[The American Funds Group(r)]
The Growth Fund of America
(Photograph of garden)
Semi-Annual Report
for the six months ended
February 29, 2000
The Growth Fund of America(r) invests in a wide range of companies that appear
to offer superior opportunities for growth of capital.
The Growth Fund of America is one of the 29 mutual funds in The American Funds
Group,(r) the nation's third-largest mutual fund family. For nearly seven
decades, Capital Research and Management Company, the American Funds adviser,
has invested with a long-term focus based on thorough research and attention to
risk.
Results at a Glance (through 2/29/00)
<TABLE>
<CAPTION>
Average annual
Total returns compound returns
<S> <C> <C>
6 months +41.3% -
12 months +59.8 -
5 years +289.8 +31.3%
10 years +586.3 +21.2
Lifetime (since 12/1/73) +9,341.0 +18.9
</TABLE>
All figures assume reinvestment of distributions.
Fund results in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Here are the fund's
total returns and average annual compound returns with all distributions
reinvested for periods ended March 31, 2000 (the most recent calendar quarter),
assuming payment of the 5.75% maximum sales charge for Class A shares at the
beginning of the stated periods - 10 years: +553.49%, or +20.65% a year; 5
years: +269.36%, or +29.86% a year; 12 months: +52.36%. Sales charges are lower
for accounts of $25,000 or more.
There are two ways to invest in The Growth Fund of America. Class A shares are
subject to a 5.75% maximum up-front sales charge that declines for accounts of
$25,000 or more. Class B shares, which are not available for certain
employer-sponsored retirement plans, have no up-front charge. They are,
however, subject to additional expenses of approximately 0.75% a year over the
first eight years of ownership. If redeemed within six years, they may also be
subject to a contingent deferred sales charge (5% maximum) that declines over
time.
Figures shown are past results and are not predictive of future results. Share
price and return will vary, so you may lose money. Investing for short periods
makes losses more likely. Investments are not FDIC-insured, nor are they
deposits of or guaranteed by a bank or any other entity.
Fellow Shareholders:
We are pleased to report that the exceptional gains achieved by The Growth Fund
of America in fiscal 1999 continued in the first half of our 2000 fiscal year.
For the six months ended February 29, the value of your shares increased 41.3%
if you reinvested the dividend of $0.045 a share and capital gain distribution
of $3.195 paid in December. This brings the total increase since the start of
our 1999 fiscal year to more than 100%.
While it is gratifying to be able to convey this extraordinarily good news
about your holdings, we should emphasize that the pace at which share values
have been rising is clearly unsustainable. We have been fortunate to
participate in an unusually sharp, well-publicized advance among
technology-related stocks. However, the law of gravity has not been repealed.
The market environment for these securities is bound to change, and may, in
fact, already be starting to do so. We would remind you that growth investing
can involve considerable volatility. The risks can be managed but not
eliminated. Therefore, we encourage you to maintain a long-term perspective
toward your holdings.
<TABLE>
<CAPTION>
Average annual
Total returns compound returns
6-month 12-month for fund's lifetime
(9/1/99-2/29/00) (3/1/99-2/29/00) (12/1/73-2/29/00)*
<S> <C> <C> <C>
The Growth Fund of America +41.3% +59.8% +18.9%
S&P 500 + 4.1 +11.7 +14.8
Lipper Capital Appreciation Funds Index +33.4 +48.8 +15.5
Lipper Growth Funds Index +21.1 +29.7 +14.3
Lipper Multi-Cap Growth Funds Index +51.9 +67.0 +16.5
</TABLE>
*Since 12/1/73, when Capital Research and Management Company became the fund's
investment adviser.
Our Benchmarks
The Growth Fund of America's results for the first half of fiscal 2000 outpaced
the unmanaged Standard & Poor's 500 Composite Index by the widest margin for
any fiscal half-year in the 26 years that the fund has been managed by Capital
Research and Management Company. The S&P 500 was up just 4.1% on a reinvested
basis. That modest gain was generated primarily by technology stocks; most
securities in the S&P 500 declined.
Meanwhile, the Lipper Growth Funds and Capital Appreciation Funds indexes
recorded total returns of 21.1% and 33.4%, respectively, for the six months.
These broad categories roughly match the funds' stated investment objectives.
Recently, Lipper, a leading mutual fund tracking service, divided U.S. equity
funds into additional categories based on their portfolio holdings. The Growth
Fund of America is part of the new Multi-Cap Growth Funds Index, which recorded
a gain of 51.9% during the period.
Our Portfolio
Among securities held in The Growth Fund of America's portfolio for the entire
six months, 97 rose and 82 went down in price. The decliners included food and
tobacco stocks and a number of issues that are representative of what is now
often called the "old" economy.
[Begin Sidebar]
Largest Equity Holdings Percent of
net assets
3Com 3.49%
Time Warner 3.32
Texas Instruments 3.22
PMC-Sierra 3.14
Viacom 2.53
Applied Materials 2.03
Micron Technology 2.03
News Corp. 1.92
KLA-Tencor 1.79
Corning 1.63
[End Sidebar]
Most of the stocks that advanced are in an area that is sometimes referred to
as T.M.T.- technology, media and telecommunications. These three industries,
which are becoming increasingly interrelated, dominate the list of our 10
largest holdings and together constitute about half of our equity investments.
Many of our tech stocks were driven upward by strong demand for advanced
electronic technologies. This demand has been fueled largely by the explosive
growth of the Internet. We own shares in several companies that supply Internet
hardware or software. One of the more significant of these is Oracle, a major
software provider, which rose 307% for the period. One of the few high-tech
holdings that did not go up was Microsoft (-3%).
