American Mutual Fund
Quarterly Report
for the nine months
ended July 31, 1995
[The American Funds Group(R)]
Fellow Shareholders:
We are pleased to report that the value of your investment in American Mutual
Fund rose 7.1% for the three-month period ended July 31, if, like most
shareholders, you reinvested the income dividend of 21 cents a share paid in
July. By comparison, the unmanaged Standard & Poor's 500 Composite Index gained
9.9%.
The stock market's robust advance was supported by strong corporate earnings, a
rally in the bond market and continued low inflation. The S&P 500's substantial
appreciation was heavily influenced by gains in low-yielding technology stocks,
which are well represented in the index. American Mutual Fund, with its
emphasis on current income and conservation of principal as well as capital
growth, has relatively few technology holdings. As many of you know, it has not
been unusual for the fund to trail such strong markets or to outpace weak ones.
Bolstered by steady consumer spending, the economy appears to have strengthened
recently after a weak second calendar quarter. While this may help corporate
profits, a stronger economy could also put upward pressure on interest rates
and downward pressure on stock and bond prices.
As you can see from the table to the right, as of July 31 70.3% of the fund's
portfolio was invested in equity-type securities, with the remainder in money
market instruments and in bonds that, for the most part, have relatively short
maturities. Our investments in cash and bonds should help cushion any market
decline and enable us to take advantage of attractive investment opportunities
as they arise.
We look forward to reporting to you again in three months.
Cordially,
James K. Dunton
President
September 7, 1995
Portfolio Summary - July 31, 1995
PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
Market Value Percent of
(in millions) Net Assets
<S> <C> <C>
Equity-Type Securities $4,425.472 70.34%
Bonds & Notes 427.648 6.79
Cash Equivalents 1,438.290 22.87
Total $6,291.410 100.00%
</TABLE>
FIVE LARGEST INDUSTRY HOLDINGS
<TABLE>
<CAPTION>
Market Value Percent of
(in millions) Net Assets
<S> <C> <C>
Banking $707.273 11.24%
Telecommunications 672.131 10.68
Energy Sources 405.777 6.45
Health & Personal Care 343.601 5.46
Utilities: Electric & Gas 250.969 3.99
</TABLE>
<TABLE>
<CAPTION>
TEN LARGEST INDIVIDUAL HOLDINGS
Market Value Percent of
(in millions) Net Assets
<S> <C> <C>
AT&T $150.074 2.39%
Pacific Telesis 117.238 1.86
Amoco 107.600 1.71
Ameritech 104.006 1.65
Royal Dutch Petroleum 95.250 1.51
Merck 90.860 1.44
U S WEST 90.038 1.43
DuPont 87.100 1.38
Monsanto 86.504 1.37
Sprint 84.563 1.34
</TABLE>
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.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS AND WERE COMPUTED WITHOUT A
SALES CHARGE UNLESS OTHERWISE INDICATED. 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.
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.
Litho in USA BDA/GAC/2712
(C)1995 American Funds Distributors, Inc.
Lit. No. AMF-012-0995
