|
|
|
|
|
|
|
|
|
|
|
|
|
THE INCOME FUND OF AMERICA
Semi-Annual Report
for the six months ended
January 31, 1996
[The American Funds Group(R)]
THE INCOME FUND OF AMERICA(R)
Seeks current income while secondarily striving for capital growth through
investments in stocks and fixed-income securities.
The Income Fund of America has continued to provide relatively high current
income to shareholders-even though this has been a period of historically low
yields on stocks. The graph below tracks 12-month dividend rates over the past
five calendar years. IFA's dividend rate far outpaces those of the average
equity-income fund as calculated by Lipper Analytical Services, and stocks as
measured by Standard & Poor's 500 Composite Index.
The fund's 30-day yield as of February 29, 1996, calculated in accordance with
the Securities and Exchange Commission formula, was 4.51%.
FELLOW SHAREHOLDERS:
Fueled by rising corporate earnings, declining interest rates and continued low
inflation, stocks posted exceptional gains during the six months ended January
31. Bonds also thrived in this period of slow economic growth and lowering of
interest rates by the Federal Reserve Board.
It was also a very good six months for The Income Fund of America. The
value of your investment rose 12.7% with all distributions reinvested. For
those of you who took dividends totaling 43 cents a share in cash and
reinvested the capital gain distribution of 18 cents a share, your income
return was 2.9% and the value of your holdings increased 9.7%.
IFA's total return for the six months far outpaced the 7.3% gain recorded
by the unmanaged Lehman Brothers Aggregate Bond Index. It was below the 14.5%
increase in the unmanaged Standard & Poor's 500 Stock Composite Index, but
since the fund is invested in a mix of stocks and bonds, its results often fall
between these two indexes. However, for the full 22 years that IFA has been
managed by Capital Research and Management Company, IFA's results have exceeded
the S&P 500 Index. IFA has also surpassed the Lehman Brothers Aggregate Bond
Index over its 20-year history.
In the current period of historically low yields on stocks, IFA has been
able to maintain its objective of providing relatively high current income to
shareholders while also attaining capital growth. The fund's six-month income
return of 2.9% (equivalent to a 5.8% annual rate) is more than double the 1.3%
income return (a 2.6% annual rate equivalent) on the S&P 500 stocks. For the
past 12 months, IFA produced an income return of 6.3%, with dividends
reinvested, compared with an income return of 3.0% for the S&P 500. The fund
has accomplished this by broadly diversifying its portfolio among stocks,
government bonds, investment-grade and high-yield corporate bonds and other
income-oriented investments such as convertible preferred shares and
convertible bonds.
At the end of January, 56% of IFA's assets was invested in equity-type
securities. The fund benefited from strong gains from its largest equity
holdings, notably pharmaceutical and bank stocks. In the recent six-month
period, the price of our largest equity investment, Eli Lilly, rose 47%, while
American Home Products increased 29% and Bristol-Myers Squibb gained 28%. We
began increasing our stake in pharmaceutical stocks in 1993 when share prices
fell sharply with the Clinton administration's discussion of federal health
care reform. These stocks have continued to rise since those wide-ranging plans
were derailed. Bank stocks, which we also began acquiring a few years ago, have
been aided by strong earnings, mergers, dividend increases and share buybacks.
IFA's fixed-income portfolio also pulled its weight in building the
six-month total return. At the end of January, 22% of the fund's total assets
was in corporate bonds and 14% was in government bonds. Declining interest
rates increased the value of our government and high-grade corporate bonds as
the fund lengthened maturities to take advantage of declining rates.
The fixed-income results also reflect a careful search for value. About
16% of the fund's total portfolio is in the higher yielding, higher risk
segment of the corporate bond market. In addition, convertible securities,
which typically offer higher yields than stocks, make up 7% of the fund's total
assets.
RESULTS AT A GLANCE
(for periods ended 1/31/96, with distributions reinvested or interest
compounded)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Avg. Annual
Compound
Six One 10 Return Over
Months Year Years Lifetime/1/ Lifetime/1/
The Income Fund of America +12.7% +28.6% +220.4% +1,699.1% +13.9%
Standard & Poor's 500
Stock Composite Index +14.5 +38.7 +311.1 +1,525.5 +13.4
Lehman Brothers Aggregate
Bond Index +7.3 +16.9 +151.1 - -
Average Savings Institution/2/ +1.6 +3.1 +69.1 +331.9 +6.8
</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, that 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.
The first two months of 1996 have been favorable for both stocks and
bonds, but it seems a good idea to sound a note of caution. Stock prices are at
all-time high valuations by most standards and recent total returns from both
stocks and bonds are at extraordinary levels. In 1995, the S&P 500 had a total
return of 37.5%. There is virtually no chance that stocks will continue to
compound at anywhere near this rate. Total returns for the S&P 500 stocks over
the past 20 years have compounded at an annual rate of 14.6%, and they have
lost ground in three of the 20 years. The Lehman Brothers Aggregate Bond Index
showed a total return of 18.5% last year. But over the past 20 years, that
fixed-income index had a total return of 10.1% annually and one year with a
negative return (1994).
With this in mind, it's good to savor the results of a strong period, but
also to keep a long-term perspective and remember that these days will not
continue indefinitely. We look forward to reporting to you again this summer at
the end of the fund's fiscal year.
Cordially,
Walter P. Stern George A. Miller
Chairman of the Board President
March 11, 1996
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the total returns and average annual compound
returns with all distributions reinvested for periods ended December 31, 1995
