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/ Julie F. Williams
Julie F. Williams
Secretary
<PAGE>
The American Funds Logo
- --------------------------------------------------------------------------------
The Growth Fund
of America(R)
Prospectus
NOVEMBER 1, 1998
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED OF THESE SECURITIES. FURTHER, IT HAS NOT
DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
THE GROWTH FUND OF AMERICA, INC.
One Market
Steuart Tower, Suite 1800
San Francisco, California 94105
TICKER SYMBOL: AGTHX NEWSPAPER ABBREV.: Gwth FUND NO.: 05
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk/Return Summary 3
.................................................................
Fees and Expenses of the Fund 5
.................................................................
Investment Objective, Strategies and Risks 6
.................................................................
Important Recent Developments 9
.................................................................
Management and Organization 10
.................................................................
Shareholder Information 12
.................................................................
Purchase and Exchange of Shares 13
.................................................................
Distribution Arrangements 16
.................................................................
Financial Highlights 17
</TABLE>
- --------------------------------------------------------------------------------
05-010-1198/B
<PAGE>
- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY
The fund seeks to make your investment grow by investing primarily in common
stocks of companies that appear to offer superior opportunities for growth of
capital.
The fund is designed for investors seeking capital appreciation through stocks.
Investors should have a long-term perspective and be able to tolerate
potentially wide price fluctuations. An investment in the fund is subject to
risks, including the possibility that its share price and total return may
decline in response to certain events, such as changes in the market or general
economy. In addition, the prices of equity securities held by the fund may be
affected by events involving the issuers of those securities. Accordingly, you
may lose money by investing in the fund. The likelihood of loss is greater if
you invest for a shorter period of time.
Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
INVESTMENT RESULTS
Here are the fund's results calculated without a sales charge on a calendar
year basis. (If a sales charge were included, results would be lower.)
<TABLE>
<S> <C>
88 18.46
89 30.06
90 -4.12
91 35.79
92 7.40
93 14.50
94 0.02
95 29.80
96 14.84
97 26.86
</TABLE>
The fund's year-to-date return for the nine months ended September 30, 1998
was 3.62%.
The fund's highest/lowest quarterly results during this time period were:
X HIGHEST 19.37% (quarter ended March 31, 1991)
X LOWEST -17.64% (quarter ended September 30, 1990)
THE GROWTH FUND OF AMERICA / PROSPECTUS 3
<PAGE>
The following information illustrates how the fund's results may vary:
For periods ended December 31, 1997:
<TABLE>
<CAPTION>
THE FUND WITH
MAXIMUM
AVERAGE ANNUAL SALES CHARGE
TOTAL RETURN(1) DEDUCTED(1) S&P 500(2) CPI(3)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 19.57% 33.32% 1.70%
...........................................................................
Five Years 15.34% 20.23% 2.60%
...........................................................................
Ten Years 15.96% 18.01% 3.41%
...........................................................................
Lifetime(4) 16.65% 14.44% 5.36%
</TABLE>
(1) These fund results were calculated according to a formula which requires
that the maximum sales charge be deducted. Results would be higher if they
were calculated at net asset value.
(2) The Standard & Poor's 500 Composite Index represents U.S. stocks. This index
is unmanaged and does not reflect sales charges, commissions or expenses.
(3) The Consumer Price Index is a measure of inflation and is computed from data
supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
(4) For the period beginning December 1, 1973 (when Capital Research and
Management Company became the fund's investment adviser).
These results are meant to illustrate the potential fluctuations in the fund's
results over shorter periods of time. In addition, past results are not an
indication of future results.
4 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
The following describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
SHAREHOLDER FEES
(fees paid directly from your investment)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.75%(1)
..................................................................
Maximum sales charge imposed on reinvested dividends 0%
..................................................................
Maximum deferred sales charge 0%(2)
..................................................................
Redemption or exchange fees 0%
</TABLE>
(1) Sales charges are reduced or eliminated for larger purchases.
(2) A contingent deferred sales charge of 1% applies on certain redemptions made
within 12 months following any purchases you made without a sales charge.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Management fees 0.35%
..................................................................
