THE FUND PROVIDES SPANISH TRANSLATIONS IN CONNECTION WITH THE PUBLIC OFFERING
AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR AND ACCURATE ENGLISH
TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS FOR THE FUND.
/s/ Patrick F. Quan
Patrick F. Quan
Secretary
<PAGE>
[LOGO OF THE AMERICAN FUNDS GROUP(R)]
- --------------------------------------------------------------------------------
The Growth Fund
of America(R)
Prospectus
for Eligible Retirement Plans
JANUARY 1, 1997
<PAGE>
THE GROWTH FUND OF AMERICA, INC.
One Market
Steuart Tower, Suite 1800
San Francisco, CA 94105
The investment objective of the fund is growth of capital. The realization of
current income will not be a consideration. The fund strives to accomplish
this objective by investing primarily in common stocks.
THIS PROSPECTUS RELATES ONLY TO SHARES OF THE FUND OFFERED WITHOUT A SALES
CHARGE TO ELIGIBLE RETIREMENT PLANS. FOR A PROSPECTUS REGARDING SHARES OF THE
FUND TO BE ACQUIRED OTHERWISE, CONTACT THE SECRETARY OF THE FUND AT THE
ADDRESS INDICATED ABOVE.
This prospectus presents information you should know before investing in the
fund. It should be retained for future reference.
More detailed information about the fund, including the fund's financial
statements, is contained in the statement of additional information dated
January 1, 1997, which has been filed with the Securities and Exchange
Commission and is available to you without charge, by writing to the Secretary
of the fund at the above address or calling American Funds Service Company.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR
GUARANTEED BY, THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON. THE
PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
RP 05-010-0197
<PAGE>
================================================================================
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary of Expenses 1
Financial Highlights 2
Investment Objective and Policies 4
Certain Securities and
Investment Techniques 5
Multiple Portfolio
Counselor System 6
Investment Results 8
Dividends, Distributions and Taxes 8
Fund Organization and Management 9
Purchasing Shares 11
Shareholder Services 13
Redeeming Shares 13
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY OF EXPENSES
Average annual expenses paid over a 10-year period would be approximately $9
per year, assuming a $1,000 investment and a 5% annual return.
This table is designed to help you understand costs of investing in the fund.
These are historical expenses; your actual expenses may vary.
SHAREHOLDER TRANSACTION EXPENSES
Certain retirement plans may purchase shares of the fund with no sales
charge./1/ The fund also has no sales charge on reinvested dividends, deferred
sales charge, redemption fees or exchange fees.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Management fees 0.37%
12b-1 expenses 0.24%/2/
Other expenses (including audit, legal, shareholder services, trans-
fer agent and custodian expenses) 0.13%
Total fund operating expenses 0.74%
</TABLE>
Summary of Expenses continued on the following page . . .
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THE GROWTH FUND OF AMERICA / PROSPECTUS 1
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
EXAMPLES
You would pay the following cumulative expenses on a $1,000 investment,
assuming a 5% annual return./3/
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
One year $ 8
................................................................................
Three years $24
................................................................................
Five years $41
................................................................................
Ten years $92
</TABLE>
/1/ Retirement plans of organizations with $100 million or more in collective
retirement plan assets may purchase shares of the fund with no sales charge.
In addition, any employer-sponsored 403(b) plan or defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or any other plan that
invests at least $1 million in shares of the fund (or in combination with
shares of other funds in The American Funds Group other than the money
market funds) may purchase shares at net asset value; however, a contingent
deferred sales charge of 1% applies on certain redemptions within 12 months
following such purchases. (See "Redeeming Shares--Contingent Deferred Sales
Charge.")
/2/ These expenses may not exceed 0.25% of the fund's average net assets
annually. (See "Fund Organization and Management--Plan of Distribution.")
Due to these distribution expenses, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers.
/3/ Use of this assumed 5% return is required by the Securities and Exchange
Commission; it is not an illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the fiscal year)
The following information for the ten years ended August 31, 1996 has been
derived from financial statements which have been audited by Deloitte & Touche
LLP, independent accountants. This information should be read in conjunction
with the financial statements and related notes, which are included in the
statement of additional information.
