New Perspective Fund 1996
Annual Report for the year ended September 30
[The American Funds Group(R)]
[cover: photo of world]
NEW PERSPECTIVE FUND (R) seeks long-term growth of capital through investments
all over the world, including the United States.
RESULTS AT A GLANCE
<TABLE>
<CAPTION>
<S> <C>
FISCAL 1996
for the year ended
September 30, 1996 Total return*
New Perspective Fund +10.6%
Morgan Stanley Capital
International Indexes:
World Index +14.2%
USA Index +21.4%
</TABLE>
- ----
<TABLE>
<CAPTION>
<S> <C> <C>
LIFETIME OF THE FUND
from March 13, 1973 Average annual
through September 30, 1996 Total return* compound return*
New Perspective Fund +2,355.4% +14.6%
Morgan Stanley Capital
International Indexes:
World Index +1,214.5% +11.6%
USA Index +1,323.5% +11.9%
</TABLE>
*With dividends and capital gain distributions reinvested
ABOUT OUR COVER: The world as depicted by Oronce Fine, the French
mathematician, astronomer and cartographer, ca. 1535 (Bibliotheque Nationale de
France).
FUND RESULTS IN THIS REPORT WERE COMPUTED WITHOUT A SALES CHARGE UNLESS
OTHERWISE INDICATED. 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.
[photo: compass]
FELLOW SHAREHOLDERS:
During fiscal 1996, optimism about prospective global economic conditions
prevailed, inflation remained relatively low, and many of the world's major
corporations prospered. Your investment in New Perspective Fund also grew.
In the 12 months ended September 30, the value of your holdings increased 10.6%
if, like most shareholders, you reinvested dividend payments totaling 33 cents
a share - one of 23 cents a share in December 1995 and another of 10 cents a
share in June 1996 - as well as the capital gain distribution of 60 cents a
share also paid in December.
Over the same period, the unmanaged Morgan Stanley Capital International (MSCI)
World Index, which measures 22 major markets including the U.S., rose 14.2%
with dividends reinvested.
These latest results bring the fund's total return since operations began in
March 1973 to 2,355.4% with all distributions taken in shares. This amounts to
an average compound return of 14.6% a year. By comparison, the MSCI World Index
rose 1,214.5% during that 23-year period, or an average compound return of
11.6% a year.
THE YEAR IN REVIEW
Fiscal 1996 saw a worldwide advance in stock prices. Virtually all of the major
markets in which the fund had investments finished on the plus side. A number
posted double-digit gains in local currency and in U.S. dollars, despite a
strengthening in the value of the dollar against many foreign currencies. An
exception was Finland, which declined 11.0% in local currency and 17.0% in U.S.
dollars with dividends reinvested. At fiscal year-end, the fund had 1.3% of its
assets invested in companies domiciled there.
The fund's largest area of concentration, the United States, was again one of
the world's strongest markets, with a gain of 21.4%, as measured by the MSCI
USA Index with dividends reinvested. The fund's next largest areas of
concentration as of September 30 were France (+24.2% in local currency, +18.2%
in U.S. dollars), the United Kingdom (+16.2% in local currency, +14.8% in U.S.
dollars), and Sweden (+13.7% in local currency, +18.9% in U.S. dollars).
Markets in developing countries such as Mexico and Argentina, where the fund
holds a few select investments, continued to rebound from levels that had
become severely depressed following the devaluation of the Mexican peso late in
1994.
[photo: compass on graph]
The fund trailed the MSCI World Index in fiscal 1996 due to weakness on the
part of a number of important holdings that, in previous years, made strong
positive contributions to the fund's results. A good example is Nokia, a major
Finnish manufacturer of cellular communications equipment and consumer
electronics. The stock declined 36.4% in U.S. dollars over the 12-month period
after rising 140.6% in fiscal 1995 and 163.8% in fiscal 1994. Concerns over
price discounting and a slowdown in the rate of growth in the mobile phone
market were factors behind the decline.
Other examples of stocks which had achieved above average gains in prior years
but experienced weakness in fiscal 1996 include Ericsson (Sweden) which, like
Nokia, manufactures telecommunications equipment, Micron Technology (U.S.), a
maker of semiconductor components, PolyGram (Netherlands), a major music
recording company, and some of our investments in the broadcasting and
publishing area, including News Corp. (Australia) and Turner Broadcasting
(which has since been acquired by Time Warner, another U.S. holding).
Stocks that made significant positive contributions to the fund's results in
1996 included pharmaceutical manufacturers such as Ciba-Geigy, which has since
announced its intention to merge with Sandoz, another Swiss-based holding, and
banking-related issues, including Citicorp (U.S.) and Westpac Banking
(Australia). Chemical manufacturers such as Praxair (U.S.) and energy-related
issues such as Schlumberger (Netherlands Antilles) were also strong.
[photo: two compasses on map]
BROAD DIVERSIFICATION
All in all, of the 210 stocks held over the course of the year, 138 rose in
price, 71 declined, and one was unchanged. The fund's holdings were broadly
diversified across 34 industries and 25 countries. At fiscal year-end, the
regional breakdown of the portfolio was 37.9% in Europe, 35.2% in North
America, and 9.8% in Asia and the Pacific Rim. Equity-type securities accounted
for 84.8% of the fund's assets and bonds 1.0%, with the remainder in short-term
securities. The latter should help cushion any market decline and enable the
fund to take advantage of new buying opportunities as they emerge.
The setbacks experienced by a number of our holdings in fiscal 1996 are a
reminder that stock prices go down as well as up. (There will no doubt come a
time when many of the world's major markets themselves go down. And
shareholders should keep in mind that investing outside the U.S. entails
additional risks, such as currency fluctuations.) We believe, however, that
the long-term prospects of these companies remain strong. In numerous
instances, we took advantage of price weakness to add to our holdings. Many of
these same investments helped us outpace the MSCI World Index in fiscal 1995
(+18.6% versus +15.0%) and in fiscal 1994 (+12.6% versus +8.1%) and we believe
that they will help us do so again.
