SEMI-ANNUAL REPORT for the six months ended April 30, 1997
AMERICAN MUTUAL FUND
[photo: field of poppies]
[The American Funds Group(r)]
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
A field of golden poppies in California's Mojave Desert.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the fund's average annual compound returns with
all distributions reinvested for periods ended March 31, 1997 (the most recent
calendar quarter), assuming payment of the 5.75% maximum sales charge at the
beginning of the stated periods (sales charges are lower for accounts of
$50,000 or more): 10 years: +11.16%; five years: +12.96%; 12 months: +7.64%.
The fund's 30-day yield as of May 31, 1997, calculated in accordance with the
Securities and Exchange Commission formula, was 2.74%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS AND ARE NOT PREDICTIVE OF
FUTURE 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.
FELLOW INVESTORS:
Buoyed by a healthy economy, rising corporate profits and continued low
inflation, American Mutual Fund posted a sizable gain during the first half of
its 1997 fiscal year. For the six months ended April 30, the value of your
investment rose 8.8% if, like most shareholders, you reinvested the two income
dividends totaling 41 cents a share and the capital gain distribution of $1.61
paid in December.
Over the six months, the unmanaged Standard & Poor's 500 Composite Index gained
14.7% with dividends reinvested. As many of you know, it has not been unusual
for AMF, with its conservative investment approach, to trail the fully invested
S&P 500 when it is advancing sharply or to give up less ground when the index
declines. But given the difference between AMF's recent results and those of
the index, we think a more detailed discussion of the current market
environment is in order.
[Pull Quote]
It is not unusual for AMF to trail the S&P 500 when the index is advancing
sharply or to give up less ground when the index declines.
[End Pull Quote]
According to Lipper Analytical Services, a firm which measures mutual fund
results, only about 4% of all U.S. equity funds and 6% of all U.S. growth and
income funds outpaced the index during the six-month period. As for the S&P 500
itself, relatively few stocks have been making a meaningful contribution to its
strong advance over the last six months, and nearly 30% posted negative returns
over that period.
What is happening is that the largest stocks in the index are having an
extraordinary impact on its return. In fact, during the first fiscal half, the
10 largest stocks in the index had an average gain of 30.4% and accounted for
nearly one-third of the S&P 500's total return. Many of these companies pay low
dividends or no dividends at all. Particularly at this time of historically low
stock dividend yields in general, such investments do not help achieve AMF's
income objective. Your fund's income return is more than half again above that
of the S&P.
Despite the current investment popularity of many of the largest stocks in the
index, we continue to focus our efforts on what we feel are the most attractive
long-term values and, in American Mutual Fund, strive for the balanced
accomplishment of current income, capital growth and conservation of principal.
We look forward to reporting to you again in three months.
Cordially,
[/s/ James K. Dunton]
James K. Dunton
Chairman of the Board
[/s/ Robert G. O'Donnell]
Robert G. O'Donnell
President
June 12, 1997
<TABLE>
AMERICAN MUTUAL FUND Investment Portfolio (unaudited)
April 30, 1997
[pie chart]
LARGEST INDUSTRY HOLDINGS*
Banking 13.09%
Energy Sources 8.08%
Telecommunications 7.80%
Health & Personal Care 6.38%
Chemicals 3.86%
Other Industries 35.06%
Bonds, Notes, Cash &
Equivalents 25.73%
[end pie chart]
LARGEST INDIVIDUAL COMMON STOCK HOLDINGS Percent of Net Assets
Amoco 2.52%
DuPont 2.51
Ameritech 2.42
AT&T 2.09
SBC Communications 1.47
Fleet Financial 1.39
Merck 1.31
American Home Products 1.27
Schering-Plough 1.24
Atlantic Richfield 1.19
*Percentages do not include certain stocks in initial period of acquisition.
