.64%
/1/ Adjusted to reflect the 100% share dividend
effective at the close of business on
December 12, 1996.
/2/Unaudited
/3/Calculated without
deducting a sales charge. The
maximum sales charge is 5.75% of
the fund's offering price.
/4/ Based on operations for the period shown and,
accordingly, not representative of a full year's operations.
/5/Brokerage commissions paid on
portfolio transactions increase
the cost of securities purchased
or reduce the proceeds of securities
sold and are not separately reflected in the
fund's statement of operations.
Shares traded on a principal basis (without commissions),
such as most over-the-counter and fixed-income transactions,
are excluded.
</TABLE>
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, 1997, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA CD/AL/3395
Lit. No. GFA-013-0497
Printed on recycled paper
OFFICE OF THE FUND
One Market
Steuart Tower, 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 92821-5804
TRANSFER AGENT FOR
SHAREHOLDER ACCOUNTS
(Please write to the address nearest you.)
American Funds Service Company
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071-2371
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR FINANCIAL ADVISER. YOU MAY ALSO CALL AMERICAN FUNDS SERVICE
COMPANY, TOLL FREE, AT 800/421-0180, OR VISIT WWW.AMERICANFUNDS.COM ON THE
WORLD WIDE WEB.
[The American Funds Group(R)]
