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American Mutual Fund
Semi-Annual Report
for the six months ended April 30, 1995
[The American Funds Group(R)]
<PAGE>
AMERICAN MUTUAL FUND(R)
Strives for the balanced accomplishment of three objectives - current income,
capital growth and conservation of principal - through investments in companies
that participate in the growth of the American economy.
ABOUT OUR COVER
The Colorado River carves a path along the White Rim Trail in Canyonlands
National Park, Utah.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the average annual compound returns with all
distributions reinvested for periods ended March 31, 1995 (the most recent
calendar quarter), assuming payment of the 5.75% maximum sales charge at the
beginning of the stated periods -
10 YEARS: +12.36% A YEAR; 5 YEARS: +8.77% A YEAR; 12 MONTHS: +5.02%.
Sales charges are lower for accounts of $50,000 or more. The fund's 30-day
yield as of May 31, 1995, calculated in accordance with the Securities and
Exchange Commission formula, was 3.53%. 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 0.19%.
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.
AMERICAN MUTUAL FUND
FELLOW SHAREHOLDERS:
American Mutual Fund showed good progress in the first half of fiscal 1995.
For the six months ended April 30, the value of your investment in the fund
rose 8.4% if, like most shareholders, you reinvested the two income dividends
of 21 cents a share paid last December and April, as well as the capital gain
distribution of 87 cents a share paid in December.
By comparison, the unmanaged Standard & Poor's 500 Composite Index gained
10.5% and the 406 growth and income funds tracked by Lipper Analytical Services
rose an average of 7.6% (both results assume dividends were reinvested). As
many of you know, it is not unusual for AMF, with its conservative
Results at a Glance
<TABLE>
<CAPTION>
<S> <C> <C>
(with dividends and capital TOTAL RETURN AVERAGE ANNUAL
gains distributions reinvested) COMPOUND RETURN
6 MONTHS +8.4% -
(11/1/94 - 4/30/95)
12 MONTHS +13.0% -
(5/1/94 - 4/30/95)
10 YEARS +250.4% +13.4%
(5/1/85 - 4/30/95)
LIFETIME +23,351.8% +12.8%
(2/21/50 - 4/30/95)
</TABLE>
mix of investments, to trail strong markets or to outpace weak ones.
During the latest six-month period, the stock market shrugged off a brewing
trade dispute with Japan, the devaluation of the Mexican peso and that
country's ensuing financial crisis, and reports of derivative-based losses by
public and private institutions both here and abroad. In reaching new highs,
the market was helped by strong corporate earnings, a decline in intermediate
and long-term interest rates and continued low inflation.
Many corporations reporting higher profits benefited from the strength of a
number of the world's major currencies against the U.S. dollar. Such a change
in currency exchange rates makes American exports more competitive abroad and
increases the value of the overseas earnings of U.S. multinationals once they
are converted back into U.S. dollars.
AMERICAN MUTUAL FUND
The stock market also seemed to be buoyed by a renewed focus in Washington on
slowing the rate of government spending, cutting the federal budget deficit and
providing incentives to save and invest. While achieving these ends should
indeed be positive for the financial markets, it remains to be seen what
legislation is signed into law.
Recently, the pace of economic growth has slowed noticeably from its
exceptionally strong pace in the second half of 1994. This has resulted in some
involuntary inventory buildup which will need to be worked off. At this
writing, however, we do not believe this slowdown in business activity is a
precursor to an imminent recession. Instead we expect more sustainable growth
in the economy to resume as the year unfolds.
After a brisk advance in stock prices, it is not unusual for the market to
pause or retrace part of its earlier gains. In order to cushion any market
decline and to take advantage of attractive investment opportunities as they
arise, we continue to maintain a sizable buying reserve in cash equivalents and
short-term bonds. In the meantime, these reserves are providing shareholders
with a significant amount of income.
Helping you keep what you earn has always been an important part of AMF's
approach. We will continue to do our utmost to preserve and increase the value
of your wealth and the income it produces.