MAINTAINING A LONG-TERM PERSPECTIVE
Successful investing, of course, requires riding out occasional storms and
staying the course. We invite you to read the profile that begins on page 8 of
one family which did just that by making New Perspective Fund a part of their
lives for more than two decades.
Beginning on page 14, you will find a comprehensive presentation of the fund's
portfolio holdings by industry in sequence of their percentage of New
Perspective's net assets. Within each industry, the companies owned are also
listed in order of size - from the largest to the smallest according to the
percentage of assets. We hope you will take a few minutes to get to know the
companies in which you are a part-owner. As you look over the descriptions, we
think you will see why we are optimistic about NPF's long-term prospects and
why the fund's flexibility to seek out attractive investment opportunities
around the world has helped it achieve superior long-term results.
We would also like to welcome our many new shareholders and thank our long-time
shareholders for your confidence. New Perspective Fund's shareholder family is
made up of more than 750,000 individuals and institutions. Collectively you
have investments in the fund worth $11.7 billion. Be assured we will do all
that we can to make your experience a rewarding one.
We look forward to reporting to you again in six months.
Cordially,
/s/Walter P. Stern
Chairman of the Board
/s/Gina H. Despres
President
November 8, 1996
[photo: map of world]
New Perspective versus the Major World Market Indexes
(with dividends reinvested)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
World's Major Latest Fiscal Year Lifetime of the Fund
Stock Markets/1/ (10/1/95-9/30/96) (3/13/73- 9/30/96)
(listed in order of
size of market Local Adjusted to Local Adjusted to
capitalization as of currency U.S. $/2/ currency U.S. $/2/
9/30/96)
United States
MSCI USA Index 21.4% 1,323.5%
Japan 13.5% 0.5 514.3% 1,357.7
United Kingdom 16.2 14.8 2,921.7 1,852.0
Germany 18.6 10.6 699.1 1,393.2
France 24.2 18.2 1,555.5 1,252.6
Switzerland 24.8 14.4 689.0 1,884.5
Canada 21.6 20.2 846.8 586.0
Netherlands 31.4 22.3 2,287.6 3,717.0
Hong Kong 23.2 23.1 1,704.3 1,100.3
Australia 5.9 11.1 1,686.2 876.6
Italy 3.4 9.4 1,327.3 420.0
Sweden 13.7 18.9 5,604.0 3,652.6
Spain 30.5 25.2 934.3 361.7
Singapore -0.9 0.0 378.2 605.1
Belgium 24.7 16.1 1,632.4 2,021.5
MSCI World Index/3/ 14.2 1,214.5
New Perspective Fund 10.6% 2,355.4%
</TABLE>
/1/ United States market represented by the U.S. component of MSCI World Index;
all other markets computed by Capital International Perspective S.A. and
included in MSCI World Index. All indexes are unmanaged.
/2/ Figures adjusted to reflect foreign exchange fluctuations relative to the
U.S. dollar.
/3/ Includes the major stock markets throughout the world, weighted by size and
adjusted to reflect foreign exchange fluctuation relative to the U.S. dollar.
U.S. companies currently represent approximately 42% of the total index.
All figures include the reinvestment of dividends.
The table above has been revised this year to include the reinvestment of
dividends to illustrate the importance of dividends, particularly to long-term
investment returns. Returns for international indexes are with gross
dividends, reinvested (i.e., without local witholding taxes removed).
<TABLE>
<CAPTION>
<S> <C> <C>
WHERE NPF'S ASSETS WERE INVESTED
(percent invested by country)
9/30/96 9/30/95
Asia/Pacific Rim 9.8% 11.0%
Australia 3.6 4.3
Hong Kong 1.6 1.7
Japan 3.1 3.2
New Zealand 1.5 1.4
Singapore - .4
Europe 37.9% 32.4%
Belgium .1 .4
Denmark .4 .6
Finland 1.3 1.9
France 7.3 4.3
Germany 4.8 3.6
Italy .7 .5
Luxembourg .1 -
Netherlands 4.2 4.8
Norway .4 .3
Spain 2.0 1.2
Sweden 5.9 5.7
Switzerland 3.5 2.5
United Kingdom 7.2 6.6
North America 35.2% 36.6%
Canada 5.4 4.0
Mexico 1.5 1.1
United States 28.3 31.5
Other 2.9% 3.3%
Cash & equivalents 14.2% 16.7%
100.0% 100.0%
</TABLE>
New Perspective's 10 Largest Stock Holdings at Fiscal Year-End
<TABLE>
<CAPTION>
Percent of % price change
NPF's net for 12 months
Company assets Country ended 9/30/96
<S> <C> <C> <C>
Astra 1.9% Sweden +17.3%
Philip Morris 1.7 U.S. +7.5
Mannesmann 1.7 Germany +14.2
ABB 1.7 Sweden/ +5.8
Switzerland
Ciba-Geigy 1.3 Switzerland +59.4
Caterpillar 1.3 U.S. +32.5
News Corp. 1.3 Australia -8.0
Daimler-Benz 1.2 Germany +11.3
Internationale
Nederlanden Groep 1.2 Netherlands +7.4
TOTAL, Class B 1.1 France +29.9
</TABLE>
Here's how a $10,000 investment in the fund grew between March 13, 1973 - when
the fund was introduced - and September 30, 1996, the end of the fund's latest
fiscal year. Unlike figures presented earlier in the report, the fund's results
in this chart reflect payment of the maximum sales charge of 5.75%, so the net
amount invested was $9,425 versus $10,000 in the indexes shown. The indexes are
unmanaged and do not have sales charges, commissions or expenses. As you can
see, the investment in New Perspective would have grown to $231,461 versus
$131,445 in the Morgan Stanley Capital International (MSCI) World Index, which
reflects results in 22 major markets, and $142,355 in the MSCI USA Index.