(the most recent calendar quarter), assuming payment of the 5.75% maximum sales
charge at the beginning of the stated periods:
<TABLE>
<CAPTION>
<S> <C> <C>
10 years 5 years 12 months
+197.99% +87.51% +21.67%
(+11.54% a year) (+13.40% a year)
</TABLE>
Sales charges are lower for accounts of $50,000 or more.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. 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.
The Income Fund of America
Investment Portfolio January 31, 1996 UNAUDITED
Equity-type Securities - 55.83%
Corporate Bonds - 22.15%
Government Bonds - 13.64%
Cash and Equivalents - 8.38%
Percent of
TEN LARGEST STOCK HOLDINGS Net Assets
Eli Lilly 1.91%
Philip Morris 1.64
Bristol-Myers Squibb 1.57
Pharmacia & Upjohn 1.57
American Home Products 1.46
Texaco 1.24
Ford Motor 1.12
First Union 1.07
DuPont .98
Lincoln National .95
<TABLE>
<CAPTION>
- ---------------------------------- --- --- ---
Shares or Market Percent
<S> <C> <C> <C>
Principal Value of Net
Equity-Type Securities Amount (000) Assets
- ---------------------------------- --- --- ---
BANKING - 8.55%
Banc One Corp. 1,500,000 56,812 .40%
Bancorp Hawaii, Inc. 975,000 33,638 .24
Bank of New York Co., Inc. 1,300,000 66,625
Bank of New York Co., Inc. 7.50% convertible
debentures 2001 $13,000,000 34,062 .71
Bankers Trust New York Corp. 410,000 26,599 .19
Barnett Banks, Inc. 100,000 5,850 .04
Boatmen's Bancshares, Inc. 2,450,000 105,044 .74
CalFed Inc., Class A (1) 328,535 5,133 .04
Central Fidelity Banks, Inc. 300,000 9,487 .07
Chemical Banking Corp. 1,600,000 107,200 .76
Comerica Inc. 1,080,000 42,795 .30
CoreStates Financial Corp. 1,500,000 60,000 .42
First Chicago NBD Corp. 1,040,750 40,459 .29
First Nationwide Bank, FSB preferred 100,000 11,563 .08
First Security Corp. 1,125,000 41,344 .29
First Tennessee National Corp. 900,000 54,900 .39
First Union Corp. 2,625,000 151,922 1.07
Fleet Financial Group, Inc. 1,325,000 53,000 .37
Glendale Federal Bank, FSB (1) 234,367 3,926
Glendale Federal Bank, FSB warrants, 6,175 10 .03
expire 1999 (1)
J.P. Morgan & Co. Inc. 660,000 53,625 .38
National Bank of Canada 5,275,000 42,658 .30
National City Corp. 950,000 30,994 .22
NationsBank Corp. 350,000 24,456 .17
PNC Bank Corp. 3,065,000 91,950 .65
Royal Bank of Canada 2,030,000 48,880 .35
Washington Mutual Savings Bank $6.00 convertible
preferred, Series D 60,000 7,117 .05
-------- -----
1,210,049 8.55
-------- -----
HEALTH & PERSONAL CARE - 7.46%
American Home Products Corp. 2,030,000 207,060 1.46
Baxter International Inc. 400,000 18,200 .13
Bristol-Myers Squibb Co. 2,515,000 222,577 1.57
Glycomed Inc. 7.50% convertible debentures 2003 $5,000,000 3,900 .03
Eli Lilly and Co. 4,700,000 270,250 1.91
Pharmacia & Upjohn, Inc. 5,292,500 221,623 1.57
Tambrands Inc. 810,000 39,791 .28
Warner-Lambert Co. 775,000 72,656 .51
-------- -----
1,056,057 7.46
-------- -----
ENERGY SOURCES - 6.62%
Amoco Corp. 850,000 59,819 .42
Ashland Inc. $3.125 convertible preferred 600,000 36,300 .26
Atlantic Richfield Co. 1,000,000 113,625 .80
California Energy Co., Inc. 5.00% convertible
debentures 2000 (2) $10,000,000 10,200 .07
Chevron Corp. 1,135,000 58,878 .42
Chieftain International Funding Corp. $1.8125
convertible preferred 152,500 4,098 .03
Cyprus Amax Minerals Co. $4.00 convertible
preferred, Series A 465,000 27,202 .19
Exxon Corp. 400,000 32,100 .23
Howell Corp. $3.50 convertible preferred, Series A 60,000 3,120 .02
Mobil Corp. 480,000 53,160 .38
Occidental Petroleum Corp. 2,000,000 43,000
Occidental Petroleum Corp. $3.875 convertible
preferred (2) 300,000 16,838 .42
Oryx Energy Co. 7.50% convertible debentures 2014 $9,500,000 8,621 .06
Phillips Petroleum Co. 3,900,000 127,237 .90
Santa Fe Energy Resources, Inc. $0.732 DECS
convertible preferred, Series A 500,000 5,000 .04
Sun Co., Inc. 404,313 11,018
Sun Co., Inc. $1.80 TARGETS, cumulative preferred,
Series A 1,227,687 34,222 .32
Texaco Inc. 2,175,000 175,903 1.24
Unocal Corp. $3.50 convertible preferred 750,000 39,938 .28
USX-Marathon Group 3,500,000 65,625 .46
Valero Energy Corp. $3.125 convertible preferred 228,100 11,890 .08
-------- -----
937,794 6.62
-------- -----
INSURANCE - 4.22%
Aetna Life and Casualty Co. 700,000 52,150 .37
Alexander & Alexander Services Inc. $3.625
convertible preferred, Series A (2) 220,000 10,670 .07
Allstate Corp. 6.76% exchangeable notes 1998 361,100 16,024 .11
American General Corp. 1,550,000 58,513 .41
CIGNA Corp. 900,000 106,762 .75
Lincoln National Corp. 2,540,000 134,303 .95
Ohio Casualty Corp. 1,795,000 66,415 .47
SAFECO Corp. 1,500,000 53,813 .38
St. Paul Companies, Inc. 1,280,000 72,960 .52
USF&G Corp. 1,300,001 20,800
USF&G Corp. 0% convertible debentures 2009 $10,000,000 5,650 .19
-------- -----
598,060 4.22
-------- -----
UTILITIES: ELECTRIC & GAS - 3.54%
American Electric Power Co., Inc. 780,000 34,515 .24
Consolidated Edison Co. of New York, Inc. 1,100,000 37,125 .26
DTE Energy Co. (formerly Detroit Edison Co.) 2,150,000 77,131 .55
Eastern Utilities Associates 640,000 15,200 .11
Entergy Corp. 1,850,000 54,806 .39
General Public Utilities Corp. 1,157,200 39,345 .28
Houston Industries Inc. 1,250,000 30,000 .21
Long Island Lighting Co. 2,450,000 41,650 .29
NorAm Energy Corp. 1,400,000 12,250 .09
Pacific Gas and Electric Co. 2,055,200 57,032 .40
PECO Energy Co. 276,000 8,487 .06
Peoples Energy Corp. 1,080,000 35,235 .25
Puget Sound Power & Light Co. 700,000 17,500 .12
Southern Co. 1,400,000 35,525 .25
Unicom Corp. 150,000 5,044 .04
-------- -----
500,845 3.54
-------- -----
TELECOMMUNICATIONS - 3.47%
ALLTEL Corp. 500,000 15,687 .11
Ameritech Corp. 1,300,000 78,163 .55
Bell Atlantic Corp. 1,400,000 96,425 .68
Dial Page, Inc. warrants (1)(3) 51,912 0 0
GTE Corp. 708,000 32,568 .23
IntelCom Group (USA), Inc. warrants, expire 2005
(1)(2) 19,800 109 0
International CableTel Inc. 7.25% convertible
notes 2005 (2) $10,000,000 10,475 .07
NYNEX Corp. 1,200,000 64,350 .45
Pacific Telesis Group 2,635,000 77,732 .55
Sprint Corp. 50,000 2,156 .02
US WEST Communications Group 2,750,000 96,594
US WEST Communications Group 0% convertible
debentures 2011 $50,000,000 17,813 .81
-------- -----
492,072 3.47
-------- -----
BEVERAGES & TOBACCO - 3.05%
American Brands, Inc. 1,600,000 73,000 .52
Philip Morris Companies Inc. 2,500,000 232,500 1.64
RJR Nabisco Holdings Corp. 2,544,400 82,693 .58