Cordially,
James K. Dunton
President
June 12, 1995
<PAGE>
AMERICAN MUTUAL FUND
April 30, 1995
- ----------------------------
<TABLE>
<CAPTION>
Percent of
Largest Industry Holdings* Net Assets
- ---------------------------- -------------
<S> <C>
Banking 11.42%
Telecommunications 10.68%
Energy Sources 6.51%
Health & Personal Care 5.22%
Utilities: Electric & Gas 4.58%
Other Industries 34.19%
Bonds, Notes, and Cash Equivalents 27.40%
</TABLE>
*Percentages above do not include certain stocks in initial period of
acquisition.
<TABLE>
<CAPTION>
Percent of
Largest Individual Holdings Net Assets
- ---------------------------- -----------------------
<S> <C>
AT&T 2.35%
IBM 2.10
Amoco 1.80
Monsanto 1.79
Ameritech 1.65
Royal Dutch Petroleum 1.59
Sprint 1.52
U S WEST 1.49
DuPont 1.46
GTE 1.43
</TABLE>
********
AMERICAN MUTUAL FUND Investment Portfolio Unaudited
April 30, 1995
<TABLE>
<CAPTION>
Market Percent
EQUITY-TYPE SECURITIES Value of Net
(common and preferred stocks) Shares (Millions) Assets
<S> <C> <C> <C>
Energy
Energy Sources- 6.51%
Amoco Corp. 1,600,000 $105.000 1.80
Atlantic Richfield Co. 70,000 8.015 .14
Chevron Corp. 165,000 7.817 .13
Exxon Corp. 925,000 64.403 1.10
Mobil Corp. 327,000 31.024 .53
Phillips Petroleum Co. 750,000 26.250 .45
Royal Dutch Petroleum Co.
(New York Registered Shares) 750,000 93.000 1.59
Texaco Inc. 400,000 27.350 .47
Unocal Corp. $3.50 convertible preferred /1/ 330,000 17.738 .30
Utilities: Electric & Gas- 4.58%
Carolina Power & Light Co. 650,000 17.875 .31
Central and South West Corp. 1,800,000 44.325 .76
Consolidated Edison Co. of New York, Inc. 1,900,000 52.725 .90
Dominion Resources, Inc. 150,000 5.475 .09
Entergy Corp. 1,750,000 38.063 .65
Houston Industries Inc. 425,000 16.787 .29
Pacific Gas and Electric Co. 1,500,000 40.312 .69
Texas Utilities Co. 600,000 19.575 .33
Unicom Corp. 1,250,000 32.813 .56
----------- ------
648.547 11.09
----------- ------
Materials
Chemicals- 3.67%
Dow Chemical Co. 350,000 24.325 .42
E.I. du Pont de Nemours and Co. 1,300,000 85.638 1.46
Monsanto Co. 1,258,900 104.803 1.79
Forest Products & Paper- 1.03%
ITT Rayonier Inc. 50,000 1.656 .03
Union Camp Corp. 750,000 37.594 .64
Westvaco Corp. 500,000 21.000 .36
Metals: Nonferrous- 0.39%
Phelps Dodge Corp. 400,000 22.650 .39
Metals: Steel- 0.34%
Worthington Industries, Inc. 1,050,000 19.687 .34
Miscellaneous Materials & Commodities- 0.46%
Olin Corp. 235,000 13.131 .22
TRINOVA Corp. 400,000 13.900 .24
----------- ------
344.384 5.89
----------- ------
Capital Equipment
Aerospace & Military Technology- 1.68%
Boeing Co. 680,000 37.400 .64
United Technologies Corp. 830,000 60.694 1.04
Construction & Housing- 0.17%
Stone & Webster, Inc. 325,000 9.669 .17
Data Processing & Reproduction- 3.15%
International Business Machines Corp. 1,295,000 122.701 2.10
Xerox Corp. 500,000 61.563 1.05
Electrical & Electronic- 1.57%
General Electric Co. 1,274,500 71.372 1.22
Hubbell Inc., Class B 380,625 20.458 .35
Electronic Components- 0.88%
Motorola, Inc. 700,000 39.812 .68
Texas Instruments Inc. 110,000 11.660 .20
Industrial Components- 0.91%
Dana Corp. 600,000 15.450 .26
TRW Inc. 500,000 37.188 .65
Machinery & Engineering- 2.02%