New Perspective's year-by-year results appear in the table under the chart. The
table shows that NPF recorded positive results in 20 of these 24 periods, and
the boxed figure at the bottom right of the table shows that over the entire
231/2 years the investment grew at an average compound rate of 14.3% a year.
You can use this table to estimate how much the value of your own holdings has
grown. Let's say, for example, that you have been reinvesting all your
dividends and capital gain distributions and want to know how your investment
has done since September 30, 1986. At that time, according to the table, the
value of the investment illustrated here was $63,273. Since then, it has more
than tripled to $231,461. Thus, in that same period, the value of your
investment - regardless of size - also has more than tripled.
NPF's return versus other global equity funds
(with distributions reinvested for periods ended 9/30/96)
New Perspective Fund has done significantly better than most other similar
mutual funds. Over its lifetime, the fund ranked second among the five global
equity funds in existence over this 23 1/2-year span, according to Lipper
Analytical Services. Here is how the fund ranks over other time periods:
- - 10 years: 1st out of 13 global equity funds
- - 5 years: 6th out of 36 global equity funds
- - 1 year: 109th out of 151 global equity funds
Lipper rankings are based on total return and do not reflect the effect of
sales charges.
[chart]
How a $10,000 investment has grown
<TABLE>
<CAPTION>
New
Perspective
Year Fund TOTAL MSCI USA MSCI World
ended VALUE Index with Index with
September Dividends Value at Total dividends dividends
30 Reinvested year-end/1/ Return reinvested reinvested
<S> <C> <C> <C> <C> <C>
1973# - $9,938 (0.6)% 9,644 9,496
1974 $325 7,402 (25.5) 5,796 5,886
1975 401 10,769 45.5 7,954 7,647
1976 337 12,720 18.1 10,379 9,328
1977 280 13,050 2.6 9,925 9,685
1978 318 17,342 32.9 10,953 11,895
1979 444 20,100 15.9 12,042 13,362
1980 501 24,866 23.7 14,200 15,945
1981 931 25,315 1.8 13,948 14,919
1982 1,667 27,151 7.3 15,458 15,314
1983 1,830 39,093 44.0 22,064 21,629
1984 1,205 39,494 1.0 23,019 22,861
1985 1,196 45,578 15.4 26,527 28,617
1986 1,178 63,273 38.8 34,776 45,581
1987 1,393 94,727 49.7 49,353 65,809
1988 1,820 81,233 (14.2) 42,818 61,905
1989 2,605 103,968 28.0 56,868 77,872
1990 2,617 98,896 (4.9) 52,008 61,430
1991 2,979 122,493 23.9 68,580 76,958
1992 2,524 132,337 8.0 76,198 76,629
1993 2,172 156,604 18.3 86,165 92,637
1994 2,231 176,345 12.6 89,637 100,116
1995 2,813 209,200 18.6 117,232 115,102
1996 4,129 231,461/2/ 10.6 142,355 131,445
</TABLE>
Average annual compound return for 23 1/2 years 14.3%/1/
$10,000 original investment/1/
#For the period March 13, 1973 (commencement of operation) through September
30, 1973.
/1/ These figures, unlike those shown elsewhere in this report, reflect payment
of the maximum sales charge of 5.75% on the $10,000 investment. Thus, the net
amount invested was $9,425. As outlined in the prospectus, the sales charge is
reduced for larger investments. The maximum initial sales charge was 8.5% prior
to July 1, 1988. There is no sales charge on dividends or capital gain
distribution that are reinvested in additional shares. No adjustment has been
made for income or capital gain taxes.
/2/ Includes reinvested dividends of $35,896 and reinvested capital gain
distributions of $71,386.
Past results are not predictive of future results.
<TABLE>
<CAPTION>
Average Annual Compound Returns*
(for periods ended September 30, 1996)
<S> <C>
10 Years + 13.17%
5 Years + 12.23%
1 Year + 4.26%
</TABLE>
*Assumes reinvestment of all distributions and payment of 5.75% sales charge at
the beginning of the stated periods.
[end chart]
NEW PERSPECTIVE FUND AND THE POTENTIAL OF COMPOUNDING GROWTH
CLAIRE AND JACK PRENDERGAST: HOW AN INVESTMENT IN THE FUND PROVIDED LONG-TERM
GROWTH
Claire Prendergast's introduction to the magic of compounding occurred on her
21st birthday when she discovered that the $100 her great-grandmother had
tucked away in a savings account at Claire's birth was now hers to spend - and
worth all of $300. "The idea that this money had been quietly working for me
left me rather surprised - and pleased," she recalls.
When Claire and Jack Prendergast, her husband, invested in New Perspective Fund
shortly after its launch in March of 1973, they were introduced to a different
sort of compounding: the compounding that, over time, can come from a carefully
selected and supervised portfolio of growth stocks from around the world.
The fact that New Perspective was one of the first funds to invest outside the
United States intrigued Claire. "It was something new and interesting that I
thought maybe we should be doing," she says.
In the years since their initial investment, the Prendergasts and the world at
large have seen wars and recessions, political upheavals, gyrating oil prices,
high and low interest rates and inflation, along with steep stock market
declines - including the substantial decline that immediately followed their
investment in the fund. But they have also seen free trade and free enterprise
flourish, economies expand, and the concept of investing globally gain wide
acceptance among investors.
They have also seen how patience and perspective, the flexibility to search out
attractive investment values around the world, and the reinvestment of capital
gain distributions and dividends have combined to create very attractive total
returns for New Perspective Fund's long-term shareholders.
The Prendergasts earmarked part of their investment in New Perspective toward
building a college fund for their two boys, John, then age 10, and Luke, who
was 8. Says Jack Prendergast, "It was Claire who said that the boys would be
grown and off to college before we knew it. And she was right." Another part of
their NPF investment was set aside to build a retirement nest egg for
themselves.