Service (12b-1) Fees 0.24%*
..................................................................
Other expenses 0.11%
..................................................................
Total Annual Fund Operating Expenses 0.70%
</TABLE>
* 12b-1 expenses may not exceed 0.25% of the fund's average net assets annually.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
One year $ 642
..................................................................
Three years $ 786
..................................................................
Five years $ 942
..................................................................
Ten years $ 1,395
</TABLE>
THE GROWTH FUND OF AMERICA / PROSPECTUS 5
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to provide you with growth of capital. It
invests primarily in common stocks.
The prices of the equity securities held by the fund may decline in response to
certain events, including those directly involving issuers of those securities,
adverse conditions affecting the general economy, or overall market declines. In
addition, the growth-oriented, equity securities generally purchased by the fund
may involve large price swings and potential for loss. The fund may also invest
in cash and cash equivalents. The extent of the fund's cash position will be
dependent on market conditions, fund purchases and redemptions, and other
factors. For example, under certain circumstances, in response to abnormal
market conditions, the fund may be invested substantially in cash or cash
equivalents. This will detract from the achievement of the fund's objective over
the short term, and it may protect the fund during a market downturn.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic investment philosophy of Capital Research and Management
Company is to seek undervalued securities that represent good long-term
investment opportunities.
OTHER IMPORTANT INVESTMENT PRACTICES
In addition to the principal investment strategies described above, the fund has
other investment practices that are described here and in the Statement of
Additional Information.
The fund may invest up to 10% of its assets in securities of issuers domiciled
outside the U.S. and not included in the Standard & Poor's 500 Composite Index.
Investments outside the U.S. may be subject to certain risks. For example, the
prices of non-U.S. securities can decline in response to currency fluctuations
or political, social and economic instability.
The fund may invest up to 10% of its assets in lower-quality debt securities
(rated Ba and BB or below or unrated but determined to be of equivalent
quality). The prices of debt securities fluctuate depending on such factors as
changing interest rates, credit quality of the issuers and maturity. For
example, their prices decline when interest rates rise and vice versa.
6 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
ADDITIONAL INVESTMENT RESULTS
The following additional investment results are for periods ended December 31,
1997:
<TABLE>
<CAPTION>
AVERAGE ANNUAL THE FUND WITH LIPPER
TOTAL RETURN NO SALES CHARGE(1) INDEX(2)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 26.86% 19.97%
...........................................................................
Five Years 16.71% 15.43%
...........................................................................
Ten Years 16.65% 15.01%
...........................................................................
Lifetime(3) 16.94% 14.28%
</TABLE>
(1) These fund results were calculated according to a formula that is required
for all stock and bond funds.
(2) The Lipper Capital Appreciation Funds Index is an equally weighted
performance index that represents funds that aim for maximum capital
appreciation. This index is unmanaged and does not reflect sales charges,
commissions or expenses.
(3) For the period beginning December 1, 1973 (when Capital Research and
Management Company became the fund's investment adviser).
THE GROWTH FUND OF AMERICA / PROSPECTUS 7
<PAGE>
The following chart illustrates the asset mix of the fund's investment
portfolio as of the end of the fund's fiscal year, August 31, 1998.
[begin pie chart]
<TABLE>
<CAPTION>
U.S. Treasury
& Federal
Cash and Agency Non-U.S.
U.S. Equities Equivalents Obligations Equities
<S> <C> <C> <C>
75.9 12.00 3.50 8.60
</TABLE>
* Includes 1% of non-U.S. securities that are in
the Standard & Poor's 500 Composite Index.
[end pie chart]
<TABLE>
<S> <C>
PERCENT OF
FIVE LARGEST INDUSTRIES IN EQUITY HOLDINGS NET ASSETS
-------------------------------------------------------------------------
Broadcasting & Publishing 23.92%
.......................................................................
Electronic Components 9.96
.......................................................................
Business & Public Services 6.49
.......................................................................
Data Processing & Reproduction 5.03
.......................................................................
Financial Services 4.72
.......................................................................