Caterpillar Inc. 400,000 23.400 .40
Deere & Co. 671,400 55.055 .94
Sundstrand Corp. 725,000 40.237 .68
----------- ------
606.659 10.38
----------- ------
Consumer Goods
Automobiles- 1.19%
Ford Motor Co. 1,600,000 43.200
Ford Motor Co. $4.20 cumulative convertible 1.19
preferred, Series A 300,000 26.438
Beverages- 0.36%
PepsiCo, Inc. 500,000 20.812 .36
Food & Household Products- 1.86%
ConAgra, Inc. 900,000 29.925
ConAgra, Inc. $1.6875 convertible preferred, .73
Class E 373,300 12.739
CPC International Inc. 185,000 10.845 .19
General Mills, Inc. 900,000 54.900 .94
Health & Personal Care- 5.22%
American Home Products Corp. 765,000 59.001 1.01
Bausch & Lomb Inc. 501,000 19.414 .33
Bristol-Myers Squibb Co. 325,000 21.165 .36
Johnson & Johnson 400,000 26.000 .44
Eli Lilly and Co. 325,000 24.294 .42
Merck & Co., Inc. 1,640,000 70.315 1.20
Schering-Plough Corp. 300,000 22.612 .39
Upjohn Co. 835,000 30.269 .52
Warner-Lambert Co. 400,000 31.900 .55
Textiles & Apparel- 0.42%
VF Corp. 500,000 25.250 .42
----------- ------
529.079 9.05
----------- ------
Services
Broadcasting & Publishing- 1.51%
Gannett Co., Inc. 850,000 44.731 .77
Times Mirror Co., Class A 525,517 9.525
TIMES MIRROR CO., $1.374 PREFERRED EQUITY .24
REDEMPTION CUMULATIVE STOCK, SERIES B /2/ 224,483 4.518
Tribune Co. 500,000 29.562 .50
Business & Public Services- 1.81%
Dun & Bradstreet Corp. 1,000,000 52.125 .89
Pitney Bowes Inc. 1,000,000 37.125 .63
WMX Technologies, Inc. 600,000 16.350 .29
Leisure & Tourism- 0.49%
Marriott International, Inc. 800,000 28.800 .49
Merchandising- 0.58%
Melville Corp. 950,000 33.963 .58
Telecommunications- 10.68%
Ameritech Corp. 2,150,000 96.750 1.65
AT&T Corp. 2,705,000 137.279 2.35
Bell Atlantic Corp. 500,000 27.438 .47
GTE Corp. 2,450,000 83.606 1.43
Pacific Telesis Group 2,350,000 72.556 1.24
SBC Communications Inc. (formerly Southwestern Bell 700,000 30.887 .53
Corp.)
Sprint Corp. 2,700,000 89.100 1.52
U S WEST, Inc. 2,100,000 86.888 1.49
Transportation: Airlines- 0.37%
Delta Air Lines, Inc. $3.50 convertible preferred,
Class C 400,000 21.900 .37
Transportation: Rail & Road- 2.19%
Conrail, Inc. 700,000 38.237 .65
Norfolk Southern Corp. 955,000 64.343 1.10
Union Pacific Corp. 450,000 24.694 .44
----------- ------
1,030.377 17.63
----------- ------
Finance
Banking- 11.42%
AmSouth Bancorporation 1,000,000 31.250 .53
Banc One Corp. 2,100,000 61.950 1.06
BankAmerica Corp. 600,000 29.700 .51
Chemical Banking Corp. 1,050,000 43.838 .75
Citicorp $5.375 convertible preferred,
Series 13 /1/ 300,000 38.288 .65
Comerica Inc. 1,700,000 48.875 .84
First Chicago Corp. 440,000 24.310 .42
First Interstate Bancorp 350,000 26.906 .46
First Security Corp. 900,000 21.375 .37
First Union Corp. 800,000 36.200 .62
Huntington Bancshares Inc. 3,000,000 56.250 .96
J.P. Morgan & Co. Inc. 500,000 32.812 .56
NBD Bancorp, Inc. 300,000 9.187 .16
PNC Bank Corp. 2,440,000 61.305 1.05
Wachovia Corp. 2,200,000 77.275 1.32
Wells Fargo & Co. 410,000 68.009 1.16
Financial Services- 0.74%
Beneficial Corp. 200,000 8.150 .14
Federal National Mortgage Assn. 395,000 34.859 .60
Insurance- 2.91%
Allstate Corp. 1,700,000 51.637 .88
American General Corp. 1,010,000 33.330 .57