Market Percent
COMMON STOCKS Value of Net
(common and preferred stocks) Shares (Millions) Assets
----------- ----------- -----------
<S> <C> <C> <C>
Energy
Energy Sources- 5.56%
Amoco Corp. 2,500,000 $209.063 2.52%
Ashland Inc. 1,474,200 65.786 .79
Atlantic Richfield Co. 725,000 98.691 1.19
Exxon Corp. 950,000 53.794 .65
Pennzoil Co. 678,700 33.426 .40
Phillips Petroleum Co. 2,000,000 78.750 .95
Royal Dutch Petroleum Co.
(New York Registered Shares) 525,000 94.631 1.14
Texaco Inc. 350,000 36.925 .44
Utilities: Electric & Gas- 3.40%
American Electric Power Co., Inc. 200,000 8.100 .10
Carolina Power & Light Co. 200,000 6.800 .08
Central and South West Corp. 2,300,000 46.287 .56
Consolidated Edison Co. of New York, Inc. 1,900,000 52.725 .63
Dominion Resources, Inc. 150,000 5.156 .06
Duke Power Co. 800,000 35.100 .42
Entergy Corp. 1,100,000 25.713 .31
FPL Group, Inc. 700,000 31.237 .38
Houston Industries Inc. 1,100,000 22.000 .26
PG&E Corp. 1,600,000 38.400 .47
Union Electric Co. 300,000 10.688 .13
----------- ------
953.272 8.96
----------- ------
Materials
Chemicals- 3.86%
Air Products and Chemicals, Inc. 200,000 14.350 .17
Dow Chemical Co. 700,000 59.413 .72
E.I. du Pont de Nemours and Co. 1,962,500 208.270 2.51
Monsanto Co. 900,000 38.475 .46
Forest Products & Paper- 2.12%
Georgia-Pacific Corp. 450,000 35.100 .42
International Paper Co. 1,000,000 42.250 .51
Rayonier Inc. 50,000 2.019 .02
Union Camp Corp. 900,000 43.762 .53
Westvaco Corp. 900,000 25.200 .30
Weyerhaeuser Co. 610,000 27.908 .34
Metals: Nonferrous- 0.42%
Aluminum Co. of America 500,000 34.937 .42
Metals: Steel- 0.24%
Worthington Industries, Inc. 1,050,000 19.819 .24
----------- ------
551.503 6.64
----------- ------
Capital Equipment
Aerospace & Military Technology- 1.39%
Boeing Co. 100,000 9.863 .12
General Motors Corp., Class H 250,000 13.437 .16
Raytheon Co. 925,000 40.353 .49
Sundstrand Corp. 750,000 36.562 .44
United Technologies Corp. 200,000 15.125 .18
Construction & Housing- 0.15%
Stone & Webster, Inc. 325,000 12.431 .15
Data Processing & Reproduction- 1.52%
International Business Machines Corp. 500,000 80.375 .97
Xerox Corp. 750,000 46.125 .55
Electrical & Electronic- 1.24%
Emerson Electric Co. 500,000 25.375 .31
Hubbell Inc., Class B 720,000 31.320 .38
Lucent Technologies Inc. 770,000 45.526 .55
Electronic Components- 0.28%
Motorola, Inc. 400,000 22.900 .28
Industrial Components- 1.71%
Dana Corp. 700,000 22.312 .27
Federal-Mogul Corp. 350,000 9.669 .12
Goodyear Tire & Rubber Co. 700,000 36.837 .44
TRW Inc. 1,400,000 72.975 .88
Machinery & Engineering- 2.41%
Briggs & Stratton Corp. 629,100 30.905 .37
Caterpillar Inc. 1,094,000 97.366 1.17
Deere & Co. 1,564,200 71.953 .87
----------- ------
721.409 8.70
----------- ------
Consumer Goods
Automobiles- 0.92%
Ford Motor Co., Class A 2,200,000 76.450 .92
Beverages- 0.50%
PepsiCo, Inc. 1,182,000 41.222 .50
Food & Household Products- 1.89%
Colgate-Palmolive Co. 200,000 22.200 .27
ConAgra, Inc. 400,000 23.050 .28
CPC International Inc. 185,000 15.286 .18
General Mills, Inc. 750,000 46.500 .56
Kellogg Co. 200,000 13.950 .17
