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
[The American Funds Logo]
- --------------------------------------------------------------------------------
The Growth Fund
of America
Prospectus
NOVEMBER 1, 1997
<PAGE>
THE GROWTH FUND OF AMERICA
One Market
Steuart Tower, Suite 1800
San Francisco, CA 94105
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Expenses 3
.................................................................
Financial Highlights 4
.................................................................
Investment Policies and Risks 5
.................................................................
Securities and Investment
Techniques 5
.................................................................
Multiple Portfolio Counselor
System 8
Investment Results 10
.................................................................
Dividends, Distributions and
Taxes 11
.................................................................
Fund Organization and
Management 12
.................................................................
Shareholder Services 15
</TABLE>
- --------------------------------------------------------------------------------
The fund's investment objective 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 presents information you should know before investing in the
fund. You should keep it on file for future reference.
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
DEPOSIT OR OBLIGATION OF, OR INSURED OR GUARANTEED BY, ANY ENTITY OR PERSON
INCLUDING THE U.S. GOVERNMENT AND THE FEDERAL DEPOSIT INSURANCE CORPORATION.
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.
05-010-1197
<PAGE>
- --------------------------------------------------------------------------------
EXPENSES
The effect of the expenses described below is reflected in the fund's share
price and return.
You may pay certain shareholder transaction expenses when you buy or sell shares
of the fund. Fund operating expenses are paid out of the fund's assets and are
factored into its share price.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum sales charge on purchases
(as a percentage of offering price) 5.75%
................................................................................
</TABLE>
SALES CHARGES ARE REDUCED OR ELIMINATED FOR LARGER PURCHASES. There is no sales
charge on reinvested dividends, and no deferred sales charge or redemption or
exchange fees. A contingent deferred sales charge of 1% applies on certain
redemptions made within 12 months following purchases without a sales charge.
FUND OPERATING EXPENSES
(as a percentage of average net assets)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Management fees 0.36%
................................................................................
12b-1 expenses 0.24%(1)
................................................................................
Other expenses 0.12%
................................................................................
Total fund operating expenses 0.72%
</TABLE>
(1) 12b-1 expenses may not exceed 0.25% of the fund's average net assets
annually.
EXAMPLES
Assuming a hypothetical annual return of 5% and shareholder transaction and
operating expenses as described above, for every $1,000 you invested, you would
pay the following total expenses over the following periods:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
One year $ 64
................................................................................
Three years $ 79
................................................................................
Five years $ 95
................................................................................
Ten years $ 142
</TABLE>
THESE EXAMPLES ARE NOT MEANT TO REPRESENT YOUR ACTUAL INVESTMENT RESULTS OR
EXPENSES, WHICH MAY VARY. YOUR EXPENSES WILL BE LESS IF YOU QUALIFY TO PURCHASE
SHARES AT A REDUCED OR NO SALES CHARGE.
THE GROWTH FUND OF AMERICA / PROSPECTUS 3
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following information has been audited by Deloitte & Touche LLP, independent
auditors. This table should be read together with the financial statements which
are included in the statement of additional information and annual report.
SELECTED PER-SHARE DATA*
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31
...........................
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $15.39 $16.55 $13.81 $13.58 $11.02 $11.21 $9.22 $11.53 $8.71 $10.61
- --------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income .13 .13 .13 .07 .07 .12 .21 .28 .27 .14
...............................................................................................................
Net realized and
unrealized gain
(loss) on
investments 5.59 (.01) 3.21 .71 2.63 .40 2.43 (1.29) 3.00 (1.34)
...............................................................................................................
Total income (loss)
from investment
operations 5.72 .12 3.34 .78 2.70 .52 2.64 (1.01) 3.27 (1.20)
- ---------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from
net investment
income (.11) (.14) (.08) (.06) (.09) (.17) (.24) (.31) (.15) (.15)
...............................................................................................................
Distributions from
net realized gains (.86) (1.14) (.52) (.49) (.05) (.54) (.41) (.99) (.30) (.55)
...............................................................................................................
Total distributions (.97) (1.28) (.60) (.55) (.14) (.71) (.65) (1.30) (.45) (.70)
...............................................................................................................