</TABLE>
<TABLE>
<S> <C>
PERCENT OF
TEN LARGEST EQUITY HOLDINGS NET ASSETS
-------------------------------------------------------------------------
Time Warner 5.45%
.......................................................................
Fannie Mae 3.57
.......................................................................
Viacom 3.16
.......................................................................
Philip Morris 3.01
.......................................................................
Tele-Communications, TCI Group 2.74
.......................................................................
Comcast 2.71
.......................................................................
Tele-Communications, Liberty Media Group 2.53
.......................................................................
News Corp. 1.90
.......................................................................
Walt Disney 1.88
.......................................................................
Texas Instruments 1.68
.......................................................................
</TABLE>
Because the fund is actively managed, its holdings will change from time to
time.
8 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT RECENT DEVELOPMENTS
YEAR 2000
The date-related computer issue known as the "Year 2000 problem" could have an
adverse impact on the quality of services provided to the fund and its
shareholders. However, the fund understands that its key service providers --
including the investment adviser and its affiliates -- are taking steps to
address the issue. In addition, the Year 2000 problem may adversely affect the
issuers in which the fund invests. For example, issuers may incur substantial
costs to address the problem. They may also suffer losses caused by corporate
and governmental data processing errors. The fund and its investment adviser
will continue to monitor developments relating to this issue.
EURO INTRODUCTION
On January 1, 1999, the European Union will introduce a single European
currency, the Euro. The first group of countries that will begin to convert
their currencies to the Euro include Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The expected
introduction of the Euro presents unique uncertainties, including: whether the
payment and operational systems of banks and other financial institutions will
be ready by the scheduled launch date; the legal treatment of certain
outstanding financial contracts after January 1, 1999 that refer to existing
currencies rather than the Euro; and the creation of suitable clearing and
settlement payment systems for the new currency. These or other factors,
including political and economic risks, could cause market disruptions before or
after the introduction of the Euro. The fund understands that the investment
adviser and other key service providers are taking steps to address Euro-related
issues.
THE GROWTH FUND OF AMERICA / PROSPECTUS 9
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT AND ORGANIZATION
INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including those in The American Funds Group. Capital Research and
Management Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
Research and Management Company manages the investment portfolio and business
affairs of the fund. The total management fee paid by the fund, as a percentage
of average net assets, for the previous fiscal year is indicated earlier under
"Fees and Expenses of the Fund."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company Institute's
Advisory Group on Personal Investing. This policy has also been incorporated
into the fund's code of ethics.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this system the portfolio of a
fund is divided into segments which are managed by individual counselors.
Counselors decide how their respective segments will be invested (within the
limits provided by a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee). In addition, Capital Research
and Management Company's research professionals may make investment decisions
with respect to a portion of a fund's portfolio. The primary individual
portfolio counselors for The Growth Fund of America are listed on the following
page.
10 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE YEARS OF
EXPERIENCE AS AN INVESTMENT
PROFESSIONAL
(INCLUDING THE LAST FIVE YEARS)
.....................................
WITH CAPITAL
YEARS OF EXPERIENCE RESEARCH AND
PORTFOLIO COUNSELORS AS PORTFOLIO COUNSELOR FOR MANAGEMENT
FOR THE GROWTH FUND THE GROWTH FUND OF AMERICA COMPANY OR
OF AMERICA PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES TOTAL YEARS
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JAMES F. ROTHENBERG Chairman of the 10 years (in addition to 3 28 years 28 years
fund. President and years as a research
Director, Capital professional prior to
Research and becoming a portfolio
Management Company counselor for the fund)
--------------------------------------------------------------------------------------------------------
JAMES E. DRASDO President of the 13 years (in addition to 9 21 years 27 years
fund. Senior Vice years as a research
President and professional prior to
Director, Capital becoming a portfolio
Research and counselor for the fund)
Management Company
--------------------------------------------------------------------------------------------------------
GORDON CRAWFORD Senior Vice 7 years (in addition to 16 27 years 27 years
President of the years as a research
fund. Senior Vice professional prior to
President and becoming a portfolio
Director, Capital counselor for the fund)
Research and
Management Company
--------------------------------------------------------------------------------------------------------
DONALD D. O'NEAL Senior Vice 5 years (in addition to 6 13 years 13 years
President of the years as a research
fund. Vice professional prior to
President, Capital becoming a portfolio
Research and counselor for the fund)
Management Company
--------------------------------------------------------------------------------------------------------
WILLIAM C. NEWTON Senior Partner, The 25 years** 39 years 45 years
Capital Group
Partners L.P.*
--------------------------------------------------------------------------------------------------------
R. MICHAEL SHANAHAN Chairman, Capital 13 years 34 years 34 years
Research and
Management Company
--------------------------------------------------------------------------------------------------------