Procter & Gamble Co. 175,000 22.006 .26
Unilever NV 70,000 13.738 .17
Health & Personal Care- 6.38%
American Home Products Corp. 1,600,000 106.000 1.27
Bristol-Myers Squibb Co. 550,000 36.025 .43
Johnson & Johnson 500,000 30.625 .37
Kimberly-Clark Corp. 660,000 33.825 .41
Eli Lilly and Co. 400,000 35.150 .42
Merck & Co., Inc. 1,200,000 108.600 1.31
Pharmacia & Upjohn, Inc. 647,500 19.182 .23
Schering-Plough Corp. 1,285,000 102.800 1.24
Warner-Lambert Co. 591,300 57.947 .70
Textiles & Apparel- 0.43%
VF Corp. 500,000 36.063 .43
----------- ------
840.619 10.12
----------- ------
Services
Broadcasting & Publishing- 1.49%
Gannett Co., Inc. 450,000 39.262 .47
Reader's Digest Assn., Inc. 1,789,500 41.159 .49
Tribune Co. 1,000,000 43.875 .53
Business & Public Services- 3.16%
Browning-Ferris Industries, Inc. 2,470,000 70.086 .84
Cognizant Corp. 1,100,000 35.887 .43
Dun & Bradstreet Corp. 400,000 9.850 .12
Electronic Data Systems Corp. 1,010,000 33.709 .41
Moore Corp. Ltd. 3,012,500 60.627 .73
Pitney Bowes Inc. 400,000 25.600 .31
Waste Management, Inc. 900,000 26.437 .32
Leisure & Tourism- 0.45%
Marriott International, Inc. 675,000 37.294 .45
Merchandising- 2.23%
J. C. Penney Co., Inc. 1,629,100 77.790 .94
Wal-Mart Stores, Inc. 3,250,000 91.812 1.10
Walgreen Co. 341,200 15.695 .19
Telecommunications- 7.80%
Ameritech Corp. 3,286,400 200.881 2.42
AT&T Corp. 5,175,000 173.362 2.09
Bell Atlantic Corp. 200,000 13.550 .16
GTE Corp. 800,000 36.700 .44
SBC Communications Inc. 2,197,175 121.943 1.47
Sprint Corp. 900,000 39.488 .48
U S WEST Communications Group 1,750,000 61.469 .74
Transportation: Rail & Road- 1.75%
Norfolk Southern Corp. 955,000 85.831 1.03
Union Pacific Corp. 950,000 60.562 .72
----------- ------
1,402.869 16.88
----------- ------
Finance
Banking- 13.09%
AmSouth Bancorporation 1,000,000 52.750 .64
Banc One Corp. 2,100,000 88.987 1.07
BankAmerica Corp. 250,000 29.219 .35
Bankers Trust New York Corp. 400,000 32.550 .39
Chase Manhattan Corp. 700,000 64.837 .78
Comerica Inc. 1,200,000 70.200 .85
CoreStates Financial Corp. 1,200,000 60.750 .73
Crestar Financial Corp. 800,000 29.600 .36
First Chicago NBD Corp. 1,200,000 67.500 .81
First Security Corp. 1,425,000 50.766 .61
First Union Corp. 319,500 26.838 .32
Firstar Corp. 2,000,000 58.750 .71
Fleet Financial Group, Inc. 1,900,000 115.900 1.39
Huntington Bancshares Inc. 1,155,000 33.062 .40
KeyCorp 400,000 20.850 .25
J.P. Morgan & Co. Inc. 450,000 45.844 .55
PNC Bank Corp. 2,300,000 94.588 1.14
U.S. Bancorp 650,000 37.131 .45
Wachovia Corp. 1,106,300 64.719 .78
Wells Fargo & Co. 160,000 42.680 .51
Financial Services- 1.22%
Beneficial Corp. 350,000 22.400 .27
Federal National Mortgage Assn. 1,180,000 48.528 .58
Household International, Inc. 350,000 30.800 .37
Insurance- 2.98%
Allstate Corp. 800,000 52.400 .63
American General Corp. 960,000 41.880 .51
Lincoln National Corp. 600,000 33.600 .41
Marsh & McLennan Companies, Inc. 250,000 30.125 .36
SAFECO Corp. 1,300,000 52.000 .63
St. Paul Companies, Inc. 550,000 36.850 .44
----------- ------
1,436.104 17.29
----------- ------
Multi-Industry & Miscellaneous