Net asset value, end
of year $20.14 $15.39 $16.55 $13.81 $13.58 $11.02 $11.21 $9.22 $11.53 $8.71
- --------------------------------------------------------------------------------------------------------------
Total return(1) 38.54% .90% 25.56% 5.98% 24.64% 4.91% 30.55% (9.76%) 39.35% (10.73%)
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA:
Net assets,
end of year
(in millions) $11,646 $ 8,511 $ 7,525 $ 5,427 $ 5,018 $ 3,700 $ 2,903 $ 1,912 $ 1,686 $ 1,038
...............................................................................................................
Ratio of expenses to
average net assets .72% .74% .75% .78% .77% .79% .83% .79% .78% .71%
...............................................................................................................
Ratio of net income
to average net
assets .73% .82% .90% .49% .56% 1.11% 2.13% 2.67% 2.82% 1.56%
...............................................................................................................
Average commissions
paid per share(2) 5.01c 5.62c 5.94c 6.05c 6.82c 6.94c 7.23c 7.13c 7.00c 6.64c
...............................................................................................................
Portfolio turnover
rate 34.10% 27.95% 26.90% 24.77% 25.23% 10.64% 18.92% 17.69% 30.28% 18.33%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* All per share data reflect the 100% stock dividend effected on December 13,
1996.
(1) Excludes maximum sales charge of 5.75%.
(2) 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.
4 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT POLICIES AND RISKS
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. The fund will maintain at least
65% of the value of its assets in growth-type securities under normal market
conditions.
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. Limits on the fund's investment
policies are determined at the time of purchase and are based on the fund's net
assets, unless otherwise stated. The fund's fundamental investment restrictions
(described in the statement of additional information) and objective may not be
changed without shareholder approval. MORE INFORMATION ON THE FUND'S INVESTMENT
POLICIES IS CONTAINED IN ITS STATEMENT OF ADDITIONAL INFORMATION.
THE FUND MAY NOT ACHIEVE ITS INVESTMENT OBJECTIVE DUE TO MARKET CONDITIONS AND
OTHER FACTORS. IN ADDITION, THE FUND MAY EXPERIENCE DIFFICULTY LIQUIDATING
CERTAIN PORTFOLIO SECURITIES DURING SIGNIFICANT MARKET DECLINES OR PERIODS OF
HEAVY REDEMPTIONS.
- --------------------------------------------------------------------------------
SECURITIES AND INVESTMENT TECHNIQUES
EQUITY SECURITIES
Equity securities represent an ownership position in a company. These securities
may include common stocks and securities with equity conversion or purchase
rights. The prices of equity securities fluctuate based on changes in the
financial condition of their issuers and on market and economic conditions. The
fund's results will be related to the overall market for these securities. The
growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss, particularly in the case of
smaller capitalization stocks.
THE GROWTH FUND OF AMERICA / PROSPECTUS 5
<PAGE>
DEBT SECURITIES
Bonds and other debt securities are used by issuers to borrow money. Issuers pay
investors interest and generally must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current interest,
but are purchased at a discount from their face values. The prices of debt
securities fluctuate depending on such factors as interest rates, credit quality
and maturity. In general their prices decline when interest rates rise and vice
versa.
The fund may invest up to 10% of its assets in debt securities rated Ba and BB
or below by Moody's Investors Service, Inc. or Standard & Poor's Corporation or
in unrated securities that are determined to be of equivalent quality. These
securities are commonly known as "high-yield, high-risk" or "junk" bonds and may
have characteristics similar to the equity securities eligible for purchase by
the fund. High-yield, high-risk bonds are described by the rating agencies as
speculative and involve greater risk of default or price changes due to changes
in the issuer's creditworthiness than higher rated bonds, or they may already be
in default. The market prices of these securities may fluctuate more than higher
quality securities and may decline significantly in periods of general economic
difficulty. It may be more difficult to dispose of, or to determine the value
of, high-yield, high-risk bonds. The fund's high-yield, high-risk securities may
be rated as low as C by Moody's or D by S&P which are described by the rating
agencies as "having extremely poor prospects of ever attaining any real
investment standing" or "in default and payment of interest and/or repayment of
principal is in arrears." See the statement of additional information for a
complete description of the bond ratings.
Capital Research and Management Company attempts to reduce the risks described
above through diversification of the portfolio and by credit analysis of each
issuer as well as by monitoring broad economic trends and corporate and
legislative developments.
During the previous fiscal year, the fund did not hold any fixed-income
securities with maturities greater than one year or convertible instruments.