* Company affiliated with Capital Research and Management Company
** Since Capital Research and Management Company took over management of the fund in 1973.
</TABLE>
THE GROWTH FUND OF AMERICA / PROSPECTUS 11
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER INFORMATION
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your needs
and circumstances change. These services are available only in states where they
may be legally offered and may be terminated or modified at any time upon 60
days written notice. For your convenience, American Funds Service Company has
four service centers across the country.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
CALL TOLL-FREE FROM ANYWHERE IN THE U.S.
(8 A.M. TO 8 P.M. ET):
800/421-0180
[U.S. CALL TOLL-FREE MAP]
[map of the United States]
<TABLE>
<S> <C> <C> <C>
WESTERN SERVICE WESTERN CENTRAL EAST CENTRAL EASTERN SERVICE
CENTER SERVICE CENTER SERVICE CENTER CENTER
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Indianapolis, Norfolk, Virginia
92822-2205 Texas Indiana 23501-2280
Fax: 714/671-7080 78265-9522 46206-6007 Fax: 757/670-4773
Fax: 210/474-4050 Fax: 317/735-6620
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS DESCRIBED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION. In addition, an easy-to-read guide to
owning a fund in The American Funds Group titled "Welcome to the Family" is sent
to new shareholders and is available by writing or calling American Funds
Service Company.
You may invest in the fund through various retirement plans. However, some
retirement plans or accounts held by investment dealers may not offer certain
services. If you have any questions, please contact your plan administrator/
trustee or dealer.
12 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
EXCHANGE
You may exchange your shares into other funds in The American Funds Group
generally without a sales charge. Exchanges of shares from the money market
funds initially purchased without a sales charge generally will be subject to
the appropriate sales charge. Exchanges have the same tax consequences as
ordinary sales and purchases. See "Transactions by Telephone . . ." for
information regarding electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE IS
CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A PERIOD
OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT
ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY INVESTOR
WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES ACTUAL OR
POTENTIAL HARM TO THE FUND.
INVESTMENT MINIMUMS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
To establish an account $1,000
For a retirement plan account $ 250
For a retirement plan account through payroll $ 25
deduction
To add to an account $ 50
For a retirement plan account through payroll $ 25
deduction
</TABLE>
SHARE PRICE
The fund calculates its share price, also called net asset value, as of 4:00
p.m. New York time, which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value, market
prices are used when available. If a market price for a particular security is
not available, the fund will determine the appropriate price for the security.
Your shares will be purchased at the offering price, or sold at the net asset
value, next determined after American Funds Service Company receives and accepts
THE GROWTH FUND OF AMERICA / PROSPECTUS 13
<PAGE>
your request. The offering price is the net asset value plus a sales charge, if
applicable.
SALES CHARGE
A sales charge may apply to your purchase. Your sales charge may be reduced for
larger purchases as indicated below.
<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE OF
.................................
NET DEALER CONCESSION
OFFERING AMOUNT AS % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
..................................................................................
$50,000 but less than
$100,000 4.50% 4.71% 3.75%
..................................................................................
$100,000 but less than
$250,000 3.50% 3.63% 2.75%
..................................................................................
$250,000 but less than
$500,000 2.50% 2.56% 2.00%
..................................................................................
$500,000 but less $1 million 2.00% 2.04% 1.60%
..................................................................................