The fund's investments in the biotech industry - including Celera Genomics,
Affymetrix and Millennium Pharmaceuticals - did especially well; all three of
those stocks were up more than 200%. (After the close of the reporting period,
they fluctuated widely.) Biotechnology began recapturing the attention of the
investment community this past winter for two reasons: increased publicity
given to research on the decoding of the human genome; and growing interest
among pharmaceutical companies in acquiring or partnering with small biotech
firms.
The fund's investments in the media industry also did very well. Two of our
largest positions in that industry are News Corp. (+95%) and Time Warner, which
gyrated in price following the announcement of its acquisition by America
Online and closed the period with a gain of 44%.
Among companies involved with the communications industry, two of our more
substantial holdings are Corning, which produces fiber-optic glass and
components, and 3Com, developer of the Palm Pilot. These two stocks rose 183%
and 295%, respectively.
Investing Outside North America
In February, The Growth Fund of America's board of directors voted to give the
fund the flexibility to invest up to 15% of net assets in the stocks of
companies that are domiciled outside the United States and Canada and not
included in the S&P 500. Previously the fund had been limited to investing no
more than 10% outside the United States. This change will be helpful as we
pursue investment opportunities in many important, rapidly growing firms in
other countries.
In exploring these opportunities, we will continue drawing on the resources of
Capital Research and Management Company's investment intelligence network,
which employs more than 100 analysts and portfolio counselors based on three
continents. These investment professionals travel millions of miles each year,
keeping a close watch on industry trends and government actions and
scrutinizing thousands of companies. We believe this extensive research effort
gives The American Funds Group, which includes The Growth Fund of America, an
important competitive edge.
Cordially,
/s/James F. Rothenberg /s/James E. Drasdo
James F. Rothenberg James E. Drasdo
Chairman of the Board President
April 17, 2000
<TABLE>
The Growth Fund of America, Inc.
Investment Portfolio, February 29, 2000
Unaudited
<S> <C> <C> <C>
Largest Industry Holdings
Electronic Components 23.99%
Broadcasting & Publishing 12.77%
Data Processing & Reproduction 9.50%
Health & Personal Care 9.44%
Electronic Instruments 5.97%
Bonds & Notes 0.08%
Cash & Equivalents 12.46%
Other Industries 25.79%
Market Percent
Value of Net
Equity Securitites (Common and Preferred Stocks) Shares (000) Assets
- ----------------------------------------------- ------ ------ ------
ELECTRONIC COMPONENTS - 23.99%
Texas Instruments Inc. 6,431,600 $1,070,861 3.22
PMC-Sierra, Inc.(1) 5,413,200 1,045,086 3.14
Micron Technology, Inc.(1) 6,892,100 675,857 2.03
Corning Inc. 2,877,900 541,045 1.63
Vitesse Semiconductor Corp.(1) 4,600,000 477,538 1.43
Intel Corp. 3,750,000 423,750 1.27
LSI Logic Corp.(1) 6,000,000 384,375 1.15
Redback Networks Inc. (1) 1,225,000 365,662 1.10
Analog Devices, Inc.(1) 2,033,333 319,233 .96
Microchip Technology Inc.(1)(2) 4,012,500 250,530 .75
Linear Technology Corp. 2,327,000 244,190 .73
Adaptec, Inc.(1) 5,100,000 209,100 .63
Rohm Co., Ltd. (Japan) 600,000 194,543 .59
Applied Micro Circuits Corp. (1) 675,600 185,832 .56
Altera Corp.(1) 2,300,000 183,425 .55
Sanmina Corp.(1) 1,550,000 181,447 .55
Murata Manufacturing Co., Ltd. (Japan) 875,000 166,485 .50
Jabil Circuit, Inc.(1) 2,026,100 140,687 .42
Taiwan Semiconductor Manufacturing Co. Ltd.
(Taiwan)(1) 20,910,000 137,215 .41
Solectron Corp.(1) 1,942,000 127,201 .38
Seagate Technology(1) 2,500,000 124,687 .37
Maxim Integrated Products, Inc.(1) 1,800,000 120,263 .36
Motorola, Inc. 625,500 106,648 .32
Cypress Semiconductor Corp. (1) 2,050,000 93,531 .28
Quantum Corp. - DLT & Storage Systems
(formerly Quantum Corp.) (1) 4,800,000 49,800
Quantum Corp. -
Hard Disk Drive (formerly Quantum Corp.) (1) 2,100,000 16,538 .20