Money market instruments and cash made up an average of 15.52% of the fund's
portfolio.
OTHER SECURITIES
The fund may also invest in securities that have a combination of equity and
debt characteristics such as non-convertible preferred stocks and convertible
securities. These securities may at times resemble equity more than debt and
vice versa. Non-convertible preferred stocks are similar to debt in that they
have a stated dividend rate akin to the coupon of a bond or note even though
they are
6 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
often classified as equity securities. The prices and yields of non-convertible
preferred stocks generally move with changes in interest rates and the issuer's
credit quality, similar to the factors affecting debt securities.
Bonds, preferred stocks, and other securities may sometimes be converted into
shares of common stock or other securities at a stated exchange ratio. These
securities prior to conversion pay a fixed rate of interest or a dividend.
Because convertible securities have both debt and equity characteristics their
value varies in response to many factors, including the value of the underlying
equity, general market and economic conditions, convertible market valuations,
as well as changes in interest rates, credit spreads, and the credit quality of
the issuer.
PRIVATE PLACEMENTS
Normally, securities acquired in private placements are subject to contractual
restrictions on resale. Any such securities will be considered illiquid unless
they have been specifically determined to be liquid under procedures adopted by
the fund's board of directors, taking into account factors such as the frequency
and volume of trading, the commitment of dealers to make markets and the
availability of qualified investors, all of which can change from time to time.
The fund may incur certain additional costs in disposing of securities that are
illiquid.
INVESTING IN VARIOUS COUNTRIES
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.
Investing outside the U.S. involves special risks, particularly in certain
developing countries, caused by, among other things: fluctuating currency
values; different accounting, auditing, and financial reporting regulations and
practices in some countries; changing local and regional economic, political,
and social conditions; greater market volatility; differing securities market
structures; and various administrative difficulties such as delays in clearing
and settling portfolio transactions or in receiving payment of dividends.
However, in the opinion of Capital Research and Management Company, investing
outside the U.S. also can reduce certain portfolio risks due to greater
diversification opportunities.
Additional costs could be incurred in connection with the fund's investment
activities outside the U.S. The fund may purchase and sell currencies to
facilitate transactions in securities denominated in currencies other than the
U.S. dollar. Brokerage commissions may be higher outside the U.S., and the fund
will bear certain expenses in connection with its currency transactions.
Furthermore, increased custodian costs may be associated with the maintenance of
assets in certain jurisdictions.
THE GROWTH FUND OF AMERICA / PROSPECTUS 7
<PAGE>
- --------------------------------------------------------------------------------
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 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 fund are listed on the following page.
8 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE AS
INVESTMENT PROFESSIONAL
(APPROXIMATE)
........................
YEARS OF EXPERIENCE
AS PORTFOLIO COUNSELOR WITH CAPITAL
PORTFOLIO (AND RESEARCH RESEARCH AND
COUNSELORS PROFESSIONAL, MANAGEMENT
FOR THE GROWTH IF APPLICABLE) FOR THE COMPANY OR
FUND GROWTH FUND OF AMERICA ITS
OF AMERICA PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES TOTAL YEARS
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GORDON CRAWFORD Senior Vice President 6 years (in addition 26 years 26 years
and Director, Capital to 16 years as a
Research and research professional
Management Company prior to becoming a
portfolio counselor
for the fund)
---------------------------------------------------------------------------------------------------
JAMES E. DRASDO Senior Vice President 12 years (in addition 20 years 26 years
of the fund. Senior to 9 years as a
Vice President and research professional
Director, Capital prior to becoming a
Research and portfolio counselor
Management Company for the fund)
---------------------------------------------------------------------------------------------------
WILLIAM C. Senior Partner, The 24 years** 38 years 44 years
NEWTON Capital Group Partners
L.P.*
---------------------------------------------------------------------------------------------------
DONALD D. O'NEAL Vice President of the 4 years (in addition 12 years 12 years
fund. Vice President, to 6 years as a
Capital Research and research professional
Management Company prior to becoming a
portfolio counselor
for the fund)
---------------------------------------------------------------------------------------------------
JAMES F. President of the fund. 9 years (in addition 27 years 27 years
ROTHENBERG President and to 3 years as a
Director, Capital research professional
Research and prior to becoming a
Management Company portfolio counselor
for the fund)
---------------------------------------------------------------------------------------------------
R. MICHAEL Chairman, Capital 12 years 33 years 33 years
SHANAHAN 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 9
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
The fund may compare investment results to various indices or other mutual
funds. Fund results may be calculated on a total return, yield and/or
distribution rate basis. Results calculated without a sales charge will be
higher.
