SEC File Nos. 811-1880
2-33371
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 45 (X)
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 26 (X)
THE INCOME FUND OF AMERICA, INC.
(Exact name of registrant as specified in charter)
P.0. Box 7650, Four Embarcadero Center, San Francisco, California 94120
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (415) 421-9360
Patrick F. Quan
Secretary
The Income Fund of America, Inc.
P.0. Box 7650, Four Embarcadero Center
San Francisco, California 94120
(Name and address of agent for service)
Copy to:
Cary I. Klafter, Esq.
Morrison & Foerster
345 California Street, 30th Floor
San Francisco, California 94104
The Registrant has filed a declaration
pursuant to Rule 24f-2. On
September 21, 1995, it filed its 24f-2
Notice for fiscal 1995.
Approximate date of proposed public offering:
[X] It is proposed that this filing will
become effective on October 1, 1995
pursuant to paragraph (b) of Rule 485.
<PAGE>
THE INCOME FUND OF AMERICA, INC.
Cross Reference Sheet
<TABLE>
<CAPTION>
Item Number Captions in
of Part "A" Prospectus
of Form N-1A (Part "A")
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Expenses
3. Condensed Financial Information Financial Highlights;
Investment Results
4. General Description of Registrant Fund Organization
and Management;
Investment Objective and
Policies; Certain
Securities and Investment
Techniques
5. Management of the Fund Financial Highlights;
Fund Organization and
Management
6. Capital Stock and Other Securities Investment Objective
and Policies; Fund
Organization and
Management; Dividends,
Distributions and Taxes;
Retirement Plans
7. Purchase of Securities Being Offered Purchasing Shares;
Fund Organization and
Management; Shareholder
Services
8. Redemption or Repurchase Redeeming Shares
9. Legal Proceedings N/A
</TABLE>
<TABLE>
<CAPTION>
Captions in Statement
Item Number of Additional
of Part "B" Information
of Form N-1A (Part "B")
<S> <C> <C>
10. Cover Page Cover
11. Table of Contents Table of Contents
12. General Information and History None
13. Investment Objectives and Policies Description of Certain
Securities; Fundamental
Policies and Investment
Restrictions
14. Management of the Fund Fund Officers and
Directors
15. Control Persons and Principal Fund Officers and
Holders of Securities Directors; Fund
Organization and
Management (Part "A")
16. Investment Advisory and Other Services Fund Officers and
Directors; Fund
Organization and
Management (Part "A");
General Information;
Management
17. Brokerage Allocation and Other Practices Execution of Portfolio
Transactions; Fund
Organization and
Management (Part "A")
18. Capital Stock and Other Securities None
19. Purchase, Redemption and Pricing Purchase of Shares;
of Securities Being Offered Shareholder Account
Services and Privileges;
Purchasing Shares (Part
"A"); General
Information
20. Tax Status Dividends,
Distributions and Federal
Taxes
21. Underwriter Management; Fund
Organization and
Management (Part "A")
22. Calculation of Performance Data Investment Results
23. Financial Statements Financial Statements
</TABLE>
<TABLE>
<CAPTION>
Item in
Part "C"
<S> <C>
24. Financial Statements and Exhibits
25. Persons Controlled by or under Common Control
with Registrant
26. Number of Holders of Securities
27. Indemnification
28. Business and Other Connections of Investment Adviser
29. Principal Underwriter
30. Location of Accounts and Records
31. Management Services
32. Undertakings
</TABLE>
Signature Page
<PAGE>
THE INCOME FUND OF AMERICA, INC.
<PAGE>
Prospectus
The
Income
Fund of
America, Inc.
[LOGO OF THE AMERICAN FUNDS GROUP(R)]
OCTOBER 1, 1995
THE INCOME FUND OF AMERICA, INC.
Four Embarcadero Center
Suite 1800
San Francisco, CA 94111
The investment objective of the fund is to emphasize current income while
secondarily striving to attain capital growth. The fund believes that a
portfolio with relatively high current income can also generate growth of
capital. The fund strives to accomplish this objective by investing in a
broadly diversified portfolio of securities including stocks and bonds.
This prospectus presents information you should know before investing in the
fund. It should be retained for future reference.
You may obtain the statement of additional information dated October 1, 1995,
which contains the fund's financial statements, without charge, by writing to
the Secretary of the fund at the above address or telephoning 800/421-0180.
These requests will be honored within three business days of receipt.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR
GUARANTEED BY, THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON. THE
PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
06-010-1095
<PAGE>
- -------------------------------------------------------------------------------
SUMMARY OF
EXPENSES
Average annual expenses
paid over a 10-year
period would be
approximately $13 per
year, assuming a $1,000
investment and a 5%
annual return.
TABLE OF
CONTENTS
Summary of Expenses........2
Financial Highlights.......3
Investment Objective and
Policies..................3
Certain Securities and
Investment Techniques.....4
Investment Results.........8
Dividends, Distributions
and Taxes.................8
Fund Organization and
Management................9
The American Funds
Shareholder Guide.....12-20
Purchasing Shares........12
Reducing Your Sales
Charge..................15
Shareholder Services.....16
Redeeming Shares.........18
Retirement Plans.........20
IMPORTANT PHONE NUMBERS
Shareholder Services:
800/421-0180 ext. 1
Dealer Services:
800/421-9900 ext. 11
American FundsLine(R)
800/325-3590
(24-hour information)
This table is designed to help you understand the costs of investing in the
fund. These are historical expenses; your actual expenses may vary.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum sales charge on purchases
(as a percentage of offering price)................................... 5.75%/1/
</TABLE>
The fund has no sales charge on reinvested dividends, deferred sales
charge,/2/ redemption fees or exchange fees.
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
<TABLE>
<S> <C>
Management fees....................................................... 0.32%
12b-1 expenses........................................................ 0.23%/3/
Other expenses (including audit, legal, shareholder services, transfer
agent and custodian expenses)........................................ 0.10%
Total fund operating expenses......................................... 0.65%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following cumulative ex-
penses on a $1,000 investment, assuming a 5%
annual return./4/ $64 $77 $92 $134
</TABLE>
/1/ Sales charges are reduced for certain large purchases. (See "The American
Funds Shareholder Guide: Purchasing Shares--Sales Charges.")
/2/ Any defined contribution plan qualified under Section 401(a) of the Internal
Revenue Code including a "401(k)" plan with 200 or more eligible employees
or any other purchaser investing at least $1 million in shares of the fund
(or in combination with shares of other funds in The American Funds Group
other than the money market funds) may purchase shares at net asset value;
however, a contingent deferred sales charge of 1% applies on certain
redemptions within 12 months following such purchases. (See "The American
Funds Shareholder Guide: Redeeming Shares--Contingent Deferred Sales
Charge.")
/3/ These expenses may not exceed 0.25% of the fund's average net assets
annually. (See "Fund Organization and Management--Plan of Distribution.")
Due to these distribution expenses, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers.
/4/ Use of this assumed 5% return is required by the Securities and Exchange
Commission; it is not an illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
2
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL The following information for the ten years ended July
HIGHLIGHTS 31, 1995 has been derived from financial statements
(For a share which have been audited by Deloitte & Touche LLP, inde-
outstanding pendent accountants. This information should be read in
throughout the conjunction with the financial statements and related
fiscal year) notes, which are included in the statement of addi-
tional information.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Year........... $13.59 $14.47 $13.94 $12.54 $12.11 $13.20 $11.50 $12.54 $12.11 $11.68
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income.. .85 .83 .85 .85 .86 .82 .90 .82 .82 .90
Net realized and
unrealized gain
(loss) on invest-
ments................. 1.29 (.53) .74 1.48 .53 (.67) 1.68 (.68) 1.08 1.21
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total income from in-
vestment operations. 2.14 .30 1.59 2.33 1.39 .15 2.58 .14 1.90 2.11
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net
investment income..... (.75) (.83) (.84) (.85) (.89) (.87) (.88) (.80) (.88) (.88)
Distributions from net
realized gains........ (.06) (.35) (.22) (.08) (.07) (.37) -- (.38) (.59) (.80)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions.. (.81) (1.18) (1.06) (.93) (.96) (1.24) (.88) (1.18) (1.47) (1.68)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of
Year................... $14.92 $13.59 $14.47 $13.94 $12.54 $12.11 $13.20 $11.50 $12.54 $12.11
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return/1/......... 16.42% 1.98% 11.88% 19.16% 12.24% 1.12% 23.43% 1.71% 16.67% 19.87%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, end of
year (in millions).... $12,290 $10,537 $9,045 $5,121 $2,771 $2,110 $1,271 $ 925 $ 943 $ 546
Ratio of expenses to
average net assets.... .65% .63% .62% .66% .73% .67% .69% .55% .54% .55%
Ratio of net income to
average net assets.... 6.12% 5.92% 6.05% 6.40% 7.23% 7.36% 7.45% 7.14% 6.55% 7.32%
Portfolio turnover
rate.................. 26.26% 26.42% 29.18% 22.71% 23.35% 18.90% 34.38% 42.83% 38.73% 41.48%
</TABLE>
--------
/1/Excludes maximum sales charge of 5.75%.
INVESTMENT The fund's investment objective is to emphasize current
OBJECTIVE income while secondarily striving to attain capital
AND POLICIES growth. The fund believes that a portfolio with rela-
tively high current income can also generate growth of
capital.
The fund aims to The portfolio of the fund is managed to earn current
provide you with income on, and to anticipate long-term capital growth
current income of, the portfolio as a whole rather than any individual
while secondarily security in it. The fund may invest in common and pre-
striving for ferred stocks, straight debt securities (including gov-
capital growth. ernment securities) or debt securities with equity con-
version or purchase rights, and cash and cash equiva-
lents. In addition, the fund may invest in various
mortgage-related securities including those issued by
the Government National Mortgage Association (GNMA),
the Federal National Mortgage Association (FNMA), and
the Federal Home Loan Mortgage Corporation (FHLMC), and
collateralized obligations (CMOs) and mortgage-backed
bonds. The fund may also invest to a very limited ex-
tent in inverse floating rate notes (a type of deriva-
tive instrument). (See the statement of additional in-
formation for a description of cash equivalents, mort-
gage-related securities and inverse floating rate
notes.) The mix of these securities is determined on
the basis of existing and anticipated conditions. The
relative percentages of each type of security in the
portfolio may be expected to fluctuate and at times the
fund may be invested solely in fixed-income securities
or solely in equity securities. The fund may also in-
vest in fixed-
3
<PAGE>
- -------------------------------------------------------------------------------
income securities of issuers domiciled outside the U.S.
provided such securities are denominated in U.S. dol-
lars. Furthermore, while the fund generally does not
invest in equity securities of issuers based outside
the U.S., it may from time to time invest a small por-
tion of assets in other North American issuers. The
fund will maintain at least 65% of the value of its to-
tal assets in income-producing securities under normal
market conditions.
The fund's straight debt securities may consist of
bonds that are rated, measured at the time of purchase,
as low as CC by Standard & Poor's Corporation or Ca by
Moody's Investors Service, Inc. (or unrated but consid-
ered of similar quality). However, securities rated BB
and Ba or below (or unrated but considered of similar
quality) must represent no more than 20% of the fund's
total assets. Securities rated BB and Ba or below (or
unrated but considered of similar quality) are commonly
referred to as "junk bonds" or "high-yield, high-risk"
bonds. The 20% limit shall not apply to debt securities
that have equity conversion or purchase rights.
During the previous fiscal year, the monthly average
percentage of the fund's net assets in fixed-income in-
vestments was 44%. The average monthly composition of
the fund's portfolio based on the higher of the Moody's
or S&P ratings for the fiscal year ended July 31, 1995
was as follows: Aaa/AAA-20.01%; Aa/AA-0.42%; A/A-1.91%;
Baa/BBB-6.09%; Ba/BB-5.29%; B/B-9.01%; and Caa/CCC-
0.76%.
The fund's investment restrictions (which are described
in the statement of additional information) and objec-
tive cannot be changed without shareholder approval.
All other investment practices may be changed by the
fund's board.
The fund's rate of portfolio turnover will depend pri-
marily on market conditions. The rate of portfolio
turnover will not be a limiting factor when changes are
appropriate.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES.
CERTAIN RISKS OF INVESTING IN STOCKS AND BONDS Because the fund
SECURITIES AND invests in common stocks or securities convertible into
INVESTMENT common stocks, the fund is subject to stock market
TECHNIQUES risks. For example, the fund is subject to the possi-
bility that stock prices in general will decline over
Investing in short or even extended periods.
stocks and bonds
involves certain The fund also invests in fixed-income securities, in-
risks. cluding bonds, which have market values which tend to
vary inversely with the level of interest rates--when
interest rates rise, their values will tend to decline
and vice versa. Although under normal market conditions
longer term securities yield more than shorter term se-
curities of similar quality, they are subject
4
<PAGE>
- -------------------------------------------------------------------------------
to greater price fluctuations. These fluctuations in
the value of the fund's investments will be reflected
in its net asset value per share. The values of high-
yield, high-risk securities may be subject to greater
fluctuations in value than are higher rated securities
because the values of high-yield, high-risk securities
tend to reflect short-term corporate and market devel-
opments and investor perceptions of the issuer's credit
quality to a greater extent. It may be more difficult
to dispose of, or determine the value of, high-yield,
high-risk securities. See the statement of additional
information for a description of the ratings and for
more information about the risks of high-yield, high-
risk securities. High-yield, high-risk securities rated
CC or Ca generally are described by the rating agencies
as "speculative in a high degree; often in default or
[having] other marked shortcomings."
U.S. GOVERNMENT SECURITIES Securities guaranteed by the
U.S. Government include: (1) direct obligations of the
U.S. Treasury (such as Treasury bills, notes and bonds)
and (2) federal agency obligations guaranteed as to
principal and interest by the U.S. Treasury.
Certain securities issued by U.S. Government instrumen-
talities and certain federal agencies are neither di-
rect obligations of, nor guaranteed by, the Treasury.
However, they generally involve federal sponsorship in
one way or another: some are backed by specific types
of collateral; some are supported by the issuer's right
to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase
certain obligations of the issuer; and others are sup-
ported only by the credit of the issuing government
agency or instrumentality.
WHEN-ISSUED SECURITIES, FIRM COMMITMENT AGREEMENTS AND
"ROLL" TRANSACTIONS The fund may purchase securities on
a delayed delivery or "when-issued" basis and enter
into firm commitment agreements (transactions whereby
the payment obligation and interest rate are fixed at
the time of the transaction but the settlement is de-
layed). The fund as purchaser assumes the risk of any
decline in value of the security beginning on the date
of the agreement or purchase. As the fund's aggregate
commitments under these transactions increase, the op-
portunity for leverage similarly increases.
The fund also may enter into "roll" transactions, which
consist of the sale of securities together with a com-
mitment (for which the fund typically receives a fee)
to purchase similar, but not identical, securities at a
later date.
PRIVATE PLACEMENTS Private placements may be either
purchased from another institutional investor that
originally acquired the securities in a private place-
ment or directly from the issuers of the securities.
Generally, securities acquired in private placements
are subject to contractual restrictions on resale and
may not be resold except pursuant to a registration
statement under the Securities Act of 1933 or in reli-
ance upon an exemption from the registration require-
ments under the Act, for example, private placements
sold pursuant to Rule 144A. Accordingly, any such
5
<PAGE>
- -------------------------------------------------------------------------------
obligation will be deemed illiquid unless it has been
specifically determined to be liquid under procedures
adopted by the fund's board of directors.
In determining whether these securities are liquid,
factors such as the frequency and volume of trading and
the commitment of dealers to make markets will be con-
sidered. Additionally, the liquidity of any particular
security will depend on such factors as the availabil-
ity of "qualified" institutional investors and the ex-
tent of investor interest in the security, which can
change from time to time.
RISKS OF INVESTING IN VARIOUS COUNTRIES The fund may
invest in non-U.S. issuers as described above. These
issuers may not be subject to uniform accounting, au-
diting and financial reporting standards and practices
or regulatory requirements comparable to those applica-
ble to U.S. issuers. There may also be less public in-
formation available about non-U.S. issuers. Addition-
ally, specific local political and economic factors
must be evaluated in making these investments including
trade balances and imbalances, and related economic
policies; expropriation or confiscatory taxation; limi-
tations on the removal of funds or other assets; polit-
ical or social instability; the diverse structure and
liquidity of the various securities markets; and na-
tionalization policies of governments around the world.
However, investing outside the U.S. can also reduce
certain risks due to greater diversification opportuni-
ties.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic invest-
ment philosophy of Capital Research and Management Com-
pany is to seek fundamental values at reasonable pric-
es, using a system of multiple portfolio counselors in
managing mutual fund assets. Under this system the
portfolio of the fund is divided into segments which
are managed by individual counselors. Each counselor
decides how their segment will be invested (within the
limits provided by the fund's objective and policies
and by Capital Research and Management Company's in-
vestment committee). In addition, Capital Research and
Management Company's research professionals make in-
vestment decisions with respect to a portion of the
fund's portfolio. The primary individual portfolio
counselors for the fund are listed on the following
page.
6
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
YEARS OF EXPERIENCE AS
INVESTMENT PROFESSIONAL
(APPROXIMATE)
YEARS OF EXPERIENCE AS WITH CAPITAL
PORTFOLIO COUNSELOR RESEARCH AND
PORTFOLIO COUNSELORS PRIMARY TITLE(S) (AND RESEARCH MANAGEMENT
FOR PROFESSIONAL, IF APPLICABLE) COMPANY OR
THE INCOME FUND OF FOR THE INCOME FUND OF ITS TOTAL
AMERICA, INC. AMERICA, INC. (APPROXIMATE) AFFILIATES YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stephen E. Bepler Senior Vice President 11 years (in addition to 11 years 23 years 29 years
of the fund. as a research professional prior
Senior Vice President to becoming a portfolio
and Director, Capital counselor for the fund)
Research Company*
- --------------------------------------------------------------------------------------------------------------
Abner D. Goldstine Senior Vice President 22 years 28 years 43 years
of the fund.
Senior Vice President
and Director, Capital
Research and Manage-
ment Company
- --------------------------------------------------------------------------------------------------------------
Gregg E. Ireland Vice President, Capi- 6 years (in addition to 5 years 22 years 22 years
tal Research and Man- as a research professional prior
agement Company to becoming a portfolio
counselor for the fund)
- --------------------------------------------------------------------------------------------------------------
Janet A. McKinley Vice President of the 2 years (in addition to 8 years 13 years 19 years
fund. as a research professional prior
Senior Vice President, to becoming a portfolio
Capital Research Com- counselor for the fund)
pany*
- --------------------------------------------------------------------------------------------------------------
George A. Miller President of the fund. 20 years 20 years 34 years
Senior Vice President
and Director, Capital
Research and
Management Company
- --------------------------------------------------------------------------------------------------------------
Dina Perry Vice President of the 3 years 4 years 29 years
fund.
Vice President, Capital
Research and Management
Company
- --------------------------------------------------------------------------------------------------------------
Richard T. Schotte Senior Vice President 17 years 18 years 28 years
of the fund.
Senior Vice President,
Capital Research and
Management Company
- --------------------------------------------------------------------------------------------------------------
John H. Smet Vice President of the 3 years 12 years 13 years
fund.
Vice President, Capital
Research and
Management Company
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
7
<PAGE>
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INVESTMENT The fund may from time to time compare its investment
RESULTS results to various unmanaged indices or other mutual
funds in reports to shareholders, sales literature and
The fund has advertisements. The results may be calculated on a
averaged a total yield and/or total return basis for various periods,
return of +13.29% with or without sales charges. Results calculated with-
a year (assuming out a sales charge will be higher. Total returns assume
the maximum sales the reinvestment of all dividends and capital gain dis-
charge was paid) tributions.
under Capital
Research and As of June 30, 1995, the fund's yield for the past 30-
Management day period was 5.36%, and total return over the past 12
Company's months and average annual total returns over the past
management five- and ten-year periods were +9.60%, +10.34% and
(December 1, 1973 +11.11%, respectively. These results were calculated in
through June 30, accordance with Securities and Exchange Commission
1995). rules which require that the maximum sales charge be
deducted. Of course, past results are not an indication
of future results. Further information regarding the
fund's investment results is contained in the fund's
annual report which may be obtained without charge by
writing to the Secretary of the fund at the address in-
dicated on the cover of this prospectus.
DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS in March, June, September and December. Capital gains,
AND TAXES if any, are usually distributed in December. When a
dividend or capital gain is distributed, the net asset
Income value per share is reduced by the amount of the pay-
distributions are ment.
usually made in
March, June, FEDERAL TAXES The fund intends to operate as a "regu-
September and lated investment company" under the Internal Revenue
December. Code. In any fiscal year in which the fund so qualifies
and distributes to shareholders all of its net invest-
ment income and net capital gains, the fund itself is
relieved of federal income tax.
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 dividends and capital gains
paid during the prior year. Such dividends and capital
gains may also be subject to state or local taxes.
IF YOU HAVE NOT FURNISHED A CERTIFIED CORRECT TAXPAYER
IDENTIFICATION NUMBER (GENERALLY YOUR SOCIAL SECURITY
NUMBER) AND HAVE NOT CERTIFIED THAT WITHHOLDING DOES
NOT APPLY, OR IF THE INTERNAL REVENUE SERVICE HAS NOTI-
FIED THE FUND THAT THE TAXPAYER IDENTIFICATION NUMBER
LISTED ON YOUR ACCOUNT IS INCORRECT ACCORDING TO THEIR
RECORDS OR THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING,
FEDERAL LAW GENERALLY REQUIRES THE FUND TO WITHHOLD 31%
FROM ANY DIVIDENDS AND/OR REDEMPTIONS (INCLUDING EX-
CHANGE REDEMPTIONS). Amounts withheld are applied to
your federal tax liability; a refund may be obtained
from the Service if withholding results in overpayment
of taxes. Federal law also requires the fund to with-
hold 30% or the applicable tax treaty rate from divi-
dends paid to certain nonresident alien, non-U.S. part-
nership and non-U.S. corporation shareholder accounts.
8
<PAGE>
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This is a brief summary of some of the tax laws that
affect your investment in the fund. Please see the
statement of additional information and your tax ad-
viser for further information.
FUND FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
ORGANIZATION end, diversified management investment company, was or-
AND ganized as a Delaware corporation in 1969 and reorga-
MANAGEMENT nized as a Maryland corporation in 1983. The fund's
board supervises fund operations and performs duties
The fund is a required by applicable state and federal law. Members
member of The of the board who are not employed by Capital Research
American Funds and Management Company or its affiliates are paid cer-
Group, which is tain fees for services rendered to the fund as de-
managed by one of scribed in the statement of additional information.
the largest and They may elect to defer all or a portion of these fees
most experienced through a deferred compensation plan in effect for the
investment fund. Shareholders have one vote per share owned and,
advisers. at the request of the holders of at least 10% of the
shares, the fund will hold a meeting at which any mem-
ber of the board could be removed by a majority vote.
There will not usually be a shareholder meeting in any
year except, for example, when the election of the
board is required to be acted upon by shareholders un-
der the Investment Company Act of 1940.
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071, and at 135 South State College Boule-
vard, Brea, CA 92621. (See "The American Funds Share-
holder Guide: Purchasing Shares--Investment Minimums
and Fund Numbers" for a listing of funds in The Ameri-
can Funds Group.) Capital Research and Management Com-
pany manages the investment portfolio and business af-
fairs of the fund and receives a fee at the annual
rates of 0.24% on the first $1 billion of the fund's
net assets, 0.20% on net assets in excess of $1 billion
but not exceeding $2 billion, 0.18% on net assets in
excess of $2 billion but not exceeding $3 billion,
0.165% on net assets in excess of $3 billion but not
exceeding $5 billion, 0.155% on net assets in excess of
$5 billion but not exceeding $8 billion, and 0.15% on
net assets in excess of $8 billion, plus 2.25% of the
portion of the fund's gross investment income for the
preceding month. Assuming net assets of $12 billion and
gross investment income levels of 3%, 4%, 5%, 6%, 7%
and 8%, management fees would be 0.24%, 0.26%, 0.28%,
0.30%, 0.33% and 0.35%, respectively.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are
9
<PAGE>
- -------------------------------------------------------------------------------
conducted by affiliated companies which have offices in
Los Angeles, San Francisco, New York, Washington, D.C.,
London, Geneva, Singapore, Hong Kong and Tokyo.
Capital Research and Management Company and its affili-
ated companies have adopted a personal investing policy
that is consistent with the recommendations contained
in the report dated May 9, 1994 issued by the Invest-
ment Company Institute's Advisory Group on Personal In-
vesting. (See the statement of additional information.)
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter mar-
ket, purchases and sales are transacted directly with
principal market-makers except in those circumstances
where it appears better prices and executions are
available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers that
have sold shares of the fund or have provided
investment research, statistical, and other related
services for the benefit of the fund and/or of other
funds served by Capital Research and Management
Company.
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors, Inc. is lo-
cated at 333 South Hope Street, Los Angeles, CA 90071,
135 South State College Boulevard, Brea, CA 92621, 8000
IH-10 West, San Antonio, TX 78230, 8332 Woodfield
Crossing Boulevard, Indianapolis, IN 46240, and 5300
Robin Hood Road, Norfolk, VA 23513. Telephone conversa-
tions with American Funds Distributors may be recorded
or monitored for verification, recordkeeping and qual-
ity assurance purposes.
PLAN OF DISTRIBUTION The fund has a plan of distribu-
tion or "12b-1 Plan" under which it may finance activi-
ties primarily intended to sell shares, provided the
categories of expenses are approved in advance by the
board and the expenses paid under the plan were in-
curred within the last 12 months and accrued while the
plan is in effect. Expenditures by the fund under the
plan may not exceed 0.25% of its average net assets an-
nually (all of which may be for service fees). See "The
American Funds Shareholder Guide: Purchasing Shares--
Sales Charges" below.
10
<PAGE>
- --------------------------------------------------------------------------------
TRANSFER AGENT American Funds Service Company, a wholly
owned subsidiary of Capital Research and Management
Company, is the transfer agent and performs shareholder
service functions. It was paid a fee of $7,211,000 for
the fiscal year ended July 31, 1995. Telephone conver-
sations with American Funds Service Company may be re-
corded or monitored for verification, recordkeeping and
quality assurance purposes.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
SERVICE ADDRESS AREAS SERVED
AREA
--------------------------------------------------------
WEST P.O. Box 2205 AK, AZ, CA, HI, ID,
Brea, CA 92622-2205 MT, NV, OR, UT, WA
Fax: 714/671-7080 and outside the U.S.
--------------------------------------------------------
CENTRAL P.O. Box 659522 AR, CO, IA, KS, LA,
-WEST San Antonio, TX 78265-9522 MN, MO, ND, NE, NM,
Fax: 210/530-4050 OK, SD, TX, and WY
--------------------------------------------------------
CENTRAL P.O. Box 6007 AL, IL, IN, KY, MI,
-WEST Indianapolis, IN 46206-6007 MS, OH, TN and WI
Fax: 317/735-6620
--------------------------------------------------------
EAST P.O. Box 2280 CT, DE, FL, GA, MA,
Norfolk, VA 23501-2280 MD, ME, NC, NH, NJ,
Fax: 804/670-4773 NY, PA, RI, SC, VA,
VT, WV and
Washington, D.C.
--------------------------------------------------------
ALL SHAREHOLDERS MAY CALL AMERICAN FUNDS SERVICE
COMPANY AT 800/421-0180 FOR SERVICE.
--------------------------------------------------------
[LOGO OF UNITED STATES MAP]
--------------------------------------------------------
West (light grey); Central-West (white); Central-East
(dark grey), East (gold)
11
<PAGE>
[LOGO OF THE AMERICAN FUNDS SHAREHOLDER GUIDE]
PURCHASING METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
SHARES ---------------------------------------------------------
See "Investment $50 minimum (except
Minimums and Fund where a lower
Numbers" for minimum is noted
initial under "Investment
investment Minimums and Fund
minimums. Numbers").
Your investment ---------------------------------------------------------
dealer can help By Visit any Mail directly to
you establish your contacting investment dealer your investment
account--and help your who is registered dealer's address
you add to it investment in the state printed on your
whenever you like. dealer where the account statement.
purchase is made
and who has a
sales agreement
with American
Funds
Distributors.
---------------------------------------------------------
By mail Make your check Fill out the account
payable to the additions form at the
fund and mail to bottom of a recent
the address account statement,
indicated on the make your check
account payable to the fund,
application. write your account
Please indicate number on your check,
an investment and mail the check
dealer on the and form in the
account envelope provided
application. with your account
statement.
---------------------------------------------------------
By wire Call 800/421-0180 Your bank should wire
to obtain your your additional
account investments in the
number(s), if same manner as
necessary. Please described under
indicate an "Initial Investment."
investment dealer
on the account.
Instruct your
bank to wire
funds to:
Wells Fargo Bank
155 Fifth Street
Sixth Floor
San Francisco,CA
94106
(ABA #121000248)
For credit to the
account of:
American Funds
Service Company
a/c #4600-076178
(fund name)
(your fund acct.
no.)
---------------------------------------------------------
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE
THE RIGHT TO REJECT ANY PURCHASE ORDER.
SHARE PRICE Shares are purchased at the next offering
price after the order is received by the fund or
American Funds Service Company. In the case of orders
sent directly to the fund or American Funds Service
Company, an investment dealer MUST be indicated. This
price is the net asset value plus a sales charge, if
applicable. Dealers are responsible for promptly
transmitting orders. (See the statement of additional
information under "Purchase of Shares--Price of
Shares.")
The net asset value per share is determined as of the
close of trading (currently 4:00 p.m., New York time) on
each day the New York Stock Exchange is open. The
current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share. The net asset value
per share of the money market funds normally will remain
constant at $1.00 based on the funds' current practice
of valuing their shares on the basis of the penny-
rounding method in accordance with rules of the
Securities and Exchange Commission.
SHARE CERTIFICATES Shares are credited to your account
and certificates are not issued unless specifically
requested. This eliminates the costly problem of lost or
destroyed certificates.
12
<PAGE>
- -------------------------------------------------------------------------------
If you would like certificates issued, please request
them by writing to American Funds Service Company.
There is usually no charge for issuing certificates in
reasonable denominations. CERTIFICATES ARE NOT
AVAILABLE FOR THE MONEY MARKET FUNDS.
INVESTMENT MINIMUMS AND FUND NUMBERS Here are the
minimum initial investments required by the funds in
The American Funds Group along with fund numbers for
use with our automated phone line, American
FundsLine(R) (see description below):
<TABLE>
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
---- ---------- ------
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund(R).................. $1,000 02
American Balanced Fund(R)...... 500 11
American Mutual Fund(R)........ 250 03
Capital Income Builder(R)...... 1,000 12
Capital World Growth and
Income Fund(SM)............... 1,000 33
EuroPacific Growth Fund(R)..... 250 16
Fundamental Investors(SM)...... 250 10
The Growth Fund of America(R).. 1,000 05
The Income Fund of America(R).. 1,000 06
The Investment Company
of America(R)................. 250 04
The New Economy Fund(R)........ 1,000 14
New Perspective Fund(R)........ 250 07
SMALLCAP World Fund(SM)........ 1,000 35
Washington Mutual Investors
Fund(SM)...................... 250 01
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
---- ---------- ------
<S> <C> <C>
BOND FUNDS
American High-Income Municipal
Bond Fund(SM)................. $1,000 40
American High-Income Trust(R).. 1,000 21
The Bond Fund of America(SM)... 1,000 08
Capital World Bond Fund(R)..... 1,000 31
Intermediate Bond Fund
of America(R)................. 1,000 23
Limited Term Tax-Exempt
Bond Fund of America(SM)...... 1,000 43
The Tax-Exempt Bond Fund
of America(SM)................ 1,000 19
The Tax-Exempt Fund of
California(R)*................ 1,000 20
The Tax-Exempt Fund of
Maryland(R)*.................. 1,000 24
The Tax-Exempt Fund of
Virginia(R)*.................. 1,000 25
U.S. Government Securities
Fund(SM)...................... 1,000 22
MONEY MARKET FUNDS
The Cash Management
Trust of America(R)........... 2,500 09
The Tax-Exempt Money
Fund of America(SM)........... 2,500 39
The U.S. Treasury Money
Fund of America(SM)........... 2,500 49
</TABLE>
- --------
* Available only in certain states.
For retirement plan investments, the minimum is $250,
except that the money market funds have a minimum of
$1,000 for individual retirement accounts (IRAs).
Minimums are reduced to $50 for purchases through
"Automatic Investment Plans" (except for the money
market funds) or to $25 for purchases by retirement
plans through payroll deductions and may be reduced or
waived for shareholders of other funds in The American
Funds Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS
RETIREMENT PLAN INVESTMENTS. The minimum is $50 for
additional investments (except as noted above).
SALES CHARGES The sales charges you pay when purchasing
the stock, stock/bond, and bond funds of The American
Funds Group are set forth below. The money market funds
of The American Funds Group are offered at net asset
value. (See "Investment Minimums and Fund Numbers" for
a listing of the funds.)
13
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
DEALER
SALES CHARGE AS CONCESSION
PERCENTAGE OF THE: AS PERCENTAGE
------------------ OF THE
AMOUNT OF PURCHASE NET AMOUNT OFFERING OFFERING
AT THE OFFERING PRICE INVESTED PRICE PRICE
--------------------- ---------- -------- -------------
<S> <C> <C> <C>
STOCK AND STOCK/BOND FUNDS
Less than $50,000................. 6.10% 5.75% 5.00%
$50,000 but less than
$100,000......................... 4.71 4.50 3.75
BOND FUNDS
Less than $25,000................. 4.99 4.75 4.00
$25,000 but less than
$50,000.......................... 4.71 4.50 3.75
$50,000 but less than
$100,000......................... 4.17 4.00 3.25
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000... 3.63 3.50 2.75
$250,000 but less than $500,000... 2.56 2.50 2.00
$500,000 but less than $1,000,000. 2.04 2.00 1.60
$1,000,000 or more................ none none (see below)
</TABLE>
Commissions of up to 1% will be paid to dealers who
initiate and are responsible for purchases of $1
million or more, for purchases by any defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees (paid pursuant to the
fund's plan of distribution), and for purchases made at
net asset value by certain retirement plans of
organizations with collective retirement plan assets of
$100 million or more as set forth in the statement of
additional information (paid by American Funds
Distributors).
American Funds Distributors, at its expense (from a
designated percentage of its income), will provide
additional promotional incentives to dealers. Currently
these incentives are limited to the top one hundred
dealers who have sold shares of the fund or other funds
in The American Funds Group. These incentive payments
will be based on a pro rata share of a qualifying
dealer's sales.
Any defined contribution plan qualified under Section
401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or
any other purchaser investing at least $1 million in
shares of the fund (or in combination with shares of
other funds in The American Funds Group other than the
money market funds) may purchase shares at net asset
value; however, a contingent deferred sales charge of
1% is imposed on certain redemptions within one year of
the purchase. (See "Redeeming Shares--Contingent
Deferred Sales Charge.")