$1 million or more and
certain other investments
described below see below see below see below
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGE
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 100 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE
IMPOSED ON CERTAIN REDEMPTIONS BY THESE ACCOUNTS MADE WITHIN ONE YEAR OF
PURCHASE. A dealer concession of up to 1% may be paid by the fund under its Plan
of Distribution and/or by American Funds Distributors on investments made with
no initial sales charge.
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your sales
charge. You must let your investment dealer or American Funds Service Company
know if you qualify for a reduction in your sales charge using one or any
combination of the methods described in the statement of additional information
and "Welcome to the Family."
PLAN OF DISTRIBUTION
The fund has a Plan of Distribution or "12b-1 Plan" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of directors. Up to 0.25%
of average net assets is paid annually to qualified dealers for providing
certain services pursuant to the fund's Plan of Distribution. The 12b-1 fee, as
a percentage of average net assets, paid by the fund for the previous fiscal
year is
14 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
indicated earlier under "Fees and Expenses of the Fund." Since these fees are
paid out of the fund's assets on an ongoing basis, over time they will increase
the cost of an investment and may cost you more than paying higher initial sales
charges.
OTHER COMPENSATION TO DEALERS
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for dealers as described in the statement of additional
information.
HOW TO SELL SHARES
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)
- Shares held for you in your dealer's name must be sold through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- Requests must be signed by the registered shareholder(s).
- A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
- Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE(R) OR AMERICAN FUNDSLINE ONLINE(R):
- Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day
- Checks must be made payable to the registered shareholder
- Checks must be mailed to an address of record that has been used with the
account for at least 10 days
THE GROWTH FUND OF AMERICA / PROSPECTUS 15
<PAGE>
TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE, OR AMERICAN
FUNDSLINE ONLINE
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all of
these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your
account(s), you agree to hold the fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, and each of their
respective directors, trustees, officers, employees and agents harmless from any
losses, expenses, costs or liabilities (including attorney fees) which may be
incurred in connection with the exercise of these privileges, provided American
Funds Service Company employs reasonable procedures to confirm that the
instructions received from any person with appropriate account information are
genuine. If reasonable procedures are not employed, the fund may be liable for
losses due to unauthorized or fraudulent instructions.
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
DIVIDENDS AND DISTRIBUTIONS
The fund intends to distribute dividends to you, usually in December. Capital
gains, if any, are usually distributed in December.
You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or any other fund in the American Funds
Group or you may elect to receive them in cash.
TAX CONSEQUENCES
Dividends and capital gains are generally taxable whether they are reinvested or
received in cash -- unless you are exempt from taxation or entitled to tax
deferral. Capital gains may be taxed at different rates depending on the length
of time the fund holds its assets.
You must provide the fund with a certified correct taxpayer identification
number (generally your Social Security Number) and certify that you are not
subject to backup withholding. If you fail to do so, the IRS can require the
fund to withhold 31% of your taxable distributions and redemptions. Federal law
also requires the fund to withhold 30% of the applicable tax treaty rate from
dividends paid to certain non-resident alien, non-U.S. partnership and non-U.S.
corporation shareholder accounts.
Please see the statement of additional information, "Welcome to the Family," and
your tax adviser for further information.
16 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(1)
The financial highlights table is intended to help you understand the fund's
results for the past five years. Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Deloitte & Touche LLP, whose report, along with the fund's financial
statements, are included in the statement of additional information, which is
available upon request.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31
...........................
1998 1997 1996 1995 1994
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year $20.14 $15.39 $16.55 $13.81 $13.58
- ---------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income .10 .13 .13 .13 .07
.............................................................................................
Net realized and unrealized gain
(loss) on investments (.10) 5.59 (.01) 3.21 .71
- ---------------------------------------------------------------------------------------------
Total income from investment
operations .00 5.72 .12 3.34 .78
- ---------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.13) (.11) (.14) (.08) (.06)
.............................................................................................
Distributions from capital gains (2.06) (.86) (1.14) (.52) (.49)
- ---------------------------------------------------------------------------------------------
Total distributions (2.19) (.97) (1.28) (.60) (.55)
.............................................................................................