X TOTAL RETURN is the change in value of an investment in the fund over a given
period, assuming reinvestment of any dividends and capital gain distributions.
X YIELD is computed by dividing the net investment income per share earned by
the fund over a given period of time by the maximum offering price per share
on the last day of the period, according to a formula mandated by the
Securities and Exchange Commission. A yield calculated using this formula may
be different than the income actually paid to shareholders.
X DISTRIBUTION RATE reflects dividends that were paid by the fund. The
distribution rate is calculated by dividing the dividends paid over the last
12 months by the sum of the month-end price and the capital gain distributions
paid over the last 12 months.
INVESTMENT RESULTS
(FOR PERIODS ENDED SEPTEMBER 30, 1997)
<TABLE>
<CAPTION>
THE FUND THE FUND
AT NET AT MAXIMUM
AVERAGE ANNUAL ASSET SALES S&P
TOTAL RETURNS: VALUE(1) CHARGE(1,2) 500(3) CPI(4)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
One year 38.22% 30.25% 40.40% 2.51%
.........................................................................................
Five years 19.21% 17.81% 20.73% 2.67%
.........................................................................................
Ten years 14.31% 13.63% 14.72% 3.43%
.........................................................................................
Lifetime(5) 17.91% 16.89% 14.47% 5.41%
- -----------------------------------------------------------------------------------------
</TABLE>
(1) These fund results were calculated according to a standard formula that is
required for all stock and bond funds.
(2) The maximum sales charge has been deducted.
(3) The Standard & Poor's 500 Index represents stocks. This index in unmanaged
and does not reflect sales charges, commissions or expenses.
(4) Consumer Price Index is computed from data supplied by the U.S. Department
of Labor, Bureau of Labor Statistics.
(5) For the period beginning December 1, 1973 (when Capital Research and
Management Company became the fund's investment adviser).
10 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
Here are the fund's annual total returns calculated without a sales charge.
This information is being supplied on a calendar year basis.
[Bar Chart]
Past results are not an indication of future results.
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
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.
If a shareholder has elected to receive dividends and/or capital gain
distributions in cash, and the postal or other delivery service is unable to
deliver checks to the shareholder's address of record, or the shareholder does
not respond to mailings from American Funds Service Company with regard to
uncashed distribution checks, the shareholder's distribution option will
automatically be converted to having all dividends and other distributions
reinvested in additional shares.
FEDERAL TAXES
In any fiscal year in which the fund qualifies as a regulated investment company
and distributes to shareholders all of its net investment income and net capital
gains, the fund itself is relieved of federal income tax.
THE GROWTH FUND OF AMERICA / PROSPECTUS 11
<PAGE>
Generally, all dividends and capital gains are taxable whether they are
reinvested or received in cash -- unless you are exempt from taxation or
entitled to tax deferral. Early each year, you will be notified as to the amount
and federal tax status of all income distributions paid during the prior year.
Such distributions may also be subject to state or local taxes. The tax
treatment of redemptions from a retirement plan account may differ from
redemptions from an ordinary shareholder account.
YOU MUST PROVIDE THE FUND WITH A CERTIFIED CORRECT TAXPAYER IDENTIFICATION
NUMBER (GENERALLY YOUR SOCIAL SECURITY NUMBER) AND CERTIFY THAT YOU ARE NOT
SUBJECT TO BACKUP WITHHOLDING. IF YOU FAIL TO DO SO THE IRS CAN REQUIRE THE FUND
TO WITHHOLD 31% OF YOUR TAXABLE DISTRIBUTIONS AND REDEMPTIONS. Federal law also
requires the fund to withhold 30% or the applicable tax treaty rate from
dividends paid to certain nonresident alien, non-U.S. partnership and non-U.S.
corporation shareholder accounts.
This is a brief summary of some of the tax laws that affect your investment in
the fund. Please see the statement additional information and your tax adviser
for further information.