Qualified dealers currently are paid a continuing
service fee not to exceed 0.25% of average net assets
(0.15% in the case of the money market funds) annually
in order to promote selling efforts and to compensate
them for providing certain services. (See "Fund
Organization and Management--
14
<PAGE>
- -------------------------------------------------------------------------------
Plan of Distribution.") These services include
processing purchase and redemption transactions,
establishing shareholder accounts and providing certain
information and assistance with respect to the fund.
NET ASSET VALUE PURCHASES The stock, stock/bond and
bond funds may sell shares at net asset value to: (1)
current or retired directors, trustees, officers and
advisory board members of the funds managed by Capital
Research and Management Company, employees of
Washington Management Corporation, employees and
partners of The Capital Group Companies, Inc. and its
affiliated companies, certain family members of the
above persons, and trusts or plans primarily for such
persons; (2) current or retired registered
representatives or full-time employees and their
spouses and minor children of dealers having sales
agreements with American Funds Distributors and plans
for such persons; (3) companies exchanging securities
with the fund through a merger, acquisition or exchange
offer; (4) trustees or other fiduciaries purchasing
shares for certain retirement plans of organizations
with retirement plan assets of $100 million or more;
(5) insurance company separate accounts; (6) accounts
managed by subsidiaries of The Capital Group Companies,
Inc.; and (7) The Capital Group Companies, Inc., its
affiliated companies and Washington Management
Corporation. Shares are offered at net asset value to
these persons and organizations due to anticipated
economies in sales effort and expense.
REDUCING AGGREGATION Sales charge discounts are available for
YOUR SALES certain aggregated investments. Qualifying investments
CHARGE include those by you, your spouse and your children
under the age of 21, if all parties are purchasing
You and your shares for their own account(s), which may include
immediate family purchases through employee benefit plan(s) such as an
may combine IRA, individual-type 403(b) plan or single-participant
investments to Keogh-type plan or by a business solely controlled by
reduce your costs. these individuals (for example, the individuals own the
entire business) or by a trust (or other fiduciary
arrangement) solely for the benefit of these
individuals. Individual purchases by a trustee(s) or
other fiduciary(ies) may also be aggregated if the
investments are (1) for a single trust estate or
fiduciary account, including an employee benefit plan
other than those described above or (2) made for two or
more employee benefit plans of a single employer or of
affiliated employers as defined in the Investment
Company Act of 1940, again excluding employee benefit
plans described above, or (3) for a diversified common
trust fund or other diversified pooled account not
specifically formed for the purpose of accumulating
fund shares. Purchases made for nominee or street name
accounts (securities held in the name of an investment
dealer or another nominee such as a bank trust
department instead of the customer) may not be
aggregated with those made for other accounts and may
not be aggregated with other nominee or street name
accounts unless otherwise qualified as described above.
15
<PAGE>
- -------------------------------------------------------------------------------
CONCURRENT PURCHASES To qualify for a reduced sales
charge, 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.) For example, if you
concurrently invest $25,000 in one fund and $25,000 in
another, the sales charge would be reduced to reflect a
$50,000 purchase.
RIGHT OF ACCUMULATION The sales charge for your invest-
ment may also be reduced by taking into account the
current value of your existing holdings in The American
Funds Group. Direct purchases of the money market funds
are excluded. (See account application.)
STATEMENT OF INTENTION You may reduce sales charges on
all investments by meeting the terms of a statement of
intention, a non-binding commitment to invest a certain
amount in fund shares subject to a commission within a
13-month period. Five percent of the statement amount
will 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 a
sales charge reduction. (See account application and
the statement of additional information under "Purchase
of Shares--Statement of Intention.")
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 ABOVE.
SHAREHOLDER AUTOMATIC INVESTMENT PLAN You may make regular monthly
SERVICES or quarterly investments through automatic charges to
your bank account. Once a plan is established, your ac-
The fund offers count will normally be charged by the 10th day of the
you a valuable month during which an investment is made (or by the
array of services 15th day of the month in the case of any retirement
designed to plan for which Capital Guardian Trust Company--another
increase the affiliate of The Capital Group Companies, Inc.--acts as
convenience and trustee or custodian).
flexibility of
your investment-- AUTOMATIC REINVESTMENT Dividends and capital gain dis-
services you can tributions are reinvested in additional shares at no
use to alter your sales charge unless you indicate otherwise on the
investment program account application. You also may elect to have divi-
as your needs and dends and/or capital gain distributions paid in cash by
circumstances informing the fund, American Funds Service Company or
change. your investment dealer.
CROSS-REINVESTMENT You may cross-reinvest dividends or
dividends and capital gain distributions paid by one
fund into another fund in The American Funds Group,
subject to conditions outlined in the statement of ad-
ditional information. Generally, to use this service
the value of your account in the paying fund must equal
at least $5,000.
EXCHANGE PRIVILEGE You may exchange shares into other
funds in The American Funds Group. Exchange purchases
are subject to the minimum investment requirements of
the fund purchased and no sales
16
<PAGE>
- -------------------------------------------------------------------------------
charge generally applies. However, exchanges of shares
from the money market funds are subject to applicable
sales charges on the fund being purchased, unless the
money market fund shares were acquired by an exchange
from a fund having a sales charge, or by reinvestment
or cross-reinvestment of dividends or capital gain
distributions.
You may exchange shares by writing to American Funds
Service Company (see "Redeeming Shares"), by contacting
your investment dealer, by using American FundsLine(R)
(see "Shareholder Services--American FundsLine(R)" be-
low), or by telephoning 800/421-0180 toll-free, faxing
(see "Transfer Agent" above for the appropriate fax
numbers) or telegraphing American Funds Service Compa-
ny. (See "Telephone Redemptions and Exchanges" below.)
Shares held in corporate-type retirement plans for
which Capital Guardian Trust Company serves as trustee
may not be exchanged by telephone, fax or telegraph.
Exchange redemptions and purchases are processed simul-
taneously at the share prices next determined after the
exchange order is received. (See "Purchasing Shares--
Share Price.") THESE TRANSACTIONS HAVE THE SAME TAX
CONSEQUENCES AS ORDINARY SALES AND PURCHASES.
AUTOMATIC EXCHANGES You may automatically exchange
shares (in amounts of $50 or more) among any of the
funds in The American Funds Group on any day (or pre-
ceding business day if the day falls on a non-business
day) of each month you designate. You must either meet
the minimum initial investment requirement for the re-
ceiving fund OR the originating fund's balance must be
at least $5,000 and the receiving fund's minimum must
be met within one year.
AUTOMATIC WITHDRAWALS You may make automatic
withdrawals of $50 or more as follows: five or more
times per year if you have an account of $10,000 or
more, or four or fewer times per year if you have an
account of $5,000 or more. Withdrawals are made on or
about the 15th day of each month you designate, and
checks will be sent within seven days. (See "Other
Important Things to Remember.") Additional investments
in a withdrawal account must not be less than one
year's scheduled withdrawals or $1,200, whichever is
greater. However, additional investments in a
withdrawal account may be inadvisable due to sales
charges and tax liabilities.
THESE SERVICES ARE AVAILABLE ONLY IN STATES WHERE THE
FUND TO BE PURCHASED MAY BE LEGALLY OFFERED AND MAY BE
TERMINATED OR MODIFIED AT ANY TIME UPON 60 DAYS'
WRITTEN NOTICE.
ACCOUNT STATEMENTS Your account is opened in accordance
with your registration instructions. Transactions in
the account, such as additional investments and
dividend reinvestments, will be reflected on regular
confirmation statements from American Funds Service
Company.
17
<PAGE>
- -------------------------------------------------------------------------------
AMERICAN FUNDSLINE(R) You may check your share balance,
the price of your shares, or your most recent account
transaction, redeem shares (up to $10,000 per fund, per
account each day), or exchange shares around the clock
with American FundsLine(R). To use this service, call
800/325-3590 from a TouchTone(TM) telephone.
Redemptions and exchanges through American FundsLine(R)
are subject to the conditions noted above and in
"Redeeming Shares--Telephone Redemptions and Exchanges"
below. You will need your fund number (see the list of
funds in The American Funds Group under "Purchasing
Shares--Investment Minimums and Fund Numbers"),
personal identification number (the last four digits of
your Social Security number or other tax identification
number associated with your account) and account
number.
--------------------------------------------------------
REDEEMING By writing to Send a letter of instruction
SHARES American specifying the name of the fund, the
Funds Service number of shares or dollar amount to
You may take money Company (at be sold, your name and account
out of your the number. You should also enclose any
account whenever appropriate share certificates you wish to
you please. address redeem. For redemptions over $50,000
indicated and for certain redemptions of
under "Fund $50,000 or less (see below), your
Organization signature must be guaranteed by a
and bank, savings association, credit
Management-- union, or member firm of a domestic
Transfer stock exchange or the National
Agent") Association of Securities Dealers,
Inc., that is an eligible guarantor
institution. You should verify with
the institution that it is an
eligible guarantor prior to signing.
Additional documentation may be
required for redemption of shares
held in corporate, partnership or
fiduciary accounts. Notarization by a
Notary Public is not an acceptable
signature guarantee.
--------------------------------------------------------
By contacting If you redeem shares through your
your investment dealer, you may be charged
investment for this service. SHARES HELD FOR YOU
dealer IN YOUR INVESTMENT DEALER'S STREET
NAME MUST BE REDEEMED THROUGH THE
DEALER.
--------------------------------------------------------
You may have You may use this option, provided the
a redemption account is registered in the name of
check sent to an individual(s), a UGMA/UTMA
you by using custodian, or a non-retirement plan
American trust. These redemptions may not
FundsLine(R) exceed $10,000 per day, per fund
or by account and the check must be made
telephoning, payable to the shareholder(s) of
faxing, or record and be sent to the address of
telegraphing record provided the address has been
American used with the account for at least 10
Funds Service days. See "Transfer Agent" and
Company "Exchange Privilege" above for the
(subject to appropriate telephone or fax number.
the
conditions
noted in this
section and
in "Telephone
Redemptions
and
Exchanges"
below)
--------------------------------------------------------
In the case Upon request (use the account
of the money application for the money market
market funds, funds) you may establish telephone
you may have redemption privileges (which will
redemptions enable you to have a redemption sent
wired to your to your bank account) and/or check
bank by writing privileges. If you request
telephoning check writing privileges, you will be
American provided with checks that you may use
Funds Service to draw against your account. These
Company checks may be made payable to anyone
($1,000 or you designate and must be signed by
more) or by the authorized number of registered
writing a shareholders exactly as indicated on
check ($250 your checking account signature card.
or more)
--------------------------------------------------------
A SIGNATURE GUARANTEE IS NOT CURRENTLY REQUIRED FOR ANY
REDEMPTION OF $50,000 OR LESS PROVIDED THE REDEMPTION
CHECK IS MADE PAYABLE TO THE REGISTERED SHAREHOLDER(S)
AND IS MAILED TO THE ADDRESS OF RECORD, PROVIDED THE
ADDRESS HAS BEEN USED WITH THE ACCOUNT FOR AT LEAST 10
DAYS.
18
<PAGE>
- -------------------------------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND
ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
TELEPHONE REDEMPTIONS AND EXCHANGES By using the
telephone (including American FundsLine(R)), fax or
telegraph redemption and/or exchange options, 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 liability (including
attorney fees) which may be incurred in connection with
the exercise of these privileges. 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 reinstate them at any time also by writing American
Funds Service Company). If American Funds Service
Company does not employ reasonable procedures to
confirm that the instructions received from any person
with appropriate account information are genuine, the
fund may be liable for losses due to unauthorized or
fraudulent instructions. In the event that shareholders
are unable to reach the fund by telephone because of
technical difficulties, market conditions, or a natural
disaster, redemption and exchange requests may be made
in writing only.
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions
within the first year on investments of $1 million or
more and on any investment made with no initial sales
charge by any defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees. The
charge is 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares.
Shares held for the longest period are assumed to be
redeemed first for purposes of calculating this charge.
The charge is waived for exchanges (except if shares
acquired by exchange were then redeemed within 12
months of the initial purchase); for distributions from
qualified retirement plans and other employee benefit
plans; for redemptions resulting from participant-
directed switches among investment options within a
401(k) plan; for distributions from 403(b) plans or
IRAs due to death, disability or attainment of age
59 1/2; for tax-free returns of excess contributions to
IRAs; for redemptions through certain automatic
withdrawals not exceeding 10% of the amount that would
otherwise be subject to the charge; and for redemptions
in connection with loans made by qualified retirement
plans.
REINSTATEMENT PRIVILEGE You may reinvest proceeds from
a redemption or a dividend or capital gain distribution
without sales charge (any contingent deferred sales
charge paid will be credited to your account) in any
fund in The American Funds Group. Send a written
19
<PAGE>
- -------------------------------------------------------------------------------
request and a check to American Funds Service Company
within 90 days after the date of the redemption or
distribution. Reinvestment will be at the next
calculated net asset value after receipt. The tax
status of a gain realized on a redemption will not be
affected by exercise of the reinstatement privilege,
but a loss may be nullified if you reinvest in the same
fund within 30 days. If you redeem your shares within
90 days after purchase and the sales charge on the
purchase of other shares is waived under the
reinstatement privilege, the sales charge you
previously paid for the shares may not be taken into
account when you calculate your gain or loss on that
redemption.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because each stock,
stock/bond and bond fund's net asset value fluctuates,
reflecting the market value of the fund's portfolio,
the amount a shareholder receives for shares redeemed
may be more or less than the amount paid for them.
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
A fund may, with 60 days' written notice, close your
account if, due to a redemption, the account has a
value of less than the minimum required initial
investment. (For example, a fund may close an account
if a redemption is made shortly after a minimum initial
investment is made.)
RETIREMENT You may invest in the funds through various retirement
PLANS plans including the following plans for which Capital
Guardian Trust Company acts as trustee or custodian:
IRAs, Simplified Employee Pension plans, 403(b) plans
and Keogh- and corporate-type business retirement
plans. For further information about any of the plans,
agreements, applications and annual fees, contact
American Funds Distributors or your investment dealer.
To determine which retirement plan is appropriate for
you, please consult your tax adviser. TAX-EXEMPT FUNDS
SHOULD NOT SERVE AS INVESTMENTS FOR RETIREMENT PLANS.
FOR MORE INFORMATION, PLEASE REFER TO THE ACCOUNT
APPLICATION OR THE STATEMENT OF ADDITIONAL INFORMATION.
IF YOU HAVE ANY QUESTIONS ABOUT ANY OF THE SHAREHOLDER
SERVICES DESCRIBED HEREIN OR YOUR ACCOUNT, PLEASE
CONTACT YOUR INVESTMENT DEALER OR AMERICAN FUNDS
SERVICE COMPANY.
[LOGO OF This prospectus has been printed on
RECYCLED PAPER] recycled paper that meets the
guidelines of the United States
Environmental Protection Agency
20
<PAGE>
Prospectus
for Eligible Retirement Plans
The Income
Fund of
America, Inc.
OCTOBER 1, 1995
[LOGO OF THE AMERICAN FUNDS GROUP(R)]
THE INCOME FUND OF AMERICA, INC.
Four Embarcadero Center
Suite 1800
San Francisco, CA 94111
The investment objective of the fund is to emphasize current income while
secondarily striving to attain capital growth. The fund believes that a
portfolio with relatively high current income can also generate growth of
capital. The fund strives to accomplish this objective by investing in a
broadly diversified portfolio of securities including stocks and bonds.
This prospectus relates only to shares of the fund offered without a sales
charge to eligible retirement plans. For a prospectus regarding shares of the
fund to be acquired otherwise, contact the Secretary of the fund at the
address indicated above.
This prospectus presents information you should know before investing in the
fund. It should be retained for future reference.
You may obtain the statement of additional information dated October 1, 1995,
which contains the fund's financial statements, without charge, by writing to
the Secretary of the fund at the above address or telephoning 800/421-0180.
These requests will be honored within three business days of receipt.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR
GUARANTEED BY, THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON. THE
PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
RP 06-010-1095
<PAGE>
- -------------------------------------------------------------------------------
SUMMARY OF
EXPENSES
Average annual expenses
paid over a 10-year
period would be
approximately $8 per
year, assuming a $1,000
investment and a 5%
annual return.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary of Expenses.......... 2
Financial Highlights......... 3
Investment Objective and
Policies.................... 3
Certain Securities and
Investment Techniques....... 4
Investment Results........... 7
Dividends, Distributions and
Taxes....................... 7
Fund Organization and
Management.................. 8
Purchasing Shares............ 10
Shareholder Services......... 11
Redeeming Shares............. 11
</TABLE>
This table is designed to help you understand the costs of investing in the
fund. These are historical expenses; your actual expenses may vary.
SHAREHOLDER TRANSACTION EXPENSES
Certain retirement plans may purchase shares of the fund with no sales
charge./1/ The fund also has no sales charge on reinvested dividends, deferred
sales charge, redemption fees or exchange fees.
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
<TABLE>
<S> <C>
Management fees....................................................... 0.32%
12b-1 expenses........................................................ 0.23%
Other expenses (including audit, legal, shareholder services,
transfer agent and custodian expenses).............................. 0.10%/2/
Total fund operating expenses......................................... 0.65%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following cumulative ex-
penses on a $1,000 investment, assuming a 5%
annual return./3/ $7 $21 $36 $81
</TABLE>
/1/ Retirement plans of organizations with $100 million or more in collective
retirement plan assets may purchase shares of the fund with no sales charge.
In addition, any defined contribution plan qualified under Section 401(a) of
the Internal Revenue Code including a "401(k)" plan with 200 or more
eligible employees or any other plan that invests at least $1 million in
shares of the fund (or in combination with shares of other funds in The
American Funds Group other than the money market funds) may purchase shares
at net asset value; however, a contingent deferred sales charge of 1%
applies on certain redemptions within 12 months following such purchases.
(See "Redeeming Shares--Contingent Deferred Sales Charge.")
/2/ These expenses may not exceed 0.25% of the fund's average net assets
annually. (See "Fund Organization and Management--Plan of Distribution.")
Due to these distribution expenses, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers.
/3/ Use of this assumed 5% return is required by the Securities and Exchange
Commission; it is not an illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
2
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL The following information for the ten years ended July
HIGHLIGHTS 31, 1995 has been derived from financial statements
(For a share which have been audited by Deloitte & Touche llp, inde-
outstanding pendent accountants. This information should be read in
throughout the conjunction with the financial statements and related
fiscal year) notes, which are included in the statement of addi-
tional information.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Year........... $13.59 $14.47 $13.94 $12.54 $12.11 $13.20 $11.50 $12.54 $12.11 $11.68
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income.. .85 .83 .85 .85 .86 .82 .90 .82 .82 .90
Net realized and
unrealized gain
(loss) on investments 1.29 (.53) .74 1.48 .53 (.67) 1.68 (.68) 1.08 1.21
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
Total income from in-
vestment operations. 2.14 .30 1.59 2.33 1.39 .15 2.58 .14 1.90 2.11
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net
investment income..... (.75) (.83) (.84) (.85) (.89) (.87) (.88) (.80) (.88) (.88)
Distributions from net
realized gains........ (.06) (.35) (.22) (.08) (.07) (.37) -- (.38) (.59) (.80)
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
Total distributions.. (.81) (1.18) (1.06) (.93) (.96) (1.24) (.88) (1.18) (1.47) (1.68)
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of
Year................... $14.92 $13.59 $14.47 $13.94 $12.54 $12.11 $13.20 $11.50 $12.54 $12.11
======= ======= ====== ====== ====== ====== ====== ====== ====== ======
Total Return/1/......... 16.42% 1.98% 11.88% 19.16% 12.24% 1.12% 23.43% 1.71% 16.67% 19.87%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, end of
year (in millions).... $12,290 $10,537 $9,045 $5,121 $2,771 $2,110 $1,271 $ 925 $ 943 $ 546
Ratio of expenses to
average net assets.... .65% .63% .62% .66% .73% .67% .69% .55% .54% .55%
Ratio of net income to
average net assets.... 6.12% 5.92% 6.05% 6.40% 7.23% 7.36% 7.45% 7.14% 6.55% 7.32%
Portfolio turnover
rate.................. 26.26% 26.42% 29.18% 22.71% 23.35% 18.90% 34.38% 42.83% 38.73% 41.48%
</TABLE>
--------
/1/ Calculated with no sales charge.
INVESTMENT The fund's investment objective is to emphasize current
OBJECTIVE income while secondarily striving to attain capital
AND POLICIES growth. The fund believes that a portfolio with rela-
tively high current income can also generate growth of
The fund aims to capital.
provide you with
current income The portfolio of the fund is managed to earn current
while secondarily income on, and to anticipate long-term capital growth
striving for of, the portfolio as a whole rather than any individual
capital growth. security in it. The fund may invest in common and pre-
ferred stocks, straight debt securities (including gov-
ernment securities) or debt securities with equity con-
version or purchase rights, and cash and cash equiva-
lents. In addition, the fund may invest in various
mortgage-related securities including those issued by
the Government National Mortgage Association (GNMA),
the Federal National Mortgage Association (FNMA), and
the Federal Home Loan Mortgage Corporation (FHLMC), and
collateralized mortgage obligations (CMOs) and mort-
gage-backed bonds. The fund may also invest to a very
limited extent in inverse floating rate notes (a type
of derivative instrument). (See the statement of addi-
tional information for a description of cash equiva-
lents, mortgage-related securities and inverse floating
rate notes.) The mix of these securities is determined
on the basis of existing and anticipated conditions.
The relative percentages of each type of security in
the portfolio may be expected to fluctuate and at times
the fund may be invested solely in fixed-income securi-
ties or solely in equity securities. The fund may also
invest in fixed-income securities of issuers domiciled
outside the U.S. provided such
3
<PAGE>
- -------------------------------------------------------------------------------
securities are denominated in U.S. dollars. Further-
more, while the fund generally does not invest in eq-
uity securities of issuers based outside the U.S., it
may from time to time invest a small portion of assets
in other North American issuers. The fund will maintain
at least 65% of the value of its total assets in in-
come-producing securities under normal market condi-
tions.
The fund's straight debt securities may consist of
bonds that are rated, measured at the time of purchase,
as low as CC by Standard & Poor's Corporation or Ca by
Moody's Investors Service, Inc. (or unrated but consid-
ered of similar quality). However, securities rated BB
and Ba or below (or unrated but considered of similar
quality) must represent no more than 20% of the fund's
total assets. Securities rated BB and Ba or below (or
unrated but considered of similar quality) are commonly
referred to as "junk bonds" or "high-yield, high-risk"
bonds. The 20% limit shall not apply to debt securities
that have equity conversion or purchase rights.
During the previous fiscal year, the monthly average
percentage of the fund's net assets in fixed-income in-
vestments was 44%. The average monthly composition of
the fund's portfolio based on the higher of the Moody's
or S&P ratings for the fiscal year ended July 31, 1995
was as follows: Aaa/AAA-20.01%; Aa/AA-0.42%; A/A-1.91%;
Baa/BBB-6.09%; Ba/BB-5.29%; B/B-9.01%; and Caa/CCC-
0.76%.
The fund's investment restrictions (which are described
in the statement of additional information) and objec-
tive cannot be changed without shareholder approval.
All other investment practices may be changed by the
fund's board.
The fund's rate of portfolio turnover will depend pri-
marily on market conditions. The rate of portfolio
turnover will not be a limiting factor when changes are
appropriate.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES.
CERTAIN RISKS OF INVESTING IN STOCKS AND BONDS Because the fund
SECURITIES AND invests in common stocks or securities convertible into
INVESTMENT common stocks, the fund is subject to stock market
TECHNIQUES risks. For example, the fund is subject to the possi-
bility that stock prices in general will decline over
Investing in short or even extended periods.
stocks and bonds
involves certain The fund also invests in fixed-income securities, in-
risks. cluding bonds, which have market values which tend to
vary inversely with the level of interest rates--when
interest rates rise, their values will tend to decline
and vice versa. Although under normal market conditions
longer term securities yield more than shorter term se-
curities of similar quality, they are subject to
greater price fluctuations. These fluctuations in the
value of the fund's investments will be reflected in
its net asset value per share. The values of high-
yield, high-risk securities may be subject to greater
fluctuations in value than are higher rated securities
because the values of high-yield, high-risk securities
tend to reflect short-term corporate and market devel-
opments and investor perceptions of the issuer's credit
quality to a greater extent. It may be more difficult
to dispose of, or determine the value of, high-yield,
4
<PAGE>
- -------------------------------------------------------------------------------
high-risk securities. See the statement of additional
information for a description of the ratings and for
more information about the risks of high-yield, high-
risk securities. High-yield, high-risk securities rated
CC or Ca generally are described by the rating agencies
as "speculative in a high degree; often in default or
[having] other marked shortcomings."
U.S. GOVERNMENT SECURITIES Securities guaranteed by the
U.S. Government include: (1) direct obligations of the
U.S. Treasury (such as Treasury bills, notes and bonds)
and (2) federal agency obligations guaranteed as to
principal and interest by the U.S. Treasury.
Certain securities issued by U.S. Government instrumen-
talities and certain federal agencies are neither di-
rect obligations of, nor guaranteed by, the Treasury.
However, they generally involve federal sponsorship in
one way or another: some are backed by specific types
of collateral; some are supported by the issuer's right
to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase
certain obligations of the issuer; and others are sup-
ported only by the credit of the issuing government
agency or instrumentality.
WHEN-ISSUED SECURITIES, FIRM COMMITMENT AGREEMENTS AND
"ROLL" TRANSACTIONS The fund may purchase securities on
a delayed delivery or "when-issued" basis and enter
into firm commitment agreements (transactions whereby
the payment obligation and interest rate are fixed at
the time of the transaction but the settlement is
delayed). The fund as purchaser assumes the risk of any
decline in value of the security beginning on the date
of the agreement or purchase. As the fund's aggregate
commitments under these transactions increase, the
opportunity for leverage similarly increases.
The fund also may enter into "roll" transactions, which
consist of the sale of securities together with a com-
mitment (for which the fund typically receives a fee)
to purchase similar, but not identical, securities at a
later date.
PRIVATE PLACEMENTS Private placements may be either
purchased from another institutional investor that
originally acquired the securities in a private place-
ment or directly from the issuers of the securities.
Generally, securities acquired in private placements
are subject to contractual restrictions on resale and
may not be resold except pursuant to a registration
statement under the Securities Act of 1933 or in reli-
ance upon an exemption from the registration require-
ments under the Act, for example, private placements
sold pursuant to Rule 144A. Accordingly, any such obli-
gation will be deemed illiquid unless it has been spe-
cifically determined to be liquid under procedures
adopted by the fund's board of directors.
In determining whether these securities are liquid,
factors such as the frequency and volume of trading and
the commitment of dealers to make markets will be con-
sidered. Additionally, the liquidity of any particular
security will depend on such factors as the availabil-
ity of "qualified" institutional investors and the ex-
tent of investor interest in the security, which can
change from time to time.
RISKS OF INVESTING IN VARIOUS COUNTRIES The fund may
invest in non-U.S. issuers as described above. These
issuers may not be subject to
5
<PAGE>
- -------------------------------------------------------------------------------
uniform accounting, auditing and financial reporting
standards and practices or regulatory requirements com-
parable to those applicable to U.S. issuers. There may
also be less public information available about non-
U.S. issuers. Additionally, specific local political
and economic factors must be evaluated in making these
investments including trade balances and imbalances,
and related economic policies; expropriation or confis-
catory taxation; limitations on the removal of funds or
other assets; political or social instability; the di-
verse structure and liquidity of the various securities
markets; and nationalization policies of governments
around the world. However, investing outside the U.S.
can also reduce certain risks due to greater diversifi-
cation opportunities.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic
investment philosophy of Capital Research and
Management Company is to seek fundamental values at
reasonable prices, using a system of multiple portfolio
counselors in managing mutual fund assets. Under this
system the portfolio of the fund is divided into
segments which are managed by individual counselors.
Each counselor decides how their segment will be
invested (within the limits provided by the fund's
objective and policies and by Capital Research and
Management Company's investment committee). In
addition, Capital Research and Management Company's
research professionals make investment decisions with
respect to a portion of the fund's portfolio. The
primary individual portfolio counselors for the fund
are listed below.
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE AS
YEARS OF EXPERIENCE AS INVESTMENT PROFESSIONAL
PORTFOLIO COUNSELOR (APPROXIMATE)
(AND WITH CAPITAL
RESEARCH PROFESSIONAL, RESEARCH AND
PRIMARY TITLE(S) IF APPLICABLE) FOR MANAGEMENT
PORTFOLIO COUNSELORS THE INCOME FUND OF COMPANY OR
FOR THE INCOME FUND AMERICA, INC. ITS TOTAL
OF AMERICA, INC. (APPROXIMATE) AFFILIATES YEARS
- -----------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
Stephen E. Bepler Senior Vice President of 11 years (in 23 years 29 years
the fund. addition to
Senior Vice President and 11 years as a
Director, Capital Research research professional
Company* prior to becoming a
portfolio counselor
for the fund)
- -----------------------------------------------------------------------------------------------------
Abner D. Goldstine Senior Vice President of 22 years 28 years 43 years
the fund.
Senior Vice President and
Director, Capital Research
and Management Company
- -----------------------------------------------------------------------------------------------------
Gregg E. Ireland Vice President, Capital 6 years (in 22 years 22 years
Research and Management addition to
Company 5 years as a research
professional prior to
becoming a portfolio
counselor for the
fund)
- -----------------------------------------------------------------------------------------------------
Janet A. McKinley Vice President of the 2 years (in 13 years 19 years
fund. Senior Vice Presi- addition to
dent, Capital Research 8 years as a
Company* research professional
prior to becoming a
portfolio counselor
for the fund)
- -----------------------------------------------------------------------------------------------------
George A. Miller President of the fund. 20 years 20 years 34 years
Senior Vice President and
Director, Capital Research
and Management Company
- -----------------------------------------------------------------------------------------------------
Dina Perry Vice President of the 3 years 4 years 29 years
fund.
Vice President, Capital
Research and Management
Company
- -----------------------------------------------------------------------------------------------------
Richard T. Schotte Senior Vice President of 17 years 18 years 28 years
the fund.
Senior Vice President,
Capital Research and
Management Company
- -----------------------------------------------------------------------------------------------------
John H. Smet Vice President of the 3 years 12 years 13 years
fund.
Vice President, Capital
Research and Management
Company
- -----------------------------------------------------------------------------------------------------
</TABLE>
*COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
6
<PAGE>
- -------------------------------------------------------------------------------
INVESTMENT The fund may from time to time compare its investment
RESULTS results to various unmanaged indices or other mutual
funds in reports to shareholders, sales literature and
The fund has advertisements. The results may be calculated on a
averaged a total yield and/or total return basis for various periods,
return (at no with or without sales charges. Results calculated with-
sales charge) of out a sales charge will be higher. Total returns assume
+13.61% a year the reinvestment of all dividends and capital gain dis-
under Capital tributions.
Research and
Management As of June 30, 1995, the fund's yield for the past 30-
Company's day period was 5.69%, and total return over the past 12
management months and average annual total returns over the past
(December 1, 1973 five- and ten-year periods were +16.29%, +11.66% and
through June 30, +11.76%, respectively. These results were calculated in
1995). accordance with Securities and Exchange Commission re-
quirements at no sales charge. Of course, past results
are not an indication of future results. Further infor-
mation regarding the fund's investment results is con-
tained in the fund's annual report which may be ob-
tained without charge by writing to the Secretary of
the fund at the address indicated on the cover of this
prospectus.
DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS in March, June, September and December. Capital gains,
AND TAXES if any, are usually distributed in December. When a
dividend or capital gain is distributed, the net asset
Income value per share is reduced by the amount of the pay-
distributions are ment.
usually made in
March, June, The terms of your plan will govern how your plan may
September and receive distributions from the fund. Generally, peri-
December. odic distributions from the fund to your plan are rein-
vested in additional fund shares, although your plan
may permit fund distributions from net investment in-
come to be received by you in cash while reinvesting
capital gain distributions in additional shares or all
fund distributions to be received in cash. Unless you
select another option, all distributions will be rein-
vested in additional fund shares.
FEDERAL TAXES The fund intends to operate as a "regu-
lated investment company" under the Internal Revenue
Code. In any fiscal year in which the fund so qualifies
and distributes to shareholders all of its net invest-
ment income and net capital gains, the fund itself is
relieved of federal income tax. The tax treatment of
redemptions from a retirement plan may differ from re-
demptions from an ordinary shareholder account.
PLEASE SEE THE STATEMENT OF ADDITIONAL INFORMATION AND
YOUR TAX ADVISER FOR FURTHER INFORMATION.
7
<PAGE>
- -------------------------------------------------------------------------------
FUND FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
ORGANIZATION end, diversified management investment company, was or-
AND ganized as a Delaware corporation in 1969 and reorga-
MANAGEMENT nized as a Maryland corporation in 1983. The fund's
board supervises fund operations and performs duties
The fund is a required by applicable state and federal law. Members
member of The of the board who are not employed by Capital Research
American Funds and Management Company or its affiliates are paid cer-
Group, which is tain fees for services rendered to the fund as de-
managed by one of scribed in the statement of additional information.
the largest and They may elect to defer all or a portion of these fees
most experienced through a deferred compensation plan in effect for the
investment fund. Shareholders have one vote per share owned and,
advisers. at the request of the holders of at least 10% of the
shares, the fund will hold a meeting at which any mem-
ber of the board could be removed by a majority vote.
There will not usually be a shareholder meeting in any
year except, for example, when the election of the
board is required to be acted upon by shareholders un-
der the Investment Company Act of 1940.
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071, and at 135 South State College Boule-
vard, Brea, CA 92621. Capital Research and Management
Company manages the investment portfolio and business
affairs of the fund and receives a fee at the annual
rates of 0.24% on the first $1 billion of the fund's
net assets, 0.20% on net assets in excess of $1 billion
but not exceeding $2 billion, 0.18% on net assets in
excess of $2 billion but not exceeding $3 billion,
0.165% on net assets in excess of $3 billion but not
exceeding $5 billion, 0.155% on net assets in excess of
$5 billion but not exceeding $8 billion, and 0.15% on
net assets in excess of $8 billion, plus 2.25% of the
portion of the fund's gross investment income for the
preceding month. Assuming net assets of $12 billion and
gross investment income levels of 3%, 4%, 5%, 6%, 7%
and 8%, management fees would be 0.24%, 0.26%, 0.28%,
0.30%, 0.33% and 0.35%, respectively.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
Capital Research and Management Company and its
affiliated companies have adopted a personal investing
policy that is consistent with the recommendations
contained in the report dated May 9, 1994 issued by
8
<PAGE>
- -------------------------------------------------------------------------------
the Investment Company Institute's Advisory Group on
Personal Investing. (See the statement of additional
information.)