Shortly after he met and married Claire in 1961, Jack joined a small start-up
company that manufactured processed foods. "Small businesses don't make a lot
of money. But I always earned a paycheck, worked hard to gain sales commissions
and, over time, the company did quite well," he says. As the company opened new
plants and facilities and expanded into new territory, his career took him and
his family from Indianapolis to Kansas City to Philadelphia, where they live
now. As its chief sales executive, over the course of 25 years he helped build
that small $200,000 business into a $40 million one before retiring in 1991.
While Jack was busy investing his time, energy and talent in helping the
company he worked for grow and prosper, many of the companies he and Claire
were part-owners of through their investment in NPF were also growing and
prospering. The growth and success of most of these companies sooner or later
found reflection in their share prices.
Key to the Prendergasts' approach toward investing was a willingness to invest
for the long term and let time, the potential growth of stocks and the power of
compounding work for them. "I always believed in investing in stocks. It was
something that I learned from my father. But I was quite aware that we could
lose money and that there would be times when we'd just have to hang in there,"
says Claire. "We were never interested in making a lot of money in just a few
years," adds Jack. "We wanted to let it grow."
New Perspective Fund also maintained a long-term perspective, as it does today.
Instead of trying to time short-term market movements, the fund's investment
professionals purchased stocks of growing companies at reasonable prices and
held on to them in order to participate in that growth. As the prices of many
of the stocks held by the fund increased, that appreciation was reflected in
NPF's own share price.
Changes in New Perspective's share price, however, are only one element of its
investment return. Because its holdings are actively managed, they do change
from time to time. Stocks in the portfolio are sold if the fund's investment
professionals think that they have become fully valued or that better
opportunities are available elsewhere. Realized gains from stocks are
distributed to shareholders once each year in the form of capital gain
distributions. The Prendergasts, like most shareholders, reinvested these
distributions to keep their capital intact and working for them.
Although NPF primarily seeks long-term growth of capital, income (which is a
secondary objective of the fund) has played an important role over time in
augmenting shareholder returns. NPF has investments in the largest and most
successful corporations in the world. Many have attractive growth prospects
because they are positioned to take advantage of growth in various parts of the
world. Many also pay dividends derived from trade with many countries, in many
currencies. Quite a few have consistently raised their dividends for years.
In any given year, the dividends paid by New Perspective Fund seemed, to the
Prendergasts, to be relatively inconsequential. In fiscal 1996, for instance,
the fund's return was 10.6% with dividends reinvested and 8.6% with dividends
in cash. But an extra 1% or 2% of return can, with enough time, make an
enormous difference to an investor's bottom line. For an illustration, consider
this: The change in value of an investment in NPF over its lifetime is +2,355%
with dividends reinvested versus +1,160% with dividends in cash.
What was important for the Prendergasts was not only the reinvestment of their
dividends and capital gain distributions but, ultimately, the rate of return
they received on those reinvestments. When reinvested, dividends and capital
gain distributions purchase more shares, which become additional capital. That
capital can grow and produce additional income which in turn becomes additional
capital. It is a circular process that, over time, can gradually pick up speed.
By reinvesting both dividends and capital gain distributions, the Prendergasts
took full advantage of the potential power of compounding. Says Claire
Prendergast, "We knew this was the way to go."
Since the Prendergasts invested in the fund in 1973, the growth of world
economies and of world-class companies and the fund's flexibility to search out
attractive opportunities wherever they may be have combined to provide a good
example of the potential of investment compounding. Perhaps more to the point,
it has helped Claire and Jack send John and Luke through college and graduate
school; assisted Luke and his wife Kim with the down payment for a house; and
helped John and his wife Jean invest toward retirement. Finally, for Jack and
Claire, New Perspective has also contributed to a secure retirement for
themselves.
Claire and Jack agree that the power of compounding growth can be a
deceptively quiet process. "It's only when you look back that you fully
appreciate it," says Claire. "The benefit came from sticking with it."
[Photo Caption] Pictured above: Claire and Jack Prendergast and their two young
sons, Luke (left) and John in 1973, the year they invested in New Perspective
Fund. At right, Claire and Jack in their home outside Philadelphia today. [End
Photo Caption]
[Photo: weather compass]
[Photo Caption] Big changes can come from seemingly small steps. The
Prendergasts have seen that with each new generation and in investing as well.
[End Photo Caption]
[Photo Caption] The custodial account that Claire and Jack established for
their son Luke helped put him through college and come up with the down payment
for a house. Today, Luke teaches English literature to high school students in
Philadelphia's inner city. [End Photo Caption]
[Photo Caption] The key to Claire Prendergast's approach to investing was a
long-term perspective [End Photo Caption]
[Photo Caption] Jack's sales career often kept him on the road, but now, in
retirement, he enjoys having the freedom to spend time with his grandchildren.
[End Photo Caption]
[Photo Caption] To harness the power of investment compounding, the
Prendergasts charted a course and then stayed the course. [End Photo Caption]
CAN A FEW PERCENTAGE POINTS REALLY MAKE A DIFFERENCE?
Here is how much a $10,000 investment would have grown...
<TABLE>
<CAPTION>
If you had an average ...after 10 years ...after 25 years
annual compound rate Value of The real Value of The real
of return of*: account difference account difference
after 10 in total after 25 in total
years return years return
<S> <C> <C> <C> <C>
8% $21,589 $68,485
10% $25,937 $4,348 $108,347 $39,862
better better
than at than at
8% 8%
12% $31,058 $5,121 $170,001 $61,654
better better
than at than at
10% 10%
$9,469 $101,516
better better
than at than at
8% 8%
</TABLE>
*Returns compounded annually
This chart is for illustrative purposes only and is not representative of the
returns on an investment in the fund.