Dallas Semiconductor Corp. 1,600,000 64,600 .20
SCI Systems, Inc.(1) 1,108,800 44,629 .14
Fairchild Semiconductor Corp., Class A (1) 1,050,000 39,638 .12
BROADCASTING & PUBLISHING - 12.77%
Time Warner Inc. 12,939,600 1,106,336 3.32
Viacom Inc., Class B (1) 13,500,000 752,625
Viacom Inc., Class A (1) 1,629,400 90,228 2.53
News Corp. Ltd., preferred (ADR) (Australia) 6,353,750 319,673
News Corp. Ltd. (ADR) 5,450,000 317,803 1.92
AT&T Corp. - Liberty Media Group, Class A (1) 7,114,400 371,727 1.12
Nippon Television Network Corp. (Japan) 177,760 245,744 .74
AMFM Inc.(1) 3,950,000 242,431 .73
Fox Entertainment Group, Inc., Class A (1) 8,606,400 226,456 .68
USA Networks Inc.(1) 7,040,000 157,960 .48
CBS Corp.(1) 2,625,427 156,377 .47
Chris-Craft Industries, Inc.(1) 1,254,540 82,564 .25
Cablevision Systems Corp., Class A (1) 900,000 57,769 .17
UnitedGlobalCom, Inc., Class A (1) 426,700 44,590 .13
Clear Channel Communications, Inc. (1) 500,000 33,312 .10
Sinclair Broadcast Group, Inc., Class A (1) 2,230,000 21,185 .06
BHC Communications, Inc., Class A(1) 62,840 10,023 .03
E.W. Scripps Co., Class A 150,000 6,469 .02
Ziff-Davis Inc. (1) 331,200 6,293 .02
DATA PROCESSING & REPRODUCTION - 9.50%
3Com Corp.(1) 11,850,000 1,161,300 3.49
Computer Associates International, Inc. 6,075,000 390,698 1.17
Oracle Corp.(1) 4,450,000 330,413 .99
PeopleSoft, Inc.(1) 13,400,000 277,212 .83
Cadence Design Systems, Inc. (1) 12,150,000 242,241 .73
Fujitsu Ltd. (Japan) 4,000,000 132,788 .40
Lexmark International Group, Inc., Class A (1) 1,000,000 119,250 .36
Microsoft Corp.(1) 1,300,000 116,188 .35
International Business Machines Corp. 600,000 61,200 .18
MMC Networks, Inc. (1) 1,500,000 59,531 .18
Storage Technology Corp.(1) 4,400,000 56,100 .17
Gateway, Inc. (1) 811,000 55,756 .17
National Computer Systems, Inc. 1,244,400 49,465 .15
Autodesk, Inc. 901,000 40,263 .12
Dell Computer Corp. (1) 800,000 32,650 .10
Compaq Computer Corp. 1,000,000 24,875 .07
BMC Software, Inc.(1) 300,000 13,800 .04
HEALTH & PERSONAL CARE - 9.44%
Pfizer Inc 13,050,000 419,231 1.26
Cardinal Health, Inc. 8,055,000 332,269 1.00
Guidant Corp. (1) 4,400,000 296,450 .89
Millennium Pharmaceuticals, Inc. (1) 1,050,000 273,131 .82
American Home Products Corp. 5,000,000 217,500 .65
Forest Laboratories, Inc.(1) 2,800,000 191,275 .57
Sepracor Inc.(1) 1,754,800 177,893 .53
AstraZeneca PLC (United Kingdom) 3,750,000 123,956
AstraZeneca PLC (ADR) 380,000 12,587 .41
Biogen, Inc.(1) 1,200,000 129,525 .39
Celera Genomics (1) 528,800 129,027 .39
Elan Corp., PLC (ADR) (Ireland)(1) 2,700,000 111,038 .33
Amgen Inc.(1) 1,500,000 102,281 .31
Medlmmune, Inc. (1) 500,000 99,250 .30
Gilead Sciences, Inc. (1) 1,200,000 91,800 .28
Pharmacia & Upjohn, Inc. 1,865,000 88,821 .27
Transkaryotic Therapies, Inc.(1) (3) 1,000,000 50,125 .15
Amylin Pharmaceuticals, Inc. (1)(3)(4) 3,000,000 38,475 .11
Genentech, Inc. (1) 198,800 38,344 .11
IDEXX Laboratories, Inc.(1) 1,200,000 35,475 .11
Warner-Lambert Co. 400,000 34,225 .10
Becton, Dickinson and Co. 1,000,000 31,062 .09
SICOR Inc. (1) 1,894,702 18,829
SICOR Inc. (1) (3) 1,125,000 11,180 .09
Guilford Pharmaceuticals, Inc.(1) 900,000 29,812 .09
Omnicare, Inc. 2,400,000 22,050 .07
Avon Products, Inc. 713,500 19,309 .06
Medtronic, Inc. 360,000 17,438 .05
ELECTRONIC INSTRUMENTS - 5.97%
Applied Materials, Inc.(1) 3,700,000 676,869 2.03
KLA - Tencor Corp.(1) 7,650,000 596,222 1.79
Affymetrix, Inc. (1)(3) 1,000,000 289,625 .87
PE Biosystems Group 2,429,600 256,323 .77
ADVANTEST CORP. (Japan) 500,000 90,586 .27
Teradyne, Inc.(1) 900,000 78,300 .24
ELECTRICAL & ELECTRONICS - 4.54%
Nortel Networks Corp. (Canada) 3,422,240 381,580 1.15
Cisco Systems, Inc.(1) 2,700,000 356,906 1.07
Juniper Networks, Inc. (1) 1,050,000 288,028 .87
Telefonaktiebolaget LM Ericsson,
Class B (ADR) (Sweden) 2,000,000 192,000 .58
NEC Corp. (Japan) 6,000,000 133,970 .40
Nokia Corp., Class A (ADR) (Finland) 570,000 113,038 .34
Lucent Technologies Inc. 412,500 24,544 .07
Corvis, Series H,
convertible preferred (1) (3) (4) 248,355 20,000 .06
BUSINESS SERVICES - 3.24%
Cendant Corp.(1) 18,521,900 329,921 .99
FDX Corp. (1) 4,700,000 164,206 .49
Flextronics International Ltd.