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter mar-
ket, purchases and sales are transacted directly with
principal market-makers except in those circumstances
where it appears better prices and executions are
available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers that
have sold shares of the fund or have provided
investment research, statistical, and other related
services for the benefit of the fund and/or of other
funds served by Capital Research and Management
Company.
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors, Inc. is lo-
cated at 333 South Hope Street, Los Angeles, CA 90071,
135 South State College Boulevard, Brea, CA 92621, 8000
IH-10 West, San Antonio, TX 78230, 8332 Woodfield
Crossing Boulevard, Indianapolis, IN 46240, and 5300
Robin Hood Road, Norfolk, VA 23513. Telephone conversa-
tions with American Funds Distributors may be recorded
or monitored for verification, recordkeeping and qual-
ity assurance purposes.
PLAN OF DISTRIBUTION The fund has a plan of distribu-
tion or "12b-1 Plan" under which it may finance activi-
ties primarily intended to sell shares, provided the
categories of expenses are approved in advance by the
board and the expenses paid under the plan were in-
curred within the last 12 months and accrued while the
plan is in effect. Expenditures by the fund under the
plan may not exceed 0.25% of its average net assets an-
nually (all of which may be for service fees.)
TRANSFER AGENT American Funds Service Company, 800/421-
0180, a wholly owned subsidiary of Capital Research and
Management Company, is the transfer agent and performs
shareholder service functions. American Funds Service
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071, 135 South State College Boulevard, Brea,
CA 92621, 8000 IH-10 West, San Antonio, TX 78230, 5300
Robin Hood Road, Norfolk, VA 23513 and 8332 Woodfield
Crossing Boulevard, Indianapolis, IN 46240. It was paid
a fee of $7,211,000 for the fiscal year ended July 31,
1995. Telephone conversations with American Funds Serv-
ice Company may be recorded or monitored for verifica-
tion, recordkeeping and quality assurance purposes.
9
<PAGE>
- -------------------------------------------------------------------------------
PURCHASING SHARES ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR
RETIREMENT PLAN. FOR MORE INFORMATION ABOUT HOW TO
PURCHASE SHARES OF THE FUND THROUGH YOUR PLAN OR
LIMITATIONS ON THE AMOUNT THAT MAY BE PURCHASED, PLEASE
CONSULT WITH YOUR EMPLOYER. Shares are sold to eligible
retirement plans at the net asset value per share next
determined after receipt of an order by the fund or
American Funds Service Company. Orders must be received
before the close of regular trading on the New York
Stock Exchange in order to receive that day's net asset
value. Plans of organizations with collective
retirement plan assets of $100 million or more may
purchase shares at net asset value. In addition, any
defined contribution plan qualified under Section
401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or
any other plan that invests at least $1 million in
shares of the fund (or in combination with shares of
other funds in The American Funds Group other than the
money market funds) may purchase shares at net asset
value; however, a contingent deferred sales charge of
1% is imposed on certain redemptions within one year of
such purchase. (See "Redeeming Shares--Contingent
Deferred Sales Charge.") Plans may also qualify to
purchase shares at net asset value by completing a
statement of intention to purchase $1 million in fund
shares subject to commission over a maximum of 13
consecutive months. Certain redemptions of such shares
may also be subject to a contingent deferred sales
charge as described above. (See the statement of
additional information.)
The minimum initial investment is $250, except that the
money market funds have a minimum of $1,000 for
individual retirement accounts (IRAs). Minimums are
reduced to $50 for purchases through "Automatic
Investment Plans" (except for the money market funds)
or to $25 for purchases by retirement plans through
payroll deductions and may be reduced or waived for
shareholders of other funds in The American Funds
Group.
American Funds Distributors, at its expense (from a
designated percentage of its income), will provide
additional promotional incentives to dealers. Currently
these incentives are limited to the top hundred dealers
who have sold shares of the fund or other funds in The
American Funds Group. The incentive payments will be
based on a pro rata share of a qualifying dealer's
sales.
Qualified dealers currently are paid a continuing
service fee not to exceed 0.25% of average net assets
annually in order to promote selling efforts and to
compensate them for providing certain services. (See
"Fund Organization and Management--Plan of
Distribution.") These services include processing
purchase and redemption transactions, establishing
shareholder accounts and providing certain information
and assistance with respect to the fund.
10
<PAGE>
- -------------------------------------------------------------------------------
Shares of the fund are offered to other shareholders
pursuant to another prospectus at public offering
prices that may include an initial sales charge.
SHARE PRICE Shares are offered to eligible retirement
plans at the net asset value after the order is
received by the fund or American Funds Service Company.
In the case of orders sent directly to the fund or
American Funds Service Company, an investment dealer
must be indicated. Dealers are responsible for promptly
transmitting orders. (See the statement of additional
information under "Purchase of Shares--Price of
Shares.")
The fund's net asset value per share is determined as
of the close of trading (currently 4:00 p.m., New York
time) on each day the New York Stock Exchange is open.
The current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share.
SHAREHOLDER Subject to any restrictions contained in your plan, you
SERVICES can exchange your shares for shares of other funds in
The American Funds Group which are offered through the
plan at net asset value. In addition, again depending
on your plan, you may be able to exchange shares
automatically or cross-reinvest dividends in shares of
other funds. Contact your plan administrator/trustee
regarding how to use these services. Also, see the
fund's statement of additional information for a
description of these and other services that may be
available through your plan. These services are
available only in states where the fund to be purchased
may be legally offered and may be terminated or
modified at any time upon 60 days' written notice.
REDEEMING SHARES Subject to any restrictions imposed by your plan, you
can sell your shares through the plan any day the New
York Stock Exchange is open. For more information about
how to sell shares of the fund through your retirement
plan, including any charges that may be imposed by the
plan, please consult with your employer.
By Your plan administrator/trustee must
contacting send a letter of instruction
your plan specifying the name of the fund, the
administrator/ number of shares or dollar amount to
trustee be sold, and, if applicable, your
name and account number. For your
protection, if you redeem more than
$50,000, the signatures of the
registered owners (i.e., trustees or
their legal representatives) must be
guaranteed by a bank, savings
association, credit union, or member
firm of a domestic stock exchange or
the National Association of
Securities Dealers, Inc., that is an
eligible guarantor institution. Your
plan administrator/trustee should
verify with the institution that it
is an eligible guarantor prior to
signing. Additional documentation may
be required to redeem shares from
certain accounts. Notarization by a
Notary Public is not an acceptable
signature guarantee.
--------------------------------------------------------
By Shares may also be redeemed through
contacting an investment dealer; however, you or
an your plan may be charged for this
investment service. SHARES HELD FOR YOU IN AN
dealer INVESTMENT DEALER'S STREET NAME MUST
BE REDEEMED THROUGH THE DEALER.
11
<PAGE>
- -------------------------------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND ALL
REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions
within the first year on investments of $1 million or
more and, subject to regulatory approval, on any
investment made with no initial sales charge by any
defined contribution plan qualified under Section
401(a) of the Internal Revenue Code including "401(k)"
plans with 200 or more eligible employees. The charge
is 1% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gain
distributions) or the total cost of such shares. Shares
held for the longest period are assumed to be redeemed
first for purposes of calculating this charge. The
charge is waived for exchanges (except if shares
acquired by exchange were then redeemed within 12
months of the initial purchase); for distributions from
qualified retirement plans and other employee benefit
plans; for redemptions resulting from participant-
directed switches among investment options within a
401(k) plan; and for redemptions in connection with
loans made by qualified retirement plans.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because the fund's
net asset value fluctuates, reflecting the market value
of the portfolio, the amount you receive for shares
redeemed may be more or less than the amount paid for
them.
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
[LOGO OF This prospectus has been printed on
RECYCLED PAPER] recycled paper that meets the
guidelines of the United States
Environmental Protection Agency
THIS PROSPECTUS RELATES ONLY TO SHARES OF THE FUND
OFFERED WITHOUT A SALES CHARGE TO ELIGIBLE RETIREMENT
PLANS. FOR A PROSPECTUS REGARDING SHARES OF THE FUND
TO BE ACQUIRED OTHERWISE, CONTACT THE SECRETARY OF
THE FUND AT THE ADDRESS INDICATED ON THE FRONT.
12
Part B
Statement of Additional Information
OCTOBER 1, 1995
This document is not a prospectus but should be read in conjunction with
the current Prospectus of The Income Fund of America, Inc. (the fund or IFA)
dated October 1, 1995. The Prospectus may be obtained from your investment
dealer or financial planner or by writing to the fund at the following
address:
THE INCOME FUND OF AMERICA, INC.
ATTENTION: SECRETARY
FOUR EMBARCADERO CENTER
P.O. BOX 7650
SAN FRANCISCO, CA 94120
TELEPHONE: (415) 421-9360
The fund has two forms of prospectuses. Each reference to the prospectus
in this statement of additional information includes both of the fund's
Prospectuses. Shareholders who purchase shares at net asset value through
eligible retirement plans should note that not all of the services or features
described below may be available to them, and they should contact their
employer for details.
Table of Contents
Item Page No.
DESCRIPTION OF CERTAIN SECURITIES
CERTAIN RISK FACTORS RELATING TO BELOW INVESTMENT GRADE BONDS
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
FUND OFFICERS AND DIRECTORS
MANAGEMENT
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
PURCHASE OF SHARES
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
EXECUTION OF PORTFOLIO TRANSACTIONS
GENERAL INFORMATION
INVESTMENT RESULTS
DESCRIPTION OF BOND RATINGS
FINANCIAL STATEMENTS ATTACHED
DESCRIPTION OF CERTAIN SECURITIES
CASH EQUIVALENTS - These securities include (1) commercial paper (short-term
notes up to 9 months in maturity issued by corporations or governmental
bodies), (2) commercial bank obligations (E.G., certificates of deposit,
bankers' acceptances (time drafts on a commercial bank where the bank accepts
an irrevocable obligation to pay at maturity) and documented discount notes
(corporate promissory discount notes accompanied by a commercial bank guarantee
to pay at maturity)), (3) savings association and savings bank obligations
(E.G., certificates of deposit issued by savings banks or savings
associations), (4) securities of the U.S. Government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (5)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES - Certificates issued by
the Government National Mortgage Association (GNMA) are mortgage-backed
securities representing part ownership of a pool of mortgage loans, which are
issued by lenders such as mortgage bankers, commercial banks and savings and
loan associations, and are either insured by the Federal Housing Administration
or guaranteed by the Veterans Administration. A pool of these mortgages is
assembled and, after being approved by GNMA, is offered to investors through
securities dealers. The timely payment of interest and principal on each
mortgage is guaranteed by GNMA and backed by the full faith and credit of the
U.S. Government.
Principal is paid back monthly by the borrower over the term of the loan.
Reinvestment of prepayments may occur at higher or lower rates than the
original yield on the certificates. Due to the prepayment feature and the need
to reinvest prepayments of principal at current market rates, GNMA certificates
can be less effective than typical bonds of similar maturities at "locking in"
yields during periods of declining interest rates. GNMA certificates typically
appreciate or decline in market value during periods of declining or rising
interest rates, respectively. Due to the regular repayment of principal and
the prepayment feature, the effective maturities of mortgage pass-through
securities are shorter than stated maturities, will vary based on market
conditions and cannot be predicted in advance. The effective maturities of
newly-issued GNMA certificates backed by relatively new loans at or near the
prevailing interest rates are generally assumed to range between approximately
9 and 12 years.
FNMA AND FHLMC MORTGAGE-BACKED OBLIGATIONS - FNMA, a federally chartered and
privately-owned corporation, issues pass-through securities representing
interests in a pool of conventional mortgage loans. FNMA guarantees the timely
payment of principal and interest but this guarantee is not backed by the full
faith and credit of the U.S. Government.
FHLMC, a corporate instrumentality of the U.S. Government, issues
participation certificates which represent an interest in a pool of
conventional mortgage loans. FHLMC guarantees the timely payment of interest
and the ultimate collection of principal, and maintains reserves to protect
holders against losses due to default, but the certificates are not backed by
the full faith and credit of the U.S. Government.
As is the case with GNMA certificates, the actual maturity of and realized
yield on particular FNMA and FHLMC pass-through securities will vary based on
the prepayment experience of the underlying pool of mortgages.
OTHER MORTGAGE-RELATED SECURITIES - The fund may invest in mortgage-related
securities issued by financial institutions such as commercial banks, savings
and loan associations, mortgage bankers and securities broker-dealers (or
separate trusts or affiliates of such institutions established to issue these
securities). These securities include mortgage pass-through certificates,
collateralized mortgage obligations (including real estate mortgage investment
conduits as authorized under the Internal Revenue Code of 1986) (CMOs) or
mortgage-backed bonds. Each class of bonds in a CMO series may have a
different effective maturity, bear a different coupon, and have a different
priority in receiving payments. All principal payments, both regular principal
payments as well as any prepayment of principal, are passed through to the
holders of the various CMO classes dependent on the characteristics of each
class. In some cases, all payments are passed through first to the holders of
the class with the shortest stated maturity until it is completely retired.
Thereafter, principal payments are passed through to the next class of bonds in
the series, until all the classes have been paid off. In other cases, payments
are passed through to holders of whichever class first has the shortest
effective maturity at the time payments are made. As a result, an acceleration
in the rate of prepayments that may be associated with declining interest rates
shortens the expected life of each class. The impact of an acceleration in
prepayments affects the expected life of each class differently depending on
the unique characteristics of that class. In the case of some CMO series, each
class may receive a differing proportion of the monthly interest and principal
repayments on the underlying collateral. In these series the classes would be
more affected by an acceleration (or slowing) in the rate of prepayments than
CMOs which share principal and interest proportionally.
Mortgage-backed bonds are general obligations of the issuer fully
collateralized directly or indirectly by a pool of mortgages. The mortgages
serve as collateral for the issuer's payment obligations on the bonds, but
interest and principal payments on the mortgages are not passed through either
directly (as with GNMA certificates and FNMA and FHLMC pass-through securities)
or on a modified basis (as with CMOs). Accordingly, a change in the rate of
prepayments on the pool of mortgages could change the effective maturity of a
CMO but not that of a mortgage-backed bond (although, like many bonds,
mortgage-backed bonds can provide that they are callable by the issuer prior to
maturity).
INVERSE FLOATING RATE NOTES - The fund may invest to a very limited extent in
inverse floating rate notes (a type of derivative instrument). These notes
have rates that move in the opposite direction of prevailing interest rates. A
change in prevailing interest rates will often result in a greater change in
the instruments' interest rates. Therefore, these securities have a greater
degree of volatility than other types of interest-bearing securities.
WHEN-ISSUED SECURITIES, FIRM COMMITMENT AGREEMENTS AND "ROLL TRANSACTIONS" -
The fund may purchase securities on a delayed delivery or "when-issued" basis
and enter into firm commitment agreements (transactions whereby the payment
obligation and interest rate are fixed at the time of the transaction but the
settlement is delayed). The fund as purchaser assumes the risk of any decline
in value of the security beginning on the date of the agreement or purchase.
The fund will identify liquid assets such as cash, U.S. Government securities
or other appropriate high-grade debt obligations in an amount sufficient to
meet its payment obligations in these transactions. Although these
transactions will not be entered into for leveraging purposes, to the extent
the fund's aggregate commitments under these transactions exceed its holdings
of cash and securities that do not fluctuate in value (such as short-term money
market instruments), the fund temporarily will be in a leveraged position
(because it will have an amount greater than its net assets subject to market
risk). Should market values of the fund's portfolio securities decline while
the fund is in a leveraged position, greater depreciation of its net assets
will likely occur than were it not in such a position. The fund will not
borrow money to settle these transactions and, therefore, will liquidate other
portfolio securities in advance of settlement if necessary to generate
additional cash to meet its obligations thereunder.
The fund also may enter into "roll" transactions, which consist of the sale
of securities together with a commitment (for which the fund typically receives
a fee) to purchase similar, but not identical, securities at a later date. The
fund intends to treat roll transactions as two separate transactions: one
involving the purchase of a security and a separate transaction involving the
sale of a security. Since the fund does not intend to enter into roll
transactions for financing purposes, it may treat these transactions as not
falling within the definition of "borrowing" set forth in Section 2(a)(23) of
the Investment Company Act of 1940.
CERTAIN RISK FACTORS RELATING TO BELOW INVESTMENT GRADE BONDS
Certain risk factors relating to investing in below investment grade
securities ("high-yield, high-risk bonds") are discussed below.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES - High-yield, high-risk
bonds are very sensitive to adverse economic changes and corporate
developments. During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress that
would adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain additional
financing. If the issuer of a bond defaulted on its obligations to pay
interest or principal or entered into bankruptcy proceedings, the fund may
incur losses or expenses in seeking recovery of amounts owed to it. In
addition, periods of economic uncertainty and changes can be expected to result
in increased volatility of market prices of high-yield, high-risk bonds.
PAYMENT EXPECTATIONS - High-yield, high-risk bonds, like other bonds, may
contain redemption or call provisions. If an issuer exercised these provisions
in a declining interest rate market, the fund would have to replace the
security with a lower yielding security, resulting in a decreased return for
investors. Conversely, a high-yield, high-risk bond's value is likely to
decrease in a rising interest rate market, as is generally true with all bonds.
LIQUIDITY AND VALUATION - There may be little trading in the secondary market
for particular bonds, which may affect adversely the fund's ability to value
accurately or dispose of such bonds. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of high-yield, high-risk bonds, especially in a thin
market.
The fund may invest no more than 20% of its total assets in securities rated
BB and Ba or below (or unrated but considered of similar quality). The 20%
limit shall not apply to debt securities that have equity conversion or
purchase rights. In addition, the fund has no current intention of holding
more than 25% of its total assets in high-yield, high-risk bonds, INCLUDING
those that have equity conversion or purchase rights.
The fund's investment adviser, Capital Research and Management Company,
attempts to reduce the fund's risks through diversification of the portfolio by
credit analysis of each issuer as well as by monitoring broad economic trends
and corporate developments, but there can be no assurance that it will be
successful in doing so. The fund's investment policy with respect to investing
in high-yield, high-risk securities is a "non-fundamental" policy and thus, may
be changed by the board of directors at any time. It is contemplated that most
of the fund's common stock investments will be made in securities that are
listed on a stock exchange.
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
The fund has adopted certain fundamental policies and investment restrictions
which cannot be changed without shareholder approval. Approval requires the
affirmative vote of 67% or more of the voting securities present at a meeting
of shareholders, provided more than 50% of such securities are represented at
the meeting, or the vote of more than 50% of the outstanding voting securities,
whichever is less.
The fund may not:
1. Act as underwriter of securities issued by other persons.
2. Invest more than 10% of the value of its total assets in securities that
are illiquid.
3. Borrow amounts in excess of 5% of its gross assets taken at cost or market
value, whichever is lower, determined at the time of borrowing, and then only
from banks as a temporary measure for extraordinary or emergency purposes; or
pledge, mortgage, or hypothecate its assets taken at market value to any extent
greater than 15% of its gross assets taken at cost or market value, whichever
is lower, at the time of such action.
4. Purchase real estate (including limited partnership interests but excluding
securities of companies, such as real estate investment trusts, which deal in
real estate or interests therein) or purchase oil, gas, or other mineral
leases.
5. Purchase or deal in commodities or commodity contracts.
6. Make loans to other persons, except by making time or demand deposits with
banks or by purchasing a portion of an issue (not prohibited by any investment
restriction set forth herein) of bonds, debentures, commercial paper or other
debt securities at original issue or otherwise.
7. Purchase securities of any company for the purpose of exercising control or
management.
8. Purchase securities of any other managed investment company.
9. Purchase any securities on "margin", except that it may obtain such
short-term credit as may be necessary for the clearance of purchases of
securities.
10. Sell or contract to sell any security which it does not own unless by
virtue of its ownership of other securities it has at the time of sale a right
to obtain securities, without payment of further consideration, equivalent in
kind and amount to the securities sold and provided that if such right is
conditional the sale is made upon the same conditions.
11. Purchase or sell puts, calls, straddles, or spreads, but this restriction
shall not prevent the purchase or sale of rights represented by warrants or
convertible securities.
12. Purchase any securities of any issuer, except the U.S. Government (or its
instrumentalities), if immediately after and as a result of such investment (1)
the market value of the securities of such other issuer shall exceed 5% of the
market value of the total assets of the fund, or (2) the fund shall own more
than 10% of the outstanding voting securities of such issuer, provided that
this restriction shall apply only as to 75% of the fund's total assets.
13. Purchase any securities (other than securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities) if immediately after and
as a result of such purchase 25% or more of the market value of the total
assets of the fund would be invested in securities of companies in any one
industry.
14. Purchase securities of companies (other than real estate investment
trusts) which, with their predecessors, have a record of less than three years'
continuous operations, if such purchase would cause more than 5% of the fund's
total assets to be invested in the securities of such companies.
Notwithstanding Investment Restriction #8, the fund may invest in
securities of other managed investment companies if deemed advisable by its
officers in connection with the administration of a deferred compensation plan
adopted by Directors pursuant to an exemptive order granted by the Securities
and Exchange Commission.
The fund has also agreed that it will not purchase any warrants if immediately
after and as a result of such purchase more than 5% of the market value of the
total assets of the fund would be invested in such warrants, with no more than
2% being unlisted on the New York or American Stock Exchanges. These are not
fundamental policies of the fund and may be changed without shareholder
approval.
FUND OFFICERS AND DIRECTORS
DIRECTORS AND DIRECTOR COMPENSATION
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION PRINCIPAL OCCUPATION(S) DURING PAST AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
TOTAL NUMBER
WITH 5 YEARS (POSITIONS WITHIN THE (INCLUDING VOLUNTARILY ALL FUNDS MANAGED BY OF FUND
BOARDS
REGISTRANT ORGANIZATIONS LISTED MAY HAVE DEFERRED COMPENSATION/1/) CAPITAL RESEARCH AND ON WHICH
CHANGED DURING THIS PERIOD) FROM THE COMPANY MANAGEMENT COMPANY DIRECTOR SERVES
DURING FISCAL YEAR ENDED FOR THE YEAR ENDED
7/31/95 7/31/95/2/
<S> <C> <C> <C> <C> <C>
Robert A. Fox Director President and Chief Executive Officer, $ 17,200 $ 77,150 5
P.O. Box 457 Foster Farms; former President,
1000 Davis Street Revlon International, Chairman and
Livingston, CA 95334 Chief Executive Officer, Clarke
Age: 58 Hooper America (advertising),
President, Continental Can Company,
Inc.
Roberta L. Hazard Director Rear Admiral, United States Navy $ 16,433 $ 37,950 3
1419 Audmar Drive (Retired)
McLean, VA 22101
Age: 60
++ Ernest T. Hinshaw, Jr. Director Private investor; former Yachting $ 16,900 $ 31,800 2
729 Via Lido Soud Commissioner, Los Angeles Olympic
Newport Beach, CA 92663 Organizing Committee, and Director,
Age: 67 Capital Research and Management
Company (retired 1983)
++ Richard H. M. Holmes Director Retired; former Vice President, $ 16,050 $ 57,750 4
580 Laurent Road Capital Research and Management
Hillsborough, CA 94010 Company (retired 1986)
Age: 69
Leonade D. Jones Director Treasurer, The Washington Post $ 16,433 $ 51,517 5
1150-15th Street, N.W. Company
Washington, D.C. 20071
Age: 47
John G. McDonald Director The IBJ Professor of Finance, $ 16,867 $ 128,950 7
Stanford University Graduate School of Business, Stanford
Stanford, CA 94305 University
Age: 58
Theodore D. Nierenberg Director Private investor; former President, $ 16,433 $ 38,850 3
15 Middle Patent Road Dansk International Designs, Ltd.
Armonk, NY 10504
Age: 72
+ James W. Ratzlaff Director Vice Chairman of the Board, Capital None None 8
P.O. Box 7650 Research and Management Company;
San Francisco, CA 94120 Senior Partner, The Capital Group
Age: 59 Partners L.P.
Henry E. Riggs Director President and Professor of $ 16,900 $ 63,750 5
Kingston Hall 201 Engineering, Harvey Mudd College
Harvey Mudd College
Claremont, CA 91711
Age: 60
+ Walter P. Stern Chairman of Chairman, Capital Group None None 8
630 Fifth Avenue the Board International, Inc.; Vice Chairman,
New York, NY 10111 Capital Research International;
Age: 67 Director, The Capital Group
Companies, Inc.; Chairman, Capital
International, Inc.; Director, Temple-
Inland Inc. (forest products)
Patricia K. Woolf Director Private investor; Lecturer, Department $ 16,300 $ 64,450 5
506 Quaker Road of Molecular Biology, Princeton
Princeton, NJ 08540 University
Age: 61
</TABLE>
+ "Interested persons" within the meaning of the Investment Company Act of
1940 (the 1940 Act) on the basis of their affiliation with the Investment
Adviser or the parent company of the Investment Adviser, The Capital Group
Companies, Inc.
++ Not considered an "interested person" within the meaning of the 1940 Act;
but he does not participate on the Contracts Committee due to his former
affiliation with the Investment Adviser.
/1/ Amounts may be deferred by eligible directors under a non-qualified
deferred compensation plan adopted by the fund in 1993. Deferred amounts
accumulate at an earnings rate determined by the total return of one or more of
the funds in the American Funds Group as designated by the director.
/2/ Capital Research and Management Company manages The American Funds Group
consisting of 28 funds: AMCAP Fund, American Balanced Fund, Inc., American
High-Income Municipal Bond Fund, Inc., American High-Income Trust, American
Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management Trust of
America, Capital Income Builder, Inc., Capital World Growth and Income Fund,
Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America.
Inc., Intermediate Bond Fund of America, The Investment Company of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of
America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of
Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of
America, The U.S. Treasury Money Fund of America, U.S. Government Securities
Fund and Washington Mutual Investors Fund, Inc. Capital Research and
Management Company also manages American Variable Insurance Series and Anchor
Pathway Fund which serve as the underlying investment vehicles for certain
variable insurance contracts.
/3/ Since the plan's adoption, the total amounts of deferred compensation
accrued by the fund (plus earnings thereon) for participating Directors are as
follows: Robert A. Fox ($65,448), Leonade D. Jones ($9,216), John G. McDonald
($26,132) and Henry E. Riggs ($29,370). Amounts deferred and accumulated
earnings thereon are not funded and are general unsecured liabilities of the
fund until paid to the Director.
/4/ James W. Ratzlaff and Walter P. Stern are affiliated with the Investment
Adviser and, accordingly, receive no remuneration from the fund.
OFFICERS
(with their principal occupations for the past five years)#
Walter P. Stern, Chairman of the Board.
Fund officers whose other positions are not described above are:
George A. Miller, President /1/; Senior Vice President and Director, Capital
Research and
Management Company.
Stephen E. Bepler, Senior Vice President /2/; Senior Vice President and
Director, Capital
Research Company.
Abner D. Goldstine, Senior Vice President /3/; Senior Vice President and
Director, Capital Research
and Management Company.
Paul G. Haaga, Jr., Senior Vice President, 333 South Hope Street, Los
Angeles, CA 90071; Senior Vice President and Director, Capital Research and
Management Company; Director, American Funds Service Company.
Richard T. Schotte, Senior Vice President /3/; Senior Vice President,
Capital Research and
Management Company.
Steven N. Kearsley, Vice President /4/; Vice President and Treasurer,
Capital Research and Management Company; Director, American Funds Service
Company.
Janet A. McKinley, Vice President /2/; Senior Vice President, Capital
Research Company.
Dina N. Perry, Vice President, 3000 K Street, N.W., Washington, D.C. 20007;
Vice President,
Capital Research and Management Company.
John H. Smet, Vice President /3/; Vice President, Capital Research and
Management Company.
Patrick F. Quan, Secretary /1/; Vice President - Fund Business Management
Group, Capital
Research and Management Company.
Mary C. Cremin, Treasurer /4/; Senior Vice President - Fund Business Management
Group,
Capital Research and Management Company.
R. Marcia Gould, Assistant Treasurer /4/; Vice President - Fund Business
Management Group, Capital
Research and Management Company.
/1/ Address is P.O. Box 7650, San Francisco, CA 94120.
/2/ Address is 630 Fifth Avenue, New York, NY 10111.
/3/ Address is 11100 Santa Monica Boulevard, Los Angeles, CA 90025.
/4/ Address is 135 South State College Boulevard, Brea, CA 92621.
# Positions within the organizations listed may have changed during this
period.
All of the directors and officers are also officers and/or directors and/or
trustees of one or more of the other funds for which Capital Research and
Management Company serves as Investment Adviser. No compensation is paid by
the fund to any officer or director who is a director, officer or employee of
the Investment Adviser or affiliated companies. The fund pays fees of $12,000
per annum to directors who are not affiliated with the Investment Adviser, plus
$700 for each Board of Directors meeting attended, plus $300 for each meeting
attended as a member of a committee of the Board of Directors. The directors
may elect, on a voluntary basis, to defer all or a portion of these fees
through a deferred compensation plan in effect for the fund. The fund also
reimburses certain expenses of the directors who are not affiliated with the
Investment Adviser. As of July 31, 1995 the officers and directors of the fund
and their families, as a group, owned beneficially or of record less than 1% of
the outstanding shares.
MANAGEMENT
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains
research facilities in the U.S. and abroad, with a staff of professionals, many
of whom have a number of years of investment experience. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world.
The Investment Adviser believes that it is able to attract and retain quality
personnel.
An affiliate of the Investment Adviser compiles indices for major stock
markets around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The Investment Adviser is responsible for more than $100 billion of stocks,
bonds and money market instruments and serves over five million investors of
all types. These investors include privately owned businesses and large
corporations as well as schools, colleges, foundations and other non-profit and
tax-exempt organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and
Service Agreement (the Agreement) between the fund and the Investment Adviser,
dated January 1, 1994, and approved by the shareholders on December 14, 1993,
shall be in effect until the close of business on November 30, 1995 and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (i) the Board of Directors of the
fund, or by the vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of the fund, and (ii) the vote of a majority of
directors who are not parties to the Agreement or interested persons (as
defined in said Act) of any such party, cast in person, at a meeting called for
the purpose of voting on such approval. The Agreement also provides that
either party has the right to terminate it without penalty, upon 60 days'
written notice to the other party, and that the Agreement automatically
terminates in the event of its assignment (as defined in said Act).
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of persons
to perform the executive, administrative, clerical and bookkeeping functions of
the fund, and provides suitable office space, necessary small office equipment
and utilities, as well as general purpose accounting forms, supplies, and
postage to be used at the offices of the fund relating to the services
furnished by the Investment Adviser. The fund pays all expenses not
specifically assumed by the Investment Adviser, including, but not limited to,
custodian, stock transfer and dividend disbursing fees and expenses; costs of
designing, printing and mailing reports, prospectuses, proxy statements, and
notices to shareholders; taxes; expenses for the issuance and redemption of
shares of the fund (including stock certificates, registration and
qualification fees and expenses); expenses pursuant to the fund's Plan of
Distribution (described below); legal and auditing expenses; compensation,
fees, and expenses paid to directors unaffiliated with the Investment Adviser;
association dues; costs of stationery and forms prepared exclusively for the
fund; and costs of assembling and storing shareholder account data.
The Investment Adviser's fee is based upon the net assets of the fund and
monthly gross investment income. Gross investment income means gross income,
computed without taking account of gains or losses from sales of capital
assets, but including original issue discount as defined for federal income tax
purposes. The Internal Revenue Code in general defines original issue discount
to mean the difference between the issue price and the stated redemption price
at maturity of certain debt obligations. The holder of such indebtedness is in
general required to treat as ordinary income the proportionate part of the
original issue discount attributable to the period during which the holder held
the indebtedness.
The Agreement provides for an advisory fee reduction to the extent that the
fund's annual ordinary operating expenses exceed 1-1/2% of the first $30
million of the net assets of the fund and 1% of the net assets in excess
thereof. Expenses which are not subject to this limitation are interest,
taxes, and extraordinary expenses. Expenditures, including costs incurred in
connection with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses.
For the fiscal year ended July 31, 1995, the Investment Adviser received
$18,773,000 for the basic management fee (based on a percentage of the net
assets of the fund as expressed above) plus $16,925,000 (based on a percentage
of the fund's gross income as expressed above), for a total fee of $35,698,000.
For the fiscal years ended July 31, 1994 and 1993, advisory fees paid by the
fund amounted to $32,273,000 and $23,101,000, respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the Principal
Underwriter) is the principal underwriter of the fund's shares. The fund has
adopted a Plan of Distribution (the Plan), pursuant to rule 12b-1 under the
1940 Act, (see "Principal Underwriter" in the Prospectus). The Principal
Underwriter receives amounts payable pursuant to the Plan (see below) and
commissions consisting of that portion of the sales charge remaining after the
discounts which it allows to investment dealers. Commissions retained by the
Principal Underwriter on sales of fund shares during the fiscal year ended July
31, 1995 amounted to $7,246,000 after allowance of $36,662,000 to dealers.
During the fiscal years ended 1994 and 1993, the Principal Underwriter received
$15,331,000 and $23,055,000, after allowance of $79,611,000 and $121,962,000,
respectively.
As required by rule 12b-1, the Plan (together with the Principal Underwriting
Agreement) has been approved by the full Board of Directors, and separately by
a majority of the directors who are not interested persons of the fund and who
have no direct or indirect financial interest in the operation of the Plan or
the Principal Underwriting Agreement, and the Plan has been approved by the
vote of a majority of the outstanding voting securities of the fund. The
officers and directors who are "interested" persons of the fund may be
considered to have a direct or indirect financial interest in the operation of
the Plan due to present or past affiliations with the Investment Adviser and
related companies. Potential benefits of the Plan to the fund include improved
shareholder services, savings to the fund in transfer agency costs, savings to
the fund in advisory fees and other expenses, benefits to the investment
process from growth or stability of assets and maintenance of a financially
healthy management organization. The selection and nomination of directors who
are not "interested persons" of the fund are committed to the discretion of the
directors who are not interested persons during the existence of the Plan. The
Plan is reviewed quarterly and must be renewed annually by the Board of
Directors.
Under the Plan the fund may expend up to 0.25% of its net assets annually
to finance any activity which is primarily intended to result in the sale of
fund shares, provided the fund's Board of Directors has approved the category
of expenses for which payment is being made. These include service fees for
qualified dealers and dealer commissions and wholesaler compensation on sales
of shares exceeding $1 million (including purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees). Only expenses incurred
during the preceding 12 months and accrued while the Plan is in effect may be
paid by the fund. During the fiscal year ended July 31, 1995, the fund paid or
accrued $25,061,000 for compensation to dealers under the Plan.