- --------------------------------------------------------------------------------
2 THE GROWTH FUND OF AMERICA / PROSPECTUS
- --------------------------------------------------------------------------------
<PAGE>
SELECTED PER-SHARE DATA*
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31
------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $16.55 $13.81 $13.58 $11.02 $11.21 $9.22 $11.53 $8.71 $10.61 $8.58
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .13 .13 .07 .07 .12 .21 .28 .27 .14 .14
Net realized and
unrealized gain (loss)
on investments (.01) 3.21 .71 2.63 .40 2.43 (1.29) 3.00 (1.34) 2.43
Total income
from investment
operations .12 3.34 .78 2.70 .52 2.64 (1.01) 3.27 (1.20) 2.57
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from net
investment income (.14) (.08) (.06) (.09) (.17) (.24) (.31) (.15) (.15) (.14)
Distributions from net
realized gains (1.14) (.52) (.49) (.05) (.54) (.41) (.99) (.30) (.55) (.40)
Total distributions (1.28) (.60) (.55) (.14) (.71) (.65) (1.30) (.45) (.70) (.54)
Net asset value, end of
year $15.39 $16.55 $13.81 $13.58 $11.02 $11.21 $9.22 $11.53 $8.71 $10.61
Total return/1/ .90% 25.56% 5.98% 24.64% 4.91% 30.55% (9.76%) 39.35% (10.73%) 32.27%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of year
(in millions) $8,511 $7,525 $5,427 $5,018 $3,700 $2,903 $1,912 $1,686 $ 1,038 $1,237
Ratio of expenses to
average net assets .74% .75% .78% .77% .79% .83% .79% .78% .71% .66%
Ratio of net income to
average net assets .82% .90% .49% .56% 1.11% 2.13% 2.67% 2.82% 1.56% 1.50%
Average commissions
paid/2/ 5.62c 5.94c 6.05c 6.82c 6.94c 7.23c 7.13c 7.00c 6.64c 6.33c
Portfolio turnover rate 27.95% 26.90% 24.77% 25.23% 10.64% 18.92% 17.69% 30.28% 18.33% 19.61%
</TABLE>
/1/ Calculated with no sales charge.
/2/ 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, such as most over-the-counter and fixed-income
transactions, are excluded.
* All per share data reflect the 100% stock dividend effected on
December 13, 1996.
- --------------------------------------------------------------------------------
THE GROWTH FUND OF AMERICA / PROSPECTUS 3
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES
The fund aims to provide you with growth of capital.
The fund's investment objective is growth of capital. The realization of
current income will not be a consideration. The fund seeks to achieve its
objective by investing in a diversified portfolio consisting primarily of
common stocks. However, assets may also be held in securities convertible into
common stocks, cash or cash equivalents, straight debt securities (including
U.S. Government securities), or nonconvertible preferred stocks. (See the
statement of additional information for a description of cash equivalents.) The
fund will maintain at least 65% of the value of its total assets in growth-type
securities under normal market conditions.
Up to 10% of the fund's assets may be invested in "high-yield, high-risk"
straight debt securities (commonly referred to as "junk bonds") which are rated
BB or below by Standard & Poor's Corporation and Ba or below by Moody's
Investors Service, Inc. or in unrated securities that are determined to be of
equivalent quality, provided the fund's investment adviser, Capital Research
and Management Company, determines that these securities have characteristics
similar to the equity securities eligible for purchase by the fund. "High-
yield, high-risk" securities carry a higher degree of investment risk than
higher rated bonds and are considered speculative.
The fund may invest up to 10% in the securities of issuers domiciled outside
the U.S. and may purchase or sell various currencies on a spot basis in
connection with such investments.
The fund will attempt to take prompt advantage of market conditions and as a
result may at times have a high rate of portfolio turnover relative to many
other mutual funds. The fund may dispose of any security at any time, and it is
the fund's intention to take either short- or long-term profits or losses
consistent with its objective and sound investment practice, and when such
action would not impair the fund's tax status.
The growth-oriented, equity-type securities generally purchased by the fund may
involve greater risk than is customarily associated with investing in stocks of
larger, more established companies and may be subject to greater price swings.