[photo: compass on map]
[Photo Caption] New generations and new perspectives: As the Prendergasts'
investment in New Perspective grew, their family also grew with addition of
daughter-in-law Kim Prendergast (opposite, at top) in 1990. Kim and Luke's sons
Dylan (age 3) and Michael (age 1) are pictured above with their grandparents.
[End Photo Caption]
<PAGE>
[chart]
<TABLE>
<S> <C>
PORTFOLIO SUMMARY
September 30, 1996
- ---------------------------- --------------------
Percent of
Largest Industry Holdings Net Assets
- ---------------------------- --------------------
Health & Personal Care 8.40%
Banking 7.70%
Telecommunications 6.53%
Broadcasting & Publishing 5.61%
Automobiles 4.93%
Other Industries 51.65%
Bonds & Cash Equivalents 15.18%
</TABLE>
[end chart]
<TABLE>
<S> <C> <C> <C>
New Perspective Fund
Investment Portfolio, September 30, 1996
Shares or Market Percent
Principal Value of Net
Equity-Type Securities Amount (Millions) Assets
- ----------------------------------------- ------------ ------------ ------------
Health & Personal Care- 8.40%
AB Astra, Class A (Sweden) 2,000,000 $84.541
AB Astra, Class A (American Depositary
Receipts) 155,000 6.529
AB Astra, Class B 3,200,000 131.643 1.91%
Ciba-Geigy Ltd. (Switzerland) 122,500 156.591 1.34
Pfizer Inc (USA) 1,300,000 102.863 .88
Teva Pharmaceutical Industries Ltd.
(American Depositary Receipts) (Israel) 1,940,000 89.968 .77
Sandoz Ltd. (Switzerland) 63,015 75.630 .65
Merck & Co., Inc. (USA) 880,000 61.930 .53
SmithKline Beecham PLC (American
Depositary Receipts) (United Kingdom) 1,000,000 60.875 .52
Johnson & Johnson (USA) 800,000 41.000 .35
Glaxo Wellcome PLC (United Kingdom) 563,264 8.824
Glaxo Wellcome PLC (American Depositary
Receipts) 854,000 26.581 .31
Genentech, Inc., Callable Putable Common Stock (USA)/1/ 600,000 31.725 .27
Alza Corp. (USA)/1/ 1,000,000 26.875 .23
Kimberly-Clark Corp. (USA) 300,000 26.438 .23
BioChem Pharma Inc. (Canada)/1/ 500,000 20.063 .17
Abbott Laboratories (USA) 400,000 19.700 .17
Bausch & Lomb Inc. (USA) 225,000 8.269 .07
Banking- 7.70%
Westpac Banking Corp. (Australia) 18,326,389 94.853
Westpac Banking Corp., warrants,
expire 20001 3,000,000 11.230 .91
Barclays PLC (United Kingdom) 6,800,000 99.877 .85
Royal Bank of Canada (Canada) 2,740,000 78.090 .67
Citicorp (USA) 850,000 77.031 .66
Bank of Nova Scotia (Canada) 2,377,300 67.404 .58
Banco de Santander, SA (Spain) 742,000 38.609
Banco de Santander, SA (American
Depositary Receipts) 500,000 26.188 .55
Banque Nationale de Paris (France) 1,500,000 56.808 .49
BankAmerica Corp. (USA) 675,000 55.434 .47
Cie. Financiere de Paribas,
Class A (France) 750,000 48.211 .41
Cie. de Suez (France) 1,100,000 43.853 .38
Australia and New Zealand Banking Group
Ltd. (Australia) 6,496,411 37.171 .32
Sumitomo Bank, Ltd. (Japan) 1,695,000 31.304
Sumitomo Bank, Ltd., 3.125% convertible
debentures 2004 $4,700,000 3.960 .30
Deutsche Bank AG (Germany) 710,000 33.453 .29
Republic New York Corp. (USA) 370,000 25.576 .22
ABN AMRO Holding NV (Netherlands) 418,240 23.198 .20
Svenska Handelsbanken Group, Class A (Sweden) 700,000 17.225 .15
Istituto Mobiliare Italiano SpA
(American Depositary Receipts) (Italy) 600,000 15.300 .13
Asahi Bank Ltd. (Japan) 1,000,000 11.386 .10
Sakura Finance (Bermuda) Trust, Convertible Preference
Share Units (Japan)/1/ 32 1.863 .02
Telecommunications-6.53%
Telefonica de Espana, SA (Spain) 5,631,200 104.615
Telefonica de Espana, SA (American
Depositary Receipts) 76,000 4.228 .93
Telecom Corp. of New Zealand Ltd.
(New Zealand) 15,600,000 73.278
Telecom Corp. of New Zealand Ltd./2/ 5,780,000 27.150 .86
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts) (Mexico) 2,959,130 95.062 .81
AirTouch Communications (USA)/1/ 2,882,000 79.615 .68
Vodafone Group PLC (American Depositary
Receipts) (United Kingdom) 2,080,000 70.980 .61
Koninklijke PTT Nederland NV
(Netherlands) 1,629,500 56.095 .47
Tele Danmark AS, Class B (Denmark) 375,000 17.805
Tele Danmark AS, Class B (American
Depositary Receipts) 1,233,700 29.146 .40
MFS Communications Co., Inc. (USA)/1/ 1,050,000 45.806 .39
Hong Kong Telecommunications Ltd. (Hong
Kong) 19,068,463 34.523
Hong Kong Telecommunications Ltd.