The Glass-Steagall Act and other applicable laws, among other things,
generally prohibit commercial banks from engaging in the business of
underwriting, selling or distributing securities, but permit banks to make
shares of mutual funds available to their customers and to perform
administrative and shareholder servicing functions. However, judicial or
administrative decisions or interpretations of such laws, as well as changes in
either federal or state statutes or regulations relating to the permissible
activities of banks or their subsidiaries of affiliates, could prevent a bank
from continuing to perform all or a part of its servicing activities. If a
bank were prohibited from so acting, shareholder clients of such bank would be
permitted to remain shareholders of the fund and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the fund might occur and shareholders serviced by such bank
might no longer be able to avail themselves of any automatic investment or
other services then being provided by such bank. It is not expected that
shareholders would suffer with adverse financial consequences as a result of
any of these occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and certain banks and financial
institutions may be required to be registered as dealers pursuant to state law.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
The fund intends to meet all the requirements, and has elected the tax status
of a "regulated investment company," under the provisions of Subchapter M of
the Internal Revenue Code of 1986 (the Code). Under Subchapter M, if the fund
distributes within specified times at least 90% of the sum of its investment
company taxable income (net investment income and the excess of net short-term
capital gains over net long-term capital losses) and its tax-exempt interest,
if any, it will be taxed only on that portion of such investment company
taxable income that it retains.
To qualify, the fund must (a) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock, securities, currencies or other income
derived with respect to its business of investing in such stock, securities or
currencies; (b) derive less than 30% of its gross income from the gains or sale
or other disposition of stock or securities held less than three months; and
(c) diversify its holdings so that, at the end of each fiscal quarter, (i) at
least 50% of the market value of the fund's assets is represented by cash, cash
items, U.S. Government securities, securities of other regulated investment
companies, and other securities (but such other securities must be limited, in
respect of any one issuer, to an amount not greater than 5% of the fund's
assets and 10% of the outstanding voting securities of such issuer), and (ii)
not more than 25% of the value of its assets is invested in the securities of
any one issuer (other than U.S. Government securities or the securities of
other regulated investment companies), or in two or more issuers which the fund
controls and which are engaged in the same or similar trades or businesses or
related trades or businesses.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gains (both long-term and
short-term) for the one-year period ending on October 31 (as though the
one-year period ending on October 31 were the regulated investment company's
taxable year), and (iii) the sum of any untaxed, undistributed net investment
income and net capital gains of the regulated investment company for prior
periods. The term "distributed amount" generally means the sum of (i) amounts
actually distributed by the fund from its current year's ordinary income and
capital gain net income and (ii) any amount on which the fund pays income tax
during the periods described above. The fund intends to distribute net
investment income and net capital gains so as to minimize or avoid the excise
tax liability.
The fund also intends to continue distributing to shareholders all of the
excess of net long-term capital gain over net short-term capital loss on sales
of securities. If the net asset value of shares of the fund should, by reason
of a distribution of realized capital gains, be reduced below a shareholder's
cost, such distribution would to that extent be a return of capital to that
shareholder even though taxable to the shareholder, and a sale of shares by a
shareholder at net asset value at that time would establish a capital loss for
federal tax purposes.
Dividends generally are taxable to shareholders at the time they are paid.
However, dividends declared in October, November and December and made payable
to shareholders of record in such a month are treated as paid and are thereby
taxable as of December 31, provided that the fund pays the dividend no later
than the end of January of the following year.
Corporate shareholders of the fund may be eligible for the dividends-received
deduction on the dividends (excluding the net capital gains dividends) paid by
the fund to the extent the fund's income is derived from dividends (which, if
received directly would qualify for such deduction) received from domestic
corporations. In order to qualify for the dividends-received deduction, a
corporate shareholder must hold the fund shares paying the dividends upon which
the deduction is based for at least 46 days.
If a shareholder exchanges or otherwise disposes of shares of the fund within
90 days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund, the sales charge previously
incurred acquiring the fund's shares shall not be taken into account (to the
extent such previous sales charges do not exceed the reduction in sales
charges) for the purpose of determining the amount of gain or loss on the
exchange, but will be treated as having been incurred in the acquisition of
such other shares. Also, any loss realized on a redemption or exchange of
shares of a fund will be disallowed to the extent shares are reacquired within
the 61-day period beginning 30 days before and ending 30 days after the shares
are disposed of.
Under the Code, distributions of net investment income by the fund to a
shareholder who, as to the U.S., is a nonresident alien individual, nonresident
alien fiduciary of a trust or estate, foreign corporation or foreign
partnership (a foreign shareholder) will be subject to U.S. withholding tax (at
a rate of 30% or lower treaty rate). Withholding will not apply if a dividend
paid by the fund to a foreign shareholder is "effectively connected" with a
U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens or domestic corporations will apply.
Distributions of net long-term capital gains not effectively connected with a
U.S. trade or business are not subject to tax withholding, but in the case of a
foreign shareholder who is a nonresident alien individual, such distributions
ordinarily will be subject to U.S. income tax at a rate of 30% if the
individual is physically present in the U.S. for more than 182 days during the
taxable year.
Income and dividends received by the fund from sources within foreign
countries may be subject to withholding and other taxes imposed by such
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes. Because not more than 50% of the value of the
total assets of the fund is expected to consist of securities of foreign
issuers, the fund will not be eligible to elect to "pass through" foreign tax
credits to shareholders.
As of the date of this statement of additional information, the maximum
federal individual stated tax rate applicable to ordinary income is 39.6%
(effective tax rates may be higher for some individuals due to phase out of
exemptions and elimination of deductions); the maximum individual tax rate
applicable to net capital gains is 28%; and the maximum corporate tax
applicable to ordinary income and net capital gains is 35% (except that
corporations which have taxable income in excess of $100,000 for a taxable year
will be required to pay an additional amount of tax of up to $11,750 and
corporations which have taxable income in excess of $15,000,000 for a taxable
year will be required to pay an additional amount of tax of up to $100,000).
Naturally, the amount of tax payable by a shareholder with respect to either
distributions from the fund or disposition of fund shares will be affected by a
combination of tax law rules covering, E.G., deductions, credits, deferrals,
exemptions, sources of income and other matters. Under the Code, an individual
is entitled to establish an IRA each year (prior to the tax return filing
deadline for the year) whereby earnings on investments are tax-deferred. In
addition, in some cases, the IRA contribution itself may be deductible.
The foregoing is limited to a summary of federal taxation and should not be
viewed as a comprehensive discussion of all provisions of the Code relevant to
investors. Dividends and capital gain -distributions may also be subject to
state or local taxes. Shareholders should consult their own tax advisers for
additional details as to their particular tax status.
PURCHASE OF SHARES
PRICE OF SHARES - Purchases of shares are made at the offering price next
determined after the purchase order is received by the fund or American Funds
Service Company; this offering price is effective for orders received prior to
the time of determination of the net asset value and, in the case of orders
placed with dealers, accepted by the Principal Underwriter prior to its close
of business. The dealer is responsible for promptly transmitting purchase
orders to the Principal Underwriter. Orders received by the investment dealer,
the Transfer Agent, or the fund after the time of the determination of the net
asset value will be entered at the next calculated offering price. Prices
which appear in the newspaper are not always indicative of prices at which you
will be purchasing and redeeming shares of the fund, since such prices
generally reflect the previous day's closing price whereas purchases and
redemptions are made at the next calculated price.
The price you pay for shares, the offering price, is based on the net asset
value per share which is calculated once daily at the close of trading
(currently 4:00 p.m., New York time) each day the New York Stock Exchange is
open. The New York Stock Exchange is currently closed on weekends and on the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The net
asset value per share is determined as follows:
1. Equity-type securities are stated at market value based upon closing
sales prices reported on recognized securities exchanges (or reported on the
NASDAQ national market) on the day of valuation or, for listed securities
having no sales reported, upon last-reported bid prices on that date.
Securities traded in the over-the-counter market are valued at the last
available sale price prior to the time of valuation or, lacking any sales, at
the last reported bid price.
Bonds and notes are valued at prices obtained from a bond-pricing service
provided by a major dealer in bonds, 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 of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality, and type.
Short-term securities with original or remaining maturities in excess of 60
days are valued at the mean of their quoted bid and asked prices. Short-term
securities with 60 days or less to maturity are valued at amortized cost, which
approximates market value. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Board of Directors.
2. There are deducted from the total assets, thus determined, the
liabilities, including proper accruals of taxes and other expense items; and
3. The value of the net assets so obtained is then divided by the total
number of shares outstanding, and the result, rounded to the nearer cent, is
the net asset value per share.
Any purchase order may be rejected by the Principal Underwriter or the fund.
The Principal Underwriter will not knowingly sell fund shares directly,
indirectly, or through a unit investment trust to any other investment company,
or to any person or entity, where, after the sale, such investment company,
person, or entity would own beneficially, directly, indirectly, or through a
unit investment trust, more than 4.5% of the outstanding shares of the fund
without the consent of a majority of the fund's directors.
STATEMENT OF INTENTION - The reduced sales charges and offering prices set
forth in the Prospectus apply to purchases of $50,000 or more made within a
13-month period pursuant to the terms of a written statement of intention (the
Statement) in the form provided by the Principal Underwriter and signed by the
purchaser. The Statement is not a binding obligation to purchase the indicated
amount. When a shareholder signs a Statement in order to qualify for a reduced
sales charge, shares equal to 5% of the dollar amount specified in the
Statement will be held in escrow in the shareholder's account out of the
initial purchase (or subsequent purchases, if necessary) by the Transfer Agent.
All dividends and any capital gain distributions on shares held in escrow will
be credited to the shareholder's account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified
13-month period, the purchaser will remit to the Principal Underwriter the
difference between the sales charge actually paid and the sales charge which
would have been paid if the total of such purchases had been made at a single
time. If the difference is not paid within 20 days after written request by
the Principal Underwriter or the securities dealer, the appropriate number of
shares held in escrow will be redeemed to pay such difference. If the proceeds
from this redemption are inadequate, the purchaser will be liable to the
Principal Underwriter for the balance still outstanding. The Statement may be
revised upward at any time during the 13-month period, and such a revision will
be treated as a new Statement, except that the 13-month period during which the
purchase must be made will remain unchanged and there will be no retroactive
reduction of the sales charges paid on prior purchases.
In the case of purchase orders by the trustees of certain retirement plans by
payroll deduction, the sales charge for the investments made during the
13-month period will be handled as follows: The investment made the first
month of the 13-month period will be multiplied by 13 and then multiplied by
1.5. On the first investment and all other investments made pursuant to the
Statement, a sales charge will be assessed according to the sales charge
breakpoint thus determined. There will be no retroactive adjustments in sales
charges on investments previously made during the 13-month period.
DEALER COMMISSIONS - The following commissions will be paid to dealers who
initiate and are responsible for purchases of $1 million or more and for
purchases made at net asset value by certain retirement plans of organizations
with collective retirement plan assets of $100 million or more: 1.00% on
amounts of $1 million to $2 million, 0.80% on amounts over $2 million to $3
million, 0.50% on amounts over $3 million to $50 million, 0.25% on amounts over
$50 million to $100 million, and 0.15% on amounts over $100 million. The level
of dealer commissions will be determined based on sales made over a 12-month
period commencing from the date of the first sale at net asset value. See "The
American Funds Shareholder Guide" in the fund's prospectus for more
information.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - The automatic investment plan enables shareholders
to make regular monthly or quarterly investments in shares through automatic
charges to their bank accounts. With shareholder authorization and bank
approval, the Transfer Agent will automatically charge the bank account for the
amount specified ($50 minimum), which will be automatically invested in shares
at the offering price on or about the 10th day of the month (or on or about the
15th day of the month in the case of accounts for retirement plans where
Capital Guardian Trust Company serves as custodian or trustee). Bank accounts
will be charged on the day or a few days before investments are credited,
depending on the bank's capabilities, and shareholders will receive a
confirmation statement showing the current transaction. Participation in the
plan will begin within 30 days after receipt of the account application. If
the shareholder's bank account cannot be charged due to insufficient funds, a
stop-payment order or the closing of the account, the plan may be terminated
and the related investment reversed. The shareholder may change the amount of
the investment or discontinue the plan at any time by writing to the Transfer
Agent.
AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - A shareholder in one fund
may elect to cross-reinvest dividends or dividends and capital gain
distributions paid by that fund (the paying fund) into any other fund in The
American Funds Group (the receiving fund) subject to the following conditions:
(i) the aggregate value of the shareholder's account(s) in the paying fund(s)
must equal or exceed $5,000 (this condition is waived if the value of the
account in the receiving fund equals or exceeds that fund's minimum initial
investment requirement), (ii) as long as the value of the account in the
receiving fund is below that fund's minimum initial investment requirement,
dividends and capital gain distributions paid by the receiving fund must be
automatically reinvested in the receiving fund, and (iii) if this privilege is
discontinued with respect to a particular receiving fund, the value of the
account in that fund must equal or exceed the fund's minimum initial investment
requirement or the fund shall have the right, if the shareholder fails to
increase the value of the account to such minimum within 90 days after being
notified of the deficiency, automatically to redeem the account and send the
proceeds to the shareholder. These cross-reinvestments of dividends and
capital gain distributions will be at net asset value (without sales charge).
EXECUTION OF PORTFOLIO TRANSACTIONS
There are occasions on which portfolio transactions for the fund may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the fund, they are effected only when the
Investment Adviser believes that to do so is in the interest of the fund. When
such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner. The fund will not pay a mark-up for
research in principal transactions.
The fund is required to disclose information regarding investments in the
securities of broker-dealers which have certain relationships with the fund.
During the last fiscal year, Ford Motor Credit Co., General Electric Capital
Corp., Merrill Lynch, Pierce, Fenner & Smith Inc., and J.P. Morgan Securities
Inc. were among the top 10 dealers that acted as principals in portfolio
transactions; and Lehman Brothers Inc., an affiliate of American Express Co.
was among the top 10 dealers receiving commissions due to portfolio
transactions. The fund held equity securities of American Express Co. and Ford
Motor Co. in the amounts of $28,875,000 and $96,650,000, respectively, and debt
securities of Ford Capital, Ford Motor Credit Co., General Electric Capital
Corp., GE Capital Mortgage Services, Inc., Merrill Lynch Mortgage Investors,
Inc., and J. P. Morgan & Co. Inc. in the amounts of $6,242,000, $2,565,000,
$4,622,000, $3,691,000, $2,544,000, and $48,263,000, respectively, as of the
close of its most recent fiscal year.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, during the fiscal years ended July 31, 1995, 1994
and 1993, amounted to $11,980,000, $22,437,000, and $20,665,000,
respectively.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including
proceeds from the sale of shares of the fund and of securities in the fund's
portfolio, are held by The Chase Manhattan Bank N.A., One Chase Manhattan
Plaza, New York, NY 10081, as Custodian.
TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the record of each shareholder's account,
processes purchases and redemptions of the fund's shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. When fund shares are purchased by an insurance
company separate account to serve as the underlying investment vehicle for
variable insurance contracts, the fund may pay a fee to the insurance company
or another party for performing certain transfer agent services with respect to
contract owners having interests in the fund.
INDEPENDENT ACCOUNTANTS - Deloitte & Touche LLP located at 1000 Wilshire
Boulevard, Los Angeles, CA 90017, serves as the fund's independent accountants
providing audit services, preparation of tax returns and review of certain
documents of the fund to be filed with the Securities and Exchange Commission.
The financial statements included in this statement of additional information
from the Annual Report have been so included in reliance on the report of
Deloitte & Touche LLP given on the authority of said firm as experts in
accounting and auditing.
REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on July 31. Shareholders
are provided at least semi-annually with reports showing the investment
portfolio, financial statements and other information. The annual financial
statements are audited annually by the fund's independent accountants, Deloitte
& Touche LLP, whose selection is determined annually by the Board of Directors.
PERSONAL INVESTING POLICY - Capital Research and Management Company and its
affiliated companies have adopted a personal investing policy consistent with
Investment Company Institute guidelines. This policy includes: a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; pre-clearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the fund; blackout periods on personal investing for certain investment
personnel; ban on short-term trading profits for investment personnel;
limitations on service as a director of publicly traded companies; and
disclosure of personal securities transactions.
The financial statements including the investment portfolio and the report of
Independent Auditors contained in the Annual Report are included in this
statement of additional information. The following information is not included
in the Annual Report:
<TABLE>
<CAPTION>
DETERMINATION OF NET ASSET VALUE,
REDEMPTION PRICE AND
MAXIMUM OFFERING PRICE PER SHARE--JULY 31, 1995
<S> <C>
Net asset value and redemption price per share
(Net assets divided by shares outstanding) $14.
92
Maximum offering price per share
(100/94.25 of net asset value per share
which takes into account the fund's current
maximum sales charge) $15.
83
</TABLE>
REMOVAL OF DIRECTORS BY SHAREHOLDERS - At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any director or directors from office and may elect a successor
or successors to fill any resulting vacancies for the unexpired terms of
removed directors. The fund has made an undertaking, at the request of the
staff of the Securities and Exchange Commission, to apply the provisions of
section 16(c) of the 1940 Act with respect to the removal of directors as
though the fund were a common-law trust. Accordingly, the directors of the
fund shall promptly call a meeting of shareholders for the purpose of voting
upon the question of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the outstanding shares.
INVESTMENT RESULTS
The fund's yield is 5.26% based on a 30-day (or one month) period ended July
31, 1995, computed by dividing the net investment income per share earned
during the period by the maximum offering price per share on the last day of
the period, according to the following formula:
YIELD = 2[(a-b/cd+1)/6/-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
The fund's average annual total return for the one, five and ten-year
periods ended on July 31, 1995 was +9.72%, +10.85% and +11.51%, respectively.
The average annual total return (T) is computed by equating the value at the
end of the period (ERV) with a hypothetical initial investment of $1,000 (P)
over a period of years (n) according to the following formula as required by
the Securities and Exchange Commission: P(1+T)/n/ = ERV.
The fund may also, at times, calculate total return based on net asset value
per share (rather than the offering price), in which case the figure would not
reflect the effect of any sales charges which would have been paid if shares
were purchased during the period reflected in the computation. Consequently,
total return calculated in this manner will be higher. These total returns may
be calculated over periods in addition to those described above. Total return
for the unmanaged indices will be calculated assuming reinvestment of dividends
and interest, but will not reflect any deductions for advisory fees, brokerage
costs or administrative expenses.
The following assumptions will be reflected in computations made in accordance
with the formula stated above: (1) deduction of the maximum sales load of
5.75% from the $1,000 initial investment; (2) reinvestment of dividends and
distributions at net asset value on the reinvestment date determined by the
Board; and (3) a complete redemption at the end of any period illustrated.
The fund may include information on its investment results and/or comparisons
of its investment results to various unmanaged indices (such as The Dow Jones
Average of 30 Industrial Stocks, The Standard and Poor's 500 Stock Composite
Index, the Lehman Brothers Corporate Bond Index, the Lehman Brothers Aggregate
Bond Index and the Salomon Brothers High-Grade Corporate Bond Index) or results
of other mutual funds or investment or savings vehicles in advertisements or in
reports furnished to present or prospective shareholders.
The fund may refer to results compiled by organizations such as CDA Investment
Technologies, Ibbotson Associates, Lipper Analytical Services, Morningstar,
Inc., and Wiesenberger Investment Companies Services and by the U.S. Department
of Commerce. Additionally, the fund may, from time to time, refer to results
published in various newspapers and periodicals, including Barrons, Forbes,
Fortune, Institutional Investor, Kiplinger's Personal Finance Magazine, Money,
U.S. News and World Report and The Wall Street Journal.
The fund may, from time to time, illustrate the benefits of tax-deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans.
The fund may, from time to time, compare its investment results with the
Consumer Price Index, which is a measure of the average change in prices over
time in a fixed market basket of goods and services (E.G. food, clothing,
fuels, transportation, and other goods and services that people buy for
day-to-day living).
The investment results for the fund set forth below were calculated as
described in the fund's prospectus. Data contained in Salomon's Market
Performance and Lehman Brothers' The Bond Market Report are used to calculate
cumulative total return from their base period (12/31/68 and 12/31/72,
respectively) for each index. The percentage increases shown in the table
below or used in published reports of the fund are obtained by subtracting the
index results at the beginning of the period from the index results at the end
of the period and dividing the difference by the index results at the beginning
of the period.
<TABLE>
<CAPTION>
IFA vs. Various Unmanaged Indices
<C> <C> <C> <C> <C> <C>
10-Year Lehman Lehman Average
Period Brothers Brothers Salomon Savings
8/1 - 7/31 IFA DJIA/1/ S&P 500/2/ Corporate/3/ Aggregate/4/ High-Grade/5/ Account/6/
1985 - 1995 +197% +391% +306% +179% +160% +206% + 73%
1984 - 1994 +241 +385 +327 +217 +193 +254 + 83
1983 - 1993 +254 +333 +294 +241 +218 +281 + 94
1982 - 1992 +351 +528 +478 +295 +251 +330 +105
1981 - 1991 +298 +392 +343 +304 +269 +329 +117
1980 - 1990 +293 +392 +344 +235 +217 +239 +124
1979 - 1989 +317 +409 +416 +202 +201 +202 +125
1978 - 1988 +267 +308 +326 +180 +178 +166 +125
1977 - 1987 +283 +388 +417 +159 +164 +146 +125
1976 - 1989 +265 +209 +271 +184 +181 +177 +124
1975 - 1985 +295 +177 +250 +161 N/A +134 +121
1974 - 1984 +270 +153 +210 +136 N/A +112 +116
1973#- 1983 +237 +147 +172 +95 N/A +76 +106
</TABLE>
________________
# From December 1, 1973
/1/ The Dow Jones Average of 30 Industrial Stocks is comprised of 30 industrial
companies such as General Motors and General Electric.
/2/ The Standard and Poor's 500 Stock Composite Index is comprised of
industrial, transportation, public utilities, and financial stocks and
represents a large portion of the value of issues traded on the New York Stock
Exchange. Selected issues traded on the American Stock Exchange are also
included.
/3/ The Lehman Brothers Corporate Bond Index is comprised of all public, fixed
rate, non-convertible investment grade domestic corporate debt. Issues
included in this index are rated at least Baa by Moody's Investors Service, BBB
by Standard and Poor's Corporation or, in the case of bank bonds not rated by
either of the previously mentioned services, BBB by Fitch Investors Service.
/4/ The Lehman Brothers Aggregate Bond Index covers all sectors of the fixed
income market and is a combination of the Lehman Brothers Treasury Bond Index,
the Agency Bond Index, the Corporate Bond Index, the Yankee Bond Index and the
Mortgage Backed Securities Index. Its inception date is December 31, 1975.
/5/ The Salomon Brothers High-Grade Corporate Bond Index is comprised of a
sample of high-grade corporate bonds which have a rating of AAA or AA by
Standard and Poor's Corporation.
/6/ Based on figures supplied by the U.S. League of Savings Institutions and
the Federal Reserve Board which reflect all kinds of savings deposits,
including longer-term certificates. Savings accounts offer a guaranteed return
of principal, but no opportunity for capital growth. During a portion of the
period, the maximum rates paid on some savings deposits were fixed by law.
<TABLE>
<CAPTION>
If you are considering IFA for an
Individual Retirement Account. . .
Here's how much you would have if you had invested $2,000 a year on August 1
of each year in IFA over the past 5 and 10 years:
<S> <C>
5 years 10 years
(8/1/90-7/31/95) (8/1/85-7/31/95)
$13,343 $36,066
</TABLE>
<PAGE>
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
<TABLE>
<CAPTION>
. . . and had taken
all dividends and
capital gain
distributions
in shares, your
If you had investment would
invested $10,000 have been worth
in IFA this many this much at
years ago . . . 7/31/95
<S> <C> <C> <C>
| |
Number Periods
of Years 8/1 - 7/31 Value
--------- ----------- --------
1 1994 - 1995 $10,972
2 1993 - 1995 11,192
3 1992 - 1995 12,517
4 1991 - 1995 14,909
5 1990 - 1995 16,736
6 1989 - 1995 16,928
7 1988 - 1995 20,903
8 1987 - 1995 21,251
9 1986 - 1995 24,800
10 1985 - 1995 29,735
11 1984 - 1995 39,663
12 1983 - 1995 42,076
13 1982 - 1995 59,887
14 1981 - 1995 63,043
15 1980 - 1995 70,283
16 1979 - 1995 74,874
17 1978 - 1995 81,457
18 1977 - 1995 86,479
19 1976 - 1995 96,086
20 1975 - 1995 124,450
21 1974 - 1995 155,892
22 1973#- 1995 150,385
</TABLE>
# From December 1, 1973
<PAGE>
Illustration of a $10,000 investment in IFA with
dividends reinvested and capital gain distributions taken in shares
(for the period December 1, 1973 through July 31, 1995)
<TABLE>
<CAPTION>
COST OF SHARES VALUE OF SHARES
<S> <C> <C> <C> <C> <C> <C> <C>
Year Annual Dividends Total From Initial From From Total
Ended Dividends (cumulative) Investment Investment Capital Dividends Value
July 31 Cost Gains Reinvested
Reinvested
1974# $ 347 $ 347 $10,347 $ 8,767 - $ 321 $ 9,088
1975 785 1,132 11,132 10,141 - 1,250 11,391
1976 998 2,130 12,130 12,155 - 2,596 14,751
1977 969 3,099 13,099 12,701 - 3,691 16,392
1978 1,117 4,216 14,216 12,584 - 4,820 17,404
1979 1,333 5,549 15,549 12,693 - 6,228 18,921
1980 1,463 7,012 17,012 12,490 - 7,672 20,162
1981 1,743 8,755 18,755 12,818 - 9,667 22,485
1982 2,187 10,942 20,942 12,256 - 11,408 23,664
1983 2,549 13,491 23,491 16,112 - 17,573 33,685
1984 2,896 16,387 26,387 15,254 $1,013 19,455 35,722
1985 3,365 19,752 29,752 18,236 2,637 26,804 47,677
1986 3,909 23,661 33,661 18,907 6,434 31,807 57,148
1987 4,431 28,092 38,092 19,578 9,644 37,452 66,674
1988 4,479 32,571 42,571 17,955 10,904 38,957 67,816
1989 5,338 37,909 47,909 20,609 12,515 50,578 83,702
1990 5,269 43,178 53,178 18,907 13,755 51,497 84,159
1991 6,311 49,489 59,489 19,578 14,787 60,070 94,435
1992 6,578 56,067 66,067 21,764 17,093 73,764 112,621
1993 6,995 63,062 73,062 22,592 19,653 83,771 126,016
1994 7,471 70,533 80,533 21,218 21,364 85,868 128,450
1995 8,046 78,579 88,579 23,294 24,107 102,984 150,385
</TABLE>
# From December 1, 1973
The dollar amount of capital gain distributions during the period was $19,346.
<PAGE>
EXPERIENCE OF INVESTMENT ADVISER - Capital Research and Management Company
manages nine common stock funds that are at least 10 years old. In the rolling
10-year periods since 1964 (115 in all), those funds have had better total
returns than the Standard and Poor's 500 Composite Stock Index in 94 of the 115
periods.
Note that past results are not an indication of future investment results.
Also, the fund has different investment policies than the funds mentioned
above. These results are included solely for the purpose of informing
investors about the experience and history of Capital Research and Management
Company.
DESCRIPTION OF BOND RATINGS
Corporate Debt Securities
MOODY'S INVESTORS SERVICE, INC. rates the long-term debt securities issued by
various entities from "Aaa" to "C" according to quality.
"AAA -- Best quality. These securities carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are
protected by a large, or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues."
"AA -- High quality by all standards. They are rated lower than the best bond
because margins of protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude, or there may be
other elements present which make the long-term risks appear somewhat greater."
"A -- Upper medium grade obligations. These bonds possess many favorable
investment attributes. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future."
"BAA -- Medium grade obligations. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and, in fact, have
speculative characteristics as well."
"BA -- Have speculative elements; future cannot be considered as well assured.
The protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Bonds in this class are characterized by uncertainty of position."
"B -- Generally lack characteristics of the desirable investment; assurance of
interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small."
"CAA -- Of poor standing. Issues may be in default or there may be present
elements of danger with respect to principal or interest."
"CA -- Speculative in a high degree; often in default or have other marked
shortcomings."
"C -- Lowest rated class of bonds; can be regarded as having extremely poor
prospects of ever attaining any real investment standing."
STANDARD & POOR'S CORPORATION rates the long-term securities debt of various
entities in categories ranging from "AAA" to "D" according to quality.
"AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong."
"AA -- High grade. Very strong capacity to pay interest and repay principal.
Generally, these bonds differ from AAA issues only in a small degree."
"A -- Have a strong capacity to pay interest and repay principal, although they
are somewhat more susceptible to the adverse effects of change in circumstances
and economic conditions, than debt in higher rated categories."
"BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal than for debt in
higher rated categories."
"BB, B, CCC, CC, C -- Regarded, on balance, as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with the
terms of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions."
"C1 -- Reserved for income bonds on which no interest is being paid."
"D -- In default and payment of interest and/or repayment of principal is in
arrears."
