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THE INCOME FUND OF AMERICA
SEMI-ANNUAL REPORT
for the six months ended
January 31, 1995
[The American Funds Group(R) LOGO]
The Income Fund of America(R)
Seeks current income while secondarily striving for capital growth through
investments in stocks and fixed-income securities.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the total returns and average annual compound
returns for periods ended December 31, 1994 (the most recent calendar quarter)
on an investment at the 5.75% maximum sales charge with all distributions
reinvested.
<TABLE>
<CAPTION>
10 Years 5 Years 12 Months
<S> <C> <C>
+19 5.03% +40.89% -8.12%
(+11.43% a year) (+7.10% a year)
</TABLE>
Sales charges are lower for accounts of $50,000 or more. The fund's 30-day
yield as of February 28, 1995, calculated in accordance with the Securities and
Exchange Commission formula, was 5.80%. Fund results through August 1988 do not
reflect service and distribution expenses now paid under its Plan of
Distribution. Such expenses may not exceed 0.25% of the fund's average net
assets per year and currently amount to approximately 0.22%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY HAVE A GAIN OR LOSS OF PRINCIPAL WHEN YOU SELL YOUR SHARES.
FUND SHARES 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. All investments are subject
to certain risks. For example, those which include common stocks are affected
by fluctuating stock prices, and those which include bonds are affected by
interest rate fluctuations. Accordingly, investors should maintain a long-term
perspective.
FELLOW SHAREHOLDERS:
In an investment climate characterized by falling bond prices and historically
low yields on stocks, The Income Fund of America recorded a positive total
return for the six months ended January 31, 1995. The value of your holdings
rose 2.1% if, like most shareholders, you reinvested the September and December
dividends totaling 43 cents a share and the six-cent capital gain distribution
paid in December. If you took your dividends in cash, you received an income
return for the six months of 2.6% and the value of your holdings declined 0.6%.
IFA's total return was above the 0.8% gain recorded by the Lehman Brothers
Government/Corporate Bond Index and below the 4.1% increase in Standard &
Poor's 500 Stock Composite Index, both with income reinvested. The fund's
results often fall between these two unmanaged indexes. As you can see below,
however, IFA has done better than both of them during its 21-year lifetime
under Capital Research and Management Company.
The fiscal half-year was generally a quiet time in the stock market, with low
returns and low volatility in most sectors. The equity portion
[SIDEBAR]
RESULTS AT A GLANCE
(for periods ended 1/31/95, with distributions reinvested or interest
compounded)
Since The Income Fund of America invests in a mixture of stocks and bonds, its
results should be weighed against a combination of stock and bond market
indexes. Here we present two leading unmanaged indexes widely used as measures
of stock and bond market activity.
<TABLE>
<CAPTION>
Six One 10 Lifetime/1/ Avg. Annual
Months Year Years Compound
Return over
Lifetime/1/
<S> <C> <C> <C> <C> <C>
The Income Fund of America +2.1% -2.4% +205.6% +1,299.3% +13.3%
Standard & Poor's 500 Stock Composite +4.1 +0.5 +264.3 +1,072.4 +12.3
Index
Lehman Brothers Government/-Corporate +0.8 -3.1 +154.9 +545.2 +9.2
Bond Index
Average Savings Institution/2/ +1.6 +3.2 +77.2 +318.7 +7.0
</TABLE>
/1/Since 12/1/73, when Capital Research and Management Company became IFA's
investment adviser.
/2/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. Unlike investments in the fund, such deposits are
insured and, if held to maturity, offer a guaranteed return of principal and a
fixed rate of interest, but no opportunity for capital growth. Maximum
allowable interest rates were imposed by law until 1983.
[END SIDEBAR]
[PULL QUOTE]
These past six months have certainly underscored the value of holding a broadly
diversified portfolio of securities.
[END PULL QUOTE]
of the fund's portfolio (which accounts for just over half of net assets)
benefited from a heavy concentration in pharmaceutical issues, one of the few
industry groups that did well. Four of our five biggest gainers for the period
were drug stocks. Our two largest equity holdings, Eli Lilly and Bristol-Myers
Squibb, rose 35.5% and 16.9%, respectively.
The strength shown by these and other drug stocks reflected consolidations
within the industry and the demise of the Clinton health plan, which had been
viewed as a threat to the industry's profitability. Our holdings in this
industry were built up starting a few years ago, when proposals for drastic
health care reforms were making headlines and the stocks were generally out of
favor.
Meanwhile, interest-rate-sensitive stocks - another area of concentration in
IFA's portfolio - fared poorly during the six months. Nearly all of our
investments in this category, including banks and financial services, posted
declines in response to the continuing rise in interest rates.
In an effort to contain inflation, the Federal Reserve has raised rates three
times since last August 1 - and a total of seven times over the past 13 months.
The Fed's actions, aimed at lifting short-term rates, have resulted in higher
intermediate and long-term rates as well.
This increase in interest rates had a negative effect on the fund's
fixed-income holdings, which account for a little over 40% of net assets. Bond
prices - which typically go down when rates go up (and vice versa) - kept
falling during most of the fiscal half-year before rallying to some extent in
late 1994 and early '95.
We have continued to build downside protection into the fund's fixed-income
portfolio by shortening maturities; the average maturity is now 6.3 years
compared with about 7 years last July 31. Bonds with shorter maturities tend to
fluctuate less in price than longer-term bonds.
The interest rate outlook for the next several months is mixed. The U.S.
economy appears to be growing more slowly, but the pace of growth may still be
vigorous enough to put pressure on production capacity and prices. We do expect
calendar 1995 to be a much better year in the fixed-income market than 1994,
which was one of the worst years for bonds in history.
These past six months have certainly underscored the value of holding a
broadly diversified portfolio of securities. They also serve as a reminder that
there are risks involved in investing in bonds as well as stocks. Both can be
expected to fluctuate in price - and so will the value of your shares in IFA.
That is why maintaining a long-term perspective on your holdings is so
important. Over time, we believe the fund will continue to provide those who