General Re Corp. 50,000 6.369 .11
Lincoln National Corp. 600,000 24.450 .42
SAFECO Corp. 550,000 30.937 .53
St. Paul Companies, Inc. 500,000 24.063 .40
----------- ------
881.325 15.07
----------- ------
Multi-Industry & Miscellaneous
Multi-Industry- 1.63%
Minnesota Mining and Manufacturing Co. 600,000 35.775 .61
Tenneco Inc. 700,000 32.113 .55
Textron Inc. 480,000 27.360 .47
----------- ------
95.248 1.63
----------- ------
Miscellaneous- 1.86%
Stocks in initial period of acquisition 109.233 1.86
----------- ------
TOTAL EQUITY-TYPE SECURITIES (cost:
$3,064.342 million) 4,244.852 72.60
----------- ------
BONDS AND NOTES Principal
Amount
Corporate- 0.22%
J.C. Penney Co., Inc. 9.05% 2001 $12,000,000 12.938 .22
----------- ------
U.S. Treasury Obligations- 7.75%
10.75% August 2005 8,000,000 10.071 .17
12.375% May 2004 50,000,000 67.446 1.15
11.75% February 2001 50,000,000 61.664 1.05
8.25% July 1998 60,000,000 62.541 1.07
5.125% April 1998 60,000,000 57.385 .98
8.125% February 1998 60,000,000 62.137 1.06
6.00% November 1997 60,000,000 59.015 1.01
6.375% June 1997 12,000,000 11.942 .20
7.25% November 1996 14,000,000 14.153 .24
7.375% May 1996 47,700,000 48.169 .82
----------- ------
454.523 7.75
----------- ------
TOTAL BONDS AND NOTES (cost: $487.320 million) 467.461 7.97
----------- ------
TOTAL INVESTMENT SECURITIES (cost: $3,551.662
million) 4,712.313 80.57
----------- ------
SHORT-TERM SECURITIES
Corporate Short-Term Notes- 16.27%
American Express Credit Corp. 5.99%-6.05%
due 6/5-6/19/95 57,700,000 57.278 .99
American General Corp. 5.95%-5.99%
due 5/12-6/20/95 47,900,000 47.662 .82
BellSouth Telecommunications Inc. 5.93%-5.95%
due 5/11-5/30/95 66,000,000 65.742 1.12
Cola-Cola Co. 5.95%-5.97%
due 6/19-6/20/95 29,000,000 28.760 .49
E.I. du Pont de Nemours and Co. 5.93%-5.95%
due 5/12-6/8/95 52,100,000 51.854 .89
Emerson Electric Co. 5.93%-5.95%
due 5/8-5/24/95 69,200,000 69.040 1.18
Ford Motor Credit Co. 5.99%-6.00%
due 5/11-5/22/95 64,250,000 64.106 1.10
General Electric Capital Corp. 5.97%-6.00%
due 5/1-6/27/95 87,300,000 86.862 1.48
Hewlett-Packard Co. 5.99%-6.00%
due 5/31-6/6/95 38,800,000 38.578 .66
Motorola, Inc. 5.94%-5.96%
due 5/16-5/23/95 59,613,000 59.418 1.01
J.C. Penney Funding Corp. 5.95%-5.97%
due 5/9-5/30/95 76,100,000 75.857 1.30
PepsiCo, Inc. 5.94%-6.00% due 5/9-6/5/95 95,400,000 95.111 1.64
Pfizer Inc. 5.95% due 5/10/95 20,000,000 19.967 .34
Procter & Gamble Co. 5.95%-5.99% due 5/10-6/19/95 53,600,000 53.401 .91
Sara Lee Corp. 5.93%-6.04% due 5/19-6/28/95 49,200,000 48.803 .83
Xerox Corp. 6.00%-6.07% due 5/1-6/1/95 88,900,000 88.648 1.51
U.S. Treasury Short-Term Securities - 3.04%
7.50%-10.375% due 5/15/95-2/29/96 175,000,000 176.172 3.04
----------- ------
TOTAL SHORT-TERM SECURITIES (cost: $1,130.056
million) 1,127.259 19.31
Excess of cash and receivables over payables 7.395 .12
----------- ------
TOTAL SHORT-TERM SECURITIES,
CASH AND RECEIVABLES, NET OF PAYABLES 1,134.654 19.43
----------- ------
NET ASSETS $5,846.967 100.00%
=========== ======
</TABLE>
/1/ Purchased in a private placement transaction;
resale to the public may require registration or
may extend only to qualified institutional buyers.