<PAGE>
THE INCOME FUND OF AMERICA
INVESTMENT PORTFOLIO July 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Equity-Type Securities 53.81%
Corporate Bonds 23.34%
Government Bonds 17.15%
Cash & Equivalents 5.70%
</TABLE>
**********
<TABLE>
<CAPTION>
- ---------------------------- -------------
Percent of
Ten Largest Stock Holdings Net Assets
- ---------------------------- -------------
<S> <C>
Eli Lilly 1.91%
Bristol-Myers Squibb 1.59
Philip Morris 1.46
American Home Products 1.30
Upjohn 1.17
Occidental Petroleum .87
Lincoln National .85
Ford Motor .78
Phillips Petroleum .78
U S WEST .77
</TABLE>
**********
<TABLE>
<CAPTION>
- ---------------------------------- --- --- ---
Shares or Market Percent
Principal Value of Net
Equity-Type Securities Amount (000) Assets
- ---------------------------------- --- --- ---
Banking - 7.65%
<S> <C> <C> <C>
AmSouth Bancorporation 750,000 $26,344 .21%
Banc One Corp. 1,500,000 47,625 .39
BANCORP HAWAII, INC. 800,000 24,500 .20
Bank of New York Co., Inc. 1,300,000 52,163
Bank of New York Co., Inc. 7.50% convertible debentures
2001 $13,000,000 26,665 .64
Bankers Trust New York Corp. 1,000,000 64,500 .52
CalFed Inc., Class A (1) 328,535 4,558 .04
Central Fidelity Banks, Inc. 281,250 8,930 .07
CHEMICAL BANKING CORP. 1,600,000 82,600 .67
Citicorp $5.375 convertible preferred, Series 13 160,000 27,200 .22
Comerica Inc. 1,080,000 37,800 .31
CoreStates Financial Corp. 1,700,000 62,050 .50
First Chicago Corp. 575,000 34,931 .28
FIRST FIDELITY BANCORPORATION 558,900 35,211 .29
First Interstate Bancorp 250,000 21,531 .18
First Nationwide Bank, FSB preferred 100,000 10,900 .09
FIRST SECURITY CORP. 1,125,000 31,219 .25
FIRST TENNESSEE NATIONAL CORP. 900,000 44,325 .36
First Union Corp. 1,700,000 83,087 .68
Fleet Financial Group, Inc. 1,225,000 43,641 .36
Glendale Federal Bank, FSB (1) 234,367 3,223
Glendale Federal Bank, FSB warrants, expire 1999 (1) 6,175 8 .03
Mellon Bank Corp. 375,000 15,047 .12
J.P. Morgan & Co. Inc. 660,000 48,263 .39
NATIONAL CITY CORP. 950,000 29,094 .24
PNC Bank Corp. 2,460,000 60,577 .49
Royal Bank of Canada 380,000 8,128 .07
Washington Mutual Savings Bank $6.00 convertible
preferred, Series D 60,000 6,075 .05
-------- -----
940,195 7.65
-------- -----
Health & Personal Care - 7.63%
American Home Products Corp. 2,030,000 160,370 1.30
Baxter International Inc. 1,300,000 48,425 .39
Bristol-Myers Squibb Co. 2,815,000 194,939 1.59
Glycomed Inc. 7.50% convertible debentures 2003 $5,000,000 3,550 .03
Eli Lilly and Co. 3,000,000 234,750 1.91
Merck & Co., Inc. 800,000 41,300 .34
Tambrands Inc. 960,000 45,240 .37
Upjohn Co. 3,750,000 144,375 1.17
Warner-Lambert Co. 775,000 65,100 .53
-------- -----
938,049 7.63
-------- -----
Energy Sources - 6.14%
Amoco Corp. 850,000 57,162 .46
Atlantic Richfield Co. 700,000 80,675 .66
California Energy Co., Inc. 5.00% convertible debentures
2000 (2) $10,000,000 9,900 .08
Chevron Corp. 1,135,000 56,041 .46
Chieftain International Funding Corp. $1.8125
convertible preferred 152,500 3,603 .03
Cyprus Amax Minerals Co. $4.00 convertible preferred,
Series A 465,000 28,772 .23
Howell Corp. $3.50 convertible preferred, Series A 60,000 3,060 .02
Mobil Corp. 550,000 53,763 .44
Occidental Petroleum Corp. 4,000,000 90,000
Occidental Petroleum Corp. $3.875 convertible
preferred (2) 300,000 16,950 .87
Oryx Energy Co. 7.50% convertible debentures 2014 $9,500,000 8,170 .07
Phillips Petroleum Co. 2,700,000 95,512 .78
Santa Fe Energy Resources, Inc. $0.732 DECS
convertible preferred, Series A 500,000 4,813 .04
Sun Co., Inc. 1,632,000 47,940 .39
Texaco Inc. 1,275,000 84,787 .69
Unocal Corp. $3.50 convertible preferred (2) 750,000 39,937 .32
USX-Marathon Group 3,100,000 62,388 .51
Valero Energy Corp. $3.125 convertible preferred 228,100 11,262 .09
-------- -----
754,735 6.14
-------- -----
Insurance - 4.03%
Aetna Life and Casualty Co. 600,000 37,125 .30
Alexander & Alexander Services Inc. $3.625 convertible
preferred, Series A (2) 220,000 10,780 .09
ALLSTATE CORP. 416,141 13,004 .11
American General Corp. 1,550,000 56,381 .46
CIGNA Corp. 975,000 78,609 .64
Lincoln National Corp. 2,540,000 104,457 .85
Ohio Casualty Corp. 1,795,000 57,889 .47
SAFECO CORP. 750,000 43,875 .36
St. Paul Companies, Inc. 1,280,000 62,400 .51
Trenwick Group Inc. 6.00% convertible debentures 1999 $3,000,000 3,135 .02
USF&G Corp. 1,351,071 22,293
USF&G Corp. 0% convertible debentures 2009 $10,000,000 5,500 .22
-------- -----
495,448 4.03
-------- -----
Telecommunications - 3.42%
Ameritech Corp. 1,300,000 62,887 .51
Bell Atlantic Corp. 1,550,000 88,738 .72
BellSouth Corp. 250,000 16,937 .14
Dial Page, Inc. warrants (1) 51,912 0 .00
GTE Corp. 708,000 25,134 .20
NYNEX Corp. 1,000,000 41,250 .34
Pacific Telesis Group 2,635,000 74,439 .61
Sprint Corp. 465,000 15,926 .13
U S WEST, Inc. 1,830,000 78,461
U S WEST, Inc. 0% convertible debentures 2011 $50,000,000 16,188 .77
-------- -----
419,960 3.42
-------- -----
Utilities: Electric & Gas - 3.29%
Consolidated Edison Co. of New York, Inc. 400,000 11,600 .10
Detroit Edison Co. 1,600,000 47,200 .38
Eastern Utilities Associates 640,000 13,920 .11
Entergy Corp. 3,675,000 87,281 .71
General Public Utilities Corp. 1,157,200 33,414 .27
Houston Industries Inc. 1,200,000 52,500 .43
Long Island Lighting Co. 2,450,000 39,200 .32
NorAm Energy Corp. 1,652,300 11,360 .09
Pacific Gas and Electric Co. 2,355,200 69,478 .57
PECO Energy Co. 276,000 7,901 .07
Puget Sound Power & Light Co. 700,000 15,050 .12
Texas Utilities Co. 333,037 11,282 .09
Unicom Corp. 150,000 4,162 .03
-------- -----
404,348 3.29
-------- -----
Beverages & Tobacco - 2.42%
American Brands, Inc. 1,600,000 63,800 .52
Philip Morris Companies Inc. 2,500,000 179,062 1.46
RJR Nabisco Holdings Corp. 1,000,000 27,625 .22
UST Inc. 1,000,000 27,250 .22
-------- -----
297,737 2.42
-------- -----
Transportation: Airlines - 1.45%
Air Wis Services, Inc. 7.75% convertible
debentures 2010 $4,000,000 3,120 .03
Alaska Air Group, Inc. 0% convertible debentures 2006 $28,000,000 12,950 .11
AMR Corp. 6.125% convertible QUICS 2024 $70,000,000 72,800 .59
Delta Air Lines, Inc. $3.50 convertible preferred, Class
C 915,000 56,616
Delta Air Lines, Inc. 3.23% convertible debentures 2003 $20,000,000 20,050 .62
UAL Corp. preferred, Series B 400,000 12,350 .10
-------- -----
177,886 1.45
-------- -----
Chemicals - 1.36%
Dow Chemical Co. 500,000 37,063 .30
E.I. du Pont de Nemours and Co. 600,000 40,200 .33
Eastman Chemical Co. 495,000 31,680 .26
BFGoodrich Co. 465,000 25,226 .20
MONSANTO CO. 300,000 27,937 .23
RPM, Inc. 0% convertible debentures 2012 $12,500,000 5,219 .04
-------- -----
167,325 1.36
-------- -----
Forest Products & Paper - 1.25%
Federal Paper Board Co., Inc. 1,050,000 39,244 .32
James River Corp. of Virginia 550,000 18,356
James River Corp. of Virginia $1.55 DECS convertible
preferred 675,000 19,744 .31
Riverwood International Corp. 6.75% convertible
debentures 2003 (2) $4,000,000 5,560 .05
Union Camp Corp. 550,000 30,938 .25
WEYERHAEUSER CO. 851,900 39,826 .32
-------- -----
153,668 1.25
-------- -----
Real Estate - 1.20%
Kimco Realty Corp. 125,700 5,012 .04
Meditrust 1,050,000 35,438
Meditrust 7.50% convertible debentures 2001 $5,000,000 5,000 .33
SECURITY CAPITAL PACIFIC TRUST (FORMERLY PROPERTY
TRUST OF AMERICA) 730,000 13,231
SECURITY CAPITAL PACIFIC TRUST $1.75
CONVERTIBLE PREFERRED, SERIES A 600,000 13,500 .22
Security Capital Realty, Inc. (1)(2) 18,680 17,830
Security Capital Realty, Inc. 12.00% convertible
debentures 2014 (2) $14,150,100 12,912 .24
Weingarten Realty Investors 1,025,847 36,546 .30
Western Investment Real Estate Trust 714,900 8,400 .07
-------- -----
147,869 1.20
-------- -----
Automobiles - 1.04%
FORD MOTOR CO. 1,700,000 49,087
Ford Motor Co. $4.20 cumulative convertible preferred,
Series A 500,000 47,563 .78
General Motors Corp. 650,000 31,687 .26
-------- -----
128,337 1.04
-------- -----
Business & Public Services - 1.02%
Air & Water Technologies Corp. 8.00% convertible
debentures 2015 $9,900,000 8,167 .07
Ceridian Corp. $2.75 cumulative convertible
exchangeable preferred 170,500 15,729 .13
Deluxe Corp. 850,000 27,306 .22
Dun & Bradstreet Corp. 1,200,000 67,500 .55
Sanifill, Inc. 7.50% convertible debentures 2006 $6,000,000 6,900 .05
-------- -----
125,602 1.02
-------- -----
Financial Services - 0.79%
American Express Co. 750,000 28,875 .23
Beneficial Corp. 1,000,000 47,375 .39
First USA 6.25% PRIDES convertible preferred 500,000 20,438 .17
-------- -----
96,688 .79
-------- -----
Recreation & Other Consumer Products - 0.76%
Coleman Co., Inc. 0% convertible debentures 2013 $8,000,000 2,400 .02
Eastman Kodak Co. 600,000 34,575 .28
Hasbro, Inc. 6.00% convertible debentures 1998 $7,950,000 8,735 .07
Jostens, Inc. 2,074,000 47,183 .39
-------- -----
92,893 .76
-------- -----
Merchandising - 0.70%
Melville Corp. 900,000 32,400 .26
J.C. PENNEY CO., INC. 800,000 38,700 .32
SEARS, ROEBUCK AND CO. 448,895 14,645 .12
-------- -----
85,745 .70
-------- -----
Multi-Industry - 0.69%
Harsco Corp. 325,000 18,078 .15
Tenneco Inc. 1,356,266 67,135 .54
-------- -----
85,213 .69
-------- -----
Metals: Steel - 0.68%
Bethlehem Steel Corp. $3.50 convertible preferred (2) 250,000 11,437 .09
Carpenter Technology Corp. 250,000 18,438 .15
USX Corp. $3.25 convertible preferred 350,000 16,800
USX Corp. 5.75% convertible debentures 2001 $21,000,000 19,110
USX Corp. 0% convertible debentures 2005 $40,000,000 18,400 .44
-------- -----
84,185 .68
-------- -----
Broadcasting & Publishing - 0.64%
Comcast Corp. 1.125% convertible debentures 2007 $54,000,000 27,000 .22
Time Warner Inc. 0% convertible debentures 2012 $67,000,000 22,445
TIME WARNER INC. 0% CONVERTIBLE DEBENTURES 2013 $25,000,000 10,187 .26
Turner Broadcasting System, Inc. 0% convertible
debentures 2007 (2) $45,000,000 19,350 .16
-------- -----
78,982 .64
-------- -----
Food & Household Products - 0.60%
Clorox Co. 250,000 16,406 .13
ConAgra, Inc. $1.6875 convertible preferred, Class E 100,000 3,812 .03
GENERAL MILLS, INC. 450,000 23,513 .19
H.J. Heinz Co. 700,000 30,362 .25
-------- -----
74,093 .60
-------- -----
Industrial Components - 0.52%
Dana Corp. 700,000 20,650 .17
GOODYEAR TIRE & RUBBER CO. 1,000,000 43,375 .35
-------- -----
64,025 .52
-------- -----
Machinery & Engineering - 0.42%
Deere & Co. 350,000 31,456 .26
Thermo Electron Corp. 5.00% convertible debentures
2001 (2) $13,800,000 20,010 .16
-------- -----
51,466 .42
-------- -----
Metals: Nonferrous - 0.42%
Alumax Inc. $4.00 convertible preferred, Series A 140,000 20,020 .16
FREEPORT-MCMORAN COPPER & GOLD INC., CLASS B 299,991 8,100 .07
Inco Ltd. 5.75% convertible debentures 2004 $15,000,000 19,350 .16
Kaiser Aluminum Corp. 8.255% PRIDES convertible
preferred 260,000 3,705 .03
-------- -----
51,175 .42
-------- -----
Miscellaneous Materials & Commodities - 0.30%
FREEPORT-MCMORAN INC. (1) 427,500 2,137 .02
Olin Corp. 600,000 34,725 .28
-------- -----
36,862 .30
-------- -----
Transportation: Rail & Road - 0.23%
BURLINGTON NORTHERN INC. $3.125 CONVERTIBLE
PREFERRED, SERIES A 258,500 19,129 .16
Yellow Corp. 607,500 9,188 .07
-------- -----
28,317 .23
-------- -----
Energy Equipment - 0.18%
COOPER INDUSTRIES, INC. 600,000 22,425 .18
-------- -----
Textiles & Apparel - 0.15%
Brown Group, Inc. 730,000 18,159 .15
-------- -----
Leisure & Tourism - 0.12%
Topps Co., Inc. 2,345,000 14,656 .12
-------- -----
Electronic Components - 0.10%
Maxtor Corp. 5.75% convertible debentures 2012 $7,500,000 4,500 .04
SEAGATE TECHNOLOGY 5.00% CONVERTIBLE DEBENTURES 2003 (2) $4,365,000 7,562 .06
-------- -----
12,062 .10
-------- -----
Data Processing & Reproduction - 0.08%
Data General Corp. 7.75% convertible debentures 2001 $10,500,000 9,293 .08
-------- -----
Gold Mines - 0.08%
Newmont Mining Corp. $2.75 convertible preferred (2) 150,000 9,113 .08
-------- -----
MISCELLANEOUS: Equity-type securities
in initial period of acquisition 547,225 4.45
-------- -----
TOTAL EQUITY-TYPE SECURITIES (cost: $5,484,689,000) 6,613,736 53.81
-------- -----
- ---------------------------------- ---
Principal
Bonds & Notes Amount
(000)
- ---------------------------------- ---
Broadcasting, Advertising & Publishing - 4.59%
Adelphia Communications Corp. 12.50% 2002 $ 4,000 4,120
Adelphia Communications Corp. 9.50% 2004 (3) 18,798 15,790
Adelphia Communications Corp. 9.875% 2005 17,000 15,555 .29
American Media Operations, Inc. 11.625% 2004 14,250 15,176 .12
Bell Cablemedia PLC 0%/11.95% 2004 (4) 47,000 31,255 .25
Cablevision Industries Corp. 10.75% 2004 18,000 19,350
Cablevision Industries Corp. 9.875% 2013 15,500 16,895
Cablevision Industries Corp. 9.875% 2023 10,000 10,800 .39
Century Communications Corp. 9.50% 2000 3,500 3,561
Century Communications Corp. 9.75% 2002 8,500 8,712
Century Communications Corp. 11.875% 2003 4,400 4,686 .14
Comcast Corp. 10.25% 2001 11,100 11,932
COMCAST CORP. 9.375% 2005 4,000 4,055 .13
Continental Cablevision, Inc. 8.50% 2001 18,200 18,473
Continental Cablevision, Inc. 10.625% 2002 5,500 5,857
Continental Cablevision, Inc. 8.625% 2003 4,000 4,090
Continental Cablevision, Inc. 8.875% 2005 7,000 7,210
Continental Cablevision, Inc. 11.00% 2007 2,000 2,215
Continental Cablevision, Inc. 9.50% 2013 15,000 15,675 .44
Falcon Holding Group, LP 11.00% 2003 (3) 18,208 16,387 .13
HEARTLAND WIRELESS COMMUNICATIONS, INC. 13.00% 2003 (2) 3,000 3,180 .03
Infinity Broadcasting Corp. 10.375% 2002 10,000 10,650 .09
Insight Communications Co., LP 8.25% 2000 (5) 10,750 10,857 .09
Jones Intercable, Inc. 10.50% 2008 15,000 16,125 .13
Marvel Holdings Inc. 0% 1998 62,750 44,866 .37
News America Holdings Inc. 12.00% 2001 7,100 7,984
News America Holdings Inc. 8.50% 2005 7,500 8,052
News America Holdings Inc. 10.125% 2012 20,000 22,882
News America Holdings Inc. 8.45% 2034 7,500 8,004 .38
PEOPLE'S CHOICE TV CORP. 0%/13.125% 2004 (4) 4,000 1,920 .02
Rogers Communications Inc. 10.875% 2004 3,500 3,627 .03
Storer Communications, Inc. 10.00% 2003 6,000 6,000 .05
Summitt Communications 10.50% 2005 6,655 7,320 .06
Time Warner Inc. 7.45% 1998 10,000 10,059
Time Warner Inc. 9.625% 2002 28,000 31,312
Time Warner Inc. 10.15% 2012 12,000 13,874
TIME WARNER INC. 9.125% 2013 15,000 15,538 .57
TKR Cable I, Inc. 10.50% 2007 30,000 33,743 .27
United International Holdings, Inc. 0% 1999 19,750 11,653 .09
Univision Television Group, Inc. 11.75% 2001 17,000 18,275 .15
Viacom International Inc. 9.125% 1999 4,000 4,160
Viacom International Inc. 10.25% 2001 8,000 8,920 .10
Videotron Holdings PLC 0%/11.125% 2004 (4) 37,500 24,562 .20
YOUNG BROADCASTING INC. 10.125% 2005 (2) 8,000 8,200 .07
-------- -----
563,557 4.59
-------- -----
Telecommunications - 3.74%
Cellular, Inc. 0%/11.75% 2003 (4) 18,000 13,320 .11
CenCall Communications Corp. 0%/10.125% 2004 (4) 41,100 21,989 .18
Centennial Cellular Corp. 8.875% 2001 28,000 26,600
CENTENNIAL CELLULAR CORP. 10.125% 2005 1,500 1,506 .23
Comcast Cellular Corp., Series A, 0% 2000 42,000 30,870
Comcast Cellular Corp., Series B, 0% 2000 40,800 29,988 .49
COMMNET CELLULAR INC. 11.25% 2005 3,000 3,105 .02
Dial Call Communications, Inc. 0%/12.25% 2004 (4) 48,500 25,462 .21
GEOTEK COMMUNICATIONS, INC. 0%/15.00% 2005 (2)(4) 10,000 4,925 .04
Horizon Cellular Telephone Co., LP, Series B,
0%/11.375% 2000 (4) 15,000 12,000 .10
International CableTel Inc. 0%/10.875% 2003 (4) 20,075 13,450
INTERNATIONAL CABLETEL INC. 0%/12.75% 2005 (2)(4) 22,000 13,090 .22
MFS Communications Co., Inc. 0%/9.375% 2004 (4) 69,050 49,716 .40
MobileMedia Communications, Inc. 0%/10.50% 2003 (4) 14,500 9,715 .08
NEXTEL Communications, Inc. 0%/11.50% 2003 (4) 48,500 29,343
NEXTEL Communications, Inc. 0%/9.75% 2004 (4) 68,500 35,962 .53
Paging Network, Inc. 11.75% 2002 9,500 10,355 .08
PanAmSat, LP 9.75% 2000 15,300 15,835 .13
PriCellular Wireless Corp. 0%/14.00% 2001 (2)(4) 10,000 8,200 .07
PRONET, INC. 11.875% 2005 (2) 3,000 3,120 .03
Rogers Cantel Mobile Communications Inc. 10.75% 2001 46,000 47,955 .39
TCI COMMUNICATIONS, INC. 8.75% 2015 8,000 8,080 .07
Tele-Communications, Inc. 9.875% 1998 7,100 7,555
Tele-Communications, Inc. 10.125% 2001 5,000 5,605
Tele-Communications, Inc. 9.80% 2012 20,000 22,108
Tele-Communications, Inc. 9.25% 2023 10,000 10,161 .36
-------- -----
460,015 3.74
-------- -----
Forest Products & Paper - 1.83%
Container Corp. of America 9.75% 2003 69,025 70,751
Container Corp. of America 11.25% 2004 16,000 17,120 .72
Fort Howard Corp. 9.25% 2001 19,500 19,500
Fort Howard Corp. 8.25% 2002 4,500 4,275
Fort Howard Corp. 10.00% 2003 5,000 4,975
Fort Howard Corp. 9.00% 2006 18,500 17,159 .37
Grupo Industrial Durango, SA de CV 9.636% 1996 (2)(5) 7,500 6,994
Grupo Industrial Durango, SA de CV 12.00% 2001 2,500 2,175 .08
PT Indah Kiat Pulp & Paper Corp. 11.375% 1999 4,000 4,100
PT Indah Kiat Pulp & Paper Corp. 8.875% 2000 (2) 11,500 10,551
PT Indah Kiat Pulp & Paper Corp. 11.875% 2002 4,500 4,601 .15
PT Indorayon Yankee 9.125% 2000 4,500 4,129 .03
Klabin Fabricadora de Papel e Celulose SA 10.00% 2001 2,500 2,288 .02
Pacific Lumber Co. 10.50% 2003 1,500 1,402 .01
REPAP WISCONSIN 9.875% 2006 17,500 17,413 .14
Riverwood International Corp. 10.75% 2000 7,000 7,542
Riverwood International Corp., Series II, 10.75% 2000 2,000 2,155
Riverwood International Corp. 11.25% 2002 17,750 19,348 .24
Tjiwi Kimia International Finance Co. 13.25% 2001 7,750 8,254 .07
-------- -----
224,732 1.83
-------- -----
Energy Sources and Energy Equipment & Services - 1.61%
California Energy Co., Inc. 0%/10.25% 2004 (2)(4) 60,300 52,461
CALIFORNIA ENERGY CO., INC. 9.875% 2003 3,000 3,030 .45
DUAL DRILLING CO. 9.875% 2004 8,550 8,037 .06
FLORES & RUCKS, INC. 13.50% 2004 9,000 10,102 .08
Global Marine, Inc. 12.75% 1999 17,500 19,316 .16
MESA CAPITAL CORP. 0%/12.75% 1998 (4) 15,000 13,575 .11
Occidental Petroleum Corp. 9.25% 2019 11,400 13,310 .11
Oryx Energy Co. 9.50% 1999 16,000 16,880
Oryx Energy Co. 10.00% 1999 4,500 4,804
Oryx Energy Co. 10.00% 2001 2,000 2,170 .19
Subic Power Corp. 9.50% 2008 (2) 10,102 9,395 .08
TRANSTEXAS GAS CORP. 11.50% 2002 38,000 39,520 .32
Wilrig AS 11.25% 2004 5,500 5,693 .05
-------- -----
198,293 1.61
-------- -----
Utilities - Electric & Gas - 1.38%
BRIDAS CORP. 12.50% 1999 6,000 5,745 .05
CMS Energy Corp. 0%/9.50% 1997 (4) 3,000 2,955 .02
Korea Electric Power Corp. 7.75% 2013 5,000 4,913 .04
LONG ISLAND LIGHTING CO. 7.30% 1999 23,500 23,077
LONG ISLAND LIGHTING CO. 7.125% 2005 10,000 8,819
LONG ISLAND LIGHTING CO. 8.90% 2019 25,000 22,969
Long Island Lighting Co. 9.00% 2022 25,000 23,016
LONG ISLAND LIGHTING CO. 8.20% 2023 10,000 8,837
Long Island Lighting Co. 9.625% 2024 19,000 18,859 .86
Midland Cogeneration Venture LP 10.33% 2002 29,655 30,767
Midland Cogeneration Venture LP, Secured Lease
Obligation Bonds 10.33% 2002 13,871 14,391 .37
OHIO EDISON CO. 7.875% 2023 5,000 4,800 .04
-------- -----
169,148 1.38
-------- -----
Banking and Insurance - 1.37%
H.F. Ahmanson & Co. 9.875% 1999 3,500 3,856 .03
American Re Corp. 10.875% 2004 20,000 22,115 .18
Bank of Scotland 8.80% 2004 (2) 5,000 5,472 .04
BankAmerica Corp. 8.375% 2002 5,000 5,325 .04
BANKERS TRUST NEW YORK CORP. 6.00% 2008 5,000 4,344 .03
Capital One Bank 8.625% 1997 10,000 10,295
CAPITAL ONE BANK 8.33% 1997 10,000 10,240
CAPITAL ONE BANK 8.125% 1998 27,500 28,178 .39
Chevy Chase Savings Bank, F.S.B. 9.25% 2005 5,000 4,875 .04
CIGNA CORP. 6.375% 2006 6,000 5,432 .04
Citicorp 9.50% 2002 5,000 5,611 .05
Coast Federal Bank 13.00% 2002 3,500 4,008 .03
Coast Savings Financial, Inc. 10.00% 2000 6,500 6,792 .06
DIME BANCORP, INC. 10.50% 2005 4,000 4,340 .04
First Nationwide Bank 10.00% 2006 4,000 4,350 .04
Golden West Financial Corp. 10.25% 1997 2,250 2,387 .02
Manufacturers Hanover Corp. 8.50% 1999 3,295 3,478 .03
Midland American Capital 12.75% 2003 6,000 7,043 .06
New American Capital, Inc. 9.60% 1999 (2) 5,000 5,000 .04
Security Pacific Corp. 10.25% 2001 3,000 3,509
Security Pacific Corp. 11.00% 2001 10,500 12,424 .13
SFFED Corp. 11.20% 2004 (2) 10,000 10,325 .08
-------- -----
169,399 1.37
-------- -----
Transportation - 1.27%
American Airlines, pass-through certificates, 1991-A1,
9.71% 2007 (6) 4,622 5,165
AMR Corp. 10.00% 2001 3,000 3,329
AMR Corp. 9.00% 2012 10,500 11,042
AMR Corp. 9.20% 2012 5,000 5,284 .20
Delta Air Lines, Inc. 9.875% 1998 6,750 7,136
Delta Air Lines, Inc. 9.875% 2000 13,000 14,166
Delta Air Lines, Inc. 10.375% 2011 15,000 17,365
Delta Air Lines, Inc., pass-through certificates,
Series 1992-A2, 9.20% 2014 (6) 5,000 5,282
Delta Air Lines, Inc., pass-through certificates,
Series 1993-A2, 10.50% 2016 (6) 6,000 6,862 .42
Mc-Cuernavaca Trust 9.25% 2001 (2) 7,786 5,985 .05
Northwest Airlines, Inc. 12.0916% 2000 10,814 11,192
NWA Trust No. 2, Class D, 13.875% 2008 10,000 11,400 .18
SFP PIPELINE HOLDINGS, INC. 11.16% 2010 3,000 3,840 .03
United Air Lines, Inc. 9.00% 2003 18,000 18,708
United Air Lines, Inc. 8.39% 2011 7,500 7,650
United Air Lines, Inc. 10.67% 2004 14,000 16,174 .34
Viking Star Shipping Inc. 9.625% 2003 6,000 6,090 .05
-------- -----
156,670 1.27
-------- -----
Leisure & Tourism - 0.81%
Foodmaker, Inc. 9.25% 1999 16,750 15,578
Foodmaker, Inc. 9.75% 2002 7,300 6,205 .18
Four Seasons Hotels Inc. 9.125% 2000 (2) 2,000 1,960 .02
Harrah's Jazz Finance Corp. 14.25% 2001 21,250 21,356
HARRAH'S OPERATING CO. INC. 8.75% 2000 4,000 4,025
HARRAH'S OPERATING CO. INC. 10.875% 2002 5,000 5,388 .25
Kloster Cruise Ltd. 13.00% 2003 33,200 24,900 .20
Plitt Theatres, Inc. 10.875% 2004 20,000 20,050 .16
-------- -----
99,462 .81
-------- -----
Financial Services - 0.73%
Chrysler Financial Corp. 13.25% 1999 11,000 13,441 .11
Fairfax Financial Holdings Ltd. 7.75% 2003 9,750 9,550 .08
Ford Capital BV 10.125% 2000 5,500 6,242 .05
Ford Motor Credit Co. 8.875% 1996 2,500 2,565 .02
General Electric Capital Corp. 8.875% 2009 4,000 4,622 .04
General Motors Acceptance Corp. 7.875% 1997 10,000 10,231
General Motors Acceptance Corp. 7.00% 2000 3,000 3,023
General Motors Acceptance Corp. 9.625% 2001 30,000 33,754
General Motors Acceptance Corp. 8.75% 2005 5,000 5,497
General Motors Acceptance Corp. 8.875% 2010 500 563 .43
-------- -----
89,488 .73
-------- -----
Food Retailing and Food Products & Beverages - 0.61%
Allied Supermarkets Inc. 6.625% 1998 9,301 8,929 .07
Canandaigua Wine Co., Inc. 8.75% 2003 17,500 17,237 .14
Dr Pepper Bottling Co. of Texas 10.25% 2000 7,500 7,800 .06
Safeway Inc. 10.00% 2002 3,500 3,990 .03
Smith's Food & Drug Centers, Inc., pass-through
certificates, Series 94-A2, 8.64% 2012 (6) 8,000 8,220 .07
Star Markets Co., Inc. 13.00% 2004 (2) 9,750 9,945 .08
Stater Brothers Holdings Inc. 11.00% 2001 (2) 16,000 16,040 .13
Vons Companies, Inc. 9.625% 2002 3,000 3,173 .03
-------- -----
75,334 .61
-------- -----
General Retailing & Merchandising - 0.60%
AnnTaylor, Inc. 8.75% 2000 10,446 9,924 .08
Barnes & Noble, Inc. 11.875% 2003 23,500 26,026 .21
CompUSA Inc. 9.50% 2000 1,500 1,447 .01
Dayton Hudson Corp. 9.50% 2015 5,000 5,813 .05
Levitz Furniture Corp. 12.375% 1997 9,250 9,065 .07
Thrifty PayLess, Inc. 11.75% 2003 7,500 7,950
Thrifty PayLess, Inc. 12.25% 2004 2,500 2,600
THRIFTY PAYLESS, INC. 12.25% 2004 10,000 11,000 .18
-------- -----
73,825 .60
-------- -----
Business & Public Services - 0.54%
ADT OPERATIONS 9.25% 2003 7,000 7,175 .06
Federal Express Corp. 10.00% 1998 4,000 4,363
Federal Express Corp. 9.875% 2002 7,000 7,993
Federal Express Corp. 7.53% 2006 14,754 14,720 .22
Neodata Services, Inc. 0%/12.00% 2003 (4) 11,500 10,005 .08
PROTECTION ONE ALARM MONITORING, INC., UNITS
CONSISTING OF NOTES AND WARRANTS, 0%/13.625%
2005 (2)(4) 15,000 10,162 .08
TNT Transport (Euro) PLC/TNT (USA) Inc. 11.50% 2004 11,750 12,220 .10
-------- -----
66,638 .54
-------- -----
Metals: Steel & Nonferrous - 0.54%
Acme Metals Inc. 0%/13.50% 2004 (4) 10,500 8,085
Acme Metals Inc. 12.50% 2002 3,000 3,030 .10
AK STEEL CORP. 10.75% 2004 8,000 8,610 .07
Armco Inc. 11.375% 1999 4,950 5,160 .04
Ispat Mexicana 10.375% 2001 (2) 2,000 1,760
Ispat Mexicana, SA de CV, 10.375% 2001 4,000 3,520 .04
KAISER ALUMINUM AND CHEMICAL CORP. 9.875% 2002 5,000 5,050
Kaiser Aluminum and Chemical Corp. 12.75% 2003 7,000 7,753 .11
POHANG IRON & STEEL CO., LTD. 7.375% 2005 10,000 10,044 .08
UCAR Global Enterprises Inc. 12.00% 2005 (2) 7,000 7,700 .06
USX Corp. 9.625% 2003 5,000 5,541 .04
-------- -----
66,253 .54
-------- -----
Miscellaneous - 0.51%
Owens-Illinois, Inc. 11.00% 2003 6,000 6,615 .05
Samsung Electronics Co., Ltd. 8.50% 2002 (2) 22,500 23,934 .19
Tenneco Inc. 10.00% 1998 1,500 1,634
Tenneco Inc. 7.875% 2002 2,000 2,080 .03
Tyco Toys, Inc. 10.125% 2002 15,700 13,973 .12
Unisys Corp. 10.625% 1999 10,000 10,700 .09
WestPoint Stevens Inc. 8.75% 2001 4,000 3,980 .03
-------- -----
62,916 .51
-------- -----
Automobiles - 0.36%
General Motors Corp. 9.45% 2011 5,000 5,832
General Motors Corp. 8.80% 2021 35,000 38,674 .36
-------- -----
44,506 .36
-------- -----
Aerospace, Automotive and Machinery - 0.36%
Caterpillar Inc. 8.01% 2002 15,000 15,903 .13
Coltec Industries Inc 9.75% 1999 8,000 8,280
Coltec Industries Inc 9.75% 2000 8,500 8,797 .14
EXIDE CORP. 10.00% 2005 (2) 8,250 8,601 .07
MagneTek, Inc. 10.75% 1998 2,000 2,100 .02
-------- -----
43,681 .36
-------- -----
Real Estate - 0.29%
Beverly Finance Corp. 8.36% 2004 (2) 5,000 5,188 .04
ERP OPERATING LP 7.95% 2002 3,750 3,844 .03
B.F. Saul Real Estate Investment Trust 11.625% 2002 23,000 21,505 .18
Shopping Center Associates 6.75% 2004 (2) 5,000 4,787 .04
-------- -----
35,324 .29
-------- -----
Construction & Building Materials - 0.23%
BUILDING MATERIALS CORP. 0%/11.75% 2004 (4) 5,000 3,050 .03
M.D.C. Holdings, Inc. 11.125% 2003 10,000 9,000 .07
Tolmex, SA de CV 8.375% 2003 3,500 2,730 .02
TRIANGLE PACIFIC CORP. 10.50% 2003 3,000 3,075 .03
Del Webb Corp. 9.75% 2003 10,500 10,237 .08
-------- -----
28,092 .23
-------- -----
Collateralized Mortgage/Asset-Backed Obligations (6)
(excluding those issued by federal agencies) - 1.69%
BANCO NACIONAL DE MEXICO 0% 2002 (2) 6,500 6,500 .05
Bank of America 9.50% 2008 104 104 .00
CASE EQUIPMENT LOAN TRUST 1995-A 7.30% 2002 19,077 19,387 .16
Chase Manhattan Bank, NA, Series 1993-I, Class 2A5,
7.25% 2024 9,910 9,625 .08
Citicorp Mortgage Securities, Inc., Series 1992-20,
Class A3, 7.50% 2006 8,270 8,304 .07
CMC Securities Corp. I, Series 1993-E, Class S9,
6.50% 2008 2,801 2,627 .02
CSFB FINANCE CO. LTD. 7.00% 2005 (2)(5) 5,000 4,803 .04
ELECTRONIC TRANSFER MASTER TRUST 9.35% 2002 (2) 15,000 15,187 .12
GE Capital Mortgage Services, Inc., Series 94-2, Class
A15, 6.582% 2009 (7) 6,310 3,691 .03
Green Tree Financial Corp., Net Interest Margin Trust,
Series 1994-A, 6.90% 2004 3,640 3,602
Green Tree Financial Corp., Seller and Servicer
Manufactured Housing Contract, Series 1993-2, Class B,
8.00% 2018 14,000 13,877
GREEN TREE FINANCIAL CORP., SELLER AND SERVICER
MANUFACTURED HOUSING CONTRACT, SERIES 1995-1, CLASS A-3,
7.95% 06/15/25
7.95% 2025 5,000 5,184 .18
Jet Equipment Trust, Series 1994-A, Class B1, 10.91%
2006 (2) 6,989 7,776
JET EQUIPMENT TRUST, SERIES 1995-B, CERTIFICATES,
10.91% 2014 (2) 4,750 4,780
JET EQUIPMENT TRUST, SERIES 1995-A, CLASS B, 8.64%
2015 (2) 15,000 15,750
JET EQUIPMENT TRUST, SERIES 1995-A, CLASS C, 10.69%
2015 (2) 5,000 5,419
JET EQUIPMENT TRUST, SERIES 1995-B, CLASS A, 7.63%
2015 (2) 14,500 14,554
JET EQUIPMENT TRUST, SERIES 1995-B, CLASS C, 9.71%
2015 (2) 5,500 5,555 .44
Merrill Lynch Mortgage Investors, Inc., Seller
Manufactured Housing Contract, Series 1992-B, Class A2,
8.05% 2012 2,500 2,544 .02
Prudential Home Mortgage Securities Co., Inc.,
Series 1992-37, Class A6, 7.00% 2022 8,000 7,987 .07
Resolution Trust Corp., Series 1992-CHF, Class E,
8.25% 2020 11,016 10,369
Resolution Trust Corp., Series 1993-C1, Class D,
9.45% 2024 6,142 6,288
Resolution Trust Corp., Series 1993-C1, Class E,
9.50% 2024 2,528 2,481
Resolution Trust Corp., Series 1993-C2, Class C,
8.00% 2025 3,000 3,026
Resolution Trust Corp., Series 1993-C2, Class D,
8.50% 2025 3,290 3,339
Resolution Trust Corp., Series 1993-C2, Class E,
8.50% 2025 1,284 1,268 .23
SKW II REAL ESTATE LP, CLASS A, 6.45% 2002 (2) 7,780 7,780 .06
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1991-1A, 8.50% 1997 4,000 4,079
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1991-4A, 8.00% 1997 5,000 5,094
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1994-2A, 7.25% 2008 5,000 5,062 .11
USWFS Manufactured Housing Contract, Series 1990-A,
9.05% 2010 (2) 1,242 1,252 .01
-------- -----
207,294 1.69
-------- -----
Federal Agency Obligations-Mortgage Pass-Throughs (6)
- 2.94%
Federal Home Loan Mortgage Corp. 8.50% 2008 604 624
Federal Home Loan Mortgage Corp. 8.50% 2020 12,198 12,572
Federal Home Loan Mortgage Corp. 9.00% 2016 3,086 3,211
Federal Home Loan Mortgage Corp. 9.00% 2021 2,482 2,582
Federal Home Loan Mortgage Corp. 10.00% 2019 125 135
Federal Home Loan Mortgage Corp. 11.50% 2000 18 19 .16
Federal National Mortgage Assn. 7.50% 2007-2023 31,210 31,494
Federal National Mortgage Assn. 8.00% 2009-2013 6,426 6,567
Federal National Mortgage Assn. 8.50% 2014-2023 4,014 4,135
Federal National Mortgage Assn. 9.00% 2008-2025 8,774 9,134
FEDERAL NATIONAL MORTGAGE ASSN. 10.00% 2020 4,145 4,502 .46
Government National Mortgage Assn. 5.50% 2023-2024 (5) 90,015 88,545
Government National Mortgage Assn. 6.00% 2017-2024 (5) 12,565 12,495
Government National Mortgage Assn. 6.125% 2022 (5) 14,738 14,834
Government National Mortgage Assn. 6.50% 2024 1,974 1,875
Government National Mortgage Assn. 6.50% 2024 (5) 3,961 3,976
Government National Mortgage Assn. 7.00% 2008-2023 34,018 33,430
Government National Mortgage Assn. 7.50% 2017-2024 36,749 36,726
Government National Mortgage Assn. 8.00% 2017 7,137 7,280
Government National Mortgage Assn. 8.50% 2017-2025 41,812 43,345
Government National Mortgage Assn. 9.00% 2008-2025 18,852 19,806
Government National Mortgage Assn. 9.50% 2009-2025 19,309 20,588
Government National Mortgage Assn. 10.00% 2016-2019 2,167 2,358
Government National Mortgage Assn. 10.50% 2018-2019 335 369
Government National Mortgage Assn. 11.00% 2015 150 167 2.32
-------- -----
360,769 2.94
-------- -----
Federal Agency Obligations-Collateralized Mortgage
Obligations (7) - 0.14%
Federal Home Loan Mortgage Corp., Series 1625, Class SC,
4.703% 2008 2,140 1,273
Federal Home Loan Mortgage Corp., Series 1587, Class SL,
7.511% 2008 3,958 2,963
Federal Home Loan Mortgage Corp., Series 1475, Class SA,
8.035% 2008 2,168 1,725
Federal Home Loan Mortgage Corp., Series 1607, Class SA,
6.536% 2013 5,287 3,374
Federal Home Loan Mortgage Corp., Series 1673, Class SA,
4.445% 2024 6,000 2,786 .10
Federal National Mortgage Assn., Series 1993-234,
Class SC, 4.977% 2008 8,754 4,583
Federal National Mortgage Assn., Series 1993-G19,
Class SJ, 0% 2023 262 136 .04
-------- -----
16,840 .14
-------- -----
Other Federal Agency Obligations - 0.76%
FEDERAL HOME LOAN BANK 7.28% 2000 6,000 6,007
Federal Home Loan Bank 6.41% 2003 10,000 9,634
Federal Home Loan Bank 6.16% 2004 13,000 12,358
Federal Home Loan Bank 6.27% 2004 6,000 5,735 .28
Federal Home Loan Mortgage Corp. 5.74% 2003 5,000 4,677
Federal Home Loan Mortgage Corp. 6.39% 2003 7,750 7,740
Federal Home Loan Mortgage Corp. 6.44% 2003 3,000 2,905
Federal Home Loan Mortgage Corp. 6.50% 2003 5,000 4,855
Federal Home Loan Mortgage Corp. 6.59% 2003 6,000 5,834
Federal Home Loan Mortgage Corp. 6.19% 2004 10,750 10,213
Federal Home Loan Mortgage Corp. 6.27% 2004 5,450 5,208 .33
Federal National Mortgage Assn. 6.30% 1997 10,000 9,998 .08
FNSM Principal STRIPS 0%/8.62% 2022 (4) 10,000 8,066 .07
-------- -----
93,230 .76
-------- -----
Governments and Governmental Authorities - 0.80%
Argentina Bocon 7.306% 2001 (3)(5) 20,000 10,889
Argentina (Republic of) 8.375% 2003 13,000 9,913
Argentina (Republic of) Eurobond Series L, 7.312% 2005
(5) 33,000 20,254
Argentina (Republic of) Eurobond Series L, 5.00% 2023 (5) 42,250 19,646 .50
BRAZIL (REPUBLIC OF) DEBT CONVERSION BOND 7.312%
2012 (5) 2,000 1,047 .01
British Columbia Hydro & Power Authority 12.50% 2014 10,000 12,066 .10
Italy (Republic of) 6.875% 2023 10,000 8,734 .07
Ontario (Province of) 7.75% 2002 2,500 2,624
Ontario (Province of) 15.25% 2012 5,000 6,093 .07
Petroleo Brasileiro SA-PETROBRAS 10.212% 1998 (5) 2,500 2,500 .02
POLAND (REPUBLIC OF) 7.75% 2000 (2) 4,250 4,250 .03
United Mexican States Government 6.25% Eurobonds 2019 1,000 603 .00
-------- -----
98,619 .80
-------- -----
Floating Rate Eurodollar Notes (Undated) (5) - 0.28%
Bank of Nova Scotia 6.562% 10,000 7,838 .06
Canadian Imperial Bank of Commerce 6.625% 10,000 7,925 .07
Financiere Credit Suisse-First Boston 6.125% 2,000 1,560 .01
Gentra Inc. 6.65% 2,125 2,120 .02
Midland Bank 6.125% 5,000 4,075 .03
Standard Chartered Bank 5.812% 15,000 11,231 .09
-------- -----
34,749 .28
-------- -----
U.S. Treasury Obligations - 12.51%
7.25% August 1996 60,000 60,881 .50
8.00% October 1996 4,000 4,100 .03
7.25% November 1996 75,000 76,324 .62
8.00% January 1997 100,000 103,031 .84
6.75% February 1997 4,000 4,055 .03
6.875% April 1997 60,000 61,003 .50
8.50% April 1997 40,000 41,681 .34
8.50% May 1997 6,000 6,262 .05
8.50% July 1997 4,000 4,189 .03
5.625% August 1997 100,000 99,422 .81
8.625% August 1997 75,000 78,856 .64
5.50% September 1997 75,000 74,379 .61
5.75% October 1997 100,000 99,609 .81
8.75% October 1997 35,000 36,996 .30
6.00% November 1997 60,000 60,075 .49
7.875% January 1998 50,000 52,133 .42
8.125% February 1998 40,000 41,975 .34
9.25% August 1998 45,000 48,951 .40
8.875% February 1999 12,000 13,048 .11
9.125% May 1999 10,000 10,997 .09
6.75% June 1999 91,000 92,863 .76
6.875% August 1999 78,000 79,950 .65
8.75% August 2000 22,500 24,954 .20
8.50% November 2000 10,000 11,052 .09
7.75% February 2001 70,000 74,955 .61
11.625% November 2002 18,000 23,425 .19
10.75% February 2003 19,500 24,491 .20
11.625% November 2004 30,000 40,598 .33
10.75% August 2005 9,000 11,758 .10
10.375% November 2009 7,100 8,933 .07
12.75% November 2010 9,500 13,793 .11
14.00% November 2011 3,500 5,519 .04
10.375% November 2012 15,000 19,477 .16
8.875% August 2017 18,500 22,547 .18
7.125% February 2023 102,500 105,111 .86
-------- -----
1,537,393 12.51
-------- -----
TOTAL BONDS & NOTES (cost: $4,969,823,000) 4,976,227 40.49
-------- -----
- ----------------------------------
Short-Term Securities
- ----------------------------------
Corporate Short-Term Notes - 2.24%
THE CIT GROUP HOLDINGS, INC. 5.71%-5.95%
DUE 8/11-8/25/95 50,000 49,856 .41
JOHN DEERE CAPITAL CORP. 5.72% DUE 8/8/95 33,800 33,757 .27
E.I. DU PONT DE NEMOURS AND CO. 5.68% DUE 9/8/95 14,900 14,808 .12
KIMBERLY-CLARK CORP. 5.63% DUE 9/7/95 10,000 9,941 .08
ELI LILLY AND CO. 5.65%-5.88% DUE 8/21-9/18/95 23,200 23,098 .19
National Rural Utilities Cooperative Finance Corp.