- --------------------------------------------------------------------------------
FUND ORGANIZATION AND MANAGEMENT
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. All fund operations are supervised by the fund's board of directors who
meet periodically and perform duties required by applicable state and federal
laws. 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. The fund does not hold annual meetings of
shareholders. However, significant matters which require shareholder approval,
such as certain elections of board members or a change in a fundamental
investment policy, will be presented to shareholders at a meeting called for
such purpose. Shareholders have one vote per share owned. 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.
12 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
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, 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 management fee paid by the fund to Capital
Research and Management Company may not exceed 0.50% of the fund's average net
assets annually and declines at certain asset levels. The total management fee
paid by the fund, as a percentage of average net assets, for the previous fiscal
year is discussed earlier under "Expenses."
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.
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. The 12b-1 fee paid by the fund,
as a percentage of average net assets, for the previous fiscal year is discussed
earlier under "Expenses."
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. Fixed-income
securities are generally traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. In underwritten offerings,
securities are usually purchased at a fixed price which includes an amount of
compensation to the dealer, generally referred to as a concession or discount.
On occasion, securities may be purchased directly from an issuer, in which case
no commissions or discounts are paid. 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.
THE GROWTH FUND OF AMERICA / PROSPECTUS 13
<PAGE>
Subject to the above policy, when two or more brokers (either directly or
through their correspondent clearing agents) are in a position to offer
comparable prices and executions, preference may be given to brokers who have
sold shares of the fund or have provided investment research, statistical, and
other related services for the benefit of the fund and/or other funds served by
Capital Research and Management Company.
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
American Funds Distributors, Inc. and American Funds Service Company serve as
the principal underwriter and transfer agent for the fund, respectively. They
are headquartered at 333 South Hope Street, Los Angeles, CA 90071 and 135 South
State College Boulevard, Brea, CA 92821, respectively.
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. TIMEZONE MAP]
<TABLE>
<S> <C> <C> <C>
WESTERN SERVICE WESTERN CENTRAL EASTERN 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, Texas Indianapolis, Indiana Norfolk, Virginia
92822-2205 78265-9522 46206-6007 23501-2280
Fax: 714/671-7080 Fax: 210/530-4050 Fax: 317/735-6620 Fax: 804/670-4773
</TABLE>
14 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
SHAREHOLDER SERVICES
The fund offers you a valuable array of services you can use to alter your
investment program as your needs and circumstances change. These services, which
are summarized below, 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. A COMPLETE DESCRIPTION OF SHAREHOLDER SERVICES AND ACCOUNT POLICIES IS
CONTAINED 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.
THE SERVICES DESCRIBED MAY NOT BE AVAILABLE THROUGH SOME RETIREMENT PLANS. IF
YOU ARE INVESTING THROUGH A RETIREMENT PLAN, YOU SHOULD CONTACT YOUR PLAN
ADMINISTRATOR/TRUSTEE ABOUT WHAT SERVICES ARE AVAILABLE AND WITH QUESTIONS ABOUT
YOUR ACCOUNT.
- --------------------------------------------------------------------------------
PURCHASING SHARES
HOW TO PURCHASE SHARES
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may add to your account through your
dealer or directly through American Funds Service Company by mail, computer,
wire, or bank debit. You may also establish or add to your account by exchanging
shares from any of your other accounts in The American Funds Group. The fund and
American Funds Distributions reserve the right to reject any purchase order for
any reason. This includes exchange purchase orders that may place an unfair
burden on other shareholders due to their frequency.
Various purchase options are available as described below subject to certain
investment minimums and limitations described in the statement of additional
information and "Welcome to the Family."
X Automatic Investment Plan
You may invest monthly or quarterly through automatic withdrawals from your
bank account.
X Automatic Reinvestment
You may reinvest your dividends and capital gain distributions into the fund
(with no sales charge). This will be done automatically unless you elect to
have the dividends and/or capital gain distributions paid to you in cash.
THE GROWTH FUND OF AMERICA / PROSPECTUS 15
<PAGE>
X Cross-Reinvestment
You may invest your dividend and capital gain distributions into any other
fund in The American Funds Group.
X Exchange Privilege
You may exchange your shares into other funds in The American Funds Group
generally with no sales charge. Exchanges of shares from the money market
funds that were initially purchased with no sales charge will generally be
subject to the appropriate sales charge. You may also elect to automatically
exchange shares among any of the funds in The American Funds Group. Exchange
requests may be made in writing, by telephone, including American
FundsLine(R), by computer using American FundsLine OnLine(SM) (see below), or
by fax. EXCHANGES HAVE THE SAME TAX CONSEQUENCES AS ORDINARY SALES AND
PURCHASES.