(American Depositary Receipts) 429,584 7.733 .36
STET-Societa Finanziaria Telefonica p.a.,
ordinary shares (Italy) 5,890,000 20.483
STET-Societa Finanziaria Telefonica p.a.,
nonconvertible savings shares 7,000,000 18.917 .34
AT&T Corp. (USA) 735,000 38.404 .33
MCI Communications Corp. (USA) 1,225,000 31.391 .27
Telecomunicacoes Brasileiras SA, preferred
nominative (American Depositary Receipts) (Brazil) 76,439 6.000 .05
DDI Corp. (Japan) 500 4.037 .03
Broadcasting & Publishing- 5.61%
News Corp. Ltd. (Australia) 3,927,488 20.607
News Corp. Ltd. (American Depositary
Receipts) 3,991,600 83.325
News Corp. Ltd., preferred shares 1,988,751 8.531
News Corp. Ltd., preferred shares
(American Depositary Receipts) 1,995,800 33.929 1.25
Turner Broadcasting System, Inc., Class B (USA) 3,512,300 99.223 .85
Time Warner Inc. (USA) 2,372,000 91.619 .78
Viacom Inc., Class B (USA)/1/ 2,140,000 75.970 .65
CANAL+ (France) 262,236 64.483 .55
Carlton Communications PLC (United
Kingdom) 4,890,000 36.944 .32
U S WEST Media Group (USA)/1/ 1,900,000 32.061 .27
Elsevier NV (Netherlands) 1,700,000 28.118 .24
Grupo Televisa, SA, Class L (American
Depositary Receipts) (Mexico)/1/ 825,000 23.822 .20
Wolters Kluwer NV (Netherlands) 162,516 20.450 .18
AUDIOFINA (Luxembourg) 415,300 18.560 .16
Pearson PLC (United Kingdom) 1,700,000 18.111 .16
Automobiles- 4.93%
Daimler-Benz AG (Germany)/1/ 1,450,000 79.721
Daimler-Benz AG (American Depositary
Receipts)/1/ 110,000 6.078
Daimler-Benz AG, 4.125% convertible
debentures 2003/2/ DM76,101,000 52.238 1.18
Regie Nationale des Usines Renault, SA (France) 4,247,783 101.244 .87
Bayerische Motoren Werke AG (Germany) 144,500 82.713
Bayerische Motoren Werke AG, preferred
shares 20,318 8.188 .78
Volvo AB, Class B (Sweden) 4,170,000 89.708 .77
Toyota Motor Corp. (Japan) 2,705,000 69.116 .59
Ford Motor Co., Class A (USA) 2,100,000 65.625 .56
General Motors Corp. (USA) 250,000 12.000 .10
Suzuki Motor Corp. (Japan) 800,000 9.754 .08
Electrical & Electronics- 4.82%
ABB AB, Class A (formerly ASEA AB) (Sweden) 115,000 12.188
ABB AB, Class B 760,000 80.314
ABB AB, Class B (American Depositary Receipts) 450,000 47.250
ABB AG (formerly BBC Brown Boveri Ltd.)
(Switzerland) 47,957 58.628 1.69
Nokia Corp., Class A (Finland) 480,000 21.501
Nokia Corp., Class A (American Depositary
Receipts) 1,450,000 64.163
Nokia Corp., Class K 460,000 20.655 .91
Telefonaktiebolaget LM Ericsson, Class B
(Sweden) 2,376,000 59.902
Telefonaktiebolaget LM Ericsson, Class B
(American Depositary Receipts) 1,200,000 30.450 .78
Alcatel Alsthom (France) 650,461 54.847 .47
General Instrument Corp. (USA)/1/ 1,805,200 44.679 .38
Northern Telecom Ltd. (Canada) 750,000 43.313 .37
Siemens AG (Germany) 325,000 17.136 .15
Hitachi, Ltd. (Japan) 900,000 8.713 .07
Chemicals- 4.68%
Praxair, Inc. (USA) 2,579,300 110.910 .95
AGA AB, Class A (Sweden) 1,800,000 29.348
AGA AB, Class B 2,120,000 35.205 .56
E.I. du Pont de Nemours and Co. (USA) 675,000 59.569 .51
Georgia Gulf Corp. (USA)/3/ 1,975,000 59.003 .50
Methanex Corp. (Canada) 6,250,000 49.581 .42
Sherwin-Williams Co. (USA) 981,000 45.494 .39
Hoechst AG (Germany) 1,000,000 36.488 .32
Valspar Corp. (USA) 580,000 28.565 .24
Bayer AG (Germany) 600,000 22.018 .19
Rhone-Poulenc SA, Class A (France) 673,000 18.764 .16
Engelhard Corp. (USA) 813,100 18.701 .16
L'Air Liquide (France) 110,098 17.054 .15
Sumitomo Chemical Co., Ltd. (Japan) 3,395,000 15.706 .13
Energy Sources- 4.26%
TOTAL, Class B (France) 131,077 10.317
TOTAL, Class B (American Depositary
Receipts) 3,018,805 118.111 1.10
Royal Dutch Petroleum Co. (New York
Registered Shares) (Netherlands) 463,000 72.286
Shell Transport and Trading Co., PLC (United Kingdom) 1,000,000 15.251 .75
Repsol SA (Spain) 1,910,000 62.784
Repsol SA (American Depositary Receipts) 76,000 2.518 .56
Unocal Corp. (USA) 1,720,000 61.920 .53
Phillips Petroleum Co. (USA) 1,225,000 52.369 .45
Anadarko Petroleum Corp. (USA) 550,000 30.731 .26
YPF SA, Class D (American Depositary
Receipts) (Argentina) 1,200,000 27.450 .23
ENI SpA (American Depositary Receipts) (Italy) 500,000 25.375 .22
Broken Hill Proprietary Co. Ltd. (Australia) 1,457,410 18.685 .16
Food & Household Products- 3.99%
Nestle SA (Switzerland) 89,782 100.028 .86
Cadbury Schweppes PLC (United Kingdom) 12,430,180 99.841 .85