(USA --- Incorporated in Singapore) (1) 2,600,000 158,275 .48
Robert Half International Inc. (1) 1,791,800 75,704 .23
United Parcel Service, Inc., Class B 1,258,800 68,762 .21
Waste Management, Inc. 3,229,100 48,437 .15
Allied Waste Industries, Inc. (1) 7,250,000 40,781 .12
Snyder Communications, Inc. (1) 1,500,000 36,375 .12
Snyder Communications, Inc.-Circle.com (1) 250,000 2,359
Sabre Group Holdings, Inc., Class A (1) 900,000 36,113 .11
Paychex, Inc. 690,000 34,543 .10
ServiceMaster Co. 1,700,000 18,700 .06
Concord EFS, Inc.(1) 875,000 17,117 .05
Galileo International, Inc. 1,000,000 17,000 .05
Apollo Group, Inc., Class A (1) 700,000 15,969 .04
United Rentals, Inc. (1) 1,000,000 15,625 .04
HEALTH CARE PROVIDERS & SERVICES - 2.09%
Columbia/HCA Healthcare Corp. 21,596,800 417,088 1.25
WellPoint Health Networks Inc. (1) 2,145,100 144,794 .43
Universal Health Services, Inc., Class B (1) 1,450,000 56,369 .17
Cintas Corp. 1,223,000 48,844 .15
Quintiles Transnational Corp.(1) 1,000,000 29,687 .09
LEISURE & TOURISM - 1.88%
Starbucks Corp.(1) 6,100,000 214,263 .64
Seagram Co. Ltd. (Canada) 3,010,000 176,837 .53
SFX Entertainment, Inc., Class A (1) 3,000,000 115,500 .35
Carnival Corp. 2,362,000 68,055 .21
Harrah's Entertainment, Inc. (1) 2,600,000 49,725 .15
FINANCIAL SERVICES - 1.80%
Fannie Mae 7,131,700 377,980 1.14
Capital One Financial Corp. 2,050,000 75,466 .23
SLM Holding Corp. 1,880,000 58,867 .17
Providian Financial Corp. 700,000 45,369 .14
Household International, Inc. 1,300,000 41,519 .12
TRANSPORTATION: AIRLINES - 1.66%
Southwest Airlines Co. 13,140,518 242,278 .73
AMR Corp.(1) 3,279,100 173,383 .52
Continental Airlines, Inc., Class B (1) 2,882,000 91,143 .27
Delta Air Lines, Inc. 1,030,000 46,994 .14
ENERGY SOURCES - 1.04%
Suncor Energy Inc. (Canada) 1,900,000 72,291 .22
Devon Energy Corp. 1,750,000 65,187 .19
EOG Resources Inc. 3,800,000 57,950 .17
Pogo Producing Co. 1,994,400 46,120 .14
Shell Canada Ltd., Class A (Canada) 1,949,800 34,943 .10
Enterprise Oil PLC (United Kingdom) 6,500,000 32,588 .10
Talisman Energy Inc. (Canada)(1) 1,067,700 27,613 .09
Petro-Canada (Canada) 600,000 8,437 .03
MERCHANDISING - 0.94%
Limited Inc. 3,360,000 114,240 .34
Lowe's Companies, Inc. 2,050,000 97,631 .29
Albertson's, Inc. 2,698,500 66,113 .20
Lands' End, Inc. (1) 650,000 21,572 .07
Circuit City Stores, Inc. - Circuit City Group 200,000 8,075 .03
Consolidated Stores Corp. (1) 392,200 4,412 .01
BEVERAGES & TOBACCO - 0.92%
Philip Morris Companies Inc. 11,150,000 223,697 .67
PepsiCo, Inc. 2,250,000 72,563 .22
R.J. Reynolds Tobacco Holdings, Inc. 641,666 11,550 .03
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.89%
MCI WorlCom, Inc. (1) 2,034,900 90,808 .27
Teleglobe Inc. (Canada) 3,045,000 77,949 .24
AT&T Corp. 1,500,000 74,156 .22
Sprint FON Group 500,000 30,500 .09
Rhythms NetConnections Inc. (1) 650,000 23,197 .07
INSURANCE - 0.78%
XL Capital Ltd., Class A
(Incorporated in Bermuda) 3,090,800 124,984 .38
Protective Life Corp. 2,920,000 64,240 .19
Mercury General Corp. 1,275,000 28,927 .09
MGIC Investment Corp. 600,000 22,425 .07
American International Group, Inc. 200,000 17,688 .05
WIRELESS TELECOMMUNICATION SERVICES - 0.75%
NTT Mobile Communications Network, Inc.
(Japan)(1) 5,000 201,455 .61
Crown Castle International Corp.(1) 1,500,000 48,375 .14
BANKING - 0.47%
Bank of America Corp. 1,100,000 50,669 .15
Washington Mutual, Inc. 2,184,000 48,321 .15
Charter One Financial, Inc. 1,750,000 27,562 .08
Wells Fargo & Co. 779,100 25,759 .08
FleetBoston Financial Corp.