The fund's investment restrictions (which are described in the statement of
additional information) and objective cannot be changed without shareholder
approval. All other investment practices may be changed by the fund's board.
- --------------------------------------------------------------------------------
4 THE GROWTH FUND OF AMERICA / PROSPECTUS
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT, OF COURSE, BE ASSURED
DUE TO THE RISK OF CAPITAL LOSS FROM FLUCTUATING PRICES INHERENT IN ANY
INVESTMENT IN SECURITIES.
- --------------------------------------------------------------------------------
CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
Investing in stocks and bonds involves certain risks.
RISKS OF INVESTING
Because the fund invests in common stocks or securities convertible into common
stocks, the fund is subject to stock market risks. For example, the fund is
subject to the possibility that stock prices in general will decline over short
or even extended periods.
The fund may also invest in high-yield, high-risk securities provided that
Capital Research and Management Company determines that these securities have
characteristics similar to the equity securities eligible for purchase by the
fund. The values of these securities may be subject to fluctuations that tend
to reflect short-term corporate and market developments and investor
perceptions of the issuers. It may be more difficult to dispose of, or
determine the value of these high-yield, high-risk securities. See the
statement of additional information for a description of the ratings and for
more information about the risks of high-yield, high-risk securities. High-
yield, high-risk securities rated CC or Ca generally are described by the
rating agencies as "speculative in a high degree; often in default or [having]
other marked shortcomings."
RISKS OF INVESTING IN VARIOUS COUNTRIES
The fund may invest up to 10% in the securities of issuers which are domiciled
outside the U.S. and which are not included in the Standard & Poor's 500
Composite Index (a broad measure of the U.S. stock market). These companies may
not be subject to uniform accounting, auditing and financial reporting
standards and practices or regulatory requirements comparable to those
applicable to U.S. companies. There may also be less public information
available about non-U.S. companies. Additionally, specific local political and
economic factors must be evaluated in making these investments including trade
balances and imbalances, and related economic policies; expropriation or
confiscatory taxation; limitations on the removal of funds or other assets;
political or social instability; the diverse structure and liquidity of the
various securities markets; and nationalization policies of governments around
the world. However, investing outside the U.S. can also reduce certain of these
risks due to greater diversification opportunities.
- --------------------------------------------------------------------------------
THE GROWTH FUND OF AMERICA / PROSPECTUS 5
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
PRIVATE PLACEMENTS
Private placements may be either purchased from another institutional investor
that originally acquired the securities in a private placement or directly from
the issuers of the securities. Generally, securities acquired in private
placements are subject to contractual restrictions on resale and may not be
resold except pursuant to a registration statement under the Securities Act of
1933 or in reliance upon an exemption from the registration requirements under
the Act, for example, private placements sold pursuant to Rule 144A.
Accordingly, any such obligation will be deemed illiquid unless it has been
specifically determined to be liquid under procedures adopted by the fund's
board of directors.
In determining whether these securities are liquid, factors such as the
frequency and volume of trading and the commitment of dealers to make markets
will be considered. Additionally, the liquidity of any particular security will
depend on such factors as the availability of "qualified" institutional
investors and the extent of investor interest in the security, which can change
from time to time.
- --------------------------------------------------------------------------------
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
The basic investment philosophy of Capital Research and Management Company is
to seek fundamental values at reasonable prices, using a system of multiple
portfolio counselors in managing mutual fund assets. Under this system the
portfolio of the fund is divided into segments which are managed by individual
counselors. Each counselor decides how their segment will be invested (within
the limits provided by the fund's objective and policies and by Capital
Research and Management Company's investment committee). In addition, Capital
Research and Management Company's research professionals make investment
decisions with respect to a portion of the fund's portfolio. The primary
individual portfolio counselors for the fund are listed on the next page.
- --------------------------------------------------------------------------------
6 THE GROWTH FUND OF AMERICA / PROSPECTUS
- --------------------------------------------------------------------------------
<PAGE>
===============================================================================
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE
AS
INVESTMENT
PROFESSIONAL
(APPROXIMATE)
......................