Unilever NV (Netherlands) 335,000 52.883
Unilever PLC (United Kingdom) 1,660,000 35.482 .75
Reckitt & Colman PLC (United Kingdom) 6,975,000 78.118 .67
Groupe Danone (France) 443,586 64.758 .56
Colgate-Palmolive Co. (USA) 400,000 34.750 .30
Beverages & Tobacco- 3.72%
Philip Morris Companies Inc. (USA) 2,235,000 200.591 1.72
Seagram Co. Ltd. (Canada) 2,600,000 97.175 .83
LVMH Moet Hennessy Louis Vuitton (France) 274,700 59.623 .51
Lion Nathan Ltd. (New Zealand) 12,950,000 32.225 .28
PepsiCo, Inc. (USA) 1,000,000 28.250 .24
American Brands, Inc. (USA) 300,000 12.675 .11
Swedish Match AB (Sweden) 1,170,000 3.533 .03
Machinery & Engineering- 3.56%
Mannesmann AG (Germany) 530,500 198.851 1.70
Caterpillar Inc. (USA) 1,952,900 147.200 1.26
Deere & Co. (USA) 780,000 32.760 .28
Kawasaki Heavy Industries, Ltd. (Japan) 4,200,000 20.221 .17
Schneider SA (France) 375,000 17.643 .15
Multi-Industry- 2.92%
Hutchison Whampoa Ltd. (Hong Kong) 15,781,000 106.121 .91
Lend Lease Corp. Ltd. (Australia) 3,977,310 64.527 .55
LTV Corp. (USA) 4,225,000 49.116 .42
Williams Holdings PLC (United Kingdom) 5,000,000 27.100 .23
Incentive AB, Class A (Sweden) 116,600 6.812
Incentive AB, Class B 193,400 11.270 .16
Canadian Pacific Ltd. (Canada) 750,000 17.344 .15
CITIC Pacific Ltd. (Hong Kong) 3,600,000 16.294 .14
Groupe Bruxelles Lambert SA (Belgium) 123,745 15.364 .13
B.A.T Industries PLC (United Kingdom) 2,126,250 14.152 .12
AlliedSignal Inc. (USA) 200,000 13.175 .11
Electronic Components- 2.27%
Advanced Micro Devices, Inc. (USA)/1/ 3,325,000 49.044 .42
Intel Corp. (USA) 450,000 42.947 .37
Seagate Technology (USA)/1/ 650,000 36.319 .31
Analog Devices, Inc. (USA)/1/ 1,282,500 34.788 .30
Arrow Electronics, Inc. (USA)/1/ 750,000 33.375 .29
Electrocomponents PLC (United Kingdom) 3,000,000 18.067 .15
Murata Manufacturing Co., Ltd. (Japan) 476,000 16.985 .15
Micron Technology, Inc. (USA) 450,000 13.725 .12
Kyocera Corp. (Japan) 176,000 12.544 .11
LSI Logic Corp. (USA)/1/ 250,000 5.813 .05
.
Recreation & Other Consumer Products- 2.24%
EMI Group PLC (United Kingdom) 2,704,145 56.468 .48
Mattel, Inc. (USA) 1,900,000 49.163 .42
Fuji Photo Film Co., Ltd. (Japan) 1,600,000 48.628 .42
Duracell International Inc. (USA) 550,000 35.269 .30
PolyGram NV (New York Registered Shares)
(Netherlands) 427,400 23.828 .20
Nintendo Co., Ltd. (Japan) 350,000 22.436 .19
Eastman Kodak Co. (USA) 200,000 15.700 .13
Hasbro, Inc. (USA) 301,800 11.204 .10
Gold Mines- 2.07%
Placer Dome Inc. (Canada) 3,565,000 84.223 .72
Newmont Mining Corp. (USA) 1,550,000 73.238 .63
Barrick Gold Corp. (Canada) 2,000,000 50.250 .43
Gold Fields of South Africa Ltd. (South Africa) 1,200,000 34.135 .29
Insurance- 1.80%
Internationale Nederlanden Groep NV
(Netherlands) 4,311,018 134.546 1.15
American International Group, Inc. (USA) 516,562 52.044 .45
Societe Centrale des Assurances
Generales de France (France) 485,000 13.579 .12
CKAG Colonia Konzern AG (Germany) 70,700 5.444
CKAG Colonia Konzern, preferred shares 5,550 .365 .05
Munchener Ruckversicherungs-Gesellschaft
(Germany) 1,000 1.769 .02
Yasuda Fire and Marine Insurance Co.,
Ltd. (Japan) 200,000 1.384 .01
Merchandising- 1.56%
Wal-Mart Stores, Inc. (USA) 4,150,000 109.456 .94
Toys 'R' Us, Inc. (USA)/1/ 875,900 25.511 .22
Home Depot, Inc. (USA) 315,000 17.916 .15
Cifra, SA de CV, Class A (Mexico) 2,500,000 3.708
Cifra, SA de CV, Class B 4,500,000 6.484
Cifra, SA de CV, Class C 3,384,800 4.859 .13
Ito-Yokado Co., Ltd. (Japan) 185,000 10.499 .09
WHSmith Group PLC, Class A (United
Kingdom) 500,000 3.692 .03
Forest Products & Paper- 1.55%
Champion International Corp. (USA) 1,000,000 45.875 .39
UPM-Kymmene Corp. (Finland)/1/ 1,953,000 40.639 .34
Louisiana-Pacific Corp. (USA) 900,000 20.475 .18
International Paper Co. (USA) 400,000 17.000 .15
Carter Holt Harvey Ltd. (New Zealand) 6,900,000 15.193 .13
Jefferson Smurfit Corp. (USA)/1/ 1,255,700 14.911 .13
Weyerhaeuser Co. (USA) 300,000 13.838 .12
Rayonier Inc. (USA) 325,000 12.919 .11
Metals: Nonferrous- 1.47%
WMC Ltd. (Australia) 6,037,151 38.844 .33
Aluminum Co. of America (USA) 600,000 35.400 .30
Alumax Inc. (USA)/1/ 1,000,000 33.500 .29
Pechiney, Class A (France) 617,000 26.222 .22
Alcan Aluminium Ltd. (Canada) 800,000 24.000 .21
Teck Corp., Class B (Canada) 700,000 14.268 .12
Appliances & Household Durables- 1.36%