(formerly Fleet Financial Group, Inc.) 171,738 4,680 .01
CHEMICALS - 0.45%
Monsanto Co. 2,414,400 93,709 .28
Millennium Chemicals Inc. 1,425,000 19,950 .06
Air Products and Chemicals, Inc. 700,000 18,025 .05
A. Schulman, Inc. 965,625 12,794 .04
International Flavors & Fragrances Inc. 162,800 4,884 .02
FOOD & HOUSEHOLD PRODUCTS - 0.43%
Nabisco Group Holdings Corp. 6,550,000 56,494 .17
Keebler Foods Co. 1,900,000 48,212 .14
Dole Food Co., Inc. 2,600,000 39,975 .12
ENERGY EQUIPMENT - 0.27%
BJ Services Co.(1) 1,300,000 74,181 .22
Schlumberger Ltd. (Netherlands Antilles) 200,000 14,775 .05
RECREATION OTHER CONSUMER PRODUCTS - 0.25%
Hasbro, Inc. 3,950,000 62,212 .19
American Greetings Corp., Class A 1,176,400 20,293 .06
MISCELLANEOUS MATERIALS & COMMODITIES - 0.21%
Sealed Air Corp. (1) 1,400,000 69,563 .21
IT CONSULTING & SERVICES - 0.18%
Modis Professional Services, Inc.(1) 2,000,000 31,500 .10
Computer Sciences Corp. (1) 350,000 27,584 .08
TEXTILES & APPAREL - 0.16%
NIKE, Inc., Class B 1,900,000 54,031 .16
AEROSPACE & MILITARY TECHNOLOGY - 0.14%
Bombardier Inc., Class B (Canada) 2,350,000 47,136 .14
UTILITIES: ELECTRIC & GAS - 0.09%
Questar Corp. 2,225,000 31,011 .09
MACHINERY & ENGINEERING - 0.08%
Thermo Electron Corp.(1) 1,725,000 26,953 .08
TRANSPORTATION: RAIL & ROAD - 0.06%
Wisconsin Central Transportation Corp.(1) 1,650,000 20,419 .06
INDUSTRIAL COMPONENTS - 0.05%
Danaher Corp. 400,000 16,325 .05
BUILDING MATERIALS & COMPONENTS - 0.04%
Johns Manville International Group, Inc. 1,500,000 12,188 .04
MISCELLANEOUS - 2.38%
Other equity securities in
initial period of acquisition 794,789 2.38
------ ------
Total Equity Securities (cost: $15,012,048,000) 29,115,768 87.46
====== ======
Principal
Amount
Bonds & Notes (000)
- ------------------------------------------------ ------ ------ ------
Federal Agency - 0.08%
Student Loan Marketing Association
5.822% 2000 (5) $25,000 25,000 0.08
------ ------
Total Bonds & Notes (cost $25,000,000) 25,000 0.08
------ ------
Short-Term Securities
Corporate Short-Term Notes - 8.84%
Ford Motor Credit Co.
5.71%-5.86% due 3/22-5/4/2000 110,000 109,240 .33
General Electric Capital Corp
5.72%-5.86% due 3/13-5/3/2000 109,950 109,144 .33
Proctor & Gamble Co.
5.74%-5.80% due 3/24-4/10/2000 103,100 102,537 .31
USAA Capital Corp.
5.74%-5.85% due 3/9-4/25/2000 102,700 102,138 .31
Motorola Inc. 5.75%-6.03% due 3/7-4/28/2000 100,000 99,352 .30
Chevron Corp. 5.65%-5.82% due 3/6-4/17/2000 99,400 98,948 .30
American Express Credit Corp.
5.65%-5.80% due 3/3-4/24/2000 98,000 97,303 .29
E.I.duPont de Nemours and Co.
5.50%-5.81% due 4/10-4/24/2000 95,000 94,255 .28
Park Avenue Receivables Corp.
5.80%-5.90% due 3/10-4/3/2000 (3) 93,601 93,290 .28
Preferred Receivable Funding
5.74%-5.85% due 3/3-4/4/2000 (3) 92,325 92,002 .28
Archer Daniels Midland Co
.5.84%-5.90% due 4/11-5/16/2000 92,300 91,334 .28
International Lease Finance Corp.
5.70%-5.82% due 3/27-4/20/2000 90,800 90,116 .27
Eastman Kodak Co. 5.72%-5.88% due 3/28-5/17/2000 90,600 89,790 .27
Duke Energy Corp. 5.80% due 4/11-4/14/2000 90,000 89,362 .27
Campbell Soup Co. 5.76%-5.85% due 4/4-5/8/2000 90,000 89,231 .27
Marsh USA Inc. 5.80%-5.90% due 3/6-5/15/2000 (3) 88,600 87,944 .26
National Rural Utilities Cooperative Finance
Corp. 5.75%-5.94% due 3/21-3/29/2000 84,200 83,835 .25
H.J. Heinz Co. 5.72%-5.75% due 3/6-3/29/2000 82,000 81,679 .25
Ciesco LP 5.77%-5.82% due 4/5-4/12/2000 (3) 76,400 75,902 .23
Bell Atlantic Financial Services, Inc.
5.76%-5.84% due 3/22-3/30/2000 75,000 74,689 .22
Emerson Electric Co.
5.69%-5.83% due 3/17-4/20/2000 (3) 73,400 72,840 .22
AT&T Corp. 5.70%-5.80% due 3/2-4/10/2000 72,900 72,568 .21
General Motors Acceptance Corp.
5.84%-6.03% due 3/1-4/26/2000 70,000 69,560 .21
PACCAR Financial Corp.
5.87%-5.98% due 3/23-5/16/2000 70,000 69,385 .21
Walt Disney Co. 5.76%-5.80% due 3/17-4/11/2000 67,000 66,749 .20
Lucent Technologies Inc.
5.75%-5.86% due 3/14-5/1/2000 66,800 66,382 .20
Pfizer Inc 5.64%-5.65% due 3/15-3/21/2000 (3) 65,000 64,817 .19
BellSouth Telecommunications, Inc.
5.74%-5.80% due 3/22-4/12/2000 65,000 64,721 .19
Coca-Cola Co. 5.74%-5.80% due 4/3-4/7/2000 65,000 64,626 .19
American General Corp.
5.82%-5.87% due 4/19-5/4/2000 64,500 63,918 .19
Fortune Brands Inc.
5.80%-5.90% due 4/11-5/15/2000 (3) 64,000 63,426 .19
Minnesota Mining & Manufacturing Co.
5.84%-5.90% due 3/24-5/19/2000 60,000 59,678 .18
Merck & Co., Inc.