X Retirement Plans
You may invest in the fund through various retirement plans. For further
information contact your investment dealer or American Funds Distributors.
SHARE PRICE
The fund's share price, also called net asset value, is determined as of the
close of trading (normally 4:00 p.m., Eastern time) every day the New York Stock
Exchange is open. The fund calculates its net asset value per share, generally
using market prices, by dividing the total value of its assets after subtracting
liabilities by the number of its shares outstanding. Shares are purchased at the
offering price next determined after your investment is received and accepted by
American Funds Service Company. The offering price is the net asset value plus a
sales charge, if applicable.
SHARE CERTIFICATES
Shares are credited to your account and certificates are not issued unless you
request them by writing to American Funds Service Company.
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........................ $ 25
</TABLE>
16 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
SALES CHARGES
A sales charge may apply, as described below, when purchasing shares. Sales
charges may be reduced for larger purchases as indicated below.
<TABLE>
<CAPTION>
SALES CHARGE AS A
PERCENTAGE OF
.................. DEALER
NET CONCESSION AS
OFFERING AMOUNT % OF OFFERING
INVESTMENT PRICE INVESTED 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 than $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 CHARGES
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 MADE WITHIN ONE YEAR OF PURCHASE BY THESE
ACCOUNTS. Investments by retirement plans, foundations or endowments with $50
million or more in assets may be made with no sales charge and are not subject
to a contingent deferred sales charge. A dealer concession of up to 1% may be
paid by the fund from its Plan of Distribution and/or by American Funds
Distributors on all investments described above. Investments by certain
individuals and entities including employees and other associated persons of
dealers authorized to sell shares of the fund and Capital Research and
Management Company and its affiliated companies are not subject to a sales
charge.
ADDITIONAL DEALER COMPENSATION
In addition to the concessions listed, 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. During the current fiscal year, American Funds
Distributors will also provide additional compensation to the top one hundred
dealers who have sold shares of funds in The American Funds Group based on the
pro rata share of a qualifying dealer's sales.
THE GROWTH FUND OF AMERICA / PROSPECTUS 17
<PAGE>
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your costs. You
must let your investment dealer or American Funds Service Company know if you
qualify for a reduction in your sales charge using one or any combination of the
methods described below.
X Aggregation
Investments that may be aggregated include those made by you, your spouse and
your children under the age of 21, if all parties are purchasing shares for
their own account(s), including any business account solely "controlled by,"
as well as any retirement plan or trust account solely for the benefit of,
these individuals. Investments made for multiple employee benefit plans of a
single employer or "affiliated" employers may be aggregated provided they are
not also aggregated with individual accounts. Finally, investments made by a
common trust fund or other diversified pooled account not specifically formed
for the purpose of accumulating fund shares may be aggregated.
Purchases made for nominee or street name accounts will generally not be
aggregated with those made for other accounts unless qualified as described
above.
X Concurrent Purchases
You may combine concurrent purchases of two or more funds in The American
Funds Group, except direct purchases of the money market funds. Shares of the
money market funds purchased through an exchange, reinvestment or
cross-reinvestment from a fund having a sales charge do qualify.
X Right of Accumulation
You may take into account the current value of your existing holdings in The
American Funds Group to determine your sales charge. Direct purchases of the
money market funds are excluded.
X Statement of Intention
You may enter into a non-binding commitment to invest a certain amount (which,
at your request, may include purchases made during the previous 90 days) in
non-money market fund shares over a 13-month period. A portion of your account
may be held in escrow to cover additional sales charges which may be due if
your total investments over the statement period are insufficient to qualify
for the applicable sales charge reduction.
18 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
SELLING SHARES
HOW TO SELL SHARES
You may sell (redeem) shares in your account by contacting your investment
dealer or American Funds Service Company. You may also use American FundsLine(R)
or American FundsLine Online(SM) (see below). In addition, you may sell shares
in amounts of $50 or more automatically. If you sell shares through your
investment dealer you may be charged for this service. Shares held for you in
your dealer's street name must be sold through the dealer.