are patient with a rewarding investment experience.
Cordially,
Walter P. Stern
Chairman of the Board
George A. Miller
President
March 10, 1995
THE INCOME FUND OF AMERICA
January 31, 1995
PORTFOLIO SUMMARY
<TABLE>
<CAPTION>
BY TYPE OF INVESTMENT
<S> <C>
- ----------------------------
Equity-Type Securities 53%
Corporate Bonds 22%
Government Bonds 20%
Cash and Equivalents 5%
- ---------------------------- -------------
Percent of
TEN LARGEST STOCK HOLDINGS Net Assets
- ---------------------------- -------------
Eli Lilly 1.93%
Bristol-Myers Squibb 1.61
Philip Morris 1.39
American Home Products 1.26
American Brands 1.19
Upjohn 1.05
Lincoln National .86
Entergy .83
Occidental Petroleum .83
American General .76
</TABLE>
THE INCOME FUND OF AMERICA
INVESTMENT PORTFOLIO January 31, 1995
<TABLE>
<CAPTION>
- ---------------------------------- --- --- ---
Shares or Market Percent
Principal Value of Net
Equity-Type Securities Amount (000) Assets
<S> <C> <C> <C>
- ---------------------------------- --- --- ---
HEALTH & PERSONAL CARE - 7.83%
American Home Products Corp. 1,930,000 $135,341 1.26%
Baxter International Inc. 2,500,000 73,750 0.69
Bristol-Myers Squibb Co. 2,815,000 173,122 1.61
Glycomed Inc. 7.50% convertible debentures 2003 $5,000,000 2,850 0.03
Eli Lilly and Co. 3,150,000 207,506 1.93
Merck & Co., Inc. 800,000 32,200 0.3
Tambrands Inc. 995,000 43,158 0.4
Upjohn Co. 3,350,000 112,644 1.05
Warner-Lambert Co. 775,000 60,450 0.56
-------- -----
841,021 7.83
-------- -----
ENERGY SOURCES - 6.51%
Amoco Corp. 1,275,000 73,950 0.69
Atlantic Richfield Co. 700,000 74,550 0.69
California Energy Co., Inc. 5.00% convertible debentures
2000 (1) $10,000,000 9,100 0.08
Chevron Corp. 1,135,000 50,649 0.47
Chieftain International Funding Corp. $1.8125
convertible preferred 152,500 3,202 0.03
Cyprus Amax Minerals Co. $4.00 convertible preferred,
Series A 465,000 27,667 0.26
Howell Corp. $3.50 convertible preferred, Series A 60,000 2,820 0.03
Mobil Corp. 775,000 66,941 0.62
Occidental Petroleum Corp. 4,000,000 75,000
Occidental Petroleum Corp. $3.875 convertible
preferred (1) 300,000 14,550 0.83
Oryx Energy Co. 7.50% convertible debentures 2014 $9,500,000 6,626 0.06
Phillips Petroleum Co. 2,350,000 74,906 0.7
Santa Fe Energy Resources, Inc. $0.732 DECS
convertible preferred, Series A 500,000 4,437 0.04
Sun Co., Inc. 1,422,100 41,419 0.39
Texaco Inc. 1,275,000 78,572 0.73
Unocal Corp. $3.50 convertible preferred (1) 750,000 36,563 0.34
USX-Marathon Group 3,100,000 49,600 0.46
Valero Energy Corp. $3.125 convertible preferred 228,100 9,181 0.09
-------- -----
699,733 6.51
-------- -----
BANKING - 5.62%
AmSouth Bancorporation 1,750,000 47,687 0.44
Banc One Corp. 1,000,000 29,500 0.27
Bank of Montreal 800,000 14,544 0.14
Bank of New York Co., Inc. 1,100,000 33,000
Bank of New York Co., Inc. 7.50% convertible debentures
2001 $13,000,000 19,955 0.49
Bankers Trust New York Corp. 1,000,000 62,625 0.58
CalFed Inc., Class A (2) 328,535 3,244 0.03
Canadian Imperial Bank of Commerce 540,000 12,499 0.12
Central Fidelity Banks, Inc. 281,250 6,820 0.06
Citicorp $5.375 convertible preferred, Series 13 160,000 17,900 0.17
Comerica Inc. 1,080,000 27,135 0.25
CoreStates Financial Corp 2,000,000 53,750 0.5
First Chicago Corp. 575,000 27,025 0.25
First Interstate Bancorp 250,000 18,500
First Interstate Bancorp preferred, Series F 70,000 1,838 0.19
First Nationwide Bank preferred 80,000 7,740 0.07
First Union Corp. 1,600,000 68,400 0.64
Fleet Financial Group, Inc. 700,000 21,963 0.2
Glendale Federal Bank, FSB (2) 234,367 2,051
Glendale Federal Bank, FSB warrants, expire 1999 (2) 6,175 5 0.02
Mellon Bank Corp. 375,000 13,125 0.12
J.P. Morgan & Co. Inc. 660,000 41,580 0.39
PNC Bank Corp. 2,460,000 57,810 0.54
Republic New York Corp. $3.375 convertible
preferred 65,400 3,450 0.03
Royal Bank of Canada 380,000 7,414 0.07
Washington Mutual Savings Bank $6.00 convertible
preferred, Series D 60,000 4,860 0.05
-------- -----
604,420 5.62
-------- -----
UTILITIES: ELECTRIC & GAS - 4.15%
Carolina Power & Light Co. 260,000 7,377 0.07
Consolidated Edison Co. of New York, Inc. 400,000 11,300 0.1
Detroit Edison Co. 1,600,000 44,800 0.42
Eastern Utilities Associates 640,000 14,640 0.14
Entergy Corp. 3,675,000 89,578 0.83
General Public Utilities Corp. 1,157,200 32,691 0.3
Houston Industries Inc. 1,250,000 49,844 0.46
Long Island Lighting Co. 1,985,000 32,752 0.3
NorAm Energy Corp. 1,583,100 8,509 0.08
Pacific Gas and Electric Co. 2,355,200 59,469 0.55
PECO Energy Co. 276,000 7,383 0.07
Puget Sound Power & Light Co. 700,000 14,612 0.14
Texas Utilities Co. 635,592 22,087 0.21
Unicom Corp. 1,963,800 51,059 0.48
-------- -----
446,101 4.15
-------- -----
INSURANCE - 3.74%
Aetna Life and Casualty Co. 500,000 24,750 0.23
Alexander & Alexander Services Inc. $3.625 convertible
preferred, Series A (1) 220,000 9,240 0.09
American General Corp. 2,750,000 81,469 0.76
CIGNA Corp. 703,000 47,540 0.44
Lincoln National Corp. 2,540,000 92,710 0.86
Ohio Casualty Corp. 1,795,000 56,991 0.53
St. Paul Companies, Inc. 1,280,000 61,120 0.57
Trenwick Group Inc. 6.00% convertible debentures 1999 $3,000,000 2,985 0.03
USF&G Corp. 768,951 11,534
USF&G Corp. $5.00 cumulative convertible preferred,
Series C 140,000 8,732
USF&G Corp. 0% convertible debentures 2009 $10,000,000 4,875 0.23
-------- -----
401,946 3.74
-------- -----
TELECOMMUNICATIONS - 3.25%
Ameritech Corp. 1,300,000 57,037 0.53
BCE Inc. 500,000 14,988 0.14
Bell Atlantic Corp. 980,000 53,165 0.5
BellSouth Corp. 250,000 14,813 0.14
Dial Page, Inc. warrants (2) 52,000 7 0
GTE Corp. 1,648,000 55,826 0.52
NYNEX Corp. 900,000 35,550 0.33
Pacific Telesis Group 1,300,000 39,813 0.37
Sprint Corp. 500,000 14,250 0.13
U S WEST, Inc. 1,630,000 63,774 0.59
-------- -----
349,223 3.25
-------- -----
BEVERAGES & TOBACCO - 2.99%
American Brands, Inc. 3,370,000 128,060 1.19
Philip Morris Companies Inc. 2,500,000 149,062 1.39
RJR Nabisco Holdings Corp. preferred equity redemption
cumulative stock (2) 4,000,000 23,500 0.22
UST Inc. 700,000 20,650 0.19
-------- -----
321,272 2.99
-------- -----
FINANCIAL SERVICES - 1.47%
American Express Co. 2,100,000 66,150 0.62
Beneficial Corp. 1,000,000 40,125 0.37
First USA 6.25% PRIDES convertible preferred 500,000 16,500 0.15
Household International, Inc. 773,200 31,411 0.29
MBNA Corp. 150,750 3,844 0.04
-------- -----
158,030 1.47
-------- -----
CHEMICALS - 1.40%
Dexter Corp. 11,500 239 0
Dow Chemical Co. 420,000 26,197 0.24
E.I. du Pont de Nemours and Co. 800,000 42,600 0.4
Eastman Chemical Co. 645,000 32,089 0.3
BFGoodrich Co. 1,025,000 44,459 0.41
RPM, Inc. 0% convertible debentures 2012 $12,500,000 4,844 0.05
-------- -----
150,428 1.4
-------- -----
TRANSPORTATION: AIRLINES - 1.33%
Air Wis Services, Inc. 7.75% convertible
debentures 2010 $4,000,000 2,440 0.02