UST Inc. 1,300,000 43,712 .31
-------- -----
431,905 3.05
-------- -----
CHEMICALS - 1.93%
Dow Chemical Co. 900,000 67,050 .47
E.I. du Pont de Nemours and Co. 1,812,500 139,336 .98
Eastman Chemical Co. 495,000 32,732 .23
BFGoodrich Co. 400,000 29,450 .21
RPM, Inc. 0% convertible debentures 2012 $12,500,000 5,219 .04
-------- -----
273,787 1.93
-------- -----
FOREST PRODUCTS & PAPER - 1.59%
Bowater Inc. 7.00% PRIDES convertible preferred
depositary shares, Series B 485,000 16,732 .12
Federal Paper Board Co., Inc. 331,900 17,964 .13
James River Corp. of Virginia 550,000 14,438
James River Corp. of Virginia $1.55 DECS
convertible preferred 1,500,000 37,687 .36
Sonoco Products Co. $2.25 convertible preferred 345,000 20,053 .14
Union Camp Corp. 960,000 49,440 .35
Weyerhaeuser Co. 1,501,900 69,275 .49
-------- -----
225,589 1.59
-------- -----
MERCHANDISING - 1.56%
Giant Food Inc., Class A 2,346,400 75,085 .53
Melville Corp. 300,000 8,550 .06
J.C. Penney Co., Inc. 1,950,000 95,550 .67
Sears, Roebuck and Co. 600,000 24,900 .18
Staples, Inc. 4.50% convertible debentures $17,000,000 16,958 .12
2000 (2)
-------- -----
221,043 1.56
-------- -----
AUTOMOBILES - 1.36%
Ford Motor Co. 5,332,700 157,981 1.12
General Motors Corp. 650,000 34,206 .24
-------- -----
192,187 1.36
-------- -----
BUSINESS & PUBLIC SERVICES - 1.30%
Air & Water Technologies Corp. 8.00% convertible
debentures 2015 $9,900,000 8,762 .06
Browning-Ferris Industries, Inc. 7.25% ACES 1998 1,000,000 32,500 .23
Ceridian Corp. $2.75 cumulative convertible
exchangeable preferred 170,000 17,000 .12
Deluxe Corp. 375,000 11,016 .08
Dun & Bradstreet Corp. 1,150,000 74,750 .53
FHP International Corp. convertible preferred, 785,000 21,293 .15
Series A
Moore Corp Ltd. 930,100 18,369 .13
Protection One Alarm Monitoring, Inc. 57,600 360 0
warrants (1)(2)
-------- -----
184,050 1.30
-------- -----
REAL ESTATE - 0.81%
Kimco Realty Corp. 172,650 4,489 .03
Security Capital Pacific Trust 730,000 14,326
Security Capital Pacific Trust $1.75
convertible preferred, Series A 600,000 14,925 .21
Security Capital Realty, Inc. (1)(2)(3) 18,680 19,095
Security Capital Realty, Inc. 12.00% convertible
debentures 2014 (2)(3) $14,150,000 13,829 .23
Weingarten Realty Investors 1,025,847 39,495 .28
Western Investment Real Estate Trust 710,000 7,988 .06
-------- -----
114,147 .81
-------- -----
TRANSPORTATION: AIRLINES - 0.71%
Air Wis Services, Inc. 7.75% convertible
debentures 2010 $4,000,000 3,640 .02
Airborne Freight Corp. 6.75% convertible $6,500,000 6,581 .05
debentures 2001
AMR Corp. 6.125% convertible QUICS 2024 $20,000,000 20,700 .15
Delta Air Lines, Inc. $3.50 convertible
preferred, Class C 665,000 38,487
Delta Air Lines, Inc. 3.23% convertible $20,000,000 17,900 .40
debentures 2003
UAL Corp. preferred, Series B 400,000 13,050 .09
-------- -----
100,358 .71
-------- -----
BROADCASTING & PUBLISHING - 0.69%
Comcast Corp. 1.125% convertible debentures 2007 $54,000,000 27,810 .20
Time Warner Inc. 0% convertible debentures 2012 $36,000,000 14,130
Time Warner Inc. 0% convertible debentures 2013 $35,000,000 14,613 .20
Turner Broadcasting System, Inc. 0% convertible
debentures 2007 (2) $45,000,000 20,700 .15
US WEST Media Group (1) 950,000 20,069 .14
-------- -----
97,322 .69
-------- -----
MULTI-INDUSTRY - 0.68%
Harsco Corp. 325,000 20,109 .14
Tenneco Inc. 1,477,900 76,297 .54
-------- -----
96,406 .68
-------- -----
FINANCIAL SERVICES - 0.62%
American Express Co. 600,000 27,600 .19
Beneficial Corp. 1,000,000 48,875 .35
First USA, Inc. 6.25% PRIDES convertible preferred 250,000 11,437 .08
-------- -----
87,912 .62
-------- -----
RECREATION & OTHER CONSUMER PRODUCTS - 0.58%
Coleman Co., Inc. 0% convertible debentures 2013 $8,000,000 2,400 .02
Eastman Kodak Co. 600,000 44,025 .31
Jostens, Inc. 1,578,431 36,304 .25
-------- -----
82,729 .58
-------- -----
FOOD & HOUSEHOLD PRODUCTS - 0.52%
ConAgra, Inc. 101,772 4,669 .04
General Mills, Inc. 450,000 25,875 .18
H.J. Heinz Co. 1,238,400 42,570 .30
-------- -----
73,114 .52
-------- -----
INDUSTRIAL COMPONENTS - 0.50%
Dana Corp. 700,000 23,012 .16
Goodyear Tire & Rubber Co. 1,000,000 47,875 .34
-------- -----
70,887 .50
-------- -----
METALS: STEEL - 0.48%
Bethlehem Steel Corp. $3.50 convertible 250,000 11,625 .08
preferred (2)
Carpenter Technology Corp. 500,000 19,000 .14
USX Corp. $3.25 convertible preferred 350,000 17,675
USX Corp. 5.75% convertible debentures 2001 $21,000,000 19,635 .26
-------- -----
67,935 .48
-------- -----
MISCELLANEOUS MATERIALS & COMMODITIES - 0.47%
Cooper Cameron Corp. 6.00% DECS 1,500,000 23,250 .16
Freeport-McMoRan Inc. 71,000 2,680 .02
Olin Corp. 494,400 40,726 .29
-------- -----
66,656 .47
-------- -----
MACHINERY & ENGINEERING - 0.45%
Deere & Co. 1,050,000 39,375 .28
Thermo Electron Corp. 5.00% convertible
debentures 2001 (2) $13,800,000 24,288 .17
-------- -----
63,663 .45
-------- -----
METALS: NONFERROUS - 0.32%
Alumax Inc. $4.00 convertible preferred, Series A 90,000 11,835 .08
Freeport-McMoRan Copper & Gold Inc., Class B 299,991 8,887 .06
Inco Ltd. 5.75% convertible debentures 2004 $15,000,000 20,663 .15
Kaiser Aluminum Corp. 8.255% PRIDES convertible
preferred 260,000 3,607 .03
-------- -----
44,992 .32
-------- -----
ENERGY EQUIPMENT - 0.27%
Cooper Cameron Corp. 1,000,000 37,625 .27
-------- -----
DATA PROCESSING & REPRODUCTION - 0.11%
AST Research, Inc. 0% convertible debentures 2013 $15,000,000 5,138 .03
Data General Corp. 7.75% convertible $10,500,000 10,920 .08
debentures 2001
-------- -----
16,058 .11
-------- -----
ELECTRONIC COMPONENTS & INSTRUMENTS - 0.10%
Geotek Communications, Inc. warrants, expire 300,000 825 .01
2005 (1)(2)
Maxtor Corp. 5.75% convertible debentures 2012 $7,500,000 5,850 .04
Seagate Technology 5.00% convertible $3,365,000 7,672 .05
debentures 2003 (2)
-------- -----
14,347 .10
-------- -----
LEISURE & TOURISM - 0.09%
Topps Co., Inc. (1) 2,345,000 12,311 .09
-------- -----
GOLD MINES - 0.08%
Newmont Mining Corp. 206,072 11,540 .08
-------- -----
MISCELLANEOUS: Equity-type securities
in initial period of acquisition 523,984 3.70
-------- -----
TOTAL EQUITY-TYPE SECURITIES 7,905,424 55.83
(cost: $5,948,305,000)
-------- -----
- ---------------------------------- --- --- ---
Principal Market Percent
BONDS & NOTES Amount Value of Net
(000) (000) Assets