/2/ Non-income-producing securities
See Notes to Financial Statements
**********
<TABLE>
<CAPTION>
- ---------------------------- ------------------------------
Equity-type securities Equity-type securities
appearing in the portfolio eliminated from the portfolio
since October 31, 1994 since October 31, 1994
<S> <C>
- ---------------------------- ------------------------------
AmSouth Bancorporation American Cyanamid
Bausch & Lomb BFGoodrich
Beneficial ITT
Comerica Snap-on Tools
Conrail
First Security
General Mills
Phillips Petroleum
Pitney Bowes
Union Pacific
</TABLE>
**********
American Mutual Fund Unaudited
- ---------------------------- ------------- --------- ------------------
Statement of Assets and Liabilities
April 30, 1995 (dollars in millions)
<TABLE>
<CAPTION>
Assets:
<S> <C> <C>
Investment securities at market
(cost: $3,551.662) $4,712.313
Short-term securities
(cost: $1,130.056) 1,127.259
Cash .741
Receivables for-
Sales of investments $14.072
Sales of fund's shares 6.394
Dividends and accrued interest 27.017 47.483
--------- ------------------
5,887.796
Liabilities:
Payables for-
Purchases of investments 33.004
Repurchases of fund's shares 4.662
Management services 1.470
Accrued expenses 1.693 40.829
--------- ------------------
Net Assets at April 30, 1995-
Equivalent to $21.99 per share on
265,937,532 shares of $1 par value
capital stock outstanding (authorized
capital stock--500,000,000 shares) $5,846.967
=================
Statement of Operations
for the six months ended April 30, 1995
(dollars in millions)
- ----------------------------------------- --------- ------------------
Investment Income:
Income:
Dividends $ 74.994
Interest 51.527 $126.521
---------
Expenses:
Management services fee 8.380
Distribution expenses 5.170
Transfer agent fee 1.781
Reports to shareholders .236
Registration statement and
prospectus .077
Postage, stationery and supplies .503
Directors' fees .094
Auditing and legal fees .050
Custodian fee .068
Taxes other than federal income tax .068
Other expenses .053 16.480
--------- ----------------
Net investment income 110.041
-----------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 151.372
Net increase in unrealized appreciation on
investments:
Beginning of period 970.648
End of period 1,157.854 187.206
--------- ----------------
Net realized gain and increase in unrealized
appreciation on investments 338.578
---------------
Net Increase in Net Assets Resulting
from Operations $448.619
================
- ---------------------------------------- ----------------
Statement of Changes in Net Assets
(dollars in millions)
- ----------------------------------------- ------------------
Six months Year
ended ended
April 30, 1995* October 31, 1994
--------- ----------------
Operations:
Net investment income $ 110.041 $ 213.211
Net realized gain on investments 151.372 205.193
Net change in unrealized appreciation
on investments 187.206 (327.297)
--------- -----------------
Net increase in net assets
resulting from operations 448.619 91.107
--------- ----------------
Dividends and Distributions
Paid to Shareholders:
Dividends from net investment income (107.727) (200.381)
Distributions from net realized
gain on investments (217.474) (251.156)
--------- -----------------
Total dividends and distributions (325.201) (451.537)
--------- -----------------
Capital Share Transactions:
Proceeds from shares sold:
15,470,409 and 30,117,655
shares, respectively 324.219 652.107
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions of
net realized gain on investments:
14,462,246 and 18,500,247
shares, respectively 291.673 395.698
Cost of shares repurchased:
13,880,809 and 26,355,477
shares, respectively (289.784) (572.989)
--------- ----------------
Net increase in net assets
resulting from capital share
transactions 326.108 474.816
--------- ------------------
Total Increase in Net Assets 449.526 114.386
Net Assets:
Beginning of period 5,397.441 5,283.055
--------- -----------------
End of period (including undistributed
net investment income: $34.141
and $31.827, respectively) $5,846.967 $5,397.441
=========== =================
</TABLE>
*Unaudited
See Notes to Financial Statements
Notes to Financial Statements
1. American Mutual Fund, 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.
Long-term and 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.