Alaska Air Group, Inc. 0% convertible debentures 2006 $28,000,000 12,040 0.11
AMR Corp. 6.125% convertible QUICS 2024 $70,000,000 59,500 0.55
Delta Air Lines, Inc. $3.50 convertible preferred, Class
C 915,000 43,920
Delta Air Lines, Inc. 3.23% convertible debentures 2003 $20,000,000 14,700 0.55
UAL Corp. preferred, Series B 400,000 10,800 0.1
-------- -----
143,400 1.33
-------- -----
REAL ESTATE - 1.20%
Kimco Realty Corp. 112,900 4,079 0.04
Meditrust 750,000 22,969
Meditrust 7.50% convertible debentures 2001 $5,000,000 4,675 0.26
Property Trust of America 489,800 8,327
Property Trust of America $1.75 convertible preferred,
Series A 600,000 13,500 0.2
Security Capital Realty (2)(3) 18,680 17,460
Security Capital Realty 12.00% convertible debentures
2014 (3) $14,150,000 12,645 0.28
Weingarten Realty Investors 1,025,847 36,033 0.33
Western Investment Real Estate Trust 714,900 9,115 0.09
-------- -----
128,803 1.2
-------- -----
BUSINESS & PUBLIC SERVICES - 1.11%
Air & Water Technologies Corp. 8.00% convertible
debentures 2015 $9,900,000 6,435 0.06
Ceridian Corp. $2.75 cumulative convertible
exchangeable preferred 170,500 11,743 0.11
Deluxe Corp. 1,150,000 30,762 0.28
Dun & Bradstreet Corp. 1,200,000 60,000 0.56
National Service Industries, Inc. 175,600 4,544 0.04
Sanifill, Inc. 7.50% convertible debentures 2006 $6,000,000 6,090 0.06
-------- -----
119,574 1.11
-------- -----
FOREST PRODUCTS & PAPER - 0.79%
Federal Paper Board Co., Inc. 1,000,000 28,000 0.26
James River Corp. of Virginia 550,000 11,894
James River Corp. of Virginia $1.55 DECS convertible
preferred 675,000 14,006 0.24
Riverwood International Corp. 6.75% convertible
debentures 2003 (1) $5,000,000 5,275 0.05
Union Camp Corp. 550,000 25,919 0.24
-------- -----
85,094 0.79
-------- -----
MULTI-INDUSTRY - 0.76%
Harsco Corp. 565,000 23,589 0.22
Tenneco Inc. 1,328,779 58,466 0.54
-------- -----
82,055 0.76
-------- -----
MERCHANDISING - 0.75%
Melville Corp. 1,650,000 50,737 0.47
Sears, Roebuck and Co. $3.75 preferred equity redemption
cumulative stock, Series A 120,000 6,720 0.06
Staples, Inc. 5.00% convertible debentures 1999 $4,800,000 6,084 0.06
Tandy Corp. $2.14 preferred equity redemption cumulative
stock 500,000 17,563 0.16
-------- -----
81,104 0.75
-------- -----
RECREATION & OTHER CONSUMER PRODUCTS - 0.72%
Coleman Co., Inc. 0% convertible debentures 2013 $8,000,000 2,160 0.02
Eastman Kodak Co. 600,000 29,400 0.27
Hasbro, Inc. 6.00% convertible debentures 1998 $7,950,000 8,467 0.08
Jostens, Inc. 2,000,000 37,500 0.35
-------- -----
77,527 0.72
-------- -----
METALS: STEEL - 0.71%
Bethlehem Steel Corp. $3.50 convertible preferred (1) 250,000 11,062 0.1
Carpenter Technology Corp. 250,000 13,781 0.13
USX Corp. $3.25 convertible preferred 350,000 16,144
USX Corp. 5.75% convertible debentures 2001 $21,000,000 17,115
USX Corp. 0% convertible debentures 2005 $40,000,000 17,800 0.48
-------- -----
75,902 0.71
-------- -----
BROADCASTING & PUBLISHING - 0.70%
Comcast Corp. 1.125% convertible debentures 2007 $54,000,000 20,925 0.2
Time Warner Inc. 0% convertible debentures 2012 $115,000,000 35,938 0.33
Turner Broadcasting System, Inc. 0% convertible
debentures 2007 (1) $45,000,000 18,113 0.17
-------- -----
74,976 0.7
-------- -----
FOOD & HOUSEHOLD PRODUCTS - 0.70%
Clorox Co. 750,000 43,969 0.41
ConAgra, Inc. $1.6875 convertible preferred, Class E 100,000 3,200 0.03
H.J. Heinz Co. 700,000 27,738 0.26
-------- -----
74,907 0.7
-------- -----
AUTOMOBILES - 0.62%
Ford Motor Co. $4.20 cumulative convertible preferred,
Series A 500,000 41,062 0.38
General Motors Corp. 650,000 25,188 0.24
-------- -----
66,250 0.62
-------- -----
METALS: NONFERROUS - 0.58%
Alumax Inc. $4.00 convertible preferred, Series A 140,000 15,610 0.15
Freeport-McMoRan Inc. $1.25 convertible preferred 320,000 6,560 0.06
Inco Ltd. 5.75% convertible debentures 2004 $15,000,000 16,200 0.15
Kaiser Aluminum Corp. 8.255% PRIDES convertible
preferred 260,000 2,925 0.03
Phelps Dodge Corp. 400,000 20,950 0.19
-------- -----
62,245 0.58
-------- -----
MISCELLANEOUS MATERIALS & COMMODITIES - 0.46%
Freeport-McMoRan Inc. $4.375 convertible preferred (1) 210,000 9,870
Freeport-McMoRan Inc. 0% convertible debentures 2006 $40,000,000 14,300 0.23
Olin Corp. 500,000 24,875 0.23
-------- -----
49,045 0.46
-------- -----
MACHINERY & ENGINEERING - 0.33%
Deere & Co. 350,000 24,937 0.23
Thermo Electron Corp. 5.00% convertible debentures
2001 (1) $10,000,000 10,500 0.1
-------- -----
35,437 0.33
-------- -----
TRANSPORTATION: RAIL & ROAD - 0.24%
Consolidated Freightways, Inc. $1.54 convertible
preferred, Class C 385,000 8,037 0.07
Yellow Corp. 840,000 17,850 0.17
-------- -----
25,887 0.24
-------- -----
DATA PROCESSING & REPRODUCTION - 0.23%
Data General Corp. 7.75% convertible debentures 2001 $10,500,000 8,820 0.08
Xerox Corp. 150,000 16,406 0.15
-------- -----
25,226 0.23
-------- -----
TEXTILES & APPAREL - 0.22%
Brown Group, Inc. 730,000 23,269 0.22
-------- -----
INDUSTRIAL COMPONENTS - 0.15%
Dana Corp. 700,000 15,575 0.15
-------- -----
LEISURE & TOURISM - 0.11%
Topps Co., Inc. 2,345,000 11,725 0.11
-------- -----
ELECTRONIC COMPONENTS - 0.10%
Maxtor Corp. 5.75% convertible debentures 2012 $7,500,000 3,938 0.04
National Semiconductor Corp. $3.25 convertible
preferred, Series A 100,000 6,850 0.06
-------- -----
10,788 0.1
-------- -----
AEROSPACE/MILITARY - 0.08%
United Technologies Corp. 131,300 8,436 0.08
-------- -----
GOLD MINES - 0.07%
Newmont Mining Corp. $2.75 convertible preferred (1) 150,000 7,556 0.07
-------- -----
MISCELLANEOUS: Equity-type securities
in initial period of acquisition 444,957 4.14
-------- -----
TOTAL EQUITY-TYPE SECURITIES (cost: $5,318,830,000) 5,701,912 53.06
-------- -----
- ---------------------------------- --- --- ---
Principal Market Percent
Bonds & Notes Amount Value of Net
(000) (000) Assets
- ---------------------------------- --- --- ---
BROADCASTING, ADVERTISING & PUBLISHING - 4.99%
Adelphia Communications Corp. 12.50% 2002 4000 3,680 0.03
Adelphia Communications Corp. 9.50% 2004 (4) 19,630 13,446 0.13
Adelphia Communications Corp. 9.875% 2005 17,000 13,345 0.13
American Media Operations, Inc. 11.625% 2004 8,500 8,776 0.08
Bell Cablemedia PLC 0%/11.95% 2004 (5) 45,500 25,707 0.24
Cablevision Industries Corp. 10.75% 2004 18,000 18,180 0.17
Cablevision Industries Corp. 9.875% 2013 16,500 15,345 0.14
Cablevision Industries Corp. 9.875% 2023 10,000 9,000 0.08
Century Communications Corp. 9.50% 2000 3,500 3,360 0.03
Century Communications Corp. 9.75% 2002 9,500 9,167 0.09
Century Communications Corp. 11.875% 2003 4,400 4,565 0.04
Comcast Corp. 10.25% 2001 11,100 10,906 0.1
Continental Cablevision, Inc. 8.50% 2001 18,200 16,744 0.16
Continental Cablevision, Inc. 10.625% 2002 5,500 5,528 0.05
Continental Cablevision, Inc. 8.625% 2003 4,000 3,680 0.03
Continental Cablevision, Inc. 8.875% 2005 12,000 10,980 0.1