YEARS OF EXPERIENCE WITH CAPITAL
AS PORTFOLIO COUNSELOR RESEARCH AND
(AND RESEARCH PROFESSIONAL, MANAGEMENT
PORTFOLIO COUNSELORS IF APPLICABLE) FOR THE COMPANY OR
FOR THE GROWTH FUND GROWTH FUND OF AMERICA, INC. ITS TOTAL
OF AMERICA, INC. PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GORDON Senior Vice 5 years (in 25 years 25 years
CRAWFORD President and addition to 16
Director, years as a
Capital research
Research and professional
Management prior to
Company becoming a
portfolio
counselor for
the fund)
- -----------------------------------------------------------------------------------------
JAMES E. Senior Vice 11 years (in 19 years 25 years
DRASDO President addition to 7
of the fund. years as a
Senior Vice research
President and professional
Director, prior to
Capital becoming a
Research and portfolio
Management counselor for
Company the fund)
- -----------------------------------------------------------------------------------------
WILLIAM C. Senior Partner, 23 years** 37 years 43 years
NEWTON The Capital
Group
Partners L.P.*
- -----------------------------------------------------------------------------------------
DONALD D. Vice President 3 years (in 11 years 11 years
O'NEAL of the fund. addition to 8
Vice President, years as a
Capital research
Research and professional
Managment prior to
Company becoming a
portfolio
counselor for
the fund)
- -----------------------------------------------------------------------------------------
JAMES F. President of 8 years (in 26 years 26 years
ROTHENBERG the fund. addition
President and to 3 years as a
Director, research
Capital professional
Research and prior to
Management becoming a
Company portfolio
counselor for
the fund)
- -----------------------------------------------------------------------------------------
R. MICHAEL Chairman, 11 years 32 years 32 years
SHANAHAN Capital
Research and
Management
Company
</TABLE>
* Company affiliated with Capital Research and Management Company.
** Since Capital Research and Management Company took over management of the
fund in 1973.
- --------------------------------------------------------------------------------
THE GROWTH FUND OF AMERICA / PROSPECTUS 7
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
The fund has averaged a total return (at no sales charge) of +16.34% a year
under Capital Research and Management Company's management.
(December 1, 1973 through September 30, 1996)
The fund may from time to time compare its investment results to various
unmanaged indices or other mutual funds in reports to shareholders, sales
literature and advertisements. The results may be calculated on a yield, total
return and/or distribution rate basis for various periods, with or without
sales charges. Results calculated without a sales charge will be higher. Total
returns assume the reinvestment of all dividends and capital gain
distributions. The fund's distribution rate is calculated by dividing the
dividends paid by the fund over the last 12 months by the sum of the month-end
price and the capital gains paid over the last 12 months. The SEC yield
reflects income the fund expects to earn based on its current portfolio of
securities, while the distribution rate is based solely on the fund's past
dividends. Accordingly, the fund's SEC yield and distribution rate may differ.
As of September 30, 1996, the fund's total return over the past 12 months and
average annual total returns over the past five- and ten-year periods were
+6.41%, +13.28% and +14.44%, respectively. These results were calculated in
accordance with Securities and Exchange Commission requirements at no sales
charge. Of course, past results are not an indication of future results.
Further information regarding the fund's investment results is contained in the
fund's annual report which may be obtained without charge by writing to the
Secretary of the fund at the address indicated on the cover of this prospectus.
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
Income distributions are usually made in December.
DIVIDENDS AND DISTRIBUTIONS
Dividends are usually paid in December. Capital gains, if any, are also usually
distributed in December. When a dividend or capital gain is distributed, the
net asset value per share is reduced by the amount of the payment.
The terms of your plan will govern how your plan may receive distributions from
the fund. Generally, periodic distributions from the fund to your plan are
reinvested in additional fund shares, although your plan may permit fund
distributions from net investment income to be received by you in cash while
reinvesting capital gain distributions in additional shares or all fund
- --------------------------------------------------------------------------------
8 THE GROWTH FUND OF AMERICA / PROSPECTUS
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
distributions to be received in cash. Unless you select another option, all
distributions will be reinvested in additional fund shares.