5.75%-5.76% due 3/13-3/15/2000 55,000 54,876 .16
Equilon Enterprises, LLC
5.83%-5.94% due 3/7-4/25/2000 45,000 44,789 .14
E.W. Scripps Co. 5.89%-5.90% due 5/2-5/8/2000 (3) 40,000 39,566 .12
Johnson & Johnson 5.90% due 5/1/2000 (3) 36,500 36,129 .11
Motiva Enterprises LLC 5.72%-5.77% due 3/28/2000 35,500 35,342 .11
GE Finance Assurance Holdings Inc.
5.91% due 3/10/2000 (3) 33,000 32,947 .10
CIT Group Holdings, Inc.5.74% due 3/27/2000 25,000 24,892 .07
Yale University 5.85% due 4/7/2000 25,000 24,846 .07
Federal Agency Discount Notes - 3.39
Fannie Mae 5.49%-5.83% due 3/9-7/13/2000 497,433 493,008 1.48
Freddie Mac 5.54%-5.83% due 3/7-7/5/2000 395,153 392,559 1.18
Federal Home Loan Banks
5.50%-5.81% due 3/3-5/31/2000 192,700 191,308 .58
Tennessee Valley Authority 5.51% due 3/2/2000 50,000 49,985 .15
Non-U.S. Currency - 0.01%
New Taiwanese Dollar NT$126,234 4,121 .01
------ ------
Total Short-Term Securities (cost:$4,074,980,000) 4,075,129 12.24
------ ------
Total Investment Securities (cost:$19,112,028,000) 33,215,897 99.78
Excess of cash and receivables over payables 72,551 .22
------ ------
NET ASSETS $33,288,448 100.00
====== ======
1 Non-income-producing security.
2 The fund owns 5.24% of the outstanding voting
securities of Microchip Tech, and thus is
considered an affiliate as defined by the
Investment Company Act of 1940.
3 Purchased in a private placement transaction;
resale to the public may require registration
or sale only to qualified institutional buyers.
4 Valued under procedures established by the
Board of Directors.
5 Coupon rate may change periodically.
ADR = American Depositary Receipt
See Notes to Financial Statements
</TABLE>
<TABLE>
The Growth Fund of America
Financial Statements
Statement of Assets and Liabilities Unaudited
- ----------------------------------------------------- -------------- --------------
at February 29, 2000 (dollars in
thousands)
<S> <C> <C>
Assets:
Investment securities at market
(cost: $19,112,028) $33,215,897
Cash 654
Receivables for-
Sales of investments $148,677
Sales of fund's shares 100,564
Dividends and interest 7,685 256,926
-------------- --------------
33,473,477
Liabilities:
Payables for-
Purchases of investments 133,226
Repurchases of fund's shares 28,456
Management services 7,779
Other expenses 15,568 185,029
-------------- --------------
Net Assets at February 29, 2000-
Equivalent to $33.05 per share on
1,007,164,300 shares of $0.001 par value
capital stock outstanding (authorized
capital stock--2,000,000,000 shares) $33,288,448
=============
Statement of Operations Unaudited
- ---------------------------------------------- -------------- --------------
for the six months ended February 29, 2000 (dollars in
thousands)
Investment Income:
Income:
Dividends $ 49,243
Interest 92,114 $ 141,357
--------------
Expenses:
Management services fee 40,311
Distribution expenses 31,061
Transfer agent fee 11,717
Reports to shareholders 701
Registration statement and prospectus 1,413
Postage, stationery and supplies 2,840
Directors' fees 86
Auditing and legal fees 55
Custodian fee 455
Taxes other than federal income tax 1
Other expenses 192 88,832
-------------- --------------
Net investment income 52,525
--------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 2,178,446
Net increase in unrealized appreciation
on investments:
Beginning of period 7,194,763
End of period 14,103,869 6,909,106
-------------- --------------
Net realized gain and unrealized appreciation
on investments 9,087,552
--------------
Net Increase in Net Assets Resulting
from Operations $ 9,140,077
=============
See Notes to Financial Statements
Statement of Changes in Net Assets
- ------------------------------------------------ -------------- --------------
(dollars in
thousands)
Six months ended Year ended
'February 29, August 31, 1999
2000 (1)
Operations:
Net investment income $ 52,525 $ 48,143
Net realized gain on investments 2,178,446 2,423,859
Net increase in unrealized appreciation
on investments 6,909,106 4,827,884
-------------- --------------
Net increase in net assets
resulting from operations 9,140,077 7,299,886
-------------- --------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (37,242) (59,245)
Distributions from net realized gain on
investments (2,644,206) (1,454,805)
-------------- --------------
Total dividends and distributions (2,681,448) (1,514,050)
-------------- --------------
Capital Share Transactions:
Proceeds from shares sold: 183,249,179
and 174,121,917 shares, respectively 5,319,375 4,179,298
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 95,708,170 and 66,551,910 shares,
respectively 2,583,882 1,460,168
Cost of shares repurchased: 60,815,730
and 109,023,256 shares, respectively (1,746,351) (2,550,833)
-------------- --------------
Net increase in net assets resulting from
capital share transactions 6,156,906 3,088,633
-------------- --------------
Total Increase in Net Assets 12,615,535 8,874,469
Net Assets:
Beginning of period 20,672,913 11,798,444
-------------- --------------
End of period (including undistributed net
investment income and distributions in
excess of net investment income: $14,623 and
$(660), respectively) $ 33,288,448 $ 20,672,913
============= =============
(1) Unaudited
See Notes to Financial Statements
</TABLE>
THE GROWTH FUND OF AMERICA, INC.
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - The Growth Fund of America, Inc. (the "fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund invests in a wide range of companies that appear
to offer superior opportunities for growth of capital.
SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with generally accepted accounting principles which require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of the significant accounting
policies consistently followed by the fund in the preparation of its financial
statements:
SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at the last reported sale price on the exchange or market on which such
securities are traded, as of the close of business on the day the securities
are being valued or, lacking any sales, at the last available bid price. In
cases where equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market.
Fixed-income securities are valued at prices obtained from a pricing service,
when such prices are available; however, in circumstances where the investment
adviser deems it appropriate to do so, such securities will be valued at the
mean quoted bid and asked prices or at prices for securities of comparable
maturity, quality and type. The ability of the issuers of the debt securities
held by the trust to meet their obligations may be affected by economic
developments in a specific industry, state or region.
Short-term securities maturing within 60 days are valued at amortized cost,
which approximates market value. Securities and assets for which
representative market quotations are not readily available are valued at fair
value as determined in good faith by a committee appointed by the Board of
Directors.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities initially expressed in
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing
market rates at the end of the reporting period. Purchases and sales of
securities and income and expenses are translated into U.S. dollars at the
prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities and other
assets and liabilities are included with the net realized and unrealized gain
or loss on investment securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INC - Security transactions are
accounted for as of the trade date. Realized gains and losses from securities
transactions are determined based on specific identified cost. Dividend income
is recognized on the ex-dividend date, and interest income is recognized on an
accrual basis. Market discounts and premiums, and original issue discounts on
securities purchased are amortized daily over the expected life of the
security.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions paid
to shareholders are recorded on the ex-dividend date.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - Investments in securities of non-U.S. issuers in certain
countries involve special investment risks. These risks may include, but are
not limited to, investment and repatriation restrictions, revaluation of
currencies, adverse political, social, and economic developments, government
involvement in the private sector, limited and less reliable investor
information, lack of liquidity, certain local tax law considerations, and
limited regulation of the securities markets.
TAXATION - Dividend income is recorded net of non-U.S. taxes paid. For the
six months ended February 29, 2000,
such non-U.S. taxes were $772.000.
CURRENCY GAINS AND LOSSES - Net realized currency gains on
dividends and other receivables and payables, on a book basis, were $70,000
for the six months ended February 29, 2000.
3. FEDERAL INCOME TAXATION - The fund complies with the requirements of the
Internal Revenue Code applicable to regulated investment companies and intends
to distribute all of its net taxable income and net capital gains for the
fiscal year. As a regulated investment company, the fund is not subject to
income taxes if such distributions are made. Required distributions are
determined on a tax basis and may differ from net investment income and net
realized gains for financial reporting purposes. In addition, the fiscal year
in which amounts are distributed may differ from the year in which the net
investment income and net realized gains are record by the fund.
As of February 29, 2000, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $14,103,869,000, of which
$15,382,022,000 related to appreciated securities and $1,278,153,000 related to
depreciated securities. There was no difference between book and tax realized
gains on securities transactions for the six months ended February 29, 2000.
Net gains related to non-U.S. currency transactions of $70,000 were treated
as an adjustment to ordinary income for federal income tax purposes. The cost
of portfolio securities for book and federal income tax purposes was
$19,112,028,000 at February 29, 2000.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $40,311,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Directors of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees,
accrued daily, based on an annual rate of 0.50% of the first $1.0 billion of
average net assets; 0.40% of such assets in excess of $1.0 billion but not
exceeding $2.0 billion; 0.37% of such assets in excess of $2.0 billion but not
exceeding $3.0 billion; 0.35% of such assets in excess of $3.0 billion but not
exceeding $5.0 billion; 0.33% of such assets in excess of $5.0 billion but not
exceeding $8.0 billion; 0.315% of such assets in excess of $8.0 billion but not
exceeding $13.0 billion; 0.30% of such assets in excess of $13.0 billion but
not exceeding $21.0 billion; and 0.29% of such assets in excess of $21.0
billion.
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution, the fund may
expend up to 0.25% of its average net assets annually for any activities
primarily intended to result in sales of fund shares, provided the categories
of expenses for which reimbursement is made are approved by the fund's Board of
Directors. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. During the six months
ended February 29, 2000, distribution expenses under the Plan were limited to
$31,061,000. Had no limitation been in effect, the fund would have paid
$33,929,000 in distribution expenses under the plan. As of February 29, 2000,
accrued and unpaid distribution expenses were $14,567,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $10,227,000(after allowances to dealers) as its portion
of the sales charges paid by purchasers of the fund's shares. Such sales
charges are not an expense of the fund and, hence, are not reflected in the
accompanying statement of operations.
TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer agent
for the fund, was paid a fee of $11,717,000.
DEFERRED DIRECTORS' FEES - Directors who are unaffiliated with CRMC may elect
to defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of February 29, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993) net of any payments to
Directors were $911,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $6,032,979,000 and $4,462,563,000, respectively,
during the six months ended February 29, 2000.
As of February 29, 2000, accumulated undistributed net realized gain on
investments was $1,668,869,000 and additional paid-in capital was
$17,500,010,000.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $455,000 includes $54,000 that was paid by these credits
rather than in cash.