Continental Cablevision, Inc. 11.00% 2007 3,000 3,052 0.03
Continental Cablevision, Inc. 9.00% 2008 1,000 903 0.01
Continental Cablevision, Inc. 9.50% 2013 18,000 16,380 0.15
Falcon Holding Group, LP 11.00% 2003 (4) 17,259 13,807 0.13
Infinity Broadcasting Corp. 10.375% 2002 9,000 9,045 0.08
Insight Communications Co., LP 8.25% 2000 (6) 10,750 10,105 0.09
Jones Intercable, Inc. 10.50% 2008 15,000 14,812 0.14
Marvel Holdings Inc. 0% 1998 62,750 38,905 0.36
News America Holdings Inc. 9.125% 1999 4,000 4,073 0.04
News America Holdings Inc. 12.00% 2001 25,133 28,085 0.26
News America Holdings Inc. 8.50% 2005 7,500 7,261 0.07
News America Holdings Inc. 10.125% 2012 25,000 25,967 0.24
News America Holdings Inc. 8.45% 2034 7,500 7,309 0.07
Rogers Communications Inc. 10.875% 2004 3,500 3,439 0.03
Storer Communications, Inc. 10.00% 2003 6,000 5,610 0.05
Summitt Communications 10.50% 2005 6,655 6,755 0.06
Time Warner Inc. 7.45% 1998 10,000 9,632 0.09
Time Warner Inc. 7.95% 2000 25,000 23,646 0.22
Time Warner Inc. 9.625% 2002 32,000 32,272 0.3
Time Warner Inc. 10.15% 2012 12,000 12,096 0.11
TKR Cable I, Inc. 10.50% 2007 28,000 29,108 0.27
United International Holdings, Inc. 0% 1999 19,750 10,468 0.1
Univision Television Group, Inc. 11.75% 2001 17,000 17,680 0.17
Viacom International Inc. 9.125% 1999 4,000 3,990 0.04
Viacom International Inc. 10.25% 2001 8,000 8,300 0.08
Videotron Holdings PLC 0%/11.125% 2004 (5) 37,500 21,000 0.2
-------- -----
536,109 4.99
-------- -----
TELECOMMUNICATIONS - 3.42%
Cellular, Inc. 0%/11.75% 2003 (5) 18,000 11,970 0.11
CenCall Communications Corp. 0%/10.125% 2004 (5) 45,100 15,108 0.14
Centennial Cellular Corp. 8.875% 2001 26,000 23,270 0.22
Comcast Cellular Corp., Series A, 0% 2000 42,000 29,085 0.27
Comcast Cellular Corp., Series B, 0% 2000 40,800 28,254 0.26
Dial Call Communications, Inc. 0%/12.25% 2004 (5) 52,000 14,560 0.14
Horizon Cellular Telephone Co., LP, Series B,
0%/11.375% 2000 (5) 15,000 10,800 0.1
International CableTel Inc. 0%/10.875% 2003 (5) 21,075 11,170 0.1
MFS Communications Co., Inc. 0%/9.375% 2004 (5) 54,550 33,480 0.31
MobileMedia Communications, Inc. 0%/10.50% 2003 (5) 14,500 7,830 0.07
NEXTEL Communications, Inc. 0%/11.50% 2003 (5) 48,500 17,945 0.17
NEXTEL Communications, Inc. 0%/9.75% 2004 (5) 58,000 19,720 0.18
Paging Network, Inc. 11.75% 2002 8,500 8,585 0.08
Paging Network, Inc. 8.875% 2006 5,000 4,175 0.04
PanAmSat, LP 9.75% 2000 15,300 14,650 0.14
PanAmSat, LP 0%/11.375% 2003 (5) 4,000 2,500 0.02
PriCellular Wireless Corp. 0%/14.00% 2001 (1)(5) 7,500 5,044 0.05
Rogers Cantel Mobile Communications Inc. 10.75% 2001 46,000 46,345 0.43
Tele-Communications, Inc. 9.875% 1998 7,100 7,340 0.07
Tele-Communications, Inc. 7.375% 2000 9,000 8,525 0.08
Tele-Communications, Inc. 10.125% 2001 5,000 5,288 0.05
Tele-Communications, Inc. 9.80% 2012 20,000 19,932 0.19
Tele-Communications, Inc. 9.25% 2023 18,000 16,571 0.15
Telecom Argentina 8.375% 2000 (1) 3,500 2,695 0.03
United Telecommunications, Inc. 9.75% 2000 2,250 2,385 0.02
-------- -----
367,227 3.42
-------- -----
FOREST PRODUCTS & PAPER - 1.82%
Container Corp. of America 9.75% 2003 69,025 66,264 0.62
Container Corp. of America 11.25% 2004 16,000 16,400 0.15
Fort Howard Corp. 9.25% 2001 19,500 18,037 0.17
Fort Howard Corp. 8.25% 2002 4,500 4,028 0.04
Fort Howard Corp. 10.00% 2003 5,000 4,600 0.04
Fort Howard Corp. 9.00% 2006 18,500 15,632 0.14
Grupo Industrial Durango, SA de CV 9.6875% 1996 (1)(6) 7,500 6,975 0.06
Grupo Industrial Durango, SA de CV 12.00% 2001 2,500 2,075 0.02
P.T. Indah Kiat Pulp & Paper Corp. 11.375% 1999 4,000 3,880 0.04
P.T. Indah Kiat Pulp & Paper Corp. 8.875% 2000 (1) 11,500 9,775 0.09
P.T. Indah Kiat Pulp & Paper Corp. 11.875% 2002 4,500 4,320 0.04
P.T. Indorayon Yankee 9.125% 2000 4,500 3,622 0.03
Klabin Fabricadora de Papel e Celulose SA 10.00% 2001 2,500 2,125 0.02
Pacific Lumber Co. 10.50% 2003 2,500 2,325 0.02
Riverwood International Corp. 10.75% 2000 8,000 8,160 0.08
Riverwood International Corp., Series II, 10.75% 2000 2,000 2,050 0.02
Riverwood International Corp. 11.25% 2002 17,750 18,416 0.17
Tjiwi Kimia International Finance Co. 13.25% 2001 7,750 7,363 0.07
-------- -----
196,047 1.82
-------- -----
FINANCIAL SERVICES - 1.21%
Chrysler Financial Corp. 9.50% 1999 5,500 5,763 0.05
Chrysler Financial Corp. 13.25% 1999 20,000 23,887 0.22
Fairfax Financial Holdings Ltd. 7.75% 2003 9,750 8,764 0.08
Ford Capital BV 10.125% 2000 5,500 5,934 0.06
Ford Motor Credit Co. 8.875% 1996 2,500 2,542 0.02
General Electric Capital Corp. 8.875% 2009 4,000 4,170 0.04
General Motors Acceptance Corp. 6.70% 1997 10,000 9,727 0.09
General Motors Acceptance Corp. 7.875% 1997 10,000 9,969 0.09
General Motors Acceptance Corp. 7.90% 1997 10,000 9,966 0.09
General Motors Acceptance Corp. 7.00% 2000 13,000 12,263 0.11
General Motors Acceptance Corp. 9.625% 2001 30,000 31,808 0.3
General Motors Acceptance Corp. 8.75% 2005 5,000 5,029 0.05
General Motors Acceptance Corp. 8.875% 2010 500 531 0.01
-------- -----
130,353 1.21
-------- -----
TRANSPORATION - 1.20%
American Airlines, pass-through certificates, 1991-A1,
9.71% 2007 (7) 4,666 4,619 0.04
AMR Corp. 9.50% 1998 3,500 3,557 0.03
AMR Corp. 10.00% 2001 3,000 3,077 0.03
AMR Corp. 9.00% 2012 10,500 9,492 0.09
AMR Corp. 9.20% 2012 5,000 4,575 0.04
Delta Air Lines, Inc. 9.875% 1998 6,750 6,891 0.06
Delta Air Lines, Inc. 9.875% 2000 13,000 13,092 0.12
Delta Air Lines, Inc. 10.375% 2011 10,000 10,010 0.09
Delta Air Lines, Inc., pass-through certificates,
Series 1992-A2, 9.20% 2014 (7) 2,500 2,214 0.02
Delta Air Lines, Inc., pass-through certificates,
Series 1993-A2, 10.50% 2016 (7) 6,000 5,952 0.06
Mc-Cuernavaca Trust 9.25% 2001 (1) 7,162 5,300 0.05
Northwest Airlines, Inc. 12.0916% 2000 4,000 3,990 0.04
Northwest Airlines, Inc. 12.0916% 2000 (3) 8,097 8,077 0.07
Northwest Airlines, Inc. 13.875% 2008 (1) 10,000 10,125 0.1
NWA Inc. 8.625% 1996 5,000 4,900 0.05
United Air Lines, Inc. 9.00% 2003 18,000 16,768 0.16
United Air Lines, Inc. 8.39% 2011 7,500 6,516 0.06
United Air Lines, Inc. 10.67% 2004 4,500 4,603 0.04
Viking Star Shipping Inc. 9.625% 2003 6,000 5,580 0.05
-------- -----
129,338 1.2
-------- -----
ENERGY SOURCES AND ENERGY EQUIPMENT &
SERVICES - 1.08%
California Energy Co., Inc. 0%/10.25% 2004 (1)(5) 60,300 43,114 0.4
Global Marine, Inc. 12.75% 1999 20,000 21,400 0.2
Occidental Petroleum Corp. 9.25% 2019 11,400 12,128 0.11
Oryx Energy Co. 9.50% 1999 16,000 15,214 0.14
Oryx Energy Co. 10.00% 1999 4,500 4,458 0.04
Oryx Energy Co. 10.00% 2001 2,000 1,983 0.02
Petronas 6.875% 2003 (1) 8,000 7,270 0.07
Subic Power Corp. 9.50% 2008 (1) 10,476 8,904 0.08
Wilrig AS 11.25% 2004 2,000 1,770 0.02
-------- -----
116,241 1.08
-------- -----
UTILITIES: ELECTRIC & GAS - 1.08%
CMS Energy Corp. 0%/9.50% 1997 (5) 3,000 2,805 0.03