FEDERAL TAXES
The fund intends to operate as a "regulated investment company" under the
Internal Revenue Code. In any fiscal year in which the fund so qualifies and
distributes to shareholders all of its net investment income and net capital
gains, the fund itself is relieved of federal income tax. The tax treatment of
redemptions from a retirement plan may differ from redemptions from an ordinary
shareholder account.
PLEASE SEE THE STATEMENT OF ADDITIONAL INFORMATION AND YOUR TAX ADVISER FOR
FURTHER INFORMATION.
- --------------------------------------------------------------------------------
FUND ORGANIZATION AND MANAGEMENT
The fund is a member of The American Funds Group, which is managed by one of
the largest and most experienced investment advisers.
FUND ORGANIZATION AND VOTING RIGHTS
The fund, an open-end, diversified management investment company, was organized
as a Delaware corporation in 1958 and reorganized as a Maryland corporation in
1983. The fund's board supervises fund operations and performs duties required
by applicable state and federal law. Members of the board who are not employed
by Capital Research and Management Company or its affiliates are paid certain
fees for services rendered to the fund as described in the statement of
additional information. They may elect to defer all or a portion of these fees
through a deferred compensation plan in effect for the fund. Shareholders have
one vote per share owned and, at the request of the holders of at least 10% of
the shares, the fund will hold a meeting at which any member of the board could
be removed by a majority vote. There will not usually be a shareholder meeting
in any year, except, for example, when the election of the board is required to
be acted upon by shareholders under the Investment Company Act of 1940.
THE INVESTMENT ADVISER
Capital Research and Management Company, a large and experienced investment
management organization founded in 1931, is the investment adviser to the fund
and other funds, including those in The American Funds Group. Capital Research
and Management Company is located at 333 South
- --------------------------------------------------------------------------------
THE GROWTH FUND OF AMERICA / PROSPECTUS 9
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
Hope Street, Los Angeles, CA 90071, and at 135 South State College Boulevard,
Brea, CA 92821. Capital Research and Management Company manages the investment
portfolio and business affairs of the fund and receives a fee at the annual
rates of 0.50% on the first $1 billion of the fund's net assets, 0.40% on net
assets in excess of $1 billion but not exceeding $2 billion, 0.37% on net
assets in excess of $2 billion but not exceeding $3 billion, 0.35% on net
assets in excess of $3 billion but not exceeding $5 billion, 0.335% on net
assets in excess of $5 billion but not exceeding $8 billion, and 0.325% on net
assets in excess of $8 billion.
Capital Research and Management Company is a wholly owned subsidiary of The
Capital Group Companies, Inc. (formerly "The Capital Group, Inc."), which is
located at 333 South Hope Street, Los Angeles, CA 90071. The research
activities of Capital Research and Management Company are conducted by
affiliated companies which have offices in Los Angeles, San Francisco, New
York, Washington, D.C., London, Geneva, Singapore, Hong Kong and Tokyo.
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the report dated May 9, 1994 issued by the Investment Company
Institute's Advisory Group on Personal Investing. (See the statement of
additional information.)
PORTFOLIO TRANSACTIONS
Orders for the fund's portfolio securities transactions are placed by Capital
Research and Management Company, which strives to obtain the best available
prices, taking into account the costs and quality of executions. In the over-
the-counter market, purchases and sales are transacted directly with principal
market-makers except in those circumstances where it appears better prices and
executions are available elsewhere.
Subject to the above policy, when two or more brokers are in a position to
offer comparable prices and executions, preference may be given to brokers that
have sold shares of the fund or have provided investment research, statistical,
and other related services for the benefit of the fund and/or of other funds
served by Capital Research and Management Company.
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc., a wholly owned subsidiary of Capital
Research and Management Company, is the principal underwriter of the fund's
shares. American Funds Distributors, Inc. is located at 333 South Hope Street,
- --------------------------------------------------------------------------------
10 THE GROWTH FUND OF AMERICA / PROSPECTUS
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
Los Angeles, CA 90071, 135 South State College Boulevard, Brea, CA 92821, 8000
IH-10 West, San Antonio, TX 78230, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, and 5300 Robin Hood Road, Norfolk, VA 23513. Telephone
conversations with American Funds Distributors may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
PLAN OF DISTRIBUTION
The fund has a plan of 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 board and the expenses paid under the
plan were incurred within the last 12 months and accrued while the plan was in
effect. Expenditures by the fund under the plan may not exceed 0.25% of its
average net assets annually (all of which may be for service fees).