<TABLE>
Per-Share Data and Ratios(1) Six months
ended Year Ended August 31
Feb 29,
2000 (2) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
------- ------- ------- ------- --------------
Net Asset Value, Beginning of Period $26.20 $17.95 $20.14 $15.39 $16.55 $13.81
------- ------- ------- ------- --------------
Income from Investment Operations:
Net investment income .06 .07 .10 .13 .13 .13
Net gains(losses) on securities (both
realized and unrealized) 10.03 10.48 (.10) 5.59 (.01) 3.21
------- ------- ------- ------- --------------
Total from investment operations 10.09 10.55 .00 5.72 .12 3.34
------- ------- ------- ------- --------------
Less Distributions:
Dividends (from net investment income) (.04) (.09) (.13) (.11) (.14) (.08)
Distributions (from captital gains) (3.20) (2.21) (2.06) (.86) (1.14) (.52)
------- ------- ------- ------- --------------
Total distributions (3.24) (2.30) (2.19) (.97) (1.28) (.60)
------- ------- ------- ------- --------------
Net Asset Value, End of Period $33.05 $26.20 $17.95 $20.14 $15.39 $16.55
======= ======= ======= ======= ==============
Total Return(3) 41.28% (4)61.26% (.24)% 38.54% .90% 25.56%
Ratios/Supplemental Data:
Net assets, end of period (in millions) $33,288 $20,673 $11,798 $11,646 $8,511 $7,525
Ratio of expenses to average net
assets 0.35% (4) .70% .70% .72% .74% .75%
Ratio of net income to average net
assets 0.21%(4) .28% .48% .73% .82% .90%
Portfolio turnover rate 20.22%(4) 45.61% 38.84% 34.10% 27.95% 26.90%
(1)Adjusted to reflect the 100% share dividend
effective at the close of business on
December 12, 1996.
(2)Unaudited
(3)Excludes maximum sales charge of 5.75%
(4)Based on operations for the period shown
and, accordingly, not representative of a full year.
</TABLE>
Results of Shareholders Meeting Unaudited
Held October 27, 1999
Adjourned to November 22, 1999
Adjourned to December 7, 1999
Shares Outstanding on August 24, 1999 (record date) 786,315,032
Shares Voting on October 27, 1999 (proposals 1 & 5) 454,304,053 (57.8%)
Shares Voting on November 22, 1999 (proposal 4) 482,673,984 (61.4%)
Shares Voting on December 7, 1999 (proposals 2 & 3) 505,925,755 (64.3%)
Proposal 1: Election of directors
<TABLE>
<CAPTION>
Percent of Votes Percent of
Director Votes For Shares Voting For Withheld Shares Withheld
<S> <C> <C> <C> <C>
Guilford C. Babcock 448,086,725 98.6% 6,217,328 1.4%
James E. Drasdo 448,403,010 98.7% 5,901,043 1.3%
Robert A. Fox 448,166,898 98.6% 6,137,156 1.4%
Roberta L. Hazard 448,015,870 98.6% 6,288,183 1.4%
Leonade D. Jones 448,193,759 98.7% 6,110,294 1.3%
John G. McDonald 448,175,072 98.7% 6,128,981 1.3%
Gail L. Neale 447,848,705 98.6% 6,455,348 1.4%
James W. Ratzlaff 448,322,292 98.7% 5,981,761 1.3%
Henry E. Riggs 448,445,408 98.7% 5,858,645 1.3%
James F. Rothenberg 448,310,401 98.7% 5,993,652 1.3%
Patricia K. Woolf 448,159,703 98.6% 6,144,351 1.4%
</TABLE>
Proposal 2: Amendment to Articles of Incorporation authorizing the board to
create new classes and series of capital stock
<TABLE>
<CAPTION>
Percent of Votes Percent of Shares Percent of
Votes For Shares Voting For Against Voting Against Abstentions Abstaining
<S> <C> <C> <C> <C> <C>
404,177,900 79.9% 20,083,072 4.0% 22,784,553 4.5%
</TABLE>
(Broker Non-Votes = 58,880,209)
Proposal 3: Amendment to Articles of Incorporation reducing the par value per
share of capital stock
<TABLE>
<CAPTION>
Percent of Percent of
Percent of Votes Shares Voting Shares
Votes For Shares Voting For Against Against Abstentions Abstaining
<S> <C> <C> <C> <C> <C>
448,924,999 88.7% 27,925,681 5.5% 29,074,805 5.8%
</TABLE>
Proposal 4: Eliminate or revise certain of the fund's investment restrictions
<TABLE>
<CAPTION>
Percent of Percent of
Percent of Votes Shares Voting Shares
Votes For Shares Voting For Against Against Abstentions Abstaining
<S> <C> <C> <C> <C> <C>
366,138,573 75.9% 26,492,362 5.5% 24,658,924 5.1%
358,369,436 74.2% 31,732,017 6.6% 27,188,406 5.6%
364,697,719 75.6% 25,222,631 5.2% 27,369,509 5.7%
368,428,628 76.3% 22,318,311 4.6% 26,542,920 5.5%
</TABLE>
(Broker Non-Votes = 65,384,125; same for all restrictions)
Proposal 5: Ratification of auditors
<TABLE>
<CAPTION>
Percent of Percent of
Percent of Votes Shares Voting Shares
Votes For Shares Voting For Against Against Abstentions Abstaining
<S> <C> <C> <C> <C> <C>
440,516,552 97.0% 3,849,719 0.8% 9,937,782 2.2%
</TABLE>
[The American Funds Group(r)]
Office of the fund
One Market
Steuart Tower, Suite 1800
Mailing address: P.O. Box 7650
San Francisco, California 94120-7650
Investment adviser
Capital Research and
Management Company
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5823
Transfer agent for
shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
Custodian of assets
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02105-1713
Counsel
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071-2371
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
For information about your account or any of the fund's services, or for a
prospectus for any of the American Funds, please contact your financial
adviser. You may also call American Funds Service Company, toll free, at
800/421-0180, or visit www.americanfunds.com on the World Wide Web. Please read
the prospectus carefully before you invest or send money.
This report is for the information of shareholders of The Growth Fund of
America, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after June 30, 2000, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Printed on recycled paper
Litho in USA CD/L/4544
Lit. No. GFA-013-0400
.