COSO Funding Corp. 8.87% 2001 (1) 7,500 7,355 0.07
Korea Electric Power Corp. 6.375% 2003 5,000 4,308 0.04
Long Island Lighting Co. 9.75% 2021 5,000 4,645 0.04
Long Island Lighting Co. 9.00% 2022 15,000 12,462 0.12
Long Island Lighting Co. 9.625% 2024 19,500 17,787 0.16
Midland Cogeneration Venture LP 10.33% 2002 31,381 30,282 0.28
Midland Cogeneration Venture LP 10.33% 2002 14,119 13,624 0.13
Texas Utilities Electric Co. 9.75% 2021 10,000 10,558 0.1
Transco Energy Co. 9.125% 1998 7,000 7,035 0.06
Transco Energy Co. 9.625% 2000 5,000 5,100 0.05
-------- -----
115,961 1.08
-------- -----
BANKING - 0.86%
H.F. Ahmanson & Co. 9.875% 1999 3,500 3,692 0.03
Bank of Scotland 8.80% 2004 (1) 5,000 5,104 0.05
BankAmerica Corp. 8.375% 2002 5,000 4,976 0.05
Capital One Bank 8.625% 1997 10,000 10,064 0.09
Chevy Chase Savings Bank, F.S.B. 9.25% 2005 5,000 4,450 0.04
Citicorp 9.50% 2002 5,000 5,279 0.05
Coast Federal Bank 13.00% 2002 3,500 3,850 0.04
Coast Savings Financial, Inc. 10.00% 2000 6,500 6,175 0.06
First Interstate Bancorp 10.83% 2001 1,500 1,675 0.02
First Nationwide Bank 10.00% 2006 4,000 4,040 0.04
Golden West Financial Corp. 10.25% 1997 2,250 2,351 0.02
Manufacturers Hanover Corp. 8.50% 1999 3,295 3,323 0.03
Midland American Capital 12.75% 2003 6,000 6,872 0.06
New American Capital, Inc. 9.60% 1999 (1) 5,000 4,962 0.05
Security Pacific Corp. 10.25% 2001 3,000 3,318 0.03
Security Pacific Corp. 11.00% 2001 10,500 11,787 0.11
SFFED Corp. 11.20% 2004 (1) 10,000 9,370 0.09
-------- -----
91,288 0.86
-------- -----
GENERAL RETAILING & MERCHANDISING - 0.78%
AnnTaylor, Inc. 8.75% 2000 11,000 10,505 0.1
Barnes & Noble, Inc. 11.875% 2003 23,500 25,145 0.23
CompUSA Inc. 9.50% 2000 5,500 4,730 0.04
Dayton Hudson Corp. 9.50% 2015 5,000 5,433 0.05
Levitz Furniture Corp. 12.375% 1997 9,250 9,157 0.08
Payless Cashways, Inc. 9.125% 2003 12,750 11,347 0.11
Thrifty PayLess, Inc. 11.75% 2003 7,500 7,425 0.07
Thrifty PayLess, Inc. 12.25% 2004 10,000 10,250 0.1
-------- -----
83,992 0.78
-------- -----
LEISURE & TOURISM - 0.64%
Embassy Suites, Inc. 8.75% 2000 4,000 3,840 0.03
Embassy Suites, Inc. 10.875% 2002 5,000 5,200 0.05
Foodmaker, Inc. 9.25% 1999 16,750 13,567 0.13
Foodmaker, Inc. 9.75% 2002 4,300 3,010 0.03
Four Seasons Hotels Inc. 9.125% 2000 (1) 2,000 1,860 0.02
Harrah's Jazz Finance Corp. 14.25% 2001 6,000 6,405 0.06
Host Marriott Hospitality, Inc. 9.125% 2000 2,522 2,487 0.02
Kloster Cruise Ltd. 13.00% 2003 24,550 19,149 0.18
Plitt Theatres, Inc. 10.875% 2004 6,000 5,520 0.05
Six Flags Entertainment Corp. 0% 1999 12,250 7,903 0.07
-------- -----
68,941 0.64
-------- -----
FOOD RETAILING - 0.54%
Allied Supermarkets Inc. 6.625% 1998 9,301 8,557 0.08
Ralphs Grocery Co. 10.25% 2002 8,000 7,720 0.07
Ralphs Grocery Co. 9.00% 2003 2,350 2,232 0.02
Safeway Inc. 10.00% 2002 3,500 3,614 0.04
Smith's Food & Drug Centers, Inc., pass-through
certificates, Series 94-A2, 0%/8.64% 2012 (5)(7) 8,000 7,456 0.07
Star Markets Co., Inc. 13.00% 2004 (1) 9,750 10,043 0.09
Stater Brothers Holdings Inc. 11.00% 2001 (1) 16,000 15,120 0.14
Vons Companies, Inc. 9.625% 2002 3,000 3,000 0.03
-------- -----
57,742 0.54
-------- -----
METALS: STEEL - 0.39%
Acme Metals Inc. 0%/13.50% 2004 (5) 10,500 7,560 0.07
Acme Metals Inc. 12.50% 2002 3,000 3,000 0.03
Armco Inc. 11.375% 1999 10,950 10,950 0.1
Essar Gujarat Ltd. 9.40% 1999 (1)(6) 5,000 4,987 0.05
Ispat Mexicana 10.375% 2001 (1) 3,500 2,660 0.02
Ispat Mexicana (Euro) 10.375% 2001 4,000 3,040 0.03
UCAR Global Enterprises Inc. 12.00% 2005 (1) 4,000 4,120 0.04
USX Corp. 9.625% 2003 5,000 5,195 0.05
-------- -----
41,512 0.39
-------- -----
FOOD PRODUCTS, BEVERAGES & TOBACCO - 0.38%
Canandaigua Wine Co., Inc. 8.75% 2003 17,500 16,013 0.15
Dr Pepper Bottling Co. of Texas 10.25% 2000 7,500 7,575 0.07
Dr Pepper/Seven-Up Cos., Inc. 0%/11.50% 2002 (5) 3,814 3,166 0.03
RJR Nabisco, Inc. 8.75% 2004 5,000 4,725 0.04
RJR Nabisco, Inc. 8.75% 2005 4,000 3,751 0.04
RJR Nabisco, Inc. 9.25% 2013 6,000 5,443 0.05
-------- -----
40,673 0.38
-------- -----
AUTOMOBILES - 0.36%
General Motors Corp. 9.45% 2011 5,000 5,183 0.05
General Motors Corp. 8.80% 2021 32,000 33,373 0.31
-------- -----
38,556 0.36
-------- -----
BUSINESS & PUBLIC SERVICES - 0.35%
Federal Express Corp. 10.00% 1998 4,000 4,230 0.04
Federal Express Corp. 9.875% 2002 7,000 7,578 0.07
Federal Express Corp. 7.53% 2006 15,000 14,028 0.13
TNT Transport (Euro) PLC/TNT (USA) Inc. 11.50% 2004 11,750 11,691 0.11
-------- -----
37,527 0.35
-------- -----
FLOATING RATE EURODOLLAR NOTES (UNDATED)(6) - 0.35%
Bank of Nova Scotia 5.437% 10,000 7,744 0.07
Canadian Imperial Bank of Commerce 5.437% 10,000 7,950 0.08
Financiere Credit Suisse-First Boston 6.437% 2,000 1,580 0.02
Gentra Inc. 5.587% 5,000 4,650 0.04
Midland Bank (#1) 7.0625% 5,000 3,975 0.04
Standard Chartered Bank 7.00% 15,000 11,138 0.1
-------- -----
37,037 0.35
-------- -----
REAL ESTATE - 0.32%
Beverly Finance Corp. 8.36% 2004 (1) 5,000 4,806 0.04
Corporate Property Investors 7.75% 2004 (1) 5,000 4,752 0.04
Rouse Co. 8.50% 2003 2,000 1,960 0.02
B.F. Saul Real Estate Investment Trust 11.625% 2002 21,500 18,812 0.18
Shopping Center Associates 6.75% 2004 (1) 5,000 4,411 0.04
-------- -----
34,741 0.32
-------- -----
ELECTRICAL & ELECTRONICS - 0.24%
MagneTek, Inc. 10.75% 1998 2,000 2,000 0.02
Samsung Electronics Co., Ltd. 8.50% 2002 (1) 22,500 21,744 0.2
Westinghouse Electric Corp. 8.875% 2001 2,500 2,456 0.02
-------- -----
26,200 0.24
-------- -----
CONSTRUCTION & HOUSING - 0.21%
Kaufman and Broad Home Corp. 10.375% 1999 7,000 7,035 0.07
Kaufman and Broad Home Corp. 9.375% 2003 3,500 3,071 0.03
M.D.C. Holdings, Inc. 11.125% 2003 10,000 8,100 0.07
Del Webb Corp. 9.75% 2003 5,000 4,250 0.04
-------- -----
22,456 0.21
-------- -----
INSURANCE - 0.20%
American Re Corp. 10.875% 2004 20,000 21,382 0.2
-------- -----
DATA PROCESSING & REPRODUCTION - 0.16%
Neodata Services, Inc. 0%/12.00% 2003 (5) 9,500 7,410 0.07
Unisys Corp. 10.625% 1999 10,000 10,100 0.09
-------- -----
17,510 0.16
-------- -----
TEXTILES & APPAREL - 0.16%
WestPoint Stevens Inc. 8.75% 2001 18,000 16,785 0.16
-------- -----
AEROSPACE/MILITARY - 0.15%
Coltec Industries Inc 9.75% 1999 8,000 7,960 0.07
Coltec Industries Inc 9.75% 2000 8,500 8,457 0.08
-------- -----
16,417 0.15
-------- -----
MACHINERY & ENGINEERING - 0.14%
Caterpillar Inc. 8.01% 2002 15,000 14,810 0.14
-------- -----
RECREATION & OTHER CONSUMER PRODUCTS - 0.11%
Tyco Toys, Inc. 10.125% 2002 15,700 11,932 0.11
-------- -----
MISCELLANEOUS MATERIALS & COMMODITIES - 0.06%
Owens-Illinois, Inc. 11.00% 2003 6,500 6,809 0.06
-------- -----
METALS: NONFERROUS - 0.04%
Kaiser Aluminum and Chemical Corp. 12.75% 2003 4,000 4,110 0.04
-------- -----
MULTI-INDUSTRY - 0.03%
Tenneco Inc. 10.00% 1998 1,500 1,582 0.01
Tenneco Inc. 7.875% 2002 2,000 1,929 0.02
-------- -----
3,511 0.03
-------- -----