Multi-Industry- 1.57%
AlliedSignal Inc. 400,000 28.900 .35
Harsco Corp. 100,000 3.688 .04
Minnesota Mining and Manufacturing Co. 200,000 17.400 .21
Tenneco Inc. 900,000 35.887 .43
Textron Inc. 400,000 44.550 .54
----------- ------
130.425 1.57
----------- ------
Miscellaneous- 1.59%
Stocks in initial period of acquisition 132.186 1.59
----------- ------
TOTAL COMMON STOCKS (cost:
$3,862.867 million) 6,168.387 71.75
----------- ------
BONDS AND NOTES Principal
Amount
Corporate- 0.15% -----------
J.C. Penney Co., Inc. 9.05% 2001 $12,000,000 12.811 .15
----------- ------
U.S. Treasury Obligations- 2.96%
12.375% May 2004 50,000,000 65.750 .79
11.75% February 2001 50,000,000 58.640 .71
8.25% July 1998 60,000,000 61.501 .74
5.125% April 1998 60,000,000 59.512 .72
----------- ------
245.403 2.96
----------- ------
TOTAL BONDS AND NOTES (cost: $274.722 million) 258.214 3.11
----------- ------
TOTAL INVESTMENT SECURITIES (cost: $4,137.589
million) 6,426.601 74.86
----------- ------
SHORT-TERM SECURITIES
Corporate Short-Term Notes- 13.92%
American Express Credit Corp. 5.50%-5.56%
due 5/14-6/30/97 63,900,000 63.510 .76
Ameritech Corp. 5.49%-5.54% due 5/07-6/19/97 80,500,000 80.007 .96
BellSouth Telecommunications, Inc. 5.52%-5.56%
due 6/10-6/18/97 48,700,000 48.382 .58
Coca-Cola Co. 5.48%-5.52% due 5/22-6/9/97 73,700,000 73.361 .88
John Deere Capital Corp. 5.25%-5.55% due 5/7-6/11/97 55,500,000 55.361 .67
E.I. du Pont de Nemours and Co. 5.33%-5.48%
due 5/27-6/25/97 78,200,000 77.771 .94
Ford Motor Credit Co. 5.56%-5.61% due 5/19-7/10/97 75,300,000 74.674 .90
General Electric Capital Corp. 5.55%-5.62% due 6/11-7/9/97 86,300,000 85.521 1.03
IBM Credit Corp. 5.54%-5.59% due 6/17-7/7/97 77,200,000 76.553 .92
Lucent Technologies Inc.5.30%-5.56% due 5/1-7/8/97 73,600,000 73.171 .88
Monsanto Co. 5.31%-5.63% due 5/13-6/23/97 58,900,000 58.574 .71
J.C. Penney Funding Corp. 5.27%-5.30% due 5/2-5/21/97* 76,000,000 75.811 .91
PepsiCo, Inc. 5.50% due 5/27-6/24/97 50,600,000 50.304 .61
Procter & Gamble Co. 5.22%-5.51% due 5/6-6/3/97 72,700,000 72.477 .87
Sara Lee Corp. 5.54% due 6/25/97 70,000,000 69.396 .84
Warner-Lambert Co. 5.28%-5.32% due 6/2-6/6/97 65,000,000 64.643 .78
Weyerhaeuser Co. 5.32%-5.55% due 5/6-6/4/97 56,300,000 56.065 .68
Federal Agency Short-Term Obligations- 6.16%
Federal Home Loan Bank 5.20%-5.50% due 5/8-7/2/97 128,660,000 128.199 1.54
Federal Home Loan Mortgage Corp. 5.18%-5.33%
due 5/9-6/16/97 236025000 235.140 2.83
Federal National Mortgage Assn. 5.18%-5.54%
due 5/14-7/18/97 149,800,000 148.744 1.79
U.S. Treasury Short-Term Securities - 1.60%
6.00%-8.125% due 6/30/97-2/15/98 132,000,000 133.071 1.60
----------- ------
TOTAL SHORT-TERM SECURITIES (cost: $1,809.002
million) 1,800.735 21.68
Excess of cash and receivables over payables 77.867 .94
----------- ------
TOTAL SHORT-TERM SECURITIES, CASH AND
RECEIVABLES, NET OF PAYABLES 1,878.602 22.62
----------- ------
NET ASSETS $8,305.203 97.48%
=========== ======
*Purchased in a private placement transaction, resale to
the public may require registration or sale only to
qualified institutional buyers.