- ---------------------------------- --- --- ---
BROADCASTING, ADVERTISING & PUBLISHING - 4.37%
Adelphia Communications Corp. 12.50% 2002 $ 4,000 4,030
Adelphia Communications Corp. 9.50% 2004 (4) 19,691 16,097
Adelphia Communications Corp. 9.875% 2005 17,000 15,810 .25
American Media Operations, Inc. 11.625% 2004 17,750 18,416 .13
Bell Cablemedia PLC 0%/11.95% 2004 (5) 50,250 36,808 .26
Cablevision Systems Corp. 10.75% 2004 18,000 19,125
Cablevision Systems Corp. 9.875% 2013 15,500 16,585
Cablevision Systems Corp. 9.875% 2023 10,000 10,625 .34
CAI Wireless Systems, Inc. 12.25% 2002 3,000 3,255 .02
Century Communications Corp. 9.50% 2000 3,500 3,631
Century Communications Corp. 9.75% 2002 8,500 8,925
Century Communications Corp. 11.875% 2003 4,400 4,763 .12
Comcast Corp. 10.25% 2001 12,600 13,860
Comcast Corp. 9.375% 2005 3,000 3,150 .12
Comcast UK Cable Partners Ltd. 0%/11.20% 2007 (5) 17,000 10,370 .07
Continental Cablevision, Inc. 8.50% 2001 20,200 21,008
Continental Cablevision, Inc. 10.625% 2002 5,500 5,913
Continental Cablevision, Inc. 8.625% 2003 4,000 4,160
Continental Cablevision, Inc. 8.875% 2005 7,000 7,368
Continental Cablevision, Inc. 8.30% 2006 (2) 15,500 15,597
Continental Cablevision, Inc. 11.00% 2007 2,000 2,240
Continental Cablevision, Inc. 9.50% 2013 12,000 12,990 .49
Falcon Holding Group, LP 11.00% 2003 (4) 19,209 18,057 .13
Heartland Wireless Communications, Inc. 3,000 3,435 .02
13.00% 2003 (2)
Infinity Broadcasting Corp. 10.375% 2002 10,250 11,096 .08
Insight Communications Co., LP 8.25% 2000 (6) 12,750 13,069 .09
Jones Intercable, Inc. 10.50% 2008 15,000 16,650 .12
Marvel Holdings Inc. 0% 1998 62,750 47,690 .34
News America Holdings Inc. 8.50% 2005 7,500 8,431
News America Holdings Inc. 10.125% 2012 20,000 24,038
News America Holdings Inc. 8.45% 2034 7,500 8,636 .29
People's Choice TV Corp. 0%/13.125% 2004 (5) 9,500 6,080 .04
Rifkin Acquisition Capital Corp. 11.125% 2006 (2) 3,500 3,570 .03
Rogers Communications Inc. 10.875% 2004 3,500 3,710 .03
Storer Communications, Inc. 10.00% 2003 6,000 6,060 .04
Summitt Communications 10.50% 2005 6,655 7,420 .05
Time Warner Inc. 7.45% 1998 10,000 10,311
Time Warner Inc. 9.625% 2002 24,000 27,914
Time Warner Inc. 10.15% 2012 12,000 14,794
Time Warner Inc. 9.125% 2013 15,000 16,739 .49
TKR Cable I, Inc. 10.50% 2007 30,000 35,409 .25
United International Holdings, Inc. 0% 1999 19,750 12,887 .09
Univision Television Group, Inc. 11.75% 2001 17,000 18,445 .13
Viacom International Inc. 9.125% 1999 4,000 4,160
Viacom International Inc. 10.25% 2001 8,000 9,160 .10
Videotron Holdings PLC 0%/11.125% 2004 (5) 37,500 27,375 .19
Young Broadcasting Inc. 10.125% 2005 8,000 8,480 .06
-------- -----
618,342 4.37
-------- -----
TELECOMMUNICATIONS - 4.01%
Cellular Communications International, Inc. 24,500 15,374 .11
0% 2000
Cellular, Inc. 0%/11.75% 2003 (5) 18,000 14,580 .10
CenCall Communications Corp. 0%/10.125% 2004 (5) 37,100 20,683 .15
Centennial Cellular Corp. 8.875% 2001 28,000 27,790
Centennial Cellular Corp. 10.125% 2005 1,500 1,590 .21
Comcast Cellular Corp., Series A, 0% 2000 37,000 28,120
Comcast Cellular Corp., Series B, 0% 2000 35,800 27,208 .39
Commnet Cellular Inc. 11.25% 2005 3,000 3,225 .02
Comunicacion Celular S.A. 0%/13.125% 2003 (2)(5) 31,000 17,670 .12
Dial Call Communications, Inc. 0%/12.25% 2004 (5) 48,500 27,645 .20
Geotek Communications, Inc., Series B, 0%/
15.00% 2005(5) 10,000 5,350 .04
Horizon Cellular Telephone Co., LP, Series B,
0%/11.375% 2000 (5) 15,000 13,425 .09
IntelCom Group (U.S.A.), Inc. 0%/13.50% 2005 (5) 11,000 6,930 .05
International CableTel Inc. 0%/10.875% 2003 (5) 20,075 14,855
International CableTel Inc. 0%/12.75% 2005 (5) 22,000 14,410 .21
MFS Communications Co., Inc. 0%/9.375% 2004 (5) 73,050 57,892
MFS Communications Co., Inc. 0%/8.875% 2006 (5) 44,500 29,092 .61
MobileMedia Communications, Inc. 0%/10.50% 8,000 6,400 .05
2003 (5)
NEXTEL Communications, Inc. 0%/11.50% 2003 (5) 43,000 26,660
NEXTEL Communications, Inc. 0%/9.75% 2004 (5) 66,500 35,910 .44
Paging Network, Inc. 11.75% 2002 10,500 11,602 .08
PanAmSat, LP 9.75% 2000 15,300 16,371 .12
PriCellular Wireless Corp. 0%/14.00% 2001 (5) 10,000 8,900
PriCellular Wireless Corp. 0%/12.25% 2003 (5) 11,100 8,852 .12
Rogers Cantel Mobile Communications Inc. 41,500 43,679 .31
10.75% 2001
TCI Communications, Inc. 8.75% 2015 8,000 8,853 .06
Telecom Argentina STET-France Telecom S.A. 5,500 5,940 .04
12.00% 2002
Tele-Communications, Inc. 9.875% 1998 7,100 7,688
Tele-Communications, Inc. 10.125% 2001 5,000 5,851
Tele-Communications, Inc. 9.80% 2012 20,000 24,027
Tele-Communications, Inc. 9.25% 2023 17,500 18,950 .40
TeleWest plc 9.625% 2006 3,000 3,083
TeleWest plc 0%/11.00% 2007 (5) 15,000 9,225 .09
-------- -----
567,830 4.01
-------- -----
TRANSPORTATION - 2.01%
American Airlines, pass-through certificates,
1991-A1,
9.71% 2007 (7) 4,481 5,199 .04
AMR Corp. 9.20% 2012 5,000 5,562 .04
Atlas Air, pass-through certificates, 10,000 10,500 .07
12.25% 2002 (7)
Continental Airlines, pass-through certificates,
Series 1996-A, 6.94% 2015 (2)(7) 4,000 4,005
Continental Airlines, pass-through certificates,
Series 1996-C, 9.50% 2015 (2)(7) 13,000 12,935 .12
Delta Air Lines, Inc. 9.875% 1998 6,750 7,212
Delta Air Lines, Inc. 9.875% 2000 13,000 14,740
Delta Air Lines, Inc. 10.375% 2011 15,000 18,608
Delta Air Lines, Inc. 10.375% 2022 18,000 23,120
Delta Air Lines, Inc., pass-through certificates,
Series 1992-A2, 9.20% 2014 (7) 5,000 5,644
Delta Air Lines, Inc., pass-through certificates,
Series 1993-A2, 10.50% 2016 (7) 6,000 7,381 .54
Jet Equipment Trust, Series 1994-A, Class
B1, 10.91%
2006 (2)(7) 6,989 8,178
Jet Equipment Trust, Series 1995-B, Certificates,
10.91% 2014 (2)(7) 4,750 5,083
Jet Equipment Trust, Series 1995-A, Class B,
8.64% 2015 (2)(7) 14,932 16,594
Jet Equipment Trust, Series 1995-A, Class C,
10.69% 2015 (2)(7) 5,000 5,950
Jet Equipment Trust, Series 1995-B, Class A, 7.63%
2015 (2)(7) 14,500 15,498
Jet Equipment Trust, Series 1995-B, Class C,
9.71% 2015 (2)(7) 5,500 6,057 .41
MC-Cuernavaca Trust 9.25% 2001 (2) 8,139 5,718 .04
Northwest Airlines, Inc. 12.0916% 2000 10,238 10,699
NWA Trust No. 2, Class D, 13.875% 2008 10,000 11,950 .16
SFP Pipeline Holdings, Inc. 11.16% 2010 3,000 3,962 .03
Teekay Shipping Corp. 8.32% 2008 5,000 5,056 .04