TRANSFER AGENT
American Funds Service Company, 800/421-0180, a wholly owned subsidiary of
Capital Research and Management Company, is the transfer agent and performs
shareholder service functions. American Funds Service Company is located at 333
South Hope Street, Los Angeles, CA 90071, 135 South State College Boulevard,
Brea, CA 92821, 8000 IH-10 West, San Antonio, TX 78230, 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 46240 and 5300 Robin Hood Road, Norfolk, VA 23513.
It was paid a fee of $8,079,000 for the fiscal year ended August 31, 1996.
Telephone conversations with American Funds Service Company may be recorded or
monitored for verification, recordkeeping and quality assurance purposes.
- --------------------------------------------------------------------------------
PURCHASING SHARES
ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR RETIREMENT PLAN. FOR
MORE INFORMATION ABOUT HOW TO PURCHASE SHARES OF THE FUND THROUGH YOUR PLAN OR
LIMITATIONS ON THE AMOUNT THAT MAY BE PURCHASED, PLEASE CONSULT WITH YOUR
EMPLOYER. Shares are sold to eligible retirement plans at the net asset value
per share next determined after receipt of an order by the fund or American
Funds Service Company. Orders must be received before the close of regular
trading on the New York Stock Exchange in order to receive that day's net asset
value. Plans of organizations with collective retirement plan assets of $100
million or more may purchase shares at net asset value. In addition, any
employer-sponsored 403(b) plan or defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200
or more eligible employees or any other plan that invests at least $1 million
in
- --------------------------------------------------------------------------------
THE GROWTH FUND OF AMERICA / PROSPECTUS 11
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
shares of the fund (or in combination with shares of other funds in The
American Funds Group other than money market funds) may purchase shares at net
asset value; however, a contingent deferred sales charge of 1% is imposed on
certain redemptions within one year of such purchase. (See "Redeeming Shares--
Contingent Deferred Sales Charge.") Plans may also qualify to purchase shares
at net asset value by completing a statement of intention to purchase
$1 million in fund shares subject to commission over a maximum of
13 consecutive months. Certain redemptions of such shares may also be subject
to a contingent deferred sales charge as described above. (See the statement of
additional information.)
The minimum initial investment is $250, except that the money market funds have
a minimum of $1,000 for individual retirement accounts (IRAs). Minimums are
reduced to $50 for purchases through "Automatic Investment Plans" (except for
the money market funds) or to $25 for purchases by retirement plans through
payroll deductions and may be reduced or waived for shareholders of other funds
in The American Funds Group.
During 1997, American Funds Distributors will provide additional compensation
to the top one hundred dealers who have sold shares of the fund or other funds
in The American Funds Group based 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 promotional incentives.
Qualified dealers currently are paid a continuing service fee not to exceed
0.25% of average net assets annually in order to promote selling efforts and to
compensate them for providing certain services. (See "Fund Organization and
Management--Plan of Distribution.") These services include processing purchase
and redemption transactions, establishing shareholder accounts and providing
certain information and assistance with respect to the fund.
Shares of the fund are offered to other shareholders pursuant to another
prospectus at public offering prices that may include an initial sales charge.
SHARE PRICE
Shares are offered to eligible retirement plans at the net asset value after
the order is received by the fund or American Funds Service Company. In the
case of orders sent directly to the fund or American Funds Service Company, an
investment dealer must be indicated. Dealers are responsible for promptly
transmitting orders. (See the statement of additional information under
"Purchase of Shares--Price of Shares.")
- --------------------------------------------------------------------------------
12 THE GROWTH FUND OF AMERICA / PROSPECTUS
- --------------------------------------------------------------------------------
<PAGE>
===============================================================================
The fund's net asset value per share is determined as of the close of trading
(currently 4:00 p.m., New York time) on each day the New York Stock Exchange is
open. The current value of the fund's total assets, less all liabilities, is
divided by the total number of shares outstanding and the result, rounded to
the nearer cent, is the net asset value per share.