See Notes to Financial Statements
</TABLE>
<TABLE>
American Mutual Fund Financial Statements Unaudited
- -------------------------------------------------- ------------ ------------
Statement of Assets and Liabilities (dollars in
April 30, 1997 millions)
- -------------------------------------------------- ------------ ------------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $4,137.589) $6,426.601
Short-term securities
(cost: $1,809.002) 1,800.735
Cash .371
Receivables for-
Sales of investments $66.160
Sales of fund's shares 4.195
Dividends and accrued interest 22.189 92.544
------------ ------------
8,320.251
Liabilities:
Payables for-
Purchases of investments 6.155
Repurchases of fund's shares 4.003
Management services 1.981
Accrued expenses 2.909 15.048
------------ ------------
Net Assets at April 30, 1997-
Equivalent to $26.75 per share on
310,446,549 shares of $1 par value
capital stock outstanding (authorized
capital stock--500,000,000 shares) $8,305.203
=================
- -------------------------------------------------- ------------ ------------
Statement of Operations (dollars in
for the six months ended April 30, 1997 millions)
- -------------------------------------------------- ------------ ------------
Investment Income:
Income:
Dividends $ 87.432
Interest 57.741 $145.173
------------
Expenses:
Management services fee 11.739
Distribution expenses 8.499
Transfer agent fee 2.224
Reports to shareholders .260
Registration statement and
prospectus .309
Postage, stationery and supplies .491
Directors' fees .098
Auditing and legal fees .053
Custodian fee .089
Taxes other than federal income tax .113
Other expenses .080 23.955
------------ ------------
Net investment income 121.218
------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 374.096
Net increase in unrealized appreciation on
investments:
Beginning of period 2,099.255
End of period 2,280.745 181.490
------------ ------------
Net realized gain and increase in unrealized
appreciation on investments 555.586
------------
Net Increase in Net Assets Resulting
from Operations $676.804
============
See Notes to Financial Statements
- -------------------------------------------------- ------------ ------------
Statement of Changes in Net Assets (dollars in
millions)
- -------------------------------------------------- ------------ ------------
Six months Year ended
ended April 30, October 31,
1997* 1996
------------ ------------
Operations:
Net investment income $ 121.218 $ 241.501
Net realized gain on investments 374.096 477.701
Net increase in unrealized appreciation
on investments 181.490 515.734
------------ ------------
Net increase in net assets
resulting from operations 676.804 1,234.936
------------ ------------
Dividends and Distributions
Paid to Shareholders:
Dividends from net investment income (122.808) (238.662)
Distributions from net realized
gain on investments (468.837) (311.944)
------------ ------------
Total dividends and distributions (591.645) (550.606)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
17,350,872 and 34,457,011
shares, respectively 459.807 865.021
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions of
net realized gain on investments:
20,931,044 and 20,031,287
shares, respectively 536.621 491.254
Cost of shares repurchased:
20,148,185 and 33,206,353
shares, respectively (535.460) (833.613)
------------ ------------
Net increase in net assets
resulting from capital share
transactions 460.968 522.662
------------ ------------
Total Increase in Net Assets 546.127 1,206.992
Net Assets:
Beginning of period 7,759.076 6,552.084
------------ ------------
End of period (including undistributed
net investment income: $43.148
and $44.738, respectively) $8,305.203 $7,759.076
============ ============
*Unaudited
See Notes to Financial Statements
</TABLE>
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 fund 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 following
paragraphs summarize the significant accounting policies consistently followed
by the fund in the preparation of its financial statements:
Common Stocks 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 by the Board of Directors or a
committee thereof.