TNT Transport (Euro) PLC/TNT (USA) Inc. 11,750 12,426 .09
11.50% 2004
United Air Lines, Inc. 9.00% 2003 18,000 19,929
United Air Lines, Inc. 10.67% 2004 14,000 16,937
United Air Lines, Inc., pass-through certificates,
Series 1993-A3, 8.39% 2011 (7) 7,500 7,997
United Airlines, Inc., pass-through certificates,
Series 1996-A2 7.87% 2019 (7) 5,000 5,013 .35
USAir, Inc. 9.625% 2001 3,204 2,908
USAir, Inc., pass-through trust, Series
1993-A3, 10.375% 2013 (7) 9,000 8,842 .08
-------- -----
283,703 2.01
-------- -----
UTILITIES - ELECTRIC & GAS - 1.69%
Bridas Corp. 12.50% 1999 6,000 6,247 .04
CMS Energy Corp. 0%/9.50% 1997 (5) 3,000 3,098 .02
Columbia Gas System, Inc., Series F 7.42% 2015 21,000 21,067 .15
Korea Electric Power Corp. 7.75% 2013 5,000 5,307 .04
Long Island Lighting Co. 7.30% 1999 23,500 23,829
Long Island Lighting Co. 6.25% 2001 9,000 8,675
Long Island Lighting Co. 7.125% 2005 10,000 9,502
Long Island Lighting Co. 7.50% 2007 15,000 14,256
Long Island Lighting Co. 7.90% 2008 20,000 20,050
Long Island Lighting Co. 8.90% 2019 32,000 31,316
Long Island Lighting Co. 9.00% 2022 17,000 16,956
Long Island Lighting Co. 8.20% 2023 22,500 21,628
Long Island Lighting Co. 9.625% 2024 19,000 19,510 1.17
Midland Cogeneration Venture LP, Secured Lease
Obligation Bonds, Series C-91 10.33% 2002 10,608 11,245
Midland Cogeneration Venture LP, Secured Lease
Obligation Bonds, Series C-94 10.33% 2002 13,417 14,222 .18
NorAm Energy Corp. 7.50% 2000 12,500 12,944 .09
-------- -----
239,852 1.69
-------- -----
ENERGY SOURCES AND ENERGY EQUIPMENT &
SERVICES - 1.63%
California Energy Co., Inc. 0%/10.25% 2004 (5) 60,300 57,586
California Energy Co., Inc. 9.875% 2003 3,000 3,180 .43
Dual Drilling Co. 9.875% 2004 8,550 9,426 .07
Flores & Rucks, Inc. 13.50% 2004 12,000 13,680 .10
Global Marine, Inc. 12.75% 1999 17,500 19,425 .14
Mesa Capital Corp. 12.75% 1998 15,000 13,425 .09
Noble Drilling Corp. 9.25% 2003 2,750 2,915 .02
Occidental Petroleum Corp. 9.25% 2019 11,400 14,309 .10
Oryx Energy Co. 9.50% 1999 16,000 17,283
Oryx Energy Co. 10.00% 1999 4,500 4,901
Oryx Energy Co. 10.00% 2001 2,000 2,230
Oryx Energy Co. 8.00% 2003 8,000 8,213 .23
Parker & Parsley Petroleum Co. 8.25% 2007 2,000 2,180 .01
Petroleo Brasileiro SA-PETROBRAS 10.087% 1998 (6) 2,500 2,538 .02
Subic Power Corp. 9.50% 2008 (2) 9,728 9,363 .07
TransTexas Gas Corp. 11.50% 2002 49,000 50,225 .35
-------- -----
230,879 1.63
-------- -----
FOREST PRODUCTS & PAPER - 1.38%
Container Corp. of America 10.75% 2002 1,000 1,027
Container Corp. of America 9.75% 2003 62,025 61,715
Container Corp. of America 11.25% 2004 23,000 23,920 .61
Fort Howard Corp. 9.25% 2001 13,500 13,973
Fort Howard Corp. 8.25% 2002 4,500 4,511
Fort Howard Corp. 10.00% 2003 4,000 4,200
Fort Howard Corp. 9.00% 2006 18,500 18,315 .29
Grupo Industrial Durango, SA de CV 9.250% 7,500 7,387
1996 (2)(6)
Grupo Industrial Durango, SA de CV 12.00% 2001 3,000 2,861 .07
Pacific Lumber Co. 10.50% 2003 1,500 1,433 .01
PT Indah Kiat Pulp & Paper Corp. 8.875% 2000 (2) 2,500 2,403
PT Indah Kiat Pulp & Paper Corp. 11.875% 2002 6,000 6,240 .06
PT Indorayon Yankee 9.125% 2000 2,250 2,171 .02
Repap Wisconsin 9.875% 2006 17,500 16,669 .12
Riverwood International Corp. 10.75% 2000 2,000 2,170
Riverwood International Corp., Series II, 7,000 7,595
10.75% 2000
Riverwood International Corp. 11.25% 2002 10,500 11,602 .15
Tjiwi Kimia International Finance Co. 13.25% 2001 6,750 7,425 .05
-------- -----
195,617 1.38
-------- -----
BANKING AND INSURANCE - 0.74%
American Re Corp. 10.875% 2004 5,000 5,582 .04
Bank of Scotland 8.80% 2004 (2) 5,000 5,728 .04
BankAmerica Corp. 8.375% 2002 5,000 5,594 .04
Chevy Chase Savings Bank, F.S.B. 9.25% 2005 5,000 5,150 .04
CIGNA Corp. 6.375% 2006 5,000 4,923 .04
Citicorp 9.50% 2002 5,000 5,870 .04
Coast Federal Bank 13.00% 2002 3,500 3,990 .03
Dime Bancorp, Inc. 10.50% 2005 4,000 4,420 .03
The Equitable Life Assurance Society of the
United States 7.70% 2015 (2) 10,000 10,350 .07
Fairfax Financial Holdings Ltd. 7.75% 2003 9,750 10,235 .07
Metropolitan Life Insurance Co. 7.45% 2023 (2) 6,300 6,104 .04
Midland American Capital 12.75% 2003 6,000 7,081 .05
New American Capital, Inc. 9.60% 1999 (2) 5,000 5,044 .04
Security Pacific Corp. 11.00% 2001 10,500 12,858 .09
SFFED Corp. 11.20% 2004 (2) 10,000 11,775 .08
-------- -----
104,704 .74
-------- -----
GENERAL RETAILING & MERCHANDISING - 0.60%
AnnTaylor, Inc. 8.75% 2000 10,446 8,592 .06
Barnes & Noble, Inc. 11.875% 2003 25,000 27,500 .20
Dayton Hudson Corp. 9.50% 2015 5,000 6,063 .04
May Department Stores Co. 8.375% 2024 10,000 11,144 .08
Thrifty PayLess, Inc. 11.75% 2003 10,000 11,075
Thrifty PayLess, Inc. 12.25% 2004 7,500 8,194
Thrifty Payless, Inc. 12.25% 2004 10,000 11,800 .22
-------- -----
84,368 .60
-------- -----
LEISURE & TOURISM - 0.54%
Foodmaker, Inc. 9.25% 1999 15,750 15,592
Foodmaker, Inc. 9.75% 2002 6,550 6,288 .15
Four Seasons Hotels Inc. 9.125% 2000 (2) 2,000 2,010 .02
Harrah's Jazz Finance Corp. 14.25% 2001 3,250 829
Harrah's Operating Co. Inc. 8.75% 2000 4,000 4,100
Harrah's Operating Co. Inc. 10.875% 2002 5,000 5,425 .07
Kloster Cruise Ltd. 13.00% 2003 37,450 27,713 .20
Plitt Theatres, Inc. 10.875% 2004 9,250 8,672 .06
Rio Hotel & Casino, Inc. 10.625% 2005 1,500 1,596 .01
Station Casinos, Inc. 9.625% 2003 4,650 4,685 .03
-------- -----
76,910 .54
-------- -----
FOOD RETAILING AND FOOD PRODUCTS &
BEVERAGES - 0.53%
Allied Supermarkets Inc. 6.625% 1998 9,301 9,115 .06
Canandaigua Wine Co., Inc. 8.75% 2003 17,500 17,675 .12
Carr-Gottstein Foods Co. 12.00% 2005 (2) 4,000 4,120 .03
Dr Pepper Bottling Co. of Texas 10.25% 2000 7,500 7,950 .06
Safeway Inc. 10.00% 2002 3,500 4,113 .03
Smith's Food & Drug Centers, Inc., pass-through
certificates, Series 94-A2, 8.64% 2012 (3)(7) 8,000 6,880 .05
Star Markets Co., Inc. 13.00% 2004 9,750 9,847 .07
Stater Brothers Holdings Inc. 11.00% 2001 16,000 16,080 .11
-------- -----
75,780 .53
-------- -----
BUSINESS & PUBLIC SERVICES - 0.52%
ADT Operations 9.25% 2003 7,000 7,525 .05
Federal Express Corp. 10.00% 1998 4,000 4,415
Federal Express Corp. 9.875% 2002 7,000 8,337
Federal Express Corp. 7.53% 2006 14,161 14,980 .20
Merit Behavioral Care Corp. 11.50% 2005 (2) 6,750 7,222 .05
Neodata Services, Inc. 0%/12.00% 2003 (5) 11,500 10,752 .08
Protection One Alarm Monitoring, Inc.