BUILDING MATERIALS - 0.02%
Tolmex, SA de CV 8.375% 2003 3,500 2,065 0.02
-------- -----
COLLATERALIZED MORTGAGE/ASSET-BACKED OBLIGATIONS (7)
(EXCLUDING THOSE ISSUED BY FEDERAL AGENCIES) - 0.99%
Bank of America 9.50% 2008 116 110 0
Chase Manhattan Bank, NA, Series 1993-I, Class 2A5,
7.25% 2024 9,910 9,112 0.08
Citicorp Mortgage Securities, Inc., Series 1992-20,
Class A3, 7.50% 2006 8,270 8,102 0.08
CMC Securities Corp. I, Series 1993-E, Class S9,
6.50% 2008 2,801 2,370 0.02
GE Capital Mortgage Services, Inc., Series 94-2, Class
A15, 6.582% 2009 (8) 6,310 2,618 0.02
Green Tree Financial Corp., Net Interest Margin Trust,
Series 1994-A, 6.90% 2004 4,056 3,888 0.04
Green Tree Financial Corp., Seller and Servicer
Manufactured Housing Contract, Series 1993-2, Class B,
8.00% 2018 14,000 12,618 0.12
Jet Equipment Trust, Series 1994-A, Class B1, 10.91%
2006 (1) 7,000 7,079 0.07
Merrill Lynch Mortgage Investors, Inc., Seller
Manufactured Housing Contract, Series 1992-B, Class A2,
8.05% 2012 2,500 2,491 0.02
Prudential Home Mortgage Securities Co., Inc.,
Series 1992-37, Class A6, 7.00% 2022 8,000 7,777 0.07
Resolution Trust Corp., Series 1992-CHF, Class E,
8.25% 2020 11,109 9,498 0.09
Resolution Trust Corp., Series 1993-C1, Class D,
9.45% 2024 6,143 5,923 0.05
Resolution Trust Corp., Series 1993-C1, Class E,
9.50% 2024 2,956 2,811 0.03
Resolution Trust Corp., Series 1993-C2, Class C,
8.00% 2025 3,000 2,773 0.03
Resolution Trust Corp., Series 1993-C2, Class D,
8.50% 2025 3,290 3,163 0.03
Resolution Trust Corp., Series 1993-C2, Class E,
8.50% 2025 1,548 1,476 0.01
Sears Credit Account Trust, Series 1991-C, 8.65% 1998 5,000 5,067 0.05
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1991-1A, 8.50% 1997 4,000 4,060 0.04
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1991-4A, 8.00% 1997 5,000 5,023 0.05
Standard Credit Card Trust, credit card participation
certificates, Series 1990-6A, 9.375% 1998 3,500 3,616 0.03
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1994-2A, 7.25% 2008 5,000 4,612 0.04
USWFS Manufactured Housing Contract, Series 1990-A,
9.05% 2010 (1) 2,130 2,125 0.02
-------- -----
106,312 0.99
-------- -----
FEDERAL AGENCY OBLIGATIONS-MORTGAGE PASS-THROUGHS (7)-
2.63%
Federal Home Loan Mortgage Corp. 8.50% 2008 647 646 0.01
Federal Home Loan Mortgage Corp. 8.50% 2020 12,939 12,906 0.12
Federal Home Loan Mortgage Corp. 9.00% 2016 3,551 3,613 0.03
Federal Home Loan Mortgage Corp. 9.00% 2021 2,641 2,688 0.03
Federal Home Loan Mortgage Corp. 10.00% 2019 126 133 0
Federal Home Loan Mortgage Corp. 11.50% 2000 19 21 0
Federal National Mortgage Assn. 7.00% 2023 7,331 6,770 0.06
Federal National Mortgage Assn. 7.50% 2007-2023 29,195 28,099 0.26
Federal National Mortgage Assn. 8.00% 2009 1,957 1,938 0.02
Federal National Mortgage Assn. 8.50% 2014-2023 4,265 4,249 0.04
Federal National Mortgage Assn. 9.00% 2008-2025 9,227 9,386 0.09
Government National Mortgage Assn. 4.50% 2024 76,855 70,867 0.66
Government National Mortgage Assn. 5.00% 2024 12,825 12,053 0.11
Government National Mortgage Assn. 5.50% 2024 1,915 1,830 0.02
Government National Mortgage Assn. 6.50% 2023-2024 26,032 22,941 0.21
Government National Mortgage Assn. 7.00% 2022-2023 35,857 32,749 0.31
Government National Mortgage Assn. 7.50% 2017-2024 37,782 35,658 0.33
Government National Mortgage Assn. 8.00% 2017 7,523 7,315 0.07
Government National Mortgage Assn. 8.50% 2017 2,078 2,073 0.02
Government National Mortgage Assn. 9.00% 2008-2025 19,780 20,196 0.19
Government National Mortgage Assn. 9.50% 2009-2019 3,200 3,342 0.03
Government National Mortgage Assn. 10.00% 2016-2019 2,335 2,480 0.02
Government National Mortgage Assn. 10.50% 2018-2019 407 439 0
Government National Mortgage Assn. 11.00% 2015 168 183 0
-------- -----
282,575 2.63
-------- -----
Federal Agency Obligations-Collateralized Mortgage
#VALUE
Federal Home Loan Mortgage Corp., Series 1625, Class SC,
6.662% 2008 2,140 1,006 0.01
Federal Home Loan Mortgage Corp., Series 1587, Class SL,
9.523% 2008 3,958 2,375 0.02
Federal Home Loan Mortgage Corp., Series 1475, Class SA,
10.671% 2008 2,168 1,404 0.01
Federal Home Loan Mortgage Corp., Series 1607, Class SA,
9.258% 2013 5,287 2,756 0.03
Federal Home Loan Mortgage Corp., Series 1673, Class SA,
6.077% 2024 6,000 2,123 0.02
Federal Home Loan Mortgage Corp., Series 1669, Class O,
3.850% 2024 12,844 4,110 0.04
Federal National Mortgage Assn., Series 1993-229,
Class SB, 6.677% 2008 3,790 1,592 0.01
Federal National Mortgage Assn., Series 1993-234,
Class SC, 7.050% 2008 8,754 4,267 0.04
Federal National Mortgage Assn., Series 1993-G19,
Class SJ, 1.764% 2023 262 68 0
-------- -----
19,701 0.18
-------- -----
OTHER FEDERAL AGENCY OBLIGATIONS - 0.65%
Federal Home Loan Bank 6.41% 2003 6,000 5,231 0.05
Federal Home Loan Bank 6.16% 2004 13,000 11,294 0.1
Federal Home Loan Bank 6.27% 2004 6,000 5,265 0.05
Federal Home Loan Mortgage Corp. 5.74% 2003 5,000 4,239 0.04
Federal Home Loan Mortgage Corp. 6.39% 2003 2,000 1,776 0.02
Federal Home Loan Mortgage Corp. 6.44% 2003 3,000 2,721 0.03
Federal Home Loan Mortgage Corp. 6.50% 2003 5,000 4,414 0.04
Federal Home Loan Mortgage Corp. 6.59% 2003 6,000 5,321 0.05
Federal Home Loan Mortgage Corp. 6.19% 2004 8,000 6,925 0.06
Federal Home Loan Mortgage Corp. 6.27% 2004 5,450 4,767 0.04
Federal National Mortgage Assn. 7.00% 1996 1,000 998 0.01
Federal National Mortgage Assn. 6.30% 1997 10,000 9,584 0.09
FNSM Principal STRIPS 0%/8.62% 2022 (5) 10,000 7,316 0.07
-------- -----
69,851 0.65
-------- -----
GOVERNMENTS AND GOVERNMENTAL AUTHORITIES - 0.75%
Argentina Bocon 7.014% 2001 (6) 10,500 4,989 0.05
Argentina (Republic of) 8.375% 2003 15,500 10,695 0.1
Argentina (Republic of) Eurobond Series L, 6.50% 2005 (6) 22,500 13,162 0.12
Argentina (Republic of) Eurobond Series L, 4.25% 2023 (6) 41,250 17,634 0.17
British Columbia Hydro & Power Authority 12.50% 2014 10,000 11,740 0.11
Italy (Republic of) 6.875% 2023 10,000 7,919 0.07
Ontario (Province of) 7.75% 2002 2,500 2,444 0.02
Ontario (Province of) 15.25% 2012 5,000 6,072 0.06
Petroleo Brasileiro SA 11.3375% 1998 (6) 2,500 2,481 0.02
United Mexican States Government 6.25% Eurobonds 2019 6,000 3,240 0.03
-------- -----
80,376 0.75
-------- -----
U.S. TREASURY OBLIGATIONS - 15.93%
8.875% February 1996 44,000 44,825 0.42
7.625% April 1996 10,000 10,069 0.09
7.375% May 1996 75,000 75,269 0.7
7.875% July 1996 4,000 4,042 0.04
7.25% August 1996 60,000 60,075 0.56
8.00% October 1996 4,000 4,050 0.04
7.25% November 1996 75,000 75,059 0.7
8.00% January 1997 100,000 101,391 0.94
6.75% February 1997 4,000 3,961 0.04
6.875% April 1997 60,000 59,485 0.55
8.50% April 1997 40,000 40,969 0.38
8.50% May 1997 6,000 6,148 0.06
8.50% July 1997 4,000 4,103 0.04
5.625% August 1997 100,000 96,016 0.89
8.625% August 1997 75,000 77,203 0.72
5.50% September 1997 75,000 71,684 0.67