5.72% due 8/17/95 30,000 29,919 .24
J.C. Penney Funding Corp. 5.69%-5.92% due 8/15-8/24/95 29,180 29,079 .24
PEPSICO, INC. 5.70%-5.91% DUE 8/10-8/29/95 37,700 37,574 .31
US WEST COMMUNICATIONS 5.62% DUE 10/11/95 15,000 14,830 .12
XEROX CORP. 5.73%-5.94% DUE 8/3-8/30/95 32,400 32,331 .26
-------- -----
275,193 2.24
-------- -----
Federal Agency Short-Term Obligations - 0.20%
Federal Home Loan Mortgage Corp.
5.58%-5.85% due 8/4-10/30/95 24,000 23,859 .19
Federal National Mortgage Assn. 7.00% due 2/10/96 1,000 1,006 .01
-------- -----
24,865 .20
-------- -----
U.S. Treasury Short-Term Securities - 2.15%
8.50% August 1995 53,500 53,550 .44
7.50% January 1996 60,000 60,515 .49
7.875% February 1996 50,000 50,555 .41
8.875% February 1996 19,000 19,312 .16
7.375% May 1996 75,000 75,914 .62
7.875% July 1996 4,000 4,078 .03
-------- -----
263,924 2.15
-------- -----
TOTAL SHORT-TERM SECURITIES (cost: $570,234,000) 563,982 4.59
-------- -----
TOTAL INVESTMENT SECURITIES (cost: $11,024,746,000) 12,153,945 98.89
Excess of cash and receivables over payables 136,212 1.11
-------- -----
NET ASSETS $12,290,157 100.00%
========== ======
</TABLE>
(1) Non-income-producing securities.
(2) Purchased in a private placement transaction; resale to the public may
require registration or may extend only to qualified institutional buyers.
(3) Payment in kind. The issuer has the option of paying additional securities
in lieu of cash.
(4) Represents a zero coupon bond which will convert to an interest-bearing
security at a later date.
(5) Coupon rates may change periodically.
(6) Pass-through securities backed by a pool of mortgages or other loans on
which principal payments are periodically made. Therefore, the effective
maturity of these securities is shorter than the stated maturity.
(7) Represents an inverse floater, which is a floating rate note whose interest
rate moves in the opposite direction of prevailing interest rates.
See Notes to Financial Statements
- ----------------------------
Equity-type securities
appearing in the portfolio
since January 31, 1995
- ----------------------------
Allstate
Bancorp Hawaii
Burlington Northern
Chemical Banking
Cooper Industries
First Fidelity
First Security
First Tennessee National
General Mills
Goodyear Tire & Rubber
Monsanto
National City
J.C. Penney
SAFECO
Seagate Technology
Weyerhaeuser
- ------------------------------
Equity-type securities
eliminated from the portfolio
since January 31, 1995
- ------------------------------
Bank of Montreal
BCE
Canadian Imperial Bank of Commerce
Carolina Power & Light
Consolidated Freightways
Dexter
Household International
MBNA
National Semiconductor
National Service Industries
Phelps Dodge
Republic New York
Staples
Tandy
United Technologies
Xerox
<PAGE>
*****************
The Income Fund of America
Financial Statements
<TABLE>
<CAPTION>
Statement of Assets and Liabilities (dollars in
July 31, 1995 thousands)
- ---------------------------------------- --------- ------------------
<S> <C> <C>
ASSETS:
Investment securities at market
(cost: $11,024,746) $12,153,945
Cash 1,282
Receivables for-
Sales of investments $ 35,360
Sales of fund's shares 20,017
Dividends and accrued interest 128,816 184,193
--------- ------------------
12,339,420
LIABILITIES:
Payables for-
Purchases of investments 33,037
Repurchases of fund's shares 8,772
Management services 3,193
Accrued expenses 4,261 49,263
--------- ------------------
NET ASSETS AT JULY 31, 1995-
Equivalent to $14.92 per share on
823,830,743 shares of $1 par value
capital stock outstanding (authorized
capital stock--1,200,000,000 shares) $12,290,157
=================
Statement of Operations (dollars in
for the year ended July 31, 1995 thousands)
- ----------------------------------------- --------- ------------------
INVESTMENT INCOME:
Income:
Dividends $259,485
Interest 492,564 $752,049
---------
Expenses:
Management services fee 35,698
Distribution expenses 25,061
Transfer agent fee 7,211
Reports to shareholders 729
Registration statement and
prospectus 960
Postage, stationery and supplies 1,577
Directors' fees 150
Auditing and legal fees 51
Custodian fee 260
Taxes other than federal income tax 2
Other expenses 53 71,752
--------- ----------------
Net investment income 680,297
-----------------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
Net realized gain 50,302
Net increase in unrealized appreciation on
investments:
Beginning of year 134,366
End of year 1,129,199 994,833
--------- ----------------
Net realized gain and unrealized
appreciation on investments 1,045,135
---------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,725,432
================
- ---------------------------------------- ----------------
Statement of Changes in Net Assets (dollars in
thousands)
- ----------------------------------------- ------------------
Year ended
July 31
1995 1994
----------------- ----------------
OPERATIONS:
Net investment income $ 680,297 $ 599,418
Net realized gain on investments 50,302 127,926
Net increase (decrease) in unrealized
appreciation on investments 994,833 (563,497)
--------- ---------
Net increase in net assets
resulting from operations 1,725,432 163,847
--------- ---------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income (598,609) (590,832)
Distributions from net realized
gain on investments (47,119) (242,204)
--------- ---------
Total dividends and distributions (645,728) (833,036)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
118,485,003 and 194,658,239
shares, respectively 1,645,595 2,785,416
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions of
net realized gain on investments:
42,687,032 and 47,830,913
shares, respectively 586,118 679,271
Cost of shares repurchased:
112,581,008 and 92,301,774
shares, respectively (1,558,083) (1,303,690)
--------- ---------
Net increase in net assets
resulting from capital share
transactions 673,630 2,160,997
--------- ---------
TOTAL INCREASE IN NET ASSETS 1,753,334 1,491,808
NET ASSETS:
Beginning of year 10,536,823 9,045,015
--------- ---------
End of year (including undistributed
net investment income: $110,419
and $28,731, respectively) $12,290,157 $10,536,823
=========== =================
</TABLE>
See Notes to Financial Statements
<PAGE>
Notes to Financial Statements
1. The Income Fund of America, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. The following paragraphs summarize the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
Equity-type securities are stated at market value based upon closing sales
prices reported on recognized securities exchanges (or reported on the NASDAQ
national market) on the last business day of the year or, for listed securities
having no sales reported, upon last-reported bid prices on that date.
Securities traded in the over-the-counter market are valued at the last
available sale price prior to the time of valuation or, lacking any sales, at
the last reported bid price.
Bonds and notes are valued at prices obtained from a bond-pricing service
provided by a major dealer in bonds, 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 of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality, and type.
Short-term securities with original or remaining maturities in excess of 60
days are valued at the mean of their quoted bid and asked prices. Short-term
securities with 60 days or less to maturity are valued at amortized cost, which
approximates market value. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Valuation Committee of the Board of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
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 $260,000 includes $57,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of July 31, 1995, net unrealized appreciation on investments for federal
income tax purposes aggregated $1,129,273,000, of which $1,315,988,000 related
to appreciated securities and $186,715,000 related to depreciated securities.
During the year ended July 31, 1995, the fund realized, on a tax basis, a net
capital gain of $50,310,000 on securities transactions. The cost of portfolio
securities for federal income tax purposes was $11,024,672,000 at July 31,
1995.
3. The fee of $35,698,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.24% of the first $1 billion of average net assets; 0.20%
of such assets in excess of $1 billion but not exceeding $2 billion; 0.18% of
such assets in excess of $2 billion but not exceeding $3 billion; 0.165% of
such assets in excess of $3 billion but not exceeding $5 billion; 0.155% of
such assets in excess of $5 billion but not exceeding $8 billion; and 0.15% of
such assets in excess of $8 billion; plus 2.25% of monthly gross investment
income.
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 year ended July 31, 1995,
distribution expenses under the Plan were $25,061,000. As of July 31, 1995,
accrued and unpaid distribution expenses were $4,105,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $7,211,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $7,246,000 (after
allowances to dealers) as its portion of the sales charges paid by purchasers
of the fund's shares. Such sales charges are not an expense of the fund and,
hence, are not reflected in the accompanying statement of operations.
Directors of the fund 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 July 31, 1995, aggregate amounts deferred were $111,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS, and AFD. No such
persons received any remuneration directly from the fund.
4. As of July 31, 1995, accumulated undistributed net realized gain on
investments was $47,534,000 and additional paid-in capital was $10,179,174,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $3,377,195,000 and $2,813,332,000, respectively,
during the year ended July 31,1995.
<PAGE>
Per-Share Data and Ratios
<TABLE>
<CAPTION>
Year
ended
July 31
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year $13.59 $14.47 $13.94 $12.54 $12.11
------- ------- ------- ------- -------
Income from Investment
Operations:
Net investment income .85 .83 .85 .85 .86
Net realized and unrealized
gain (loss) on investments 1.29 (.53) .74 1.48 .53
------- ------- ------- ------- -------
Total income from
investment operations 2.14 .30 1.59 2.33 1.39
------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment
income (.75) (.83) (.84) (.85) (.89)
Distributions from net
realized gains (.06) (.35) (.22) (.08) (.07)
------- ------- ------- ------- -------
Total distributions (.81) (1.18) (1.06) (.93) (.96)
------- ------- ------- ------- -------
Net Asset Value, End of Year $14.92 $13.59 $14.47 $13.94 $12.54
======= ======= ======= ======= =======
Total Return /1/ 16.42% 1.98% 11.88% 19.16% 12.24%
Ratios/Supplemental Data:
Net assets, end of year (in
millions) $12,290 $10,537 $9,045 $5,121 $2,771
Ratio of expenses to average
net assets .65% .63% .62% .66% .73%
Ratio of net income to average
net assets 6.12% 5.92% 6.05% 6.40% 7.23%
Portfolio turnover rate 26.26% 26.42% 29.18% 22.71% 23.35%
</TABLE>
/1/ This was calculated without deducting a sales charge. The maximum sales
charge is 5.75% of the fund's offering price.
<PAGE>
Independent Auditors' Report
To the Board of Directors and Shareholders of
The Income Fund of America, Inc.:
We have audited the accompanying statement of assets and liabilities of The
Income Fund of America, Inc., including the schedule of portfolio investments
as of July 31, 1995, 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 July 31, 1995 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 Income Fund of America, Inc. as of July 31, 1995, 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.
/s/Deloitte & Touche LLP
Los Angeles, California
August 23, 1995
TAX INFORMATION (UNAUDITED)
Corporate shareholders may deduct up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 38% of the
dividends paid by the fund from net investment income represents qualifying
dividends.
Certain states may exempt from income taxation a portion of the dividends paid
from net investment income if derived from direct U.S. Treasury obligations.
For purposes of computing this exclusion, 20% of the dividends paid by the fund
from net investment income was derived from interest on direct U.S. Treasury
obligations.
In January 1996 we will provide you information on distributions paid during
the calendar year to help you in completing your 1995 income tax returns.
Shareholders should consult their own tax advisors.
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements.
Included in Prospectus - Part A
Financial Highlights
Included in Statement of Additional Information - Part B
Investment Portfolio
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Selected Per-Share Data and Ratios
Independent Auditors' Report
(b) Exhibits.
1. On file (see SEC files nos. 811-1880 and 2-33371)
2. On file (see SEC files nos. 811-1880 and 2-33371)
3. None
4. On file (see SEC files nos. 811-1880 and 2-33371)
5. On file (see SEC files nos. 811-1880 and 2-33371)
6. On file (see SEC files nos. 811-1880 and 2-33371)
7. None
8. On file (see SEC files nos. 811-1880 and 2-33371)
9. On file (see SEC files nos. 811-1880 and 2-33371)
10. Not applicable to this filing
11. Consent of Independent Auditors
12. None
13. None
14. On file (see SEC files nos. 811-1880 and 2-33371)
15. On file (see SEC files nos. 811-1880 and 2-33371)
16. Updates to previously filed schedule for computation of each performance
quotation provided in the Registration Statement in response to Item 22 (see
SEC files nos. 811-1880 and 2-33371)
Item 25. Persons Controlled by or under Common Control with Registrant.
None.
Item 26. Number of Holders of Securities.
As of August 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Title of Class Number of Record-Holders
Common Stock 538,876
($1.00 Par Value)
</TABLE>
Item 27. Indemnification.
Registrant is a joint-insured under an Investment Adviser/Mutual Fund Errors
and Omissions Policy. The carrier of the primary policy in the amount of $15
million is American International Surplus Lines Insurance Company, and the
policy has a $250,000 deductible. The carrier of the secondary policy in the
amount of $10 million is Chubb Custom Insurance Company. The carrier of the
excess policy in the amount of $20 million is ICI Mutual Insurance Company.
The Articles of Incorporation state:
The Corporation shall indemnify (a) its directors to the full extent provided
by the general laws of the State of Maryland now or hereafter in force,
including the advance of expenses under the procedures provided by such laws;
(b) its officers to the same extent it shall indemnify its directors; and (c)
its officers who are not directors to such further extent as shall be
authorized by the Board of Directors and be consistent with law. The foregoing
shall not limit the authority of the Corporation to indemnify other employees
and agents consistent with law.
The By-Laws of the Corporation state:
Section 5.01. Any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, may be indemnified by the Corporation against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding in the manner and on the terms provided by, and to the fullest
extent authorized by, applicable state law, and shall be indemnified by the
Corporation against such expenses, judgments, fines, and amounts in the manner
and to the fullest extent required by applicable state law. However, no
indemnification may be made under this section in the absence of a judicial or
administrative determination absolving the prospective indemnitee of liability
to the Corporation or its security holders unless, based upon a review of all
material facts, (1) a majority of a quorum of directors who are neither
interested persons of the Corporation nor parties to the proceeding, or (2)
independent legal counsel in a written opinion, concludes that such person was
not guilty of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties initiated in the conduct of his office.
Section 5.02. No expenses incurred by a director, officer, employee, or
agent of the Corporation in defending a civil or criminal action, suit, or
proceeding to which he is a party may be paid or reimbursed by the Corporation
in advance of the final disposition of such action, suit, or proceeding
unless:
(1) One of the following determines, on the basis of the facts then known to
it, that there is reason to believe that indemnification would be permissible:
(a) a majority of a quorum of disinterested non-party directors, or, if such
a quorum cannot be obtained, a majority of a committee of two or more
disinterested non-party directors duly designated to act in the matter by a
majority vote of the full board;
(b) special legal counsel selected by such a committee or such a quorum of
disinterested non-party directors; or
(c) the stockholders; and
(2) the Corporation receives the following from the prospective recipient of
the advance:
(a) a written affirmation of his good faith belief that he met the standard
of conduct necessary for indemnification; and
(b) an undertaking to repay the advance if it is ultimately determined that
he is not entitled to indemnification under this Article.
Section 5.03. The Corporation is authorized to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
Anything in this Article V to the contrary notwithstanding, however, the
Corporation shall not pay for insurance which protects any director or officer
against liabilities arising from action involving willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his office; provided, that any such insurance may cover any of such
categories if it provides only for payment to the Corporation and/or third
parties of any damages caused by a director or officer, and also provides that
the insurance company would be subrogated to the rights of the Corporation to
recover from the director or officer.
Item 28. Business and Other Connections of Investment Adviser.
None.
Item 29. Principal Underwriters.
(a) American Funds Distributors, Inc. is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., American Funds
Income Series, The American Funds Tax-Exempt Series I, The American Funds
Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American
High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc.,
Capital Income Builder, Capital World Bond Fund, Capital World Growth and
Income Fund, Inc., The Cash Management Trust of America, EuroPacific Growth
Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc.,
Intermediate Bond Fund of America, The Investment Company of America, Limited
Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective
Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America,
Inc., The Tax-Exempt Money Fund of America, The U.S. Treasury Money Fund of
America and Washington Mutual Investors Fund, Inc.
<TABLE>
<CAPTION>
(b) (1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C>
# David L. Abzug Assistant Vice President None
John A. Agar Regional Vice President None
1501 N. University Drive
Little Rock, AR 72207
Robert B. Aprison Regional Vice President None
2983 Brynwood Drive
Madison, WI 53711
& Richard L. Armstrong Assistant Vice President None
* William W. Bagnard Vice President None
Steven L. Barnes Vice President None
8000 Town Line Avenue So.
Suite 204
Minneapolis, MN 55438
Michelle A. Bergeron Regional Vice President None
1190 Rockmart Circle
Kennesaw, GA 30144
Joseph T. Blair Vice President None
27 Drumlin Road
West Simsbury, CT 06092
Ian B. Bodell Vice President None
3100 West End Avenue, Suite 870
Nashville, TN 37215
Mick L. Brethower Vice President None
108 Hagen Court
Georgetown, TX 78628
C. Alan Brown Regional Vice President None
4619 McPherson Avenue
St. Louis, MO 63108
* Daniel C. Brown Senior Vice President, None
Director
@ J. Peter Burns Vice President None
Brian C. Casey Regional Vice President None
9508 Cable Drive
Kensington, MD 20895
Victor C. Cassato Vice President None
999 Green Oaks Drive
Littleton, CO 80121
Christopher J. Cassin Regional Vice President None
231 Burlington
Clarendon Hills, IL 60514
Denise M. Cassin Regional Vice President None
1425 Vallejo, #203
San Francisco, CA 94109
* Larry P. Clemmensen Treasurer, Director None
* Kevin G. Clifford Senior Vice President None
Ruth M. Collier Vice President None
145 W. 67th Street #12K
New York, NY 10023
Thomas E. Cournoyer Vice President None
2333 Granada Blvd.
Coral Gables, FL 33134
% Douglas A. Critchell Vice President None
3000 K Street, Suite 230
Washington, D.C. 20007
* Carl D. Cutting Vice President None
Michael A. Dilella Vice President None
P.O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President None
3622 East 87th Street
Tulsa, OK 74137
Kirk D. Dodge Vice President None
2617 Salisbury Road
Ann Arbor, MI 48103
Peter J. Doran Senior Vice President None
1205 Franklin Avenue
Garden City, NY 11530
* Michael J. Downer Secretary None
Robert W. Durbin Vice President None
74 Sunny Lane
Tiffin, OH 44883
+ Lloyd G. Edwards Vice President None
@ Richard A. Eychner Vice President None
* Paul H. Fieberg Senior Vice President None
John R. Fodor Regional Vice President None
5 Marlborough Street
Suite 51
Boston, MA 02116
* Mark P. Freeman, Jr. President, Director None
Clyde E. Gardner Vice President None
Rt. 2, Box 3162
Osage Beach, MO 65065
# Evelyn K. Glassford Vice President None
Jeffrey J. Greiner Regional Vice President None
5898 Heather Glen Court
Dublin, OH 43017
* Paul G. Haaga, Jr. Director Senior Vice
President
David E. Harper Vice President None
R.D. 1, Box 210, Rte. 519
Frenchtown, NJ 08825
Ronald R. Hulsey Regional Vice President None
6744 Avalon
Dallas, TX 75214
* Robert L. Johansen Vice President, Controller None
Victor J. Kriss, Jr. Senior Vice President None
P.O. Box 274
Surfside, CA 90743
Arthur J. Levine Vice President None
12558 Highlands Place
Fishers, IN 46038
# Karl A. Lewis Assistant Vice President None
T. Blake Liberty Regional Vice President None
12585-E East Tennessee Circle
Aurora, CO 80012
* Heather A. Maier Assistant Vice President, None
Institutional Investment Service
Division
Stephen A. Malbasa Regional Vice President None
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President None
5241 S. Race Street
Littleton, CO 80121
* John C. Massar Senior Vice President None
* E. Lee McClennahan Senior Vice President None
Laurie B. McCurdy Regional Vice President None
6008 E. Anderson Drive
Scottsdale, AZ 85255
& John V. McLaughlin Senior Vice President None
Terry W. McNabb Vice President None
2002 Barrett Station Rd.
St. Louis, MO 63131
* R. William Melinat Vice President, Institutional None
Investment Services Division
David R. Murray Regional Vice President None
25701 S.E. 32nd Place
Issaquah, WA 98027
Stephen S. Nelson Vice President None
7215 Trevor Court
Charlotte, NC 28226
* Barbara G. Nicolich Assistant Vice President, None
Institutional Investment
Services Division
William E. Noe Regional Vice President None
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Regional Vice President None
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Regional Vice President None
62 Park Drive
Glenview, IL 60025
Fredric Phillips Regional Vice President None
32 Ridge Avenue
Newton Centre, MA 02161
# Candance D. Pilgram Assistant Vice President None
Carl S. Platou Regional Vice President None
4021 96th Avenue, SE
Mercer Island, WA 98040
* John O. Post, Jr. Vice President None
Steven J. Reitman Vice President None
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Regional Vice President None
12025 Delmahoy Drive
Charlotte, NC 28277
* George L. Romine, Jr. Vice President, Institutional None
Investment Services Division
George S. Ross Vice President None
55 Madison Avenue
Morristown, NJ 07960
* Julie D. Roth Vice President None
Douglas F. Rowe Regional Vice President None
104 River Road
Georgetown, TX 78628
Christopher S. Rowey Regional Vice President None
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Vice President None
1080 Bay Pointe Crossing
Alpharetta, GA 30202
Richard R. Samson Vice President None
4604 Glencoe Avenue, #4
Marina del Rey, CA 90292
Joe D. Scarpitti Regional Vice President None
25760 Kensington Drive
Westlake, OH 44145
* R. Michael Shanahan Chairman None
David W. Short Senior Vice President None
1000 RIDC Plaza, Ste. 212
Pittsburgh, PA 15238
* Victor S. Sidhu Vice President, None
Institutional Investment Services
Division
William P. Simon, Jr. Vice President None
554 Canterbury Lane
Berwyn, PA 19312
* John C. Smith Assistant Vice President, None
Institutional Investment Services
Division
* Mark S. Smith Senior Vice President, None
Director
* Mary E. Smith Assistant Vice President, None
Institutional Investment Services
Division
Rodney G. Smith Regional Vice President None
2350 Lakeside Blvd., #850
Richardson, TX 75082
Nicholas D. Spadaccini Regional Vice President None
855 Markley Woods Way
Cincinnati, OH 45230
Daniel S. Spradling Senior Vice President None
4 West 4th Avenue, Suite 406
San Mateo, CA 94402
Craig R. Strauser Regional Vice President None
17040 Summer Place
Lake Oswego, OR 97035
Francis N. Strazzeri Regional Vice President None
31641 Saddletree Drive
Westlake Village, CA 91361
& James P. Toomey Assistant Vice President None
+ Christopher E. Trede Assistant Vice President None
George F. Truesdail Vice President None
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Regional Vice President None
606 Glenwood Avenue
Mill Valley, CA 94941
@ Andrew J. Ward Vice President None
* David M. Ward Assistant Vice President, None
Institutional Investment
Services Division
Thomas E. Warren Regional Vice President None
4001 Crockers Lake Blvd., #1012
Sarasota, FL 34238
# J. Kelly Webb Senior Vice President None
Gregory J. Weimer Regional Vice President None
125 Surrey Drive
Canonsburg, PA 15317
# Timothy W. Weiss Director None
N. Dexter Williams Vice President None
Four Embarcadero Center
San Francisco, CA 94111
Timothy J. Wilson Regional Vice President None
113 Farmview Place
Venetia, PA 15367
* Marshall D. Wingo Senior Vice President None
* Robert L. Winston Senior Vice President, None
Director
William R. Yost Regional Vice President None
9320 Overlook Trail
Eden Prairie, MN 55347
Janet Young Regional Vice President None
1616 Vermont
Houston, TX 77006
</TABLE>
* Business Address, 333 South Hope Street, Los Angeles, CA 90071
# Business Address, 135 South State College Blvd., Brea, CA 92621
& Business Address, 8000 IH-10, Suite 1400, San Antonio, TX 78230
@ Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
+ Business Address, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240
(c) None.
Item 30. Location of Accounts and Records.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, are maintained and held in the offices of its
investment adviser, Capital Research and Management Company, 333 South Hope
Street, Los Angeles, California 90071, and/or 135 South State College
Boulevard, Brea, California 92621, and/or the offices of the Registrant, Four
Embarcadero Center (Suite 1800), San Francisco, California 94111.
Registrant's records covering shareholder accounts are maintained and kept by
the fund's transfer agent, American Funds Service Company, 135 South State
College Boulevard, Brea, California 92621, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, 8000 IH-10, Suite 1400, San Antonio, Texas 78230 and
5300 Robin Hood Road, Norfolk, VA 23513.
Registrant's records covering portfolio transactions are maintained and kept
by the fund's custodian, The Chase Manhattan Bank, N.A., One Chase Manhattan
Plaza, New York, New York 10081.
Item 31. Management Services.
None.
Item 32. Undertakings.
As reflected in the prospectus, the fund undertakes to provide each person to
whom a prospectus is delivered with a copy of the fund's latest annual report
to shareholders, upon request and without charge.
<PAGE>
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of San Francisco, and State of California on
the 28th day of September, 1995.
THE INCOME FUND OF AMERICA, INC.
By /s/ Patrick F. Quan
Patrick F. Quan, Secretary
ATTEST:
/s/ Barbara A. Preddy
Barbara A. Preddy
Pursuant to the requirements of the Securities Act of 1933, this amendment to
its registration statement has been signed below on September 28 , 1995 by
the following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
<S> <C> <C>
(1) Principal Executive Officer: President
/s/ George A. Miller
(George A. Miller)
(2) Principal Financial Officer and
Principal Accounting Officer: Treasurer
/s/ Mary C. Cremin
(Mary C. Cremin)
(3) Directors:
Robert A. Fox* Director
Roberta L. Hazard* Director
Ernest T. Hinshaw, Jr.* Director
Richard H. M. Holmes* Director
Leonade D. Jones* Director
John G. McDonald* Director
Theodore D. Nierenberg* Director
/s/ James W. Ratzlaff Director
(James W. Ratzlaff)
Henry E. Riggs* Director
Walter P. Stern* Chairman
Patricia K. Woolf* Director
</TABLE>
*By /s/ Patrick F. Quan
Patrick F. Quan, Attorney-in-Fact
Counsel reports that the amendment does not contain disclosures that would
make the amendment ineligible for effectiveness under the provisions of Rule
485(b).
/s/ Michael J. Downer
Michael J. Downer, Counsel
CONSENT OF INDEPENDENT AUDITORS
The Income Fund of America, Inc.
We consent to (a) the use in this Post-Effective Amendment No. 45 to
Registration Statement No. 2-33371 on Form N-1A of our report dated August 23,
1995 appearing in the Financial Statements which are included in Part B, the
Statement of Additional Information of such Registration Statement, (b) the
reference to us under the heading "General Information" in such Statement of
Additional Information, and (c) the reference to us under the heading
"Financial Highlights" in the Prospectus, which is a part of such Registration
Statement.
/s/Deloitte & Touche LLP
September 21, 1995
EXHIBIT 16
SCHEDULE FOR COMPUTATION OF EACH PERFORMANCE QUOTATION
PROVIDED IN THE REGISTRATION STATEMENT
(1) ENDING REDEMPTION VALUE AND TOTAL RETURN
Value of an initial investment at the end of a period and total return for the
period are computed as set forth below.