0%/13.625% 2005 (5) 18,000 14,940 .10
Regency Health Services, Inc. 9.875% 2002 5,000 5,175 .04
-------- -----
73,346 .52
-------- -----
METALS: STEEL & NONFERROUS - 0.49%
Acme Metals Inc. 12.50% 2002 3,000 3,097
Acme Metals Inc. 0%/13.50% 2004 (5) 10,500 9,030 .09
AK Steel Corp. 10.75% 2004 2,750 3,063 .02
Inco Ltd. 9.60% 2022 500 574
Inco Ltd. 9.875% 2019 5,000 5,628 .04
Ispat Mexicana 10.375% 2001 (2) 2,000 1,870
Ispat Mexicana, SA de CV, 10.375% 2001 4,000 3,740 .04
Kaiser Aluminum and Chemical Corp. 9.875% 2002 5,000 5,213
Kaiser Aluminum and Chemical Corp. 12.75% 2003 9,000 9,990 .11
Pohang Iron & Steel Co., Ltd. 7.375% 2005 10,000 10,608 .07
UCAR Global Enterprises Inc. 12.00% 2005 4,250 4,972 .04
USX Corp. 9.125% 2013 10,000 11,519 .08
-------- -----
69,304 .49
-------- -----
FINANCIAL SERVICES - 0.42%
Ford Capital BV 10.125% 2000 5,500 6,471 .05
Ford Motor Credit Co. 8.875% 1996 2,500 2,540 .02
General Electric Capital Corp. 8.875% 2009 4,000 4,940 .04
General Motors Acceptance Corp. 7.00% 2000 3,000 3,129
General Motors Acceptance Corp. 9.625% 2001 30,000 35,361
General Motors Acceptance Corp. 8.75% 2005 5,000 5,826 .31
-------- -----
58,267 .42
-------- -----
REAL ESTATE - 0.37%
Beverly Finance Corp. 8.36% 2004 (2) 5,000 5,500 .04
ERP Operating LP 7.95% 2002 3,750 4,022 .03
Irvine Co. 7.46% 2006 (2)(3) 10,000 10,088 .07
The Price REIT, Inc. 7.25% 2000 4,000 4,061 .03
B.F. Saul Real Estate Investment Trust 23,000 23,805 .17
11.625% 2002
Shopping Center Associates 6.75% 2004 (2) 5,000 5,025 .03
-------- -----
52,501 .37
-------- -----
AUTOMOBILES - 0.35%
General Motors Corp. 9.45% 2011 5,000 6,241
General Motors Corp. 8.80% 2021 35,000 42,766 .35
-------- -----
49,007 .35
-------- -----
AEROSPACE, AUTOMOTIVE AND MACHINERY - 0.27%
Caterpillar Inc. 8.01% 2002 15,000 16,477 .12
Coltec Industries Inc 9.75% 1999 5,500 5,706
Coltec Industries Inc 9.75% 2000 8,500 8,819 .10
MagneTek, Inc. 10.75% 1998 2,000 2,015 .01
Northrup Grumman 8.625% 2004 5,000 5,510 .04
-------- -----
38,527 .27
-------- -----
CONSTRUCTION & BUILDING MATERIALS - 0.27%
Building Materials Corp. 0%/11.75% 2004 (5) 7,500 5,475 .04
M.D.C. Holdings, Inc. 11.125% 2003 12,000 11,670 .08
Schuller International Group, Inc. 10.875% 2004 2,000 2,250 .02
Tolmex, SA de CV 8.375% 2003 3,500 3,028 .02
Triangle Pacific Corp. 10.50% 2003 5,000 5,300 .04
Del Webb Corp. 9.75% 2003 10,500 10,710 .07
-------- -----
38,433 .27
-------- -----
DATA PROCESSING & REPRODUCTION - 0.22%
Digital Equipment Corp. 8.625% 2012 20,000 21,973 .15
Unisys Corp. 10.625% 1999 10,000 9,700 .07
-------- -----
31,673 .22
-------- -----
MISCELLANEOUS - 0.42%
Owens-Illinois, Inc. 11.00% 2003 6,000 6,795 .05
Samsung Electronics Co., Ltd. 8.50% 2002 (2) 20,000 22,210 .16
Swire Pacific Ltd. 8.50% 2004 (2) 7,500 8,224 .06
Tenneco Inc. 10.00% 1998 1,500 1,655
Tenneco Inc. 7.875% 2002 2,000 2,188 .03
Tyco Toys, Inc. 10.125% 2002 15,700 13,659 .09
WestPoint Stevens Inc. 8.75% 2001 4,000 4,050 .03
-------- -----
58,781 .42
-------- -----
COLLATERALIZED MORTGAGE/ASSET-BACKED
OBLIGATIONS (7)(EXCLUDING THOSE ISSUED
BY FEDERAL AGENCIES) - 1.12%
Banco Nacional de Mexico 0% 2002 (2) 8,303 6,271 .04
Bank of America 9.50% 2008 94 96 0
Case Equipment Loan Trust 1995-A 7.30% 2002 14,597 14,940 .11
Chase Manhattan Bank, NA, Series 1993-I,
Class 2A5, 7.25% 2024 9,910 9,855 .07
Citicorp Mortgage Securities, Inc., Series
1992-20, Class A3, 7.50% 2006 8,142 8,150 .06
CMC Securities Corp. I, Series 1993-E, Class S9,
6.50% 2008 2,801 2,722 .02
CSFB Finance Co. Ltd. 5.00% 2005 (2)(6) 5,000 4,966 .03
Electronic Transfer Master Trust 9.35% 2002 (2) 15,000 15,225 .11
Fifth Avenue Capital Trust, Class C 12.36% 5,000 5,294 .04
2002 (2)
GE Capital Mortgage Services, Inc., Series 94-2,
Class A15, 4.702% 2009 (8) 6,310 4,369
GE Capital Mortgage Services, Inc., Series 94-9,
Class A9, 6.50% 2024 5,477 4,785 .06
Green Tree Financial Corp., Net Interest Margin
Trust, Series 1994-A, 6.90% 2004 3,261 3,296
Green Tree Financial Corp., Seller and Servicer
Manufactured Housing Contract, Series 1993-2,
Class B, 8.00% 2018 14,000 14,805
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 5,258
Green Tree Financial Corp., Seller and Servicer
Manufactured Housing Contract, Series 1995-9,
Class A-5, 6.80% 2027 4,000 4,045 .19
Merrill Lynch Mortgage Investors, Inc., Seller
Manufactured Housing Contract, Series 1992-B,
Class A2, 8.05% 2012 2,500 2,536
Merrill Lynch Mortgage Investors, Inc., Seller
Manufactured Housing Contract, Series 1995-C2,
Class A-1, 7.522% 2021 (6) 10,020 10,383 .09
Prudential Home Mortgage Securities Co., Inc.,
Series 1992-37, Class A6, 7.00% 2022 7,646 7,660 .05
Resolution Trust Corp., Series 1992-CHF, Class E,
8.25% 2020 10,922 10,621
Resolution Trust Corp., Series 1993-C1, Class D,
9.45% 2024 6,143 6,450
Resolution Trust Corp., Series 1993-C1, Class E,
9.50% 2024 2,123 2,115
Resolution Trust Corp., Series 1993-C2, Class C,
8.00% 2025 3,000 3,101
Resolution Trust Corp., Series 1993-C2, Class D,
8.50% 2025 3,290 3,426
Resolution Trust Corp., Series 1993-C2, Class E,
8.50% 2025 975 966 .19
SKW II Real Estate LP, Class A, 6.45% 2002 (2)(6) 2,469 2,469 .02
Standard Credit Card Master Trust I, credit card
participation certificates, Series 1994-2A, 5,000 5,408 .04
7.25% 2008
USWFS Manufactured Housing Contract,
Series 1990-A, 9.05% 2010 (2) 347 347 0
-------- -----
159,559 1.12
-------- -----
FEDERAL AGENCY OBLIGATIONS-MORTGAGE
PASS-THROUGHS (7) - 2.97%
Federal Home Loan Mortgage Corp. 8.00% 2025 9,942 10,306
Federal Home Loan Mortgage Corp. 8.50% 2008-2020 29,778 31,120
Federal Home Loan Mortgage Corp. 9.00% 2007-2021 14,773 15,673
Federal Home Loan Mortgage Corp. 10.00% 2019 125 136
Federal Home Loan Mortgage Corp. 11.50% 2000 17 17 .40
Federal National Mortgage Assn. 7.50% 2007-2023 29,222 30,080
Federal National Mortgage Assn. 8.00% 2009-2024 13,117 13,666
Federal National Mortgage Assn. 8.50% 2014-2023 3,600 3,788
Federal National Mortgage Assn. 9.00% 2008-2025 14,846 15,793
Federal National Mortgage Assn. 10.00% 2020 3,565 3,922 .48
Government National Mortgage Assn. 5.00% 2025 (6) 4,034 4,029
Government National Mortgage Assn. 5.50% 2024 (6) 72,198 73,563
Government National Mortgage Assn. 6.00% 2023 3,023 2,942