5.75% October 1997 100,000 96,031 0.89
8.75% October 1997 45,000 46,463 0.43
6.00% November 1997 60,000 57,881 0.54
7.875% January 1998 50,000 50,609 0.47
8.125% February 1998 104,000 105,933 0.98
9.25% August 1998 45,000 47,426 0.44
8.875% February 1999 12,000 12,564 0.12
9.125% May 1999 10,000 10,573 0.1
6.75% June 1999 72,000 69,918 0.65
6.875% August 1999 78,000 76,038 0.71
8.75% August 2000 22,500 23,716 0.22
8.50% November 2000 10,000 10,439 0.1
7.75% February 2001 31,000 31,295 0.29
11.625% November 2002 18,000 22,179 0.21
10.75% February 2003 19,500 23,101 0.21
11.625% November 2004 50,000 63,469 0.59
10.75% August 2005 9,000 10,974 0.1
10.375% November 2009 7,100 8,353 0.08
12.75% November 2010 9,500 12,916 0.12
14.00% November 2011 3,500 5,166 0.05
10.375% November 2012 9,000 10,859 0.1
12.00% August 2013 14,000 18,874 0.17
12.50% August 2014 2,000 2,811 0.03
7.125% February 2023 172,000 160,041 1.49
-------- -----
1,711,978 15.93
-------- -----
TOTAL BONDS & NOTES (cost: $4,877,398,000) 4,558,065 42.42
-------- -----
- ---------------------------------- --- --- ---
Principal Market Percent
Short-Term Securities Amount Value of Net
(000) (000) Assets
- ---------------------------------- --- --- ---
CORPORATE SHORT-TERM NOTES - 2.08%
American Express Credit Corp. 5.95%-6.00% due 3/2-3/13/95 47,500 47,220 0.44
Beneficial Corp. 5.95% due 2/1/95 23,900 23,896 0.22
Duke Power Co. 5.63% due 2/13/95 17,000 16,965 0.16
H.J. Heinz Co. 5.70% due 2/28/95 16,500 16,427 0.15
Hershey Foods Corp. 5.97% due 2/2/95 15,000 14,995 0.14
Intel Corp. 5.72% due 2/17/95 6,500 6,482 0.06
National Rural Utilities Cooperative Finance Corp.
5.70%-5.80% due 2/10-2/21/95 42,900 42,805 0.4
PACCAR Financial Corp. 5.65% due 2/13/95 7,000 6,986 0.07
J.C. Penney Funding Corp. 5.70%-5.98% due 2/8-3/23/95 19,500 19,420 0.18
Raytheon Co. 5.63% due 2/16/95 14,200 14,165 0.13
Vermont American Corp. 5.65% due 2/15/95 14,131 14,098 0.13
-------- -----
223,459 2.08
-------- -----
U.S. TREASURY SHORT-TERM SECURITIES - 1.06%
8.50% August 1995 53,500 54,044 0.5
7.50% January 1996 60,000 60,356 0.56
-------- -----
114,400 1.06
-------- -----
TOTAL SHORT-TERM SECURITIES (cost: $342,707,000) 337,859 3.14
-------- -----
TOTAL INVESTMENT SECURITIES (cost: $10,538,935,000) 10,597,836 98.62
Excess of cash and receivables over payables 147,768 1.38
-------- -----
NET ASSETS $10,745,604 100.00%
======== =====
</TABLE>
(1) Purchased in a private placement transaction; resale potential may be
limited to qualified institutional buyers.
(2) Non-income-producing securities.
(3) Purchased in a private placement transaction; resale to the public may
require registration.
(4) Payment in kind. The issuer has the option of paying additional securities
in lieu of cash.
(5) Represents a zero coupon bond which will convert to an interest-bearing
security at a later date.
(6) Coupon rates may change periodically.
(7) 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.
(8) 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
THE INCOME FUND OF AMERICA
FINANCIAL STATEMENTS UNAUDITED
<TABLE>
<CAPTION>
- ----------------------------------------- --------- -------------
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1995 (dollars in
thousands)
- ---------------------------------------- --------- -------------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $10,538,935) $10,597,836
Cash 5,065
Receivables for-
Sales of investments $38,989
Sales of fund's shares 38,519
Dividends and accrued interest 125,446 202,954
--------- -------------
10,805,855
Liabilities:
Payables for-
Purchases of investments 39,984
Repurchases of fund's shares 13,962
Management services 2,747
Accrued expenses 3,558 60,251
--------- -------------
Net Assets at January 31, 1995-
Equivalent to $13.45 per share on
798,797,868 shares of $1 par value
capital stock outstanding (authorized
capital stock--1,200,000,000 shares) $10,745,604
============
Statement of Operations
for the six months ended January 31, 1995 (dollars in
thousands)
- ----------------------------------------- --------- -------------
Investment Income:
Income:
Dividends $128,955
Interest 241,052 $370,007
---------
Expenses:
Management services fee 17,362
Distribution expenses 11,410
Transfer agent fee 3,330
Reports to shareholders 451
Registration statement and
prospectus 811
Postage, stationery and supplies 670
Directors' fees 79
Auditing and legal fees 49
Custodian fee 125
Taxes other than federal income tax 1
Other expenses 47 34,335
--------- ------------
Net investment income 335,672
------------
Realized Gain and Change in Unrealized
Appreciation on Investments:
Net realized gain (loss) (42,750)
Net change in unrealized appreciation on
investments:
Beginning of period $134,366
End of period 58,901 (75.465)
--------- -------------
Net realized gain (loss) and change in
unrealized appreciation on investments (118,215)
-------------
Net Increase in Net Assets Resulting
from Operations $217,457
=============
- ---------------------------------------- ------------
STATEMENT OF CHANGES IN NET ASSETS
(dollars in
thousands)
- ----------------------------------------- ------------
Six months
ended
January 31, Year ended
July 31,
1995* 1994
----------- -------------
Operations:
Net investment income $335,672 $599,418
Net realized gain (loss) on investments (42,750) 127,926
Net change in unrealized appreciation
on investments (75,465) (563,497)
--------- ---------
Net increase in net assets
resulting from operations 217,457 163,847
--------- ---------
Dividends and Distributions
Paid to Shareholders:
Dividends from net investment income (276,183) (590,832)
Distributions from net realized
gain on investments (47,119) (242,204)
--------- ---------
Total dividends and distributions (323,302) (833,036)
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
60,481,332 and 194,658,239
shares, respectively 815,832 2,785,416
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions of
net realized gain on investments:
24,044,415 and 47,830,913
shares, respectively 319,827 679,271
Cost of shares repurchased:
60,967,595 and 92,301,774
shares, respectively (821,033) (1,303,690)
--------- ---------
Net increase in net assets
resulting from capital share
transactions 314,626 2,160,997
--------- ---------
Total Increase in Net Assets 208,781 1,491,808
Net Assets:
Beginning of period 10,536,823 9,045,015
--------- ---------
End of period (including undistributed
net investment income: $88,220
and $28,731, respectively) $10,745,604 $10,536,823
=========== =============
</TABLE>
*Unaudited
See Notes to Financial Statements
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 on the last business day of
the period or, for listed securities having no sales reported and for unlisted
securities, upon last-reported bid prices on that date.