(A) INITIAL INVESTMENT divided by
PUBLIC OFFERING PRICE FOR ONE SHARE AT
BEGINNING OF PERIOD equals
NUMBER OF SHARES INITIALLY PURCHASED
(B) NUMBER OF SHARES INITIALLY PURCHASED plus
NUMBER OF SHARES ACQUIRED AT NET ASSET
VALUE THROUGH REINVESTMENT OF DIVIDENDS
AND CAPITAL GAIN DISTRIBUTIONS DURING
PERIOD equals
NUMBER OF SHARES PURCHASED DURING PERIOD
(C) NUMBER OF SHARES PURCHASED DURING PERIOD multiplied by
NET ASSET VALUE OF ONE SHARE AS OF THE LAST
DAY OF THE PERIOD equals
VALUE OF INVESTMENT AT END OF PERIOD
(D) VALUE OF INVESTMENT AT END OF PERIOD divided by
INITIAL INVESTMENT minus one
and then
multiplied by
100 equals
TOTAL RETURN FOR THE PERIOD EXPRESSED AS A
PERCENTAGE
(2) AVERAGE ANNUAL TOTAL RETURN
Average annual total return quotations for the 1-, 5-, and 10-year periods
ended on the date of the most recent balance sheet are computed according to
the formula set forth below.
P(1+T)/n/ = ERV
WHERE: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 investment as of the
end of 1-, 5-, and 10-year periods (computed in accordance with the formula
shown in (1), above)
THUS:
AVG. ANNUAL TOTAL RETURN AT PUBLIC OFFERING PRICE:
1 Year Total Return 1,000(1+T)/1/ = $1,097.19
T = +9.72%
5 Year Avg. Annual Total Return 1,000(1+T)/5/ = $1,673.55
T = +10.85%
10 Year Avg. Annual Total Return 1,000(1+T)/10/ $ 2,973.50
T = +11.51%
Hypothetical illustrations based on $1,000 and $10,000 initial investments used
to obtain ending values over various time periods are attached. Illustrations
of $2,000 per year which show the benefits of systematic investing are also
included.
(3) YIELD
Yield is computed as set forth below.
(A) DIVIDENDS AND INTEREST EARNED DURING
THE PERIOD minus
EXPENSES ACCRUED FOR THE PERIOD equals
NET INVESTMENT INCOME
(B) NET INVESTMENT INCOME divided by
AVERAGE DAILY NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD THAT WERE ENTITLED
TO RECEIVE DIVIDENDS equals
NET INVESTMENT INCOME PER SHARE EARNED
DURING THE PERIOD
(C) NET INVESTMENT INCOME PER SHARE EARNED
DURING THE PERIOD divided by
MAXIMUM OFFERING PRICE PER SHARE ON
LAST DAY OF THE PERIOD equals
CURRENT MONTH'S YIELD
(D) CURRENT MONTH'S YIELD plus one, raised
to the sixth
power equals
SEMIANNUAL COMPOUNDED YIELD
(E) SEMIANNUAL COMPOUNDED YIELD minus one,
multiplied by
two equals
ANNUALIZED RATE
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
07/01/85 1000 12.93 5.75 % 77.34 12.19 943
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/86 1000 73 73 1073 63 990 76 1066 79 1145.2 89.469
06/30/87 1000 83 156 1156 54 984 134 1118 164 1282.53 100.828
06/30/88 1000 93 249 1249 39 903 163 1066 245 1311.38 112.372
06/30/89 1000 92 341 1341 0 1002 181 1183 375 1558.12 120.318
06/30/90 1000 137 478 1478 46 948 216 1164 487 1651.9 134.739
06/30/91 1000 122 600 1600 10 953 228 1181 617 1798.82 146.008
06/30/92 1000 127 727 1727 12 1050 263 1313 814 2127.12 156.636
06/30/93 1000 135 862 1862 35 1121 318 1439 1007 2446.61 168.848
06/30/94 1000 145 1007 2007 60 1039 351 1390 1072 2462.93 183.254
06/30/95 1000 157 1164 2164 11 1135 395 1530 1336 2866.84 195.422
TOTAL $330
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
07/01/85 1000 12.19 0.00 % 82.034 12.19 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/86 1000 77 77 1077 67 1050 80 1130 84 1214.71 94.899
06/30/87 1000 88 165 1165 57 1043 142 1185 175 1360.39 106.949
06/30/88 1000 98 263 1263 42 957 173 1130 260 1390.99 119.194
06/30/89 1000 98 361 1361 0 1062 192 1254 398 1652.69 127.621
06/30/90 1000 144 505 1505 49 1006 229 1235 517 1752.17 142.918
06/30/91 1000 130 635 1635 10 1011 242 1253 654 1907.99 154.869
06/30/92 1000 135 770 1770 13 1114 279 1393 863 2256.19 166.141
06/30/93 1000 143 913 1913 37 1189 337 1526 1069 2595.06 179.093
06/30/94 1000 154 1067 2067 64 1103 372 1475 1137 2612.39 194.374
06/30/95 1000 165 1232 2232 12 1203 419 1622 1418 3040.81 207.281
TOTAL $351
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
12/01/73 1000 12.81 5.75 % 78.064 12.07 942
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/74 1000 34 34 1034 0 894 0 894 32 926.64 80.929
06/30/75 1000 79 113 1113 0 1056 0 1056 130 1186.46 87.691
06/30/76 1000 79 192 1192 0 1229 0 1229 241 1470.32 93.413
06/30/77 1000 90 282 1282 0 1302 0 1302 350 1652.54 99.073
06/30/78 1000 104 386 1386 0 1238 0 1238 437 1675.97 211.345
06/30/79 1000 135 521 1521 0 1277 0 1277 592 1869.12 228.499
06/30/80 1000 141 662 1662 0 1233 0 1233 718 1951.67 247.047
06/30/81 1000 163 825 1825 0 1333 0 1333 952 2285.22 267.59
06/30/82 1000 197 1022 2022 0 1252 0 1252 1092 2344.5 292.332
06/30/83 1000 238 1260 2260 0 1685 0 1685 1745 3430.48 317.931
06/30/84 1000 279 1539 2539 108 1538 102 1640 1859 3499.5 355.279
06/30/85 1000 323 1862 2862 124 1903 275 2178 2684 4862.62 398.902
06/30/86 1000 374 2236 3236 327 1998 680 2678 3228 5906.68 461.459
06/30/87 1000 426 2662 3662 278 1986 978 2964 3650 6614.96 520.044
06/30/88 1000 478 3140 4140 202 1822 1106 2928 3835 6763.68 579.578
06/30/89 1000 476 3616 4616 0 2022 1228 3250 4786 8036.29 620.563
06/30/90 1000 702 4318 5318 238 1914 1393 3307 5213 8520.03 694.945
06/30/91 1000 631 4949 5949 50 1923 1453 3376 5901 9277.77 753.066
06/30/92 1000 658 5607 6607 61 2120 1665 3785 7186 10971.11 807.887
06/30/93 1000 700 6307 7307 180 2262 1968 4230 8388 12618.88 870.868
06/30/94 1000 747 7054 8054 309 2098 2113 4211 8492 12703.1 945.171
06/30/95 1000 805 7859 8859 58 2290 2370 4660 10126 14786.38 1007.933
TOTAL $1,935
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
12/01/73 1000 12.07 0.00 % 82.85 12.07 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/30/74 1000 37 37 1037 0 949 0 949 34 983.45 85.891
06/30/75 1000 84 121 1121 0 1121 0 1121 138 1259.21 93.068
06/30/76 1000 84 205 1205 0 1304 0 1304 256 1560.5 99.142
06/30/77 1000 96 301 1301 0 1382 0 1382 371 1753.87 105.148
06/30/78 1000 110 411 1411 0 1314 0 1314 464 1778.73 224.304
06/30/79 1000 143 554 1554 0 1355 0 1355 628 1983.72 242.508
06/30/80 1000 150 704 1704 0 1309 0 1309 762 2071.33 262.194
06/30/81 1000 174 878 1878 0 1415 0 1415 1010 2425.33 283.996
06/30/82 1000 209 1087 2087 0 1329 0 1329 1159 2488.26 310.257
06/30/83 1000 255 1342 2342 0 1788 0 1788 1852 3640.8 337.424
06/30/84 1000 295 1637 2637 114 1632 108 1740 1974 3714.07 377.063
06/30/85 1000 345 1982 2982 132 2020 292 2312 2848 5160.78 423.362
06/30/86 1000 397 2379 3379 347 2121 722 2843 3425 6268.88 489.756
06/30/87 1000 453 2832 3832 296 2108 1038 3146 3874 7020.6 551.934
06/30/88 1000 508 3340 4340 214 1934 1174 3108 4070 7178.44 615.119
06/30/89 1000 505 3845 4845 0 2146 1303 3449 5080 8529.09 658.617
06/30/90 1000 744 4589 5589 253 2031 1478 3509 5533 9042.46 737.558
06/30/91 1000 670 5259 6259 53 2041 1542 3583 6263 9846.65 799.241
06/30/92 1000 698 5957 6957 65 2250 1767 4017 7626 11643.79 857.422
06/30/93 1000 742 6699 7699 191 2401 2089 4490 8902 13392.61 924.266
06/30/94 1000 793 7492 8492 328 2227 2242 4469 9012 13481.97 1003.123
06/30/95 1000 854 8346 9346 61 2431 2516 4947 10746 15693 1069.734
TOTAL $2,054
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/85 1000 12.39 5.75 % 80.71 11.68 943
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/86 1000 78 78 1078 65 977 73 1050 79 1129.96 93.308
07/31/87 1000 88 166 1166 55 1012 135 1147 171 1318.31 105.128
07/31/88 1000 89 255 1255 40 928 164 1092 248 1340.89 116.599
07/31/89 1000 105 360 1360 0 1065 189 1254 400 1654.99 125.378
07/31/90 1000 104 464 1464 47 977 218 1195 469 1664.04 137.41
07/31/91 1000 124 588 1588 10 1012 236 1248 619 1867.23 148.902
07/31/92 1000 130 718 1718 12 1125 276 1401 825 2226.78 159.74
07/31/93 1000 139 857 1857 36 1168 324 1492 999 2491.65 172.194
07/31/94 1000 147 1004 2004 61 1097 362 1459 1080 2539.78 186.886
07/31/95 1000 159 1163 2163 11 1204 410 1614 1359 2973.5 199.296
TOTAL $337
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/85 10000 12.39 5.75 % 807.103 11.68 9427
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/86 10000 773 773 10773 646 9774 731 10505 794 11299.76 933.093
07/31/87 10000 876 1649 11649 551 10121 1347 11468 1715 13183.25 1051.296
07/31/88 10000 885 2534 12534 399 9282 1643 10925 2483 13408.99 1165.999
07/31/89 10000 1055 3589 13589 0 10654 1885 12539 4011 16550.09 1253.795
07/31/90 10000 1042 4631 14631 471 9774 2179 11953 4687 16640.48 1374.111
07/31/91 10000 1248 5879 15879 98 10121 2364 12485 6187 18672.45 1489.031
07/31/92 10000 1301 7180 17180 121 11251 2758 14009 8259 22268.13 1597.427
07/31/93 10000 1383 8563 18563 356 11679 3240 14919 9997 24916.78 1721.961
07/31/94 10000 1476 10039 20039 611 10969 3617 14586 10812 25398.08 1868.88
07/31/95 10000 1591 11630 21630 114 12042 4101 16143 13592 29735.25 1992.979
TOTAL $3,367
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DOW JONES INDUSTRIAL AVERAGE
SALES NET ASSETINITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
08/01/85 10000 1347.45 0 % 7.421 1347.45 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/86 10000 493 493 10493 0 13175 0 13175 555 13730.25 7.734
07/31/87 10000 544 1037 11037 0 19088 0 19088 1478 20566.27 7.996
07/31/88 10000 597 1634 11634 0 15798 0 15798 1827 17625.88 8.28
07/31/89 10000 775 2409 12409 0 19746 0 19746 3210 22956.17 8.628
07/31/90 10000 918 3327 13327 0 21561 0 21561 4478 26039.31 8.963
07/31/91 10000 903 4230 14230 0 22448 0 22448 5655 28103.6 9.291
07/31/92 10000 899 5129 15129 0 25187 0 25187 7315 32502.23 9.577
07/31/93 10000 987 6116 16116 0 26268 0 26268 8670 34938.11 9.871
07/31/94 10000 1031 7147 17147 0 27938 0 27938 10260 38198.38 10.147
07/31/95 10000 1138 8285 18285 0 34943 0 34943 14166 49109.34 10.43
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STANDARD & POOR'S 500 COMPOSITE INDEX
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/85 10000 190.92 0.00 % 52.378 190.92 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/86 10000 431 431 10431 0 12367 0 12367 474 12841.39 54.385
07/31/87 10000 470 901 10901 0 16691 0 16691 1195 17886.7 56.131
07/31/88 10000 524 1425 11425 0 14248 0 14248 1553 15801.37 58.089
07/31/89 10000 607 2032 12032 0 18127 0 18127 2710 20837.82 60.211
07/31/90 10000 712 2744 12744 0 18654 0 18654 3518 22172.83 62.257
07/31/91 10000 767 3511 13511 0 20313 0 20313 4684 24997.07 64.457
07/31/92 10000 805 4316 14316 0 22219 0 22219 5977 28196.81 66.469
07/31/93 10000 842 5158 15158 0 23472 0 23472 7183 30655.23 68.407
07/31/94 10000 888 6046 16046 0 24003 0 24003 8225 32228.05 70.327
07/31/95 10000 950 6996 16996 0 29440 0 29440 11185 40625.7 72.28
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE FIXED INCOME ACCOUNT
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/85 10000 10 0.00 % 1000 10 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/86 10000 751 751 10751 0 10000 0 10000 751 10751.25 1075.125
07/31/87 10000 703 1454 11454 0 10000 0 10000 1455 11455.44 1145.544
07/31/88 10000 730 2184 12184 0 10000 0 10000 2184 12184.16 1218.416
07/31/89 10000 857 3041 13041 0 10000 0 10000 3039 13039.78 1303.978
07/31/90 10000 958 3999 13999 0 10000 0 10000 3997 13997.42 1399.742
07/31/91 10000 930 4929 14929 0 10000 0 10000 4927 14927.42 1492.742
07/31/92 10000 763 5692 15692 0 10000 0 10000 5690 15690.83 1569.083
07/31/93 10000 574 6266 16266 0 10000 0 10000 6264 16264.13 1626.413
07/31/94 10000 518 6784 16784 0 10000 0 10000 6780 16780.87 1678.087
07/31/95 10000 530 7314 17314 0 10000 0 10000 7310 17310.59 1731.059
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE FIXED INCOME ACCOUNT
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/84 10000 10 0.00 % 1000 10 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/85 10000 883 883 10883 0 10000 0 10000 883 10883.28 1088.328
07/31/86 10000 817 1700 11700 0 10000 0 10000 1700 11700.88 1170.088
07/31/87 10000 766 2466 12466 0 10000 0 10000 2467 12467.27 1246.727
07/31/88 10000 793 3259 13259 0 10000 0 10000 3260 13260.35 1326.035
07/31/89 10000 931 4190 14190 0 10000 0 10000 4191 14191.55 1419.155
07/31/90 10000 1043 5233 15233 0 10000 0 10000 5233 15233.78 1523.378
07/31/91 10000 1012 6245 16245 0 10000 0 10000 6245 16245.92 1624.592
07/31/92 10000 830 7075 17075 0 10000 0 10000 7076 17076.76 1707.676
07/31/93 10000 625 7700 17700 0 10000 0 10000 7700 17700.7 1770.07
07/31/94 10000 562 8262 18262 0 10000 0 10000 8263 18263.08 1826.308
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE FIXED INCOME ACCOUNT
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/83 10000 10 0.00 % 1000 10 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/84 10000 937 937 10937 0 10000 0 10000 937 10937.25 1093.725
07/31/85 10000 966 1903 11903 0 10000 0 10000 1903 11903.32 1190.332
07/31/86 10000 894 2797 12797 0 10000 0 10000 2797 12797.55 1279.755
07/31/87 10000 839 3636 13636 0 10000 0 10000 3635 13635.77 1363.577
07/31/88 10000 867 4503 14503 0 10000 0 10000 4503 14503.19 1450.319
07/31/89 10000 1018 5521 15521 0 10000 0 10000 5521 15521.67 1552.167
07/31/90 10000 1140 6661 16661 0 10000 0 10000 6661 16661.57 1666.157
07/31/91 10000 1107 7768 17768 0 10000 0 10000 7768 17768.58 1776.858
07/31/92 10000 908 8676 18676 0 10000 0 10000 8677 18677.29 1867.729
07/31/93 10000 683 9359 19359 0 10000 0 10000 9359 19359.72 1935.972
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE FIXED INCOME ACCOUNT
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/82 10000 10 0.00 % 1000 10 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/83 10000 1002 1002 11002 0 10000 0 10000 1001 11001.48 1100.148
07/31/84 10000 1032 2034 12034 0 10000 0 10000 2032 12032.58 1203.258
07/31/85 10000 1063 3097 13097 0 10000 0 10000 3095 13095.38 1309.538
07/31/86 10000 985 4082 14082 0 10000 0 10000 4079 14079.16 1407.916
07/31/87 10000 923 5005 15005 0 10000 0 10000 5001 15001.33 1500.133
07/31/88 10000 955 5960 15960 0 10000 0 10000 5955 15955.61 1595.561
07/31/89 10000 1121 7081 17081 0 10000 0 10000 7076 17076.08 1707.608
07/31/90 10000 1254 8335 18335 0 10000 0 10000 8330 18330.15 1833.015
07/31/91 10000 1217 9552 19552 0 10000 0 10000 9548 19548.02 1954.802
07/31/92 10000 1000 10552 20552 0 10000 0 10000 10547 20547.73 2054.773
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE FIXED INCOME ACCOUNT
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/81 10000 10 0.00 % 1000 10 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/82 10000 1092 1092 11092 0 10000 0 10000 1092 11092.07 1109.207
07/31/83 10000 1111 2203 12203 0 10000 0 10000 2202 12202.92 1220.292
07/31/84 10000 1144 3347 13347 0 10000 0 10000 3346 13346.63 1334.663
07/31/85 10000 1178 4525 14525 0 10000 0 10000 4525 14525.52 1452.552
07/31/86 10000 1091 5616 15616 0 10000 0 10000 5616 15616.74 1561.674
07/31/87 10000 1024 6640 16640 0 10000 0 10000 6639 16639.61 1663.961
07/31/88 10000 1058 7698 17698 0 10000 0 10000 7698 17698.11 1769.811
07/31/89 10000 1242 8940 18940 0 10000 0 10000 8940 18940.95 1894.095
07/31/90 10000 1392 10332 20332 0 10000 0 10000 10331 20331.97 2033.197
07/31/91 10000 1351 11683 21683 0 10000 0 10000 11682 21682.85 2168.285
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE FIXED INCOME ACCOUNT
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/80 10000 10 0.00 % 1000 10 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/81 10000 995 995 10995 0 10000 0 10000 994 10994.45 1099.445
07/31/82 10000 1200 2195 12195 0 10000 0 10000 2195 12195.13 1219.513
07/31/83 10000 1221 3416 13416 0 10000 0 10000 3416 13416.45 1341.645
07/31/84 10000 1257 4673 14673 0 10000 0 10000 4673 14673.9 1467.39
07/31/85 10000 1296 5969 15969 0 10000 0 10000 5970 15970.02 1597.002
07/31/86 10000 1199 7168 17168 0 10000 0 10000 7169 17169.75 1716.975
07/31/87 10000 1125 8293 18293 0 10000 0 10000 8294 18294.35 1829.435
07/31/88 10000 1163 9456 19456 0 10000 0 10000 9458 19458.11 1945.811
07/31/89 10000 1367 10823 20823 0 10000 0 10000 10824 20824.55 2082.455
07/31/90 10000 1529 12352 22352 0 10000 0 10000 12353 22353.9 2235.39
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE FIXED INCOME ACCOUNT
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/79 10000 10 0.00 % 1000 10 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/80 10000 817 817 10817 0 10000 0 10000 816 10816.83 1081.683
07/31/81 10000 1075 1892 11892 0 10000 0 10000 1892 11892.52 1189.252
07/31/82 10000 1299 3191 13191 0 10000 0 10000 3191 13191.26 1319.126
07/31/83 10000 1320 4511 14511 0 10000 0 10000 4512 14512.34 1451.234
07/31/84 10000 1359 5870 15870 0 10000 0 10000 5872 15872.5 1587.25
07/31/85 10000 1402 7272 17272 0 10000 0 10000 7274 17274.48 1727.448
07/31/86 10000 1298 8570 18570 0 10000 0 10000 8572 18572.22 1857.222
07/31/87 10000 1216 9786 19786 0 10000 0 10000 9788 19788.68 1978.868
07/31/88 10000 1259 11045 21045 0 10000 0 10000 11047 21047.5 2104.75
07/31/89 10000 1478 12523 22523 0 10000 0 10000 12525 22525.55 2252.555
TOTAL $0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/90 2000 12.85 5.75 % 155.642 12.11 1885
ANNUAL INVESTMENTS OF $ 2000.00 -- SAME DAY AS INITIAL INVESTMENT
DIVIDENDS AND CAPITAL GAINS REINVESTED
RIGHT OF ACCUMULATION DISCOUNT REFLECTED WHERE APPLICABLE IN THIS ILLUSTRATION
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/91 2000 141 141 2141 11 1952 12 1964 150 2114.98 168.659
07/31/92 4000 278 419 4419 26 4264 41 4305 464 4769.4 342.138
07/31/93 6000 413 832 6832 107 6383 156 6539 906 7445.99 514.581
07/31/94 8000 553 1385 9385 229 7766 361 8127 1384 9511.56 699.894
07/31/95 10000 714 2099 12099 51 10595 455 11050 2292 13342.6 894.276
TOTAL $424
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/85 2000 12.39 5.75 % 161.421 11.68 1885
ANNUAL INVESTMENTS OF $ 2000.00 -- SAME DAY AS INITIAL INVESTMENT
DIVIDENDS AND CAPITAL GAINS REINVESTED
RIGHT OF ACCUMULATION DISCOUNT REFLECTED WHERE APPLICABLE IN THIS ILLUSTRATION
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/86 2000 154 154 2154 129 1955 146 2101 158 2259.96 186.619
07/31/87 4000 321 475 4475 202 3976 368 4344 491 4835.64 385.617
07/31/88 6000 452 927 6927 204 5374 545 5919 916 6835.03 594.35
07/31/89 8000 686 1613 9613 0 8333 625 8958 1805 10763.02 815.38
07/31/90 10000 797 2410 12410 360 9373 917 10290 2426 12716.48 1050.081
07/31/91 12000 1095 3505 15505 86 11658 1044 12702 3682 16384.29 1306.562
07/31/92 14000 1272 4777 18777 118 15054 1287 16341 5445 21786.48 1562.875
07/31/93 16000 1470 6247 22247 379 17583 1738 19321 7166 26487.12 1830.485
07/31/94 18000 1681 7928 25928 696 18285 2286 20571 8349 28920.5 2128.072
07/31/95 20000 1929 9857 29857 138 22143 2667 24810 11255 36065.94 2417.288
TOTAL $2,312
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
12/01/73 10000 12.81 5.75 % 780.64 12.07 9422
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/74 10000 347 347 10347 0 8767 0 8767 321 9088.37 809.294
07/31/75 10000 785 1132 11132 0 10141 0 10141 1250 11391.16 876.918
07/31/76 10000 998 2130 12130 0 12155 0 12155 2596 14751.06 947.403
07/31/77 10000 969 3099 13099 0 12701 0 12701 3691 16392.32 1007.518
07/31/78 10000 1117 4216 14216 0 12584 0 12584 4819 17403.85 2159.287
07/31/79 10000 1333 5549 15549 0 12693 0 12693 6228 18921.39 2327.354
07/31/80 10000 1463 7012 17012 0 12490 0 12490 7672 20162.08 2520.26
07/31/81 10000 1743 8755 18755 0 12818 0 12818 9667 22485.17 2738.754
07/31/82 10000 2187 10942 20942 0 12256 0 12256 11408 23664.43 3014.577
07/31/83 10000 2549 13491 23491 0 16112 0 16112 17572 33684.71 3264.022
07/31/84 10000 2896 16387 26387 1077 15254 1013 16267 19455 35722.28 3656.323
07/31/85 10000 3365 19752 29752 1243 18236 2637 20873 26803 47676.5 4081.892
07/31/86 10000 3909 23661 33661 3266 18907 6434 25341 31807 57148.13 4719.086
07/31/87 10000 4431 28092 38092 2784 19578 9644 29222 37451 66673.83 5316.892
07/31/88 10000 4479 32571 42571 2020 17955 10904 28859 38956 67815.53 5897.003
07/31/89 10000 5338 37909 47909 0 20609 12515 33124 50577 83701.61 6341.031
07/31/90 10000 5269 43178 53178 2382 18907 13755 32662 51496 84158.81 6949.53
07/31/91 10000 6311 49489 59489 495 19578 14787 34365 60070 94435.49 7530.741
07/31/92 10000 6578 56067 66067 612 21764 17093 38857 73763 112620.51 8078.946
07/31/93 10000 6995 63062 73062 1803 22592 19653 42245 83771 126016.06 8708.781
07/31/94 10000 7471 70533 80533 3089 21218 21364 42582 85868 128450.19 9451.817
07/31/95 10000 8046 78579 88579 575 23294 24107 47401 102984 150385.29 10079.443
TOTAL $19,346
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/74 10000 11.92 5.75 % 838.926 11.23 9421
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/75 10000 814 814 10814 0 10898 0 10898 910 11808.25 909.026
07/31/76 10000 1034 1848 11848 0 13062 0 13062 2229 15291.19 982.093
07/31/77 10000 1006 2854 12854 0 13649 0 13649 3343 16992.52 1044.408
07/31/78 10000 1158 4012 14012 0 13523 0 13523 4518 18041.09 2238.349
07/31/79 10000 1382 5394 15394 0 13641 0 13641 5973 19614.19 2412.569
07/31/80 10000 1517 6911 16911 0 13423 0 13423 7477 20900.32 2612.54
07/31/81 10000 1807 8718 18718 0 13775 0 13775 9533 23308.48 2839.035
07/31/82 10000 2268 10986 20986 0 13171 0 13171 11359 24530.93 3124.959
07/31/83 10000 2641 13627 23627 0 17315 0 17315 17603 34918.11 3383.538
07/31/84 10000 3001 16628 26628 1117 16393 1050 17443 19587 37030.3 3790.205
07/31/85 10000 3489 20117 30117 1289 19597 2734 22331 27091 49422.25 4231.357
07/31/86 10000 4052 24169 34169 3385 20319 6669 26988 32252 59240.7 4891.883
07/31/87 10000 4592 28761 38761 2886 21040 9997 31037 38078 69115.19 5511.578
07/31/88 10000 4644 33405 43405 2094 19295 11303 30598 39700 70298.72 6112.932
07/31/89 10000 5533 38938 48938 0 22148 12974 35122 51644 86766.49 6573.219
07/31/90 10000 5463 44401 54401 2469 20319 14259 34578 52662 87240.42 7203.998
07/31/91 10000 6544 50945 60945 513 21040 15329 36369 61524 97893.37 7806.489
07/31/92 10000 6820 57765 67765 634 23389 17719 41108 75636 116744.24 8374.766
07/31/93 10000 7251 65016 75016 1869 24279 20373 44652 85978 130630.27 9027.662
07/31/94 10000 7746 72762 82762 3203 22802 22146 44948 88205 133153.5 9797.903
07/31/95 10000 8341 81103 91103 597 25034 24990 50024 105867 155891.77 10448.51
TOTAL $20,056
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/75 10000 13.78 5.75 % 725.689 12.99 9427
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/76 10000 825 825 10825 0 11299 0 11299 908 12207.16 784.018
07/31/77 10000 803 1628 11628 0 11807 0 11807 1758 13565.34 833.764
07/31/78 10000 924 2552 12552 0 11698 0 11698 2704 14402.45 1786.904
07/31/79 10000 1103 3655 13655 0 11800 0 11800 3858 15658.27 1925.986
07/31/80 10000 1211 4866 14866 0 11611 0 11611 5074 16685 2085.625
07/31/81 10000 1444 6310 16310 0 11916 0 11916 6691 18607.45 2266.437
07/31/82 10000 1811 8121 18121 0 11393 0 11393 8190 19583.35 2494.694
07/31/83 10000 2109 10230 20230 0 14978 0 14978 12897 27875.57 2701.121
07/31/84 10000 2395 12625 22625 891 14180 838 15018 14543 29561.74 3025.767
07/31/85 10000 2785 15410 25410 1029 16952 2182 19134 20320 39454.39 3377.944
07/31/86 10000 3236 18646 28646 2702 17576 5324 22900 24392 47292.59 3905.251
07/31/87 10000 3667 22313 32313 2304 18200 7981 26181 28994 55175.51 4399.961
07/31/88 10000 3706 26019 36019 1672 16691 9023 25714 30406 56120.32 4880.028
07/31/89 10000 4417 30436 40436 0 19158 10357 29515 39751 69266.76 5247.482
07/31/90 10000 4361 34797 44797 1971 17576 11383 28959 40686 69645.11 5751.041
07/31/91 10000 5223 40020 50020 410 18200 12237 30437 47712 78149.49 6232.017
07/31/92 10000 5444 45464 55464 506 20232 14146 34378 58820 93198.38 6685.68
07/31/93 10000 5789 51253 61253 1492 21001 16264 37265 67018 104283.77 7206.895
07/31/94 10000 6182 57435 67435 2557 19724 17679 37403 68895 106298.09 7821.787
07/31/95 10000 6658 64093 74093 476 21655 19950 41605 82845 124450.32 8341.174
TOTAL $16,010
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/76 10000 16.52 5.75 % 605.327 15.57 9425
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/77 10000 620 620 10620 0 9849 0 9849 624 10473.57 643.735
07/31/78 10000 715 1335 11335 0 9758 0 9758 1361 11119.87 1379.636
07/31/79 10000 852 2187 12187 0 9843 0 9843 2246 12089.46 1487.019
07/31/80 10000 936 3123 13123 0 9685 0 9685 3197 12882.18 1610.273
07/31/81 10000 1114 4237 14237 0 9939 0 9939 4427 14366.48 1749.876
07/31/82 10000 1398 5635 15635 0 9504 0 9504 5615 15119.96 1926.109
07/31/83 10000 1629 7264 17264 0 12494 0 12494 9028 21522.24 2085.488
07/31/84 10000 1850 9114 19114 688 11828 647 12475 10349 22824.1 2336.141
07/31/85 10000 2151 11265 21265 794 14140 1685 15825 14637 30462.02 2608.05
07/31/86 10000 2498 13763 23763 2086 14661 4111 18772 17741 36513.73 3015.172
07/31/87 10000 2831 16594 26594 1779 15182 6162 21344 21255 42599.99 3397.128
07/31/88 10000 2862 19456 29456 1291 13923 6967 20890 22439 43329.45 3767.778
07/31/89 10000 3411 22867 32867 0 15981 7997 23978 29501 53479.55 4051.481
07/31/90 10000 3367 26234 36234 1522 14661 8789 23450 30321 53771.67 4440.27
07/31/91 10000 4033 30267 40267 316 15182 9448 24630 35707 60337.74 4811.622
07/31/92 10000 4203 34470 44470 391 16877 10922 27799 44157 71956.69 5161.886
07/31/93 10000 4470 38940 48940 1152 17518 12557 30075 50440 80515.52 5564.307
07/31/94 10000 4773 43713 53713 1974 16453 13650 30103 51967 82070.77 6039.056
07/31/95 10000 5142 48855 58855 368 18063 15403 33466 62619 96085.77 6440.065
TOTAL $12,361
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/77 10000 17.26 5.75 % 579.374 16.27 9426
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/78 10000 642 642 10642 0 9340 0 9340 668 10008.09 1241.699
07/31/79 10000 766 1408 11408 0 9421 0 9421 1459 10880.74 1338.344
07/31/80 10000 842 2250 12250 0 9270 0 9270 2324 11594.19 1449.274
07/31/81 10000 1003 3253 13253 0 9513 0 9513 3417 12930.08 1574.919
07/31/82 10000 1257 4510 14510 0 9096 0 9096 4512 13608.23 1733.532
07/31/83 10000 1466 5976 15976 0 11958 0 11958 7412 19370.4 1876.977
07/31/84 10000 1665 7641 17641 619 11321 582 11903 8639 20542.11 2102.57
07/31/85 10000 1934 9575 19575 715 13534 1517 15051 12365 27416.39 2347.294
07/31/86 10000 2247 11822 21822 1878 14032 3700 17732 15131 32863.06 2713.713
07/31/87 10000 2548 14370 24370 1601 14531 5546 20077 18263 38340.8 3057.48
07/31/88 10000 2577 16947 26947 1162 13326 6270 19596 19401 38997.35 3391.074
07/31/89 10000 3069 20016 30016 0 15295 7197 22492 25640 48132.65 3646.413
07/31/90 10000 3029 23045 33045 1370 14032 7910 21942 26453 48395.56 3996.33
07/31/91 10000 3629 26674 36674 285 14531 8504 23035 31270 54305.18 4330.557
07/31/92 10000 3784 30458 40458 352 16153 9830 25983 38779 64762.49 4645.803
07/31/93 10000 4022 34480 44480 1037 16767 11302 28069 44396 72465.62 5007.99
07/31/94 10000 4296 38776 48776 1777 15747 12285 28032 45833 73865.35 5435.272
07/31/95 10000 4627 43403 53403 331 17289 13863 31152 55327 86479.14 5796.189
TOTAL $11,127
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/78 10000 8.55 5.75 %1169.591 8.06 9427
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/79 10000 722 722 10722 0 9509 0 9509 739 10248.88 1260.625
07/31/80 10000 793 1515 11515 0 9357 0 9357 1563 10920.91 1365.114
07/31/81 10000 944 2459 12459 0 9602 0 9602 2577 12179.23 1483.463
07/31/82 10000 1185 3644 13644 0 9181 0 9181 3636 12817.97 1632.863
07/31/83 10000 1380 5024 15024 0 12070 0 12070 6175 18245.52 1767.977
07/31/84 10000 1568 6592 16592 583 11427 549 11976 7373 19349.17 1980.468
07/31/85 10000 1823 8415 18415 673 13661 1428 15089 10735 25824.23 2210.979
07/31/86 10000 2118 10533 20533 1769 14164 3485 17649 13305 30954.6 2556.119
07/31/87 10000 2401 12934 22934 1508 14667 5223 19890 16224 36114.25 2879.924
07/31/88 10000 2427 15361 25361 1094 13450 5906 19356 17376 36732.67 3194.145
07/31/89 10000 2891 18252 28252 0 15439 6779 22218 23119 45337.45 3434.655
07/31/90 10000 2854 21106 31106 1290 14164 7451 21615 23970 45585.09 3764.252
07/31/91 10000 3419 24525 34525 268 14667 8010 22677 28474 51151.49 4079.066
07/31/92 10000 3564 28089 38089 331 16304 9259 25563 35438 61001.48 4376.003
07/31/93 10000 3789 31878 41878 977 16924 10645 27569 40688 68257.25 4717.156
07/31/94 10000 4047 35925 45925 1673 15895 11572 27467 42108 69575.69 5119.624