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES
Subject to any restrictions contained in your plan, you can exchange your
shares for shares of other funds in The American Funds Group which are offered
through the plan at net asset value. In addition, again depending on your plan,
you may be able to exchange shares automatically or cross-reinvest dividends in
shares of other funds. Contact your plan administrator/trustee regarding how to
use these services. Also, see the fund's statement of additional information
for a description of these and other services that may be available through
your plan. These services are available only in states where the fund to be
purchased may be legally offered and may be terminated or modified at any time
upon 60 days' written notice.
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REDEEMING SHARES
Subject to any restrictions imposed by your plan, you can sell your shares
through the plan any day the New York Stock Exchange is open. For more
information about how to sell shares of the fund through your retirement plan,
including any charges that may be imposed by the plan, please consult with your
employer.
By contacting Your plan administrator/trustee must send a letter of
your plan instruction specifying the name of the fund, the number of
administrator/ shares or dollar amount to be sold, and, if applicable, your
trustee name and account number. For your protection, if you redeem
more than $50,000, the signatures of the registered owners
(i.e., trustees or their legal representatives) must be
guaranteed by a bank, savings association, credit union, or
member firm of a domestic stock exchange or the National
Association of Securities Dealers, Inc., that is an eligible
guarantor institution. Your plan administrator/trustee should
verify with the institution that it is an eligible guarantor
prior to signing. Additional documentation may be required to
redeem shares from certain accounts. Notarization by a Notary
Public is not an acceptable signature guarantee.
By contacting Shares may also be redeemed through an investment dealer;
an investment however, you or your plan may be charged for this service.
dealer SHARES HELD FOR YOU IN AN INVESTMENT DEALER'S STREET NAME MUST
BE REDEEMED THROUGH THE DEALER.
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THE GROWTH FUND OF AMERICA / PROSPECTUS 13
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THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE NET ASSET VALUE NEXT
DETERMINED AFTER YOUR ORDER AND ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE
FUND OR AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING SHARES--SHARE PRICE.")
CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge of 1% applies to certain redemptions within
the first year on investments of $1 million or more and on any investment made
with no initial sales charge by any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of the Internal Revenue Code
including a "401(k)" plan with 200 or more eligible employees. The charge is 1%
of the lesser of the value of the shares redeemed (exclusive of reinvested
dividends and capital gain distributions) or the total cost of such shares.
Shares held for the longest period are assumed to be redeemed first for
purposes of calculating this charge. The charge is waived for exchanges (except
if shares acquired by exchange were then redeemed within 12 months of the
initial purchase); for distributions from qualified retirement plans and other
employee benefit plans; for redemptions resulting from participant-directed
switches among investment options within a participant-directed employer-
sponsored retirement plan; and for redemptions in connection with loans made by
qualified retirement plans.
OTHER IMPORTANT THINGS TO REMEMBER
The net asset value for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because the fund's net asset value
fluctuates, reflecting the market value of the portfolio, the amount you
receive for shares redeemed may be more or less than the amount paid for them.
Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the Investment Company Act of 1940), redemption proceeds will
be paid on or before the seventh day following receipt of a proper redemption
request.
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14 THE GROWTH FUND OF AMERICA / PROSPECTUS
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NOTES
THIS PROSPECTUS RELATES ONLY TO SHARES OF THE FUND OFFERED WITHOUT A SALES
CHARGE TO ELIGIBLE RETIREMENT PLANS. FOR A PROSPECTUS REGARDING SHARES OF THE
FUND TO BE ACQUIRED OTHERWISE, CONTACT THE SECRETARY OF THE FUND AT THE ADDRESS
INDICATED ON THE FRONT.
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THE GROWTH FUND OF AMERICA / PROSPECTUS 15
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NOTES
[RECYCLED This prospectus has been printed on recycled paper that meets the
LOGO] guidelines of the United States Environmental Protection Agency
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16 THE GROWTH FUND OF AMERICA / PROSPECTUS
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