Government National Mortgage Assn. 6.00% 2024 (6) 12,080 12,317
Government National Mortgage Assn. 6.50% 2024 4,811 4,781
Government National Mortgage Assn. 6.50% 17,867 18,219
2023-2024 (6)
Government National Mortgage Assn. 7.00% 2008-2023 25,953 26,339
Government National Mortgage Assn. 7.00% 2022 (6) 19,260 19,701
Government National Mortgage Assn. 7.50% 2017-2024 36,070 37,171
Government National Mortgage Assn. 8.00% 2017 6,617 6,993
Government National Mortgage Assn. 8.50% 2017-2025 47,848 50,205
Government National Mortgage Assn. 9.00% 2008-2025 16,712 17,896
Government National Mortgage Assn. 9.50% 2009-2021 17,691 19,287
Government National Mortgage Assn. 10.00% 2016-2019 1,960 2,159
Government National Mortgage Assn. 10.50% 2018-2019 279 313
Government National Mortgage Assn. 11.00% 2015 131 149 2.09
-------- -----
420,565 2.97
-------- -----
FEDERAL AGENCY OBLIGATIONS-COLLATERALIZED MORTGAGE
OBLIGATIONS (8) - 0.11%
Federal Home Loan Mortgage Corp., Series 1475,
Class SA, 8.110% 2008 2,168 1,837
Federal Home Loan Mortgage Corp., Series 1607,
Class SA, 6.614% 2013 5,287 3,794
Federal Home Loan Mortgage Corp., Series 1673,
Class SA, 4.492% 2024 6,000 3,345 .07
Federal National Mortgage Assn., Series 1993-234,
Class SC, 5.036% 2008 8,754 6,108 .04
-------- -----
15,084 .11
-------- -----
OTHER FEDERAL AGENCY OBLIGATIONS - 0.59%
Federal Home Loan Bank 6.41% 2003 10,000 9,959
Federal Home Loan Bank 6.16% 2004 13,000 12,894
Federal Home Loan Bank 6.27% 2004 6,000 5,954 .20
Federal Home Loan Mortgage Corp. 5.74% 2003 5,000 4,895
Federal Home Loan Mortgage Corp. 6.39% 2003 7,750 7,727
Federal Home Loan Mortgage Corp. 6.44% 2003 3,000 2,992
Federal Home Loan Mortgage Corp. 6.50% 2003 5,000 4,958
Federal Home Loan Mortgage Corp. 6.59% 2003 6,000 5,999
Federal Home Loan Mortgage Corp. 6.19% 2004 12,750 12,585
Federal Home Loan Mortgage Corp. 6.27% 2004 5,450 5,414 .32
Federal National Mortgage Assn. 7.00% 1996 1,000 1,000 .01
FNSM Principal STRIPS 0%/8.62% 2022 (5) 10,000 8,844 .06
-------- -----
83,221 .59
-------- -----
GOVERNMENTS AND GOVERNMENTAL AUTHORITIES
(EXCLUDING U.S. GOVERNMENT) - 0.67%
Argentina (Republic of) 8.375% 2003 13,000 11,537
Argentina (Republic of) Eurobond Series L,
6.812% 2005(6) 50,500 39,074 .36
Brazil (Republic of) Debt Conversion Bond 6.875%
2012 (6) 8,000 5,180 .04
British Columbia Hydro & Power Authority 12.50% 2014 10,000 12,223 .08
Ecuador-Bear Past Due Interest 6.812% 2015 (6) 3,064 1,318
Ecuador-Registered Past Due Interest 6.812% 2015 (6) 2,043 878 .01
Italy (Republic of) 6.875% 2023 10,000 9,668 .07
Ontario (Province of) 7.75% 2002 2,500 2,754 .02
Philippine Front-Loaded Interest Reduction Bond,
Series B 5.00% 2008 (6) 8,000 6,760 .05
United Mexican States Government 9.75% 2001 5,000 5,033
United Mexican States Government 6.25% Eurobonds 2019 1,000 690 .04
-------- -----
95,115 .67
-------- -----
FLOATING RATE EURODOLLAR NOTES (UNDATED) (6) - 0.22%
Bank of Nova Scotia 6.00% 10,000 7,828 .05
Canadian Imperial Bank of Commerce 6.125% 10,000 7,850 .06
Midland Bank 5.812% 5,000 4,040 .03
Standard Chartered Bank 5.562% 15,000 11,775 .08
-------- -----
31,493 .22
-------- -----
U.S. TREASURY OBLIGATIONS - 9.28%
7.875% February 1996 12,500 12,510 .09
8.875% February 1996 12,000 12,013 .09
7.375% May 1996 75,000 75,457 .53
7.25% August 1996 50,000 50,586 .36
7.25% November 1996 50,000 50,851 .36
8.00% January 1997 75,000 77,063 .54
6.75% February 1997 4,000 4,074 .03
6.875% April 1997 50,000 51,141 .36
8.50% May 1997 6,000 6,264 .04
8.50% July 1997 4,000 4,197 .03
5.625% August 1997 50,000 50,516 .36
8.625% August 1997 50,000 52,711 .37
5.50% September 1997 50,000 50,461 .36
5.75% October 1997 50,000 50,672 .36
8.75% October 1997 30,000 31,842 .23
6.00% November 1997 50,000 50,906 .36
7.875% January 1998 50,000 52,695 .37
8.125% February 1998 30,000 31,814 .22
9.25% August 1998 45,000 49,472 .35
8.875% February 1999 42,000 46,430 .33
9.125% May 1999 10,000 11,194 .08
6.75% June 1999 50,000 52,515 .37
6.875% August 1999 50,000 52,758 .37
8.75% August 2000 22,500 25,657 .18
8.50% November 2000 20,000 22,719 .16
7.75% February 2001 50,000 55,446 .39
11.625% November 2002 38,000 51,252 .36
10.75% February 2003 19,500 25,405 .18
11.625% November 2004 26,500 37,448 .26
10.75% August 2005 9,000 12,355 .09
10.375% November 2012 16,000 22,090 .16
8.875% August 2017 44,500 59,199 .42
7.125% February 2023 65,250 73,947 .52
-------- -----
1,313,660 9.28
-------- -----
TOTAL BONDS & NOTES (cost: $4,919,691,000) 5,066,521 35.79
-------- -----
- ---------------------------------- --- --- ---
Principal Market Percent
SHORT-TERM SECURITIES Amount Value of Net
(000) (000) Assets
- ---------------------------------- --- --- ---
CORPORATE SHORT-TERM NOTES - 5.43%
AT&T Corp. 5.38%-5.64% due 2/9-3/18/96 126,425 125,820 .89
Ameritech Corp. 5.50% due 2/29/96 15,000 14,934 .11
Chevron Oil Finance Co. 5.30%-5.70% due 2/6-3/14/96 79,900 79,758 .56
Coca-Cola Co. 5.52% due 2/2/96 15,000 14,995 .11
John Deere Capital Corp. 5.43% due 3/7/96 34,000 33,815 .24
E.I. du Pont de Nemours and Co. 5.44% due 2/16/96 50,000 49,879 .35
Ford Motor Credit Co. 5.37%-5.55% due 2/12-3/22/96 75,000 74,571 .53
Gannett Co. 5.23% due 4/18/96 (2) 16,200 16,016 .11
General Electric Capital Corp. 5.54% due 2/16/96 5,000 4,988 .03
H.J. Heinz Co. 5.40% due 2/27/96 18,300 18,226 .13
Hershey Foods Corp. 5.55% due 2/1/96 17,500 17,497 .12
Home Depot, Inc. 5.48% due 2/12/96 10,000 9,983 .07
Motorola, Inc. 5.30%-5.57% due 2/5-3/8/96 35,000 34,836 .25
J.C. Penney Funding Corp. 5.36%-5.38% due 3/6-3/13/96 17,400 17,296 .12
PepsiCo, Inc. 5.50%-5.58% due 2/9-2/15/96 32,900 32,832 .23
Pitney Bowes Credit Corp. 5.34%-5.37% due 3/4-3/8/96 10,200 10,144 .07
Procter & Gamble Co. 5.35%-5.47% due 2/26-3/11/96 47,000 46,769 .33
SAFECO Credit Co. 5.63% due 2/8/96 11,000 10,986 .08
United Parcel Service of America, Inc. 5.50% due 17,400 17,338 .12
2/23/96
Wal-Mart Stores, Inc. 5.35%-5.40% due 2/26-3/18/96 20,300 20,172 .14
Xerox Corp. 5.32%-5.50% due 2/5-3/12/96 119,100 118,604 .84
-------- -----
769,459 5.43
-------- -----
FEDERAL AGENCY SHORT-TERM OBLIGATIONS - 1.74%
Federal Farm Credit Banks 5.30% due 3/22/96 17,000 16,872 .12
Federal Home Loan Mortgage Corp.