07/31/95 10000 4358 40283 50283 312 17450 13058 30508 50948 81456.95 5459.581
TOTAL $10,478
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/79 10000 8.63 5.75 %1158.749 8.13 9421
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/80 10000 729 729 10729 0 9270 0 9270 768 10038.36 1254.795
07/31/81 10000 868 1597 11597 0 9513 0 9513 1681 11194.99 1363.58
07/31/82 10000 1089 2686 12686 0 9096 0 9096 2686 11782.13 1500.908
07/31/83 10000 1268 3954 13954 0 11958 0 11958 4813 16771.04 1625.101
07/31/84 10000 1442 5396 15396 536 11321 504 11825 5960 17785.51 1820.421
07/31/85 10000 1675 7071 17071 619 13534 1313 14847 8890 23737.31 2032.304
07/31/86 10000 1945 9016 19016 1626 14032 3203 17235 11218 28453.06 2349.551
07/31/87 10000 2207 11223 21223 1386 14531 4801 19332 13863 33195.75 2647.189
07/31/88 10000 2230 13453 23453 1006 13326 5429 18755 15009 33764.18 2936.016
07/31/89 10000 2657 16110 26110 0 15295 6231 21526 20147 41673.59 3157.09
07/31/90 10000 2623 18733 28733 1186 14032 6848 20880 21021 41901.22 3460.051
07/31/91 10000 3142 21875 31875 247 14531 7362 21893 25124 47017.79 3749.425
07/31/92 10000 3276 25151 35151 305 16153 8511 24664 31407 56071.78 4022.366
07/31/93 10000 3482 28633 38633 898 16767 9785 26552 36189 62741.2 4335.95
07/31/94 10000 3719 32352 42352 1538 15747 10637 26384 37569 63953.09 4705.893
07/31/95 10000 4005 36357 46357 287 17289 12003 29292 45582 74874.17 5018.376
TOTAL $9,634
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/80 10000 8.49 5.75 %1177.856 8 9423
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/81 10000 814 814 10814 0 9670 0 9670 838 10508.56 1279.971
07/31/82 10000 1023 1837 11837 0 9246 0 9246 1813 11059.71 1408.88
07/31/83 10000 1191 3028 13028 0 12155 0 12155 3587 15742.74 1525.459
07/31/84 10000 1354 4382 14382 503 11508 473 11981 4714 16695 1708.802
07/31/85 10000 1573 5955 15955 581 13757 1232 14989 7292 22281.85 1907.693
07/31/86 10000 1828 7783 17783 1526 14264 3007 17271 9437 26708.46 2205.488
07/31/87 10000 2072 9855 19855 1301 14770 4507 19277 11883 31160.35 2484.876
07/31/88 10000 2094 11949 21949 944 13545 5096 18641 13052 31693.93 2755.994
07/31/89 10000 2495 14444 24444 0 15548 5849 21397 17721 39118.36 2963.512
07/31/90 10000 2463 16907 26907 1113 14264 6429 20693 18639 39332.02 3247.896
07/31/91 10000 2951 19858 29858 231 14770 6911 21681 22453 44134.87 3519.527
07/31/92 10000 3075 22933 32933 286 16419 7989 24408 28225 52633.73 3775.734
07/31/93 10000 3269 26202 36202 843 17044 9185 26229 32665 58894.19 4070.089
07/31/94 10000 3492 29694 39694 1444 16007 9984 25991 34040 60031.79 4417.35
07/31/95 10000 3760 33454 43454 269 17574 11267 28841 41442 70283.26 4710.674
TOTAL $9,041
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/81 10000 8.71 5.75 %1148.106 8.21 9426
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/82 10000 917 917 10917 0 9013 0 9013 907 9920.3 1263.733
07/31/83 10000 1068 1985 11985 0 11848 0 11848 2272 14120.88 1368.302
07/31/84 10000 1214 3199 13199 452 11217 425 11642 3333 14975.05 1532.758
07/31/85 10000 1411 4610 14610 521 13410 1106 14516 5470 19986.35 1711.16
07/31/86 10000 1639 6249 16249 1369 13904 2697 16601 7355 23956.93 1978.277
07/31/87 10000 1857 8106 18106 1167 14397 4043 18440 9510 27950.18 2228.882
07/31/88 10000 1878 9984 19984 847 13203 4571 17774 10654 28428.81 2472.07
07/31/89 10000 2237 12221 22221 0 15155 5247 20402 14686 35088.37 2658.21
07/31/90 10000 2209 14430 24430 999 13904 5766 19670 15610 35280.03 2913.297
07/31/91 10000 2645 17075 27075 208 14397 6199 20596 18992 39588.09 3156.945
07/31/92 10000 2758 19833 29833 257 16005 7166 23171 24040 47211.38 3386.756
07/31/93 10000 2932 22765 32765 756 16613 8239 24852 27974 52826.87 3650.786
07/31/94 10000 3132 25897 35897 1295 15603 8956 24559 29288 53847.28 3962.272
07/31/95 10000 3373 29270 39270 241 17130 10106 27236 35806 63042.61 4225.376
TOTAL $8,112
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/82 10000 8.33 5.75 % 1200.48 7.85 9424
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/83 10000 1015 1015 11015 0 12389 0 12389 1025 13414.09 1299.815
07/31/84 10000 1153 2168 12168 429 11729 403 12132 2093 14225.51 1456.04
07/31/85 10000 1340 3508 13508 495 14022 1050 15072 3913 18985.98 1625.512
07/31/86 10000 1558 5066 15066 1300 14538 2562 17100 5657 22757.83 1879.259
07/31/87 10000 1765 6831 16831 1109 15054 3840 18894 7657 26551.19 2117.32
07/31/88 10000 1784 8615 18615 805 13806 4342 18148 8857 27005.85 2348.335
07/31/89 10000 2126 10741 20741 0 15846 4984 20830 12502 33332.07 2525.157
07/31/90 10000 2099 12840 22840 949 14538 5478 20016 13498 33514.13 2767.476
07/31/91 10000 2514 15354 25354 197 15054 5889 20943 16663 37606.57 2998.929
07/31/92 10000 2620 17974 27974 244 16735 6807 23542 21306 44848.3 3217.238
07/31/93 10000 2785 20759 30759 718 17371 7826 25197 24985 50182.74 3468.054
07/31/94 10000 2975 23734 33734 1230 16315 8508 24823 26329 51152.07 3763.949
07/31/95 10000 3205 26939 36939 229 17911 9600 27511 32376 59887.16 4013.885
TOTAL $7,705
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/83 10000 10.95 5.75 % 913.242 10.32 9425
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/84 10000 809 809 10809 301 8922 283 9205 789 9994.75 1023.004
07/31/85 10000 941 1750 11750 348 10667 738 11405 1934 13339.42 1142.074
07/31/86 10000 1094 2844 12844 914 11059 1800 12859 3130 15989.5 1320.355
07/31/87 10000 1239 4083 14083 779 11452 2698 14150 4504 18654.7 1487.616
07/31/88 10000 1254 5337 15337 565 10502 3051 13553 5421 18974.15 1649.926
07/31/89 10000 1494 6831 16831 0 12055 3502 15557 7861 23418.94 1774.162
07/31/90 10000 1474 8305 18305 666 11059 3849 14908 8638 23546.83 1944.412
07/31/91 10000 1766 10071 20071 139 11452 4137 15589 10833 26422.14 2107.029
07/31/92 10000 1840 11911 21911 171 12731 4783 17514 13996 31510.13 2260.411
07/31/93 10000 1957 13868 23868 504 13215 5499 18714 16544 35258.07 2436.632
07/31/94 10000 2090 15958 25958 864 12411 5977 18388 17551 35939.09 2644.525
07/31/95 10000 2251 18209 28209 161 13626 6745 20371 21705 42076.34 2820.13
TOTAL $5,412
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/84 10000 10.37 5.75 % 964.32 9.77 9421
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/85 10000 888 888 10888 328 11263 376 11639 935 12574.22 1076.56
07/31/86 10000 1031 1919 11919 861 11678 1366 13044 2028 15072.28 1244.614
07/31/87 10000 1169 3088 13088 734 12093 2201 14294 3290 17584.59 1402.28
07/31/88 10000 1181 4269 14269 533 11090 2561 13651 4234 17885.71 1555.279
07/31/89 10000 1407 5676 15676 0 12729 2940 15669 6406 22075.53 1672.389
07/31/90 10000 1390 7066 17066 628 11678 3297 14975 7221 22196.1 1832.874
07/31/91 10000 1665 8731 18731 131 12093 3557 15650 9256 24906.48 1986.163
07/31/92 10000 1735 10466 20466 161 13443 4127 17570 12132 29702.61 2130.747
07/31/93 10000 1845 12311 22311 476 13954 4788 18742 14493 33235.55 2296.859
07/31/94 10000 1969 14280 24280 815 13105 5263 18368 15509 33877.52 2492.827
07/31/95 10000 2123 16403 26403 152 14388 5950 20338 19324 39662.7 2658.358
TOTAL $4,819
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/85 10000 12.39 5.75 % 807.103 11.68 9427
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/86 10000 773 773 10773 646 9774 731 10505 794 11299.76 933.093
07/31/87 10000 876 1649 11649 551 10121 1347 11468 1715 13183.25 1051.296
07/31/88 10000 885 2534 12534 399 9282 1643 10925 2483 13408.99 1165.999
07/31/89 10000 1055 3589 13589 0 10654 1885 12539 4011 16550.09 1253.795
07/31/90 10000 1042 4631 14631 471 9774 2179 11953 4687 16640.48 1374.111
07/31/91 10000 1248 5879 15879 98 10121 2364 12485 6187 18672.45 1489.031
07/31/92 10000 1301 7180 17180 121 11251 2758 14009 8259 22268.13 1597.427
07/31/93 10000 1383 8563 18563 356 11679 3240 14919 9997 24916.78 1721.961
07/31/94 10000 1476 10039 20039 611 10969 3617 14586 10812 25398.08 1868.88
07/31/95 10000 1591 11630 21630 114 12042 4101 16143 13592 29735.25 1992.979
TOTAL $3,367
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/86 10000 12.85 5.75 % 778.21 12.11 9424
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/87 10000 731 731 10731 459 9759 492 10251 743 10994.96 876.791
07/31/88 10000 738 1469 11469 333 8949 791 9740 1443 11183.24 972.456
07/31/89 10000 880 2349 12349 0 10272 907 11179 2623 13802.98 1045.68
07/31/90 10000 869 3218 13218 393 9424 1207 10631 3247 13878.39 1146.027
07/31/91 10000 1041 4259 14259 82 9759 1340 11099 4474 15573.07 1241.872
07/31/92 10000 1085 5344 15344 101 10848 1598 12446 6125 18571.9 1332.274
07/31/93 10000 1152 6496 16496 297 11261 1973 13234 7546 20780.92 1436.138
07/31/94 10000 1232 7728 17728 509 10576 2332 12908 8274 21182.33 1558.67
07/31/95 10000 1327 9055 19055 95 11611 2668 14279 10520 24799.58 1662.17
TOTAL $2,269
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/87 10000 13.31 5.75 % 751.315 12.54 9421
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/88 10000 633 633 10633 286 8640 291 8931 651 9582.82 833.289
07/31/89 10000 756 1389 11389 0 9917 334 10251 1576 11827.65 896.034
07/31/90 10000 744 2133 12133 337 9098 628 9726 2166 11892.27 982.021
07/31/91 10000 891 3024 13024 70 9421 727 10148 3196 13344.44 1064.15
07/31/92 10000 930 3954 13954 86 10473 901 11374 4540 15914.13 1141.616
07/31/93 10000 988 4942 14942 255 10872 1205 12077 5730 17807.01 1230.616
07/31/94 10000 1055 5997 15997 437 10210 1542 11752 6398 18150.95 1335.611
07/31/95 10000 1137 7134 17134 81 11210 1785 12995 8255 21250.56 1424.3
TOTAL $1,552
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/88 10000 12.2 5.75 % 819.672 11.5 9426
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/89 10000 743 743 10743 0 10820 0 10820 814 11634.35 881.39
07/31/90 10000 732 1475 11475 331 9926 316 10242 1455 11697.88 965.969
07/31/91 10000 877 2352 12352 69 10279 403 10682 2444 13126.31 1046.755
07/31/92 10000 914 3266 13266 85 11426 539 11965 3688 15653.95 1122.952
07/31/93 10000 973 4239 14239 251 11861 825 12686 4829 17515.91 1210.498
07/31/94 10000 1038 5277 15277 429 11139 1178 12317 5537 17854.24 1313.778
07/31/95 10000 1119 6396 16396 80 12230 1385 13615 7288 20903.17 1401.017
TOTAL $1,245
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/89 10000 14.01 5.75 % 713.776 13.2 9422
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/90 10000 593 593 10593 268 8644 256 8900 573 9473.31 782.272
07/31/91 10000 710 1303 11303 56 8951 326 9277 1353 10630.12 847.697
07/31/92 10000 741 2044 12044 69 9950 436 10386 2291 12677.11 909.405
07/31/93 10000 787 2831 12831 203 10328 668 10996 3188 14184.97 980.302
07/31/94 10000 842 3673 13673 348 9700 954 10654 3804 14458.94 1063.94
07/31/95 10000 906 4579 14579 65 10650 1121 11771 5157 16928.07 1134.589
TOTAL $1,009
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/90 10000 12.85 5.75 % 778.21 12.11 9424
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/91 10000 707 707 10707 55 9759 61 9820 754 10574.89 843.293
07/31/92 10000 737 1444 11444 69 10848 141 10989 1622 12611.27 904.682
07/31/93 10000 783 2227 12227 202 11261 360 11621 2490 14111.3 975.211
07/31/94 10000 837 3064 13064 346 10576 664 11240 3143 14383.89 1058.417
07/31/95 10000 902 3966 13966 64 11611 802 12413 4427 16840.19 1128.699
TOTAL $736
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/91 10000 13.31 5.75 % 751.315 12.54 9421
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/92 10000 656 656 10656 61 10473 65 10538 697 11235.75 806.008
07/31/93 10000 697 1353 11353 180 10872 258 11130 1442 12572.17 868.844
07/31/94 10000 746 2099 12099 308 10210 533 10743 2072 12815.02 942.974
07/31/95 10000 803 2902 12902 57 11210 650 11860 3143 15003.4 1005.59
TOTAL $606
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/92 10000 14.79 5.75 % 676.133 13.94 9425
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/93 10000 586 586 10586 151 9784 160 9944 602 10546.37 728.844
07/31/94 10000 626 1212 11212 259 9189 393 9582 1168 10750.07 791.028
07/31/95 10000 673 1885 11885 48 10088 486 10574 2011 12585.83 843.554
TOTAL $458
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/93 10000 15.35 5.75 % 651.466 14.47 9427
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/94 10000 558 558 10558 231 8853 217 9070 538 9608.78 707.048
07/31/95 10000 602 1160 11160 43 9720 287 10007 1242 11249.65 753.998
TOTAL $274
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/94 10000 14.42 5.75 % 693.481 13.59 9424
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/95 10000 591 591 10591 42 10347 48 10395 638 11033.8 739.531
TOTAL $42
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE INCOME FUND OF AMERICA, INC.
SALES NET ASSETINITIAL
INITIAL OFFERINGCHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASEDPER SHARE VALUE
08/01/95 10000 15.83 5.75 % 631.712 14.92 9425
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINSUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'DTOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07/31/95 10000 0 0 10000 0 9425 0 9425 0 9425.14 631.712
TOTAL $0
</TABLE>
<TABLE>
IFA (6): 1 Year - TOTAL RETURN: 6/30/94-6/30/95
Based on $1,000 investment at NAV, all reinvested
Amount Div Reinvest Share Adjusted
Date Invested NAV Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/94 $1,000 $13.44 74.405 74.405 13.440 1,000.00
(7/1/94- 74.405 ********** 0.00
09/23/94 9/23/94******** 13.54 13.90 1.027 75.432 ********** 0.00
12/28/94 0.29 13.15 21.88 1.664 77.096 ********** 0.00
03/24/95 0.20 13.85 15.42 1.113 78.209 ********** 0.00
06/23/95 0.20 14.74 15.64 1.061 79.27 ********** 0.00
06/30/95 14.67 79.27 ********** 1,162.89 16.29%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ NAV)
Amount Div Reinvest Share Adjusted
Date Invested NAV Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/92 $1,000 13.58 73.638 73.638 13.58 1,000.00
(7/1/92- 73.638 ********** 0.00
9/25/92 9/25/92******** 13.89 14.08 1.014 74.652 ********** 0.00
12/29/92 0.460 13.66 34.34 2.514 77.166 ********** 0.00
3/26/93 0.200 14.31 15.43 1.078 78.244 ********** 0.00
6/25/93 0.200 14.42 15.65 1.085 79.329 ********** 0.00
9/24/93 0.200 14.73 15.87 1.077 80.406 ********** 0.00
12/29/93 0.580 14.45 46.64 3.228 83.634 ********** 0.00
03/25/94 0.200 13.89 16.73 1.204 84.838 ********** 0.00
06/24/94 0.200 13.47 16.97 1.260 86.098 ********** 0.00
09/23/94 0.200 13.54 17.22 1.272 87.370 ********** 0.00
12/28/94 0.29 13.15 25.34 1.927 89.297 ********** 0.00
03/24/95 0.20 13.85 17.86 1.290 90.587 ********** 0.00
06/23/95 0.20 14.74 18.12 1.229 91.816 ********** 0.00 34.69%
06/30/95 14.67 91.816 ********** 1,346.94 10.44%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ NAV)
Amount Div Reinvest Share Adjusted
Date Invested NAV Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/90 $1,000 12.26 81.566 81.566 12.26 1,000.00
(7/1/90- 81.566 ********** 0.00
9/28/90 9/28/90******** 11.06 16.31 1.475 83.041 ********** 0.00
12/28/90 0.35 11.42 29.06 2.545 85.586 ********** 0.00
3/22/91 0.20 12.20 17.12 1.403 86.989 ********** 0.00
6/21/91 0.20 12.44 17.4 1.399 88.388 ********** 0.00
9/27/91 0.20 12.79 17.68 1.382 89.770 ********** 0.00
12/27/91 0.33 13.02 29.62 2.275 92.045 ********** 0.00
3/27/92 0.20 13.21 18.41 1.394 93.439 ********** 0.00
6/26/92 0.200 13.51 18.69 1.383 94.822 ********** 0.00
9/25/92 0.200 13.89 18.96 1.365 96.187 ********** 0.00
12/29/92 0.460 13.66 44.25 3.239 99.426 ********** 0.00
3/26/93 0.200 14.31 19.89 1.390 100.816 ********** 0.00
6/25/93 0.200 14.42 20.16 1.398 102.214 ********** 0.00
9/24/93 0.200 14.73 20.44 1.388 103.602 ********** 0.00
12/29/93 0.580 14.45 60.09 4.158 107.760 ********** 0.00
03/25/94 0.200 13.89 21.55 1.551 109.311 ********** 0.00
06/24/94 0.200 13.47 21.86 1.623 110.934 ********** 0.00
09/23/94 0.200 13.54 22.19 1.639 112.573 ********** 0.00
12/28/94 0.290 13.15 32.65 2.483 115.056 ********** 0.00
03/24/95 0.20 13.85 23.01 1.661 116.717 ********** 0.00
06/23/95 0.20 14.74 23.34 1.583 118.300 ********** 0.00 73.55%
06/30/95 14.67 118.300 ********** 1,735.46 11.66%
</TABLE>
<TABLE>
IFA (6): 1 Year - TOTAL RETURN: 6/30/94-6/30/95
Based on $1,000 investment at MOP, all reinvested
Amount Div Reinvest Share Adjusted
Date Invested MOP Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/94 $1,000 $14.26 70.126 70.126 14.260 1,000.00
(7/1/94- 70.126 ********** 0.00
09/23/94 9/23/94******** 13.54 13.10 0.968 71.094 ********** 0.00
12/28/94 0.29 13.15 20.62 1.568 72.662 ********** 0.00
03/24/95 0.20 13.85 14.53 1.049 73.711 ********** 0.00
06/23/95 0.20 14.74 14.74 1 74.711 ********** 0.00
06/30/95 14.67 74.711 ********** 1,096.01 9.60%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ MOP)
Amount Div Reinvest Share Adjusted
Date Invested MOP Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/92 $1,000 14.41 69.396 69.396 14.41 1,000.00
(7/1/92- 69.396 ********** 0.00
9/25/92 9/25/92******** 13.89 13.27 0.955 70.351 ********** 0.00
12/29/92 0.460 13.66 32.36 2.369 72.720 ********** 0.00
3/26/93 0.200 14.31 14.54 1.016 73.736 ********** 0.00
6/25/93 0.200 14.42 14.75 1.023 74.759 ********** 0.00
9/24/93 0.200 14.73 14.95 1.015 75.774 ********** 0.00
12/29/93 0.580 14.45 43.95 3.042 78.816 ********** 0.00
03/25/94 0.200 13.89 15.76 1.135 79.951 ********** 0.00
06/24/94 0.200 13.47 15.99 1.187 81.138 ********** 0.00
09/23/94 0.200 13.54 16.23 1.199 82.337 ********** 0.00
12/28/94 0.29 13.15 23.88 1.816 84.153 ********** 0.00
03/24/95 0.20 13.85 16.83 1.215 85.368 ********** 0.00
06/23/95 0.20 14.74 17.07 1.158 86.526 ********** 0.00 26.93%
06/30/95 14.67 86.526 ********** 1,269.34 8.27%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ MOP)
Amount Div Reinvest Share Adjusted
Date Invested MOP Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/90 $1,000 13.01 76.864 76.864 13.01 1,000.00
(7/1/90- 76.864 ********** 0.00
9/28/90 9/28/90******** 11.06 15.37 1.390 78.254 ********** 0.00
12/28/90 0.35 11.42 27.39 2.398 80.652 ********** 0.00
3/22/91 0.20 12.20 16.13 1.322 81.974 ********** 0.00
6/21/91 0.20 12.44 16.39 1.318 83.292 ********** 0.00
9/27/91 0.20 12.79 16.66 1.303 84.595 ********** 0.00
12/27/91 0.33 13.02 27.92 2.144 86.739 ********** 0.00
3/27/92 0.20 13.21 17.35 1.313 88.052 ********** 0.00
6/26/92 0.200 13.51 17.61 1.303 89.355 ********** 0.00
9/25/92 0.200 13.89 17.87 1.287 90.642 ********** 0.00
12/29/92 0.460 13.66 41.7 3.053 93.695 ********** 0.00
3/26/93 0.200 14.31 18.74 1.310 95.005 ********** 0.00
6/25/93 0.200 14.42 19 1.318 96.323 ********** 0.00
9/24/93 0.200 14.73 19.26 1.308 97.631 ********** 0.00
12/29/93 0.580 14.45 56.63 3.919 101.550 ********** 0.00
03/25/94 0.200 13.89 20.31 1.462 103.012 ********** 0.00
06/24/94 0.200 13.47 20.6 1.529 104.541 ********** 0.00
09/23/94 0.200 13.54 20.91 1.544 106.085 ********** 0.00
12/28/94 0.290 13.15 30.76 2.339 108.424 ********** 0.00
03/24/95 0.20 13.85 21.68 1.565 109.989 ********** 0.00
06/23/95 0.20 14.74 22 1.493 111.482 ********** 0.00 63.54%
06/30/95 14.67 111.482 ********** 1,635.44 10.34%
</TABLE>
<TABLE>
IFA (6): 1 Year - TOTAL RETURN: 7/31/94-7/31/95
Based on $1,000 investment at OFFER, all reinvested
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/94 $1,000 $14.42 69.348 69.348 14.420 1,000.00
(8/1/94- 69.348 ********** 0.00
09/23/94 9/23/94******** 13.54 8.54 0.631 69.979 ********** 0.00
12/28/94 0.29 13.15 20.29 1.543 71.522 ********** 0.00
03/24/95 0.20 13.85 14.30 1.032 72.554 ********** 0.00
06/23/95 0.20 14.74 14.51 0.984 73.538 ********** 0.00
07/31/95 14.92 73.538 ********** 1,097.19 9.72%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ OFFER)
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/92 $1,000 14.79 67.613 67.613 14.79 1,000.00
(8/1/92- 67.613 ********** 0.00
9/25/92 9/25/92******** 13.89 8.32 0.599 68.212 ********** 0.00
12/29/92 0.460 13.66 31.38 2.297 70.509 ********** 0.00
3/26/93 0.200 14.31 14.1 0.985 71.494 ********** 0.00
6/25/93 0.200 14.42 14.3 0.992 72.486 ********** 0.00
9/24/93 0.200 14.73 14.5 0.984 73.470 ********** 0.00
12/29/93 0.580 14.45 42.61 2.949 76.419 ********** 0.00
03/25/94 0.200 13.89 15.28 1.100 77.519 ********** 0.00
06/24/94 0.200 13.47 15.5 1.151 78.670 ********** 0.00
09/23/94 0.200 13.54 15.73 1.162 79.832 ********** 0.00
12/28/94 0.29 13.15 23.15 1.760 81.592 ********** 0.00
03/24/95 0.20 13.85 16.32 1.178 82.770 ********** 0.00
06/23/95 0.20 14.74 16.55 1.123 83.893 ********** 0.00 25.17%
07/31/95 14.92 83.893 ********** 1,251.68 7.77%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ OFFER)
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/90 $1,000 12.85 77.821 77.821 12.85 1,000.00
(8/1/90- 77.821 ********** 0.00
9/28/90 9/28/90******** 11.06 10.14 0.917 78.738 ********** 0.00
12/28/90 0.35 11.42 27.56 2.413 81.151 ********** 0.00
3/22/91 0.20 12.20 16.23 1.330 82.481 ********** 0.00
6/21/91 0.20 12.44 16.5 1.326 83.807 ********** 0.00
9/27/91 0.20 12.79 16.76 1.310 85.117 ********** 0.00
12/27/91 0.33 13.02 28.09 2.157 87.274 ********** 0.00
3/27/92 0.20 13.21 17.45 1.321 88.595 ********** 0.00
6/26/92 0.200 13.51 17.72 1.312 89.907 ********** 0.00
9/25/92 0.200 13.89 17.98 1.294 91.201 ********** 0.00
12/29/92 0.460 13.66 41.95 3.071 94.272 ********** 0.00
3/26/93 0.200 14.31 18.85 1.317 95.589 ********** 0.00
6/25/93 0.200 14.42 19.12 1.326 96.915 ********** 0.00
9/24/93 0.200 14.73 19.38 1.316 98.231 ********** 0.00
12/29/93 0.580 14.45 56.97 3.943 102.174 ********** 0.00
03/25/94 0.200 13.89 20.43 1.471 103.645 ********** 0.00
06/24/94 0.200 13.47 20.73 1.539 105.184 ********** 0.00
09/23/94 0.200 13.54 21.04 1.554 106.738 ********** 0.00
12/28/94 0.290 13.15 30.95 2.354 109.092 ********** 0.00
03/24/95 0.20 13.85 21.82 1.575 110.667 ********** 0.00
06/23/95 0.20 14.74 22.13 1.501 112.168 ********** 0.00 67.35%
07/31/95 14.92 112.168 ********** 1,673.55 10.85%
</TABLE>
<TABLE>
IFA (6): 1 Year - TOTAL RETURN: 7/31/94-7/31/95
Based on $10,000 investment at OFFER, all reinvested
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/94 $10,000 $14.42 ******* 693.481 14.420 10,000.00
(8/1/94- 693.481 ********** 0.00
09/23/94 9/23/94******** 13.54 85.35 6.304 699.785 ********** 0.00
12/28/94 0.29 13.15 202.94 15.433 715.218 ********** 0.00
03/24/95 0.20 13.85 143.04 10.328 725.546 ********** 0.00
06/23/95 0.20 14.74 145.11 9.845 735.391 ********** 0.00
07/31/95 14.92 735.391 **********10,972.03 9.72%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ OFFER)
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/92 $10,000 14.79 ******* 676.133 14.79 10,000.01
(8/1/92- 676.133 ********** 0.00
9/25/92 9/25/92******** 13.89 83.22 5.991 682.124 ********** 0.00
12/29/92 0.460 13.66 313.78 22.971 705.095 ********** 0.00
3/26/93 0.200 14.31 141.02 9.855 714.950 ********** 0.00
6/25/93 0.200 14.42 142.99 9.916 724.866 ********** 0.00
9/24/93 0.200 14.73 144.97 9.842 734.708 ********** 0.00
12/29/93 0.580 14.45 426.13 29.490 764.198 ********** 0.00
03/25/94 0.200 13.89 152.84 11.004 775.202 ********** 0.00
06/24/94 0.200 13.47 155.04 11.510 786.712 ********** 0.00
09/23/94 0.200 13.54 157.34 11.620 798.332 ********** 0.00
12/28/94 0.29 13.15 231.52 17.606 815.938 ********** 0.00
03/24/95 0.20 13.85 163.19 11.783 827.721 ********** 0.00
06/23/95 0.20 14.74 165.54 11.231 838.952 ********** 0.00 25.17%
07/31/95 14.92 838.952 **********12,517.16 7.77%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ OFFER)
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/90 $10,000 12.85 ******* 778.21 12.85 10,000.00
(8/1/90- 778.210 ********** 0.00
9/28/90 9/28/90******** 11.06 101.43 9.171 787.381 ********** 0.00
12/28/90 0.35 11.42 275.58 24.131 811.512 ********** 0.00
3/22/91 0.20 12.20 162.3 13.303 824.815 ********** 0.00
6/21/91 0.20 12.44 164.96 13.260 838.075 ********** 0.00
9/27/91 0.20 12.79 167.62 13.106 851.181 ********** 0.00
12/27/91 0.33 13.02 280.89 21.574 872.755 ********** 0.00
3/27/92 0.20 13.21 174.55 13.213 885.968 ********** 0.00
6/26/92 0.200 13.51 177.19 13.115 899.083 ********** 0.00
9/25/92 0.200 13.89 179.82 12.946 912.029 ********** 0.00
12/29/92 0.460 13.66 419.53 30.712 942.741 ********** 0.00
3/26/93 0.200 14.31 188.55 13.176 955.917 ********** 0.00
6/25/93 0.200 14.42 191.18 13.258 969.175 ********** 0.00
9/24/93 0.200 14.73 193.84 13.160 982.335 ********** 0.00
12/29/93 0.580 14.45 569.75 39.429 ******************* 0.00
03/25/94 0.200 13.89 204.35 14.712 ******************* 0.00
06/24/94 0.200 13.47 207.3 15.390 ******************* 0.00
09/23/94 0.200 13.54 210.37 15.537 ******************* 0.00
12/28/94 0.290 13.15 309.55 23.540 ******************* 0.00
03/24/95 0.20 13.85 218.19 15.754 ******************* 0.00
06/23/95 0.20 14.74 221.34 15.016 ******************* 0.00 67.36%
07/31/95 14.92 *******************16,735.96 10.85%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ OFFER)
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/93 $10,000 15.35 ******* 651.466 15.35 10,000.00
(8/1/93- 651.466 ********** 0.00
9/24/93 9/24/93******** 14.73 80.18 5.443 656.909 ********** 0.00
12/29/93 0.580 14.45 381.01 26.367 683.276 ********** 0.00
03/25/94 0.200 13.89 136.66 9.839 693.115 ********** 0.00
06/24/94 0.200 13.47 138.62 10.291 703.406 ********** 0.00
09/23/94 0.200 13.54 140.68 10.390 713.796 ********** 0.00
12/28/94 0.29 13.15 207 15.741 729.537 ********** 0.00
03/24/95 0.20 13.85 145.91 10.535 740.072 ********** 0.00
06/23/95 0.20 14.74 148.01 10.041 750.113 ********** 0.00 11.92%
07/31/95 14.92 750.113 **********11,191.69 5.79%
</TABLE>
<TABLE>
INCOME FUND OF AMERICA (@ OFFER)
Amount Div Reinvest Share Adjusted
Date Invested OFFER Shares DividendReinvest P Amount Shares Balance NAV ENDING VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/91 $10,000 13.31 ******* 751.315 13.31 10,000.00
(8/1/91- 751.315 ********** 0.00
9/27/91 9/27/91******** 12.79 88.93 6.953 758.268 ********** 0.00
12/27/91 0.33 13.02 250.23 19.219 777.487 ********** 0.00
3/27/92 0.20 13.21 155.5 11.771 789.258 ********** 0.00
6/26/92 0.200 13.51 157.85 11.684 800.942 ********** 0.00
9/25/92 0.200 13.89 160.19 11.533 812.475 ********** 0.00
12/29/92 0.460 13.66 373.74 27.360 839.835 ********** 0.00
3/26/93 0.200 14.31 167.97 11.738 851.573 ********** 0.00
6/25/93 0.200 14.42 170.31 11.811 863.384 ********** 0.00
9/24/93 0.200 14.73 172.68 11.723 875.107 ********** 0.00
12/29/93 0.580 14.45 507.56 35.125 910.232 ********** 0.00
03/25/94 0.200 13.89 182.05 13.107 923.339 ********** 0.00
06/24/94 0.200 13.47 184.67 13.710 937.049 ********** 0.00
09/23/94 0.200 13.54 187.41 13.841 950.890 ********** 0.00
12/28/94 0 0.290 13.15 275.76 20.970 971.860 ********** 0.00
03/24/95 0.20 13.85 194.37 14.034 985.894 ********** 0.00
06/23/95 0.20 14.74 197.18 13.377 999.271 ********** 0.00 49.09%
07/31/95 14.92 999.271 **********14,909.12 10.50%
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-START> AUG-1-1994
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 11,024,746
<INVESTMENTS-AT-VALUE> 12,153,945
<RECEIVABLES> 184,193
<ASSETS-OTHER> 1,282
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,339,420
<PAYABLE-FOR-SECURITIES> 33,037
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<OTHER-ITEMS-LIABILITIES> 16,226
<TOTAL-LIABILITIES> 49,263
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<PAID-IN-CAPITAL-COMMON> 10,179,174
<SHARES-COMMON-STOCK> 823,830,743
<SHARES-COMMON-PRIOR> 775,239,716
<ACCUMULATED-NII-CURRENT> 110,419
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 47,534
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,129,199
<NET-ASSETS> 12,290,157
<DIVIDEND-INCOME> 259,485
<INTEREST-INCOME> 492,564
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<EXPENSES-NET> 71,752
<NET-INVESTMENT-INCOME> 680,297
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<DISTRIBUTIONS-OF-INCOME> 598,609
<DISTRIBUTIONS-OF-GAINS> 47,119
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<NUMBER-OF-SHARES-SOLD> 118,485,003
<NUMBER-OF-SHARES-REDEEMED> 112,581,008
<SHARES-REINVESTED> 42,687,032
<NET-CHANGE-IN-ASSETS> 1,753,334
<ACCUMULATED-NII-PRIOR> 28,731
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