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 the mean of such
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 $125,000 includes $72,000 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 January 31, 1995, net unrealized appreciation on investments for
federal income tax purposes aggregated $58,975,000, of which $602,932,000
related to appreciated securities and $543,957,000 related to depreciated
securities. During the six months ended January 31, 1995, the fund realized,
on a tax basis, a net capital loss of $22,767,000 on securities transactions.
The cost of portfolio securities for federal income tax purposes was
$10,538,861,000 at January 31, 1995.
3. The fee of $17,362,000 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 six months ended January 31,
1995, distribution expenses under the Plan were $11,410,000. As of January 31,
1995, accrued and unpaid distribution expenses were $3,415,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $3,330,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $3,312,000 (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 January 31, 1995, aggregate amounts deferred were $79,000.
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/or AFD. No
affiliated officers, Directors, or employees of CRMC, AFS or AFD received any
renumeration directly from the fund.
4. As of January 31, 1995, excess distributions of net realized gain on
investments was $2,768,000 and additional paid-in capital was $9,845,203,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,546,961,000 and $1,262,406,000, respectively,
during the six months ended January 31, 1995.
Per-Share Data and Ratios
<TABLE>
<CAPTION>
Six months Year
ended ended
January 31, July 31
1995/1/ 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $13.59 $14.47 $13.94 $12.54 $12.11 $13.20
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net investment income .42 .83 .85 .85 .86 .82
Net realized and unrealized
gain (loss) on investments (.15) (.53) .74 1.48 .53 (.67)
------- ------- ------- ------- ------- -------
Total income from
investment operations .27 .30 1.59 2.33 1.39 .15
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment
income (.35) (.83) (.84) (.85) (.89) (.87)
Distributions from net
realized gains (.06) (.35) (.22) (.08) (.07) (.37)
------- ------- ------- ------- ------- -------
Total distributions (.41) (1.18) (1.06) (.93) (.96) (1.24)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period $13.45 $13.59 $14.47 $13.94 $12.54 $12.11
======= ======= ======= ======= ======= =======
Total Return/2/ 2.07%/3/ 1.98% 11.88% 19.16% 12.24% 1.12%
Ratios/Supplemental Data:
Net assets, end of period (in
millions) $10,746 $10,537 $9,045 $5,121 $2,771 $2,110
Ratio of expenses to average
net assets .32%/3/ .63% .62% .66% .%73 .67%
Ratio of net income to average
net assets 3.16%/3/ 5.92% 6.05% 6.40% 7.23% 7.36%
Portfolio turnover rate 12.30%/3/ 26.42% 29.18% 22.71% 23.35% 18.90%
</TABLE>
/1/Unaudited
/2/This was calculated without
deducting a sales charge.
The maximum sales charge is
5.75% of the fund's offering
price.
/3/Based on operations for six
months and, accordingly, not
representative of a full
year's operations.
THE AMERICAN FUNDS GROUP(R)
A PORTFOLIO FOR EVERY INVESTOR
- ----------------------------------------------------------------
The Income Fund of America is a member of The American Funds Group - 28 funds
with a wide range of investment objectives and assets totaling more than $90
billion. These funds serve more than seven million shareholders throughout the
world, including hundreds of leading corporations and institutions.
GROWTH FUNDS
- ----------------------------------------------------------------
AMCAP Fund
EuroPacific Growth Fund
The Growth Fund of America
The New Economy Fund
New Perspective Fund
SMALLCAP World Fund
GROWTH AND INCOME FUNDS
- ----------------------------------------------------------------
American Mutual Fund
Capital World Growth and Income Fund
Fundamental Investors
The Investment Company of America
Washington Mutual Investors Fund
EQUITY-INCOME FUNDS
- ----------------------------------------------------------------
Capital Income Builder
The Income Fund of America
BALANCED FUND
- ----------------------------------------------------------------
American Balanced Fund
INCOME FUNDS
- ----------------------------------------------------------------
American High-Income Trust
The Bond Fund of America
Capital World Bond Fund
Intermediate Bond Fund of America
U.S. Government Securities Fund
TAX-EXEMPT INCOME FUNDS
- ----------------------------------------------------------------
American High-Income Municipal Bond Fund*
Limited Term Tax-Exempt Bond Fund of America
The Tax-Exempt Bond Fund of America
The Tax-Exempt Fund of California
The Tax-Exempt Fund of Maryland
The Tax-Exempt Fund of Virginia
MONEY MARKET FUNDS
- ----------------------------------------------------------------
The Cash Management Trust of America
The Tax-Exempt Money Fund of America
The U.S. Treasury Money Fund of America
*May invest up to 100% of its assets in bonds subject to the alternative
minimum tax.
Investments in the funds are neither insured nor guaranteed by the U.S.
government or any other entity. There can be no assurance that the money market
funds will maintain a constant net asset value of $1.00 per share.
FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE FUNDS, INCLUDING CHARGES AND
EXPENSES, PLEASE OBTAIN A PROSPECTUS FROM YOUR SECURITIES DEALER OR FINANCIAL
PLANNER, OR PHONE THE FUND'S TRANSFER AGENT, AMERICAN FUNDS SERVICE COMPANY, AT
800/421-0180. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.
Remember, as a shareholder of The Income Fund of America, whenever your
objectives change you can transfer some or all of your holdings to another fund
in The American Funds Group free of charge. Exchange privileges are subject to
change or termination.
BOARD OF DIRECTORS
- ----------------------------------------------------------------
ROBERT A. FOX, Livingston, California
President and Chief Executive Officer,
Foster Farms Inc.
ROBERTA L. HAZARD, McLean, Virginia
Rear Admiral, U.S. Navy (Retired)
E.T. HINSHAW, JR., Newport Beach, California
Private investor; former Yachting Commissioner,
Los Angeles Olympic Organizing Committee
RICHARD H.M. HOLMES, Hillsborough, California
Retired; former Vice President,
Capital Research and Management Company
LEONADE D. JONES, Washington, D.C.
Treasurer, The Washington Post Company
JOHN G. MCDONALD, Stanford, California
The IBJ Professor of Finance,
Graduate School of Business,
Stanford University
THEODORE D. NIERENBERG, Armonk, New York
Private investor; former President,
Dansk International Designs, Ltd.
JAMES W. RATZLAFF, San Francisco, California
Vice Chairman of the Board,
Capital Research and Management Company
HENRY E. RIGGS, Claremont, California
President and Professor of Engineering,
Harvey Mudd College
WALTER P. STERN, New York, New York
Chairman of the Board of the fund
Chairman of the Board, Capital Group International, Inc.
PATRICIA K. WOOLF, Princeton, New Jersey
Private investor; lecturer, Department of Molecular Biology, Princeton
University
OTHER OFFICERS
- ----------------------------------------------------------------
GEORGE A. MILLER, San Francisco, California
President of the fund
Senior Vice President and Director,
Capital Research and Management Company
STEPHEN E. BEPLER, New York, New York
Senior Vice President of the fund
Senior Vice President and Director,
Capital Research Company
ABNER D. GOLDSTINE, Los Angeles, California
Senior Vice President of the fund
Senior Vice President and Director,
Capital Research and Management Company
PAUL G. HAAGA, JR., Los Angeles, California
Senior Vice President of the fund
Senior Vice President and Director,
Capital Research and Management Company
RICHARD T. SCHOTTE, Los Angeles, California
Senior Vice President of the fund
Senior Vice President,
Capital Research and Management Company
STEVEN N. KEARSLEY, Los Angeles, California
Vice President of the fund
Vice President and Treasurer,
Capital Research and Management Company
JANET A. MCKINLEY, New York, New York
Vice President of the fund
Senior Vice President,
Capital Research Company
DINA N. PERRY, Washington, D.C.
Vice President of the fund
Vice President, Capital Research and Management Company
JOHN H. SMET, Los Angeles, California
Vice President of the fund
Vice President, Capital Research and Management Company
PATRICK F. QUAN, San Francisco, California
Secretary of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
MARY C. CREMIN, Los Angeles, California
Treasurer of the fund
Senior Vice President - Fund Business Management Group,
Capital Research and Management Company
R. MARCIA GOULD, Los Angeles, California
Assistant Treasurer of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
OFFICE OF THE FUND
Four Embarcadero Center, Suite 1800
Mailing Address: P.O. Box 7650
San Francisco, California 94120-7650
INVESTMENT ADVISER
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
AMERICAN FUNDS SERVICE COMPANY
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
This report is for the information of shareholders of The Income Fund of
America, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after March 31, 1995, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA BDA/AL
Lit. No. IFA-013-0395
Printed on recycled paper
[The American Funds Group(R) LOGO]
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