5.30%-5.53% due 2/5-3/25/96 154,838 153,883 1.09
Federal National Mortgage Assn.
5.30%-5.54% due 2/9-3/28/96 75,845 75,430 .53
-------- -----
246,185 1.74
-------- -----
TOTAL SHORT-TERM SECURITIES (cost: $1,015,645,000) 1,015,644 7.17
-------- -----
TOTAL INVESTMENT SECURITIES 13,987,589 98.79
(cost: $11,883,641,000)
Excess of cash and receivables over payables 172,161 1.21
-------- -----
NET ASSETS $14,159,750 100.00%
======== =====
</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) Valued under procedures established by the Board of Directors.
(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
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
Unaudited
- ----------------------------------------- --------- ------------
STATEMENT OF ASSETS AND LIABILITIES (dollars in
January 31, 1996 thousands)
<S> <C> <C>
- ---------------------------------------- --------- ------------
ASSETS:
Investment securities at market
(cost: $11,883,641) $13,987,589
Cash 35,737
Receivables for-
Sales of investments $ 86,487
Sales of fund's shares 28,205
Dividends and accrued interest 114,103 228,795
--------- ------------
14,252,121
LIABILITIES:
Payables for-
Purchases of investments 74,151
Repurchases of fund's shares 10,058
Management services 3,346
Accrued expenses 4,816 92,371
--------- ------------
NET ASSETS AT JANUARY 31, 1996-
Equivalent to $16.18 per share on
874,872,659 shares of $1 par value
capital stock outstanding (authorized
capital stock--1,200,000,000 shares) $14,159,750
============
STATEMENT OF OPERATIONS (dollars in
for the six months ended January 31, 1996 thousands)
INVESTMENT INCOME:
Income:
Dividends $ 144,159
Interest 263,866 $ 408,025
---------
EXPENSES:
Management services fee 20,112
Distribution expenses 14,936
Transfer agent fee 4,249
Reports to shareholders 582
Registration statement and
prospectus 213
Postage, stationery and supplies 673
Directors' fees 78
Auditing and legal fees 53
Custodian fee 133
Taxes other than federal income tax 1
Other expenses 16 41,046
--------- ------------
Net investment income 366,979
------------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
Net realized gain 245,516
Net increase in unrealized appreciation on
investments:
Beginning of period 1,129,199
End of period 2,103,941 974,742
--------- ----------
Net realized gain and unrealized
appreciation on investments 1,220,258
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,587,237
==========
- ---------------------------------------- ----------
Statement of Changes in Net Assets (dollars in
thousands)
- ----------------------------------------- ----------
Six months
ended
January 31, Year ended
1996* July 31, 1995
----------------- ----------
OPERATIONS:
Net investment income $366,979 $680,297
Net realized gain on investments 245,516 50,302
Net increase in unrealized appreciation
on investments 974,742 994,833
--------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 1,587,237 1,725,432
--------- ---------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income (361,213) (598,609)
Distributions from net realized
gain on investments (152,790) (47,119)
--------- ---------
Total dividends and distributions (514,003) (645,728)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
70,751,564 and 118,485,003
shares, respectively 1,102,626 1,645,595
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions of
net realized gain on investments:
28,132,803 and 42,687,032
shares, respectively 439,325 586,118
Cost of shares repurchased:
47,842,451 and 112,581,008
shares, respectively (745,592) (1,558,083)
--------- ---------
Net increase in net assets
resulting from capital share
transactions 796,359 673,630
--------- ---------
TOTAL INCREASE IN NET ASSETS 1,869,593 1,753,334
NET ASSETS:
Beginning of period 12,290,157 10,536,823
--------- ---------
End of period (including undistributed
net investment income: $116,185
and $110,419, respectively) $14,159,750 $12,290,157
=========== ===========
</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 fund seeks current income while secondarily striving
for capital growth through investments in stocks and fixed-income securities.
The following paragraphs summarize the significant accounting policies
consistently followed by the fund in the preparation of its financial
statements:
Equity-type securities traded on a national securities exchange (or
reported on the NASDAQ national market) and securities traded in the
over-the-counter market are stated at the last-reported sales price on the day
of valuation; other securities, and securities for which no sale was reported
on that date, are stated at the last-quoted 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 $133,000 includes $100,000 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, 1996, net unrealized appreciation on investments for
federal income tax purposes aggregated $2,104,022,000, of which $2,222,315,000
related to appreciated securities and $118,293,000 related to depreciated
securities. During the six months ended January 31, 1996, the fund realized, on
a tax basis, a net capital gain of $245,652,000 on securities transactions. The
cost of portfolio securities for federal income tax purposes was
$11,883,567,000 at January 31, 1996.
3. The fee of $20,112,000 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; 0.15% of such
assets in excess of $8 billion but not exceeding $13 billion; and 0.147% of
such assets in excess of $13 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,
1996, distribution expenses under the Plan were $14,936,000. As of January 31,
1996, accrued and unpaid distribution expenses were $4,615,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $4,249,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $5,287,000 (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, 1996, aggregate amounts deferred were $177,000.
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 January 31, 1996, accumulated undistributed net realized gain on
investments was $140,260,000 and additional paid-in capital was
$10,924,491,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $2,106,192,000 and $2,249,132,000, respectively,
during the six months ended January 31, 1996.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six
months Year
ended ended
January 31, July 31
1996/1/ 1995 1994 1993 1992 1991
------- ------- ------ ------ ------ ------
Net Asset Value, Beginning of
Period $14.92 $13.59 $14.47 $13.94 $12.54 $12.11
------- ------- ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .43 .85 .83 .85 .85 .86
Net realized and unrealized
gain (loss) on investments 1.44 1.29 (.53) .74 1.48 .53
------- ------- ------ ------ ------ ------
Total income from
investment operations 1.87 2.14 .30 1.59 2.33 1.39
------- ------- ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.43) (.75) (.83) (.84) (.85) (.89)
Distributions from net
realized gains (.18) (.06) (.35) (.22) (.08) (.07)
------- ------- ------ ------ ------ ------
Total distributions (.61) (.81) (1.18) (1.06) (.93) (.96)
------- ------- ------ ------ ------ ------
Net Asset Value, End of Period $16.18 $14.92 $13.59 $14.47 $13.94 $12.54
======= ======= ====== ====== ====== ======
Total Return/2/ 12.72%3 16.42% 1.98% 11.88% 19.16% 12.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions) $14,160 $12,290 $10,537 $9,045 $5,121 $2,771
Ratio of expenses to average
net assets .31%/3/ .65% .63% .62% .66% .73%
Ratio of net income to average
net assets 2.79%/3/ 6.12% 5.92% 6.05% 6.40% 7.23%
Portfolio turnover rate 17.01%/3/ 26.26% 26.42% 29.18% 22.71% 23.35%
</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 INCOME FUND OF AMERICA
BOARD OF DIRECTOR
ROBERT A. FOX, Livingston, California
President and Chief Executive Officer,
Foster Farms Inc.
ROBERTA L. HAZARD, McLean, Virginia
Consultant; 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
Senior Partner, The Capital Group Partners L.P.
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
JANET A. McKINLEY, New York, New York
Executive Vice President of the fund
Senior Vice President,
Capital Research 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, Brea, California
Vice President of the fund
Vice President and Treasurer,
Capital Research and Management 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. HALL, Brea, California
Treasurer of the fund
Senior Vice President - Fund Business
Management Group, Capital Research and
Management Company
R. MARCIA GOULD, Brea, 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 llp
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR SECURITIES DEALER OR FINANCIAL PLANNER, OR CALL THE FUND'S
TRANSFER AGENT, TOLL-FREE, AT 800/421-0180.
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, 1996, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA SG/AL/2919
Lit. No. IFA-013-0396
[The American Funds Group(R)]
Printed on recycled paper
|
|