Shares are sold at the net asset value next determined after your request is
received in good order by American Funds Service Company. Sale requests may be
made in writing, by telephone, including American FundsLine(R), by computer
using American FundsLine Online(SM), or by fax. Sales by telephone, computer, or
fax are limited to $50,000 in accounts registered to individual(s) (including
non-retirement trust accounts). In addition, checks must be made payable to the
registered shareholder(s) and mailed to an address of record that has been used
with the account for at least 10 days.
Proceeds will not be mailed until sufficient time has passed to provide
reasonable assurance that checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may take up to 15 calendar days
from the purchase date). Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and as permissible under the
Investment Company Act of 1940), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.
The fund may, with 60 days' written notice, close your account if due to a sale
of shares the account has a value of less than the minimum required initial
investment.
Generally, written requests to sell shares must be signed by you and must
include any shares you wish to sell that are in certificate form. Your signature
must be guaranteed by a member firm of a domestic stock exchange or the National
Association of Securities Dealers, Inc., that is an eligible guarantor
institution, bank, savings association, or credit union. A signature guarantee
is not currently required for any sale of $50,000 or less provided the check is
made payable to the registered shareholder(s) and is mailed to the address of
record on the account, and provided the address has been used with the account
for at least 10 days. Additional documentation may be required for sale of
shares held in corporate, partnership or fiduciary accounts.
THE GROWTH FUND OF AMERICA / PROSPECTUS 19
<PAGE>
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution without a sales charge (any contingent deferred sales charge paid
will be credited to your account) in any fund in The American Funds Group within
90 days after the date of the redemption or distribution. Redemption proceeds of
shares representing direct purchases in the money market funds are excluded.
Reinvestment will be at the next calculated net asset value after receipt and
acceptance by American Funds Service Company.
- --------------------------------------------------------------------------------
OTHER IMPORTANT THINGS TO REMEMBER
AMERICAN FUNDSLINE(R) AND AMERICAN FUNDSLINE ONLINE(SM)
You may check your share balance, the price of your shares, or your most recent
account transaction, sell shares (up to $50,000 per shareholder each day) or
exchange shares around the clock with American FundsLine(R) or American
FundsLine Online(SM). To use these services, call 800/325-3590 from a
TouchTone(TM) telephone or access The American Funds' Web site on the Internet
at www.americanfunds.com.
TELEPHONE AND COMPUTER PURCHASES, SALES AND EXCHANGES
Unless you opt out of the telephone, computer (including American FundsLine(R)
or American FundsLine Online(SM)) or fax purchase, sale and/or exchange options
(see below), 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, cost 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.
Generally, all shareholders are automatically eligible to use these options.
However, you may elect to opt out of these options by writing American Funds
Service Company. (You may also reinstate them at any time by writing to American
Funds Service Company.)
ACCOUNT STATEMENTS
You will receive regular confirmation statements reflecting transactions in your
account. Dividend and capital gain reinvestments and purchases through automatic
investment plans and certain retirement plans will be confirmed at least
quarterly.
20 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
NOTES
THE GROWTH FUND OF AMERICA / PROSPECTUS 21
<PAGE>
NOTES
22 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
NOTES
THE GROWTH FUND OF AMERICA / PROSPECTUS 23
<PAGE>
<TABLE>
<S> <C>
FOR SHAREHOLDER SERVICES FOR DEALER SERVICES
American Funds American Funds
Service Company Distributors
800/421-0180 ext. 1 800/421-9900 ext. 11
FOR 24-HOUR INFORMATION
American American Funds
FundsLine(R) Internet Web site
800/325-3590 http://www.americanfunds.com
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
---------------------------------------------------------------
MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. In the
event of any inconsistency or ambiguity as to the meaning of
any word or phrase contained in a translation, the English text
shall prevail.
---------------------------------------------------------------
OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Includes financial statements, detailed performance
information, portfolio holdings, a statement from portfolio
management and the independent auditor's 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"). It is incorporated by reference into this
prospectus and is available along with other related materials
on the SEC's Internet Web site at http://www.sec.gov.
CODE OF ETHICS
Includes a description of the fund's personal investing policy.
To request a free copy of any of the documents above:
Call American Funds or Write to the Secretary
Service Company of the fund
800/421-0180 ext. 1 P.O. Box 7650
San Francisco, CA 94120
</TABLE>
This prospectus has been printed on recycled paper.[RECYCLING ARROWS LOGO]
24 THE GROWTH FUND OF AMERICA / PROSPECTUS
<PAGE>