Distributions 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 $68,000 includes $34,000 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 April 30, 1995, net unrealized appreciation on investments for
federal income tax purposes aggregated $1,159,579,000, of which $1,219,906,000
related to appreciated securities and $60,327,000 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the six months ended April 30, 1995. The cost of
portfolio securities for federal income tax purposes was $4,679,993,000 at
April 30, 1995.
3. The fee of $8,380,000 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 Board of
Directors has approved a new Investment Advisory and Service Agreement
containing a reduced fee schedule. The reduced fee schedule provides for
monthly fees, accrued daily, based on an annual rate of 0.384% of the first $1
billion of net assets; 0.33% of such assets in excess of $1 billion but not
exceeding $2 billion; 0.294% of such assets in excess of $2 billion but not
exceeding $3 billion; 0.27% of such assets in excess of $3 billion but not
exceeding $5 billion; 0.252% of such assets in excess of $5 billion but not
exceeding $8 billion; and 0.24% of such assets in excess of $8 billion. The
old fee schedule provided for monthly fees, accrued daily, based on an annual
rate of 0.39% of the first $800 million of net assets; 0.336% of such assets
in excess of $800 million but not exceeding $1.8 billion; 0.30% of such assets
in excess of $1.8 billion but not exceeding $3 billion; and 0.276% of such
assets in excess of $3 billion. Recognizing the substantial growth in the
fund's net assets, CRMC agreed to waive any fee in excess of what it would
receive under the reduced schedule effective January 1, 1995. Had such a
waiver not taken place, the fee for management services would have been
$8,501,000. There can be no assurance that this voluntary fee waiver will
continue in the future.
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 April 30,
1995, distribution expenses under the Plan were $5,170,000. As of April 30,
1995, accrued and unpaid distribution expenses were $1,614,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $1,781,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $1,359,000 (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 April 30, 1995, aggregate amounts deferred were $57,000.
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 such
persons received any remuneration directly from the fund.
4. As of April 30, 1995, accumulated undistributed net realized gain on
investments was $136,446,000 and additional paid-in capital was $4,252,588,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $578,120,000 and $610,876,000, respectively, during
the six months ended April 30, 1995.
Per-Share Data and Ratios
<TABLE>
<CAPTION>
Six Year
Months
ended ended
April 30 October 31
1995 /1/ 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
----- ----- ----- ----- ----- -----
Net Asset Value, Beginning of
Period $21.60 $23.21 $21.29 $20.98 $17.91 $20.53
----- ----- ----- ----- ----- -----
Income from Investment
Operations:
Net investment income .42 .88 .85 .87 .89 .96
Net realized and unrealized
gain (loss) on investments 1.26 (.54) 2.89 .98 3.39 (1.79)
----- ----- ----- ----- ----- -----
Total income (loss) from
investment operations 1.68 .34 3.74 1.85 4.28 (.83)
----- ----- ----- ----- ----- -----
Less Distributions:
Dividends from net investment
income (.42) (.84) (.85) (.88) (1.01) (1.00)
Distributions from net
realized gains (.87) (1.11) (.97) (.66) (.20) (.79)
----- ----- ----- ----- ----- -----
Total distributions (1.29) (1.95) (1.82) (1.54) (1.21) (1.79)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $21.99 $21.60 $23.21 $21.29 $20.98 $17.91
===== ===== ===== ===== ===== =====
Total Return /2/ 8.37% /3/ 1.75% 18.63% 9.43% 24.62% (4.65)%
Ratios/Supplemental Data:
Net assets, end of period (in
millions) $5,847 $5,397 $5,283 $4,565 $4,134 $3,196
Ratio of expenses to average
net assets .30% /3/ .60% .59% .60% .63% .60%
Ratio of net income to average
net assets 2.00% /3/ 4.07% 3.83% 4.15% 4.47% 5.00%
Portfolio turnover rate 12.45% /3/ 18.46% 22.48% 37.35% 23.77% 12.17%
</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
OFFICES OF THE FUND AND OF
THE 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
O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071-2899
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 American Mutual Fund,
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 after June 30, 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/2652
Lit. No. AMF-013-0695
[The American Funds Group(R)]
Printed on recycled paper
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