Net Asset Value, End of Year $17.95 $20.14 $15.39 $16.55 $13.81
- ---------------------------------------------------------------------------------------------
Total Return(2) (.24)% 38.54% .90% 25.56% 5.98%
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
millions) $11,798 $11,646 $8,511 $7,525 $5,427
.............................................................................................
Ratio of expenses to average net
assets .70% .72% .74% .75% .78%
.............................................................................................
Ratio of net income to average
net assets .48% .73% .82% .90% .49%
.............................................................................................
Portfolio turnover rate 38.84% 34.10% 27.95% 26.90% 24.77%
</TABLE>
(1) Adjusted to reflect the 100% share dividend at the close of business on
December 12, 1996.
(2) Excludes maximum sales charge of 5.75%.
THE GROWTH FUND OF AMERICA / PROSPECTUS 17
<PAGE>
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NOTES
18 THE GROWTH FUND OF AMERICA / PROSPECTUS
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THE GROWTH FUND OF AMERICA / PROSPECTUS 19
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20 THE GROWTH FUND OF AMERICA / PROSPECTUS
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THE GROWTH FUND OF AMERICA / PROSPECTUS 21
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22 THE GROWTH FUND OF AMERICA / PROSPECTUS
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THE GROWTH FUND OF AMERICA / PROSPECTUS 23
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<CAPTION>
FOR SHAREHOLDER FOR RETIREMENT PLAN FOR DEALER
SERVICES SERVICES SERVICES
<S> <C> <C>
American Funds Call your employer American Funds
Service Company or Distributors
800/421-0180 plan administrator 800/421-9900
ext. 11
</TABLE>
<TABLE>
<CAPTION>
FOR 24-HOUR INFORMATION
<S> <C>
American American Funds
FundsLine(R) Internet Web site
800/325-3590 http://www.americanfunds.com
</TABLE>
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
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MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. If
there are any inconsistencies or ambiguities, the English
text will prevail.
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OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Contains additional information about the fund including
financial statements, investment results, portfolio
holdings, a statement from portfolio management discussing
market conditions and the fund's investment strategies, and
the independent accountants' report (in the annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more detailed information on all aspects of the
fund, including the fund's financial statements.
A current SAI has been filed with the Securities and
Exchange Commission ("SEC") and is incorporated by reference
into this prospectus. The SAI and other related materials
about the fund are available for review or to be copied at
the SEC's Public Reference Room (1-800-SEC-0330) or on the
SEC's Internet Web site at http://www.sec.gov.
CODE OF ETHICS
Includes a description of the fund's personal investing
policy.
To request a free copy of any of the documents above:
<TABLE>
<S> <C>
Call American Funds or Write to the Secretary of
Service Company the fund
800/421-0180 ext. 1 P.O. Box 7650
San Francisco, CA 94120
</TABLE>
Investment Company File No. 811-862
LOGO Printed on recycled paper
Independent Auditors' Report
To the Board of Directors and Shareholders of
The Growth Fund of America, Inc.:
We have audited the accompanying statement of assets and liabilities of The
Growth Fund of America, Inc., including the investment portfolio, as of August
31,1998,and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the per-share data and ratios for each of the five years in the
period then ended. These financial statements and the per-share data and ratios
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the per-share data and
ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per-share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at August
31, 1998 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other procedures. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of The Growth Fund of America, Inc. at August 31, 1998, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the per-share data and ratios
for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Los Angeles, California
September 30, 1998
1998 Tax Information (Unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
fund were earned from the following sources:
Dividends and Distributions per Share
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<CAPTION>
To Payment Date From Net From Net From Net
Shareholders Investment Realized Realized
of Record Income Short-Term Long-Term
Gains Gains*
<S> <C> <C> <C> <C>
December 17, December 18, $0.13 .472 1.588
1997 1997
</TABLE>
*INCLUDES $0.921 LONG-TERM CAPITAL GAINS TAXED AT A MAXIMUM RATE OF 28%.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 6% of the dividends
paid by the fund from net investment income represents qualifying dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many plan retirement trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099 DIV OR OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 1999 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 1998 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.