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 $89,000 includes $13,000 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, 1997, net unrealized appreciation on investments for
federal income tax purposes aggregated $2,282,101,000, of which $2,391,314,000
related to appreciated securities and $109,213,000 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the six months ended April 30, 1997. The cost of
portfolio securities for federal income tax purposes was $5,945,235,000 at
April 30, 1997.
3. The fee of $11,739,000 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 0.384% of the first $1 billion of average 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.
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,
1997, distribution expenses under the Plan were $8,499,000. As of April 30,
1997, accrued and unpaid distribution expenses were $2,619,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $2,224,000. American Funds
Distributors, Inc. (AFD), the principal underwriter of the fund's shares,
received $1,543,000 (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 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, 1997,
aggregate amounts deferred and earnings thereon were $266,000.
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 April 30, 1997, accumulated undistributed net realized gain on
investments was $361,740,000 and additional paid-in capital was $5,309,123,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $589,859,000 and $986,717,000, respectively, during
the six months ended April 30, 1997.
<TABLE>
Per-Share Data and Ratios Six months Year ended
ended October 31
April 30 ------- ------- ------- ------- -------
1997 /1/ 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
Net Asset Value, Beginning of
Period $26.54 24.17 $21.60 $23.21 $21.29 $20.98
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Income from Investment
Operations:
Net investment income .40 .84 .87 .88 .85 .87
Net realized gain and change in
unrealized appreciation on
investments 1.83 3.52 3.41 (.54) 2.89 .98
------- ------- ------- ------- ------- -------
Total income from
investment operations 2.23 4.36 4.28 .34 3.74 1.85
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment
income (.41) (.84) (.84) (.84) (.85) (.88)
Distributions from net
realized gains (1.61) (1.15) (.87) (1.11) (.97) (.66)
------- ------- ------- ------- ------- -------
Total distributions (2.02) (1.99) (1.71) (1.95) (1.82) (1.54)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period $26.75 $26.54 $24.17 $21.60 $23.21 $21.29
======= ======= ======= ======= ======= =======
Total Return /2/ 8.79% /3/ 18.89% 21.25% 1.75% 18.63% 9.43%
Ratios/Supplemental Data:
Net assets, end of period (in
millions) $8,305 $7,759 $6,552 $5,397 $5,283 $4,565
Ratio of expenses to average
net assets .29% /3/ .59% .59% .60% .59% .60%
Ratio of net income to average
net assets 1.49% /3/ 3.36% 3.92% 4.07% 3.83% 4.15%
Average commissions paid
per share /4/ 5.10 c 5.88 c 6.27 c 6.54 c 7.31 c 7.56 c
Portfolio turnover rate 9.05% /e/ 24.21% 23.31% 18.46% 22.48% 37.35%
/1/Unaudited
/2/Calculated without deducting a sales charge.
The maximum sales charge is 5.75% of the fund's
offering price.
/3/Based on operations for the period shown and, accordingly,
not representative of a full year's operations.
/4/Brokerage commissions paid on portfolio transactions increase
the cost of securities purchased or reduce the proceeds of
securities sold, and are not separately reflected in the
fund's statement of operations. Shares traded on a principal
basis (without commissions), such as most over-the-counter
and fixed-income transactions, are excluded.
</TABLE>
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 92821-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
(Please write to the address nearest you.)
American Funds Service Company
P.O. Box 2205
Brea, California 92822-2205
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
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
O'Melveny & Myers LLP
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 FINANCIAL ADVISER. YOU MAY ALSO CALL AMERICAN FUNDS SERVICE
COMPANY, TOLL-FREE, AT 800/421-0180, OR VISIT WWW.AMERICANFUNDS.COM ON THE
WORLD WIDE WEB.
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 as sales material after
June 30, 1997, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Litho in USA SG/AL/3429
Lit. No. AMF-013-0697
Printed on recycled paper
[The American Funds Group (r)]