Philips Electronics NV (Netherlands) 1,400,000 50.567
Philips Electronics NV (New York
Registered Shares) 500,000 17.938
Philips Electronics NV, warrants, expire 1998/1/ 500,000 8.475 .66
AB Electrolux, Class B (Sweden) 707,600 39.792 .34
Sony Corp. (Japan) 480,000 30.253 .26
SANYO Electric Co. Ltd. (Japan) 2,170,000 11.653 .10
Energy Equipment- 1.34%
Schlumberger Ltd. (Netherlands Antilles) 1,223,300 103.369 .88
Baker Hughes Inc. (USA) 1,271,100 38.610 .33
Western Atlas Inc. (USA)/1/ 240,000 14.940 .13
Business & Public Services- 1.11%
Cie. Generale des Eaux (France) 376,283 40.872 .34
WMX Technologies, Inc. (USA) 600,000 19.725 .17
Electronic Data Systems Holding Corp. (USA) 300,000 18.413 .16
Reuters Holdings PLC (American Depositary
Receipts) (United Kingdom) 200,000 13.850 .12
Thorn PLC (United Kingdom) 2,283,145 12.982 .11
United Utilities PLC (United Kingdom) 1,074,200 9.586 .08
Federal Express Corp. (USA)/1/ 100,000 7.925 .07
Havas SA (France) 51,300 3.400 .03
Waste Management International PLC
(American Depositary Receipts) (United Kingdom)/1/ 207,400 1.867 .02
Eurotunnel SA, units, comprised of one
share of Eurotunnel SA ordinary and one
share of Eurotunnel PLC ordinary
(France)/1/ 930,000 1.648 .01
Utilities: Electric & Gas- 1.04%
National Power PLC (United Kingdom) 11,300,000 69.552 .59
VEBA AG (Germany) 340,450 17.826 .15
Hongkong Electric Holdings Ltd.
(Hong Kong) 5,213,500 16.855 .14
Enersis SA (American Depositary Receipts)
(Chile) 420,000 13.545 .12
Hong Kong and China Gas Co. Ltd. (Hong
Kong) 2,882,160 4.901 .04
Leisure & Tourism- 1.01%
Carnival Cruise Lines, Inc., Class A (USA) 2,200,000 68.199 .58
Walt Disney Co. (USA) 670,000 42.461 .36
Euro Disney SCA (France)/1/ 3,870,000 8.167
Euro Disney SCA, warrants, expire 2004/1/ 760,000 .206 .07
Transportation: Shipping- 0.75%
Bergesen d.y. AS, Class A (Norway) 1,500,000 31.729
Bergesen d.y. AS, Class B 795,000 16.511 .41
Nippon Yusen KK (Japan) 6,700,000 34.839 .30
Overseas Shipholding Group, Inc. (USA) 300,000 4.950 .04
Industrial Components- 0.74%
Goodyear Tire & Rubber Co. (USA) 1,020,000 47.047 .40
Cie. Generale des Etablissements
Michelin, Class B (France) 550,000 28.060 .24
Rockwell International Corp. (USA) 200,000 11.275 .10
Data Processing & Reproduction- 0.72%
Oracle Corp. (USA)/1/ 950,000 40.433 .35
Sybase, Inc. (USA)/1/ 1,850,000 27.518 .24
Cisco Systems, Inc. (USA)/1/ 200,000 12.413 .11
Autodesk, Inc. (USA) 100,000 2.588 .02
Metals: Steel- 0.60%
Usinor Sacilor (France) 2,300,000 35.492 .30
Companhia Vale do Rio Doce, ordinary
nominative (Brazil) 38,400 .959
Companhia Vale do Rio Doce, preferred
nominative (American Depositary Receipts) 990,240 19.557 .18
Armco Inc. (USA)/1/ 3,000,000 13.500
Armco Inc., convertible preferred 20,000 .885 .12
Miscellaneous Materials & Commodities- 0.52%
Potash Corp. of Saskatchewan Inc.
(Canada) 400,000 29.249 .25
Cie. de Saint-Gobain (France) 122,395 16.589 .14
De Beers/Centenary linked units (South Africa) 500,000 15.546 .13
Building Materials & Components- 0.49%
CEMEX, SA de CV, Class A (Mexico) 2,362,225 8.948
CEMEX, SA de CV CPO 7,380,000 27.613 .31
Holderbank Financiere Glaris Ltd. (Switzerland) 23,000 16.680 .14
Pioneer International Ltd. (Australia) 1,905,300 5.202 .04
Transportation: Rail & Road-0.40%
CSX Corp. (USA) 950,000 47.974 .40
Transportation: Airlines- 0.33%
British Airways PLC (United Kingdom) 1,545,000 13.097
British Airways PLC (American Depositary
Receipts) 305,500 26.081 .33
Aerospace & Military Technology- 0.29%
Rolls-Royce PLC (United Kingdom) 6,000,000 22.476 .19
Bombardier Inc., Class B (Canada) 336,200 4.791 .04
Boeing Co. (USA) 50,000 4.725 .04
Litton Industries, Inc. (USA)/1/ 40,000 1.969 .02
Electronic Instruments- 0.03%
Scitex Corp. Ltd. (Israel) 240,000 2.969 .03
Miscellaneous- 0.01%
Other equity-type securities in initial
period of acquisition .529 .01
------------ ------------
TOTAL EQUITY-TYPE SECURITIES
(cost: $7,413.361 million) 9,913.559 84.82
------------ ------------
Principal
Amount
Bonds (Millions)
- --------------------------------------- ------------
Canadian Government- 0.42%
Canada 9.00% June 2025 C$58.800 49.550 .42
South African Government- 0.32%
South Africa 13.00% August 2010 ZAR200.000 37.861 .32
New Zealand Government- 0.27%
New Zealand 8.00% November 2006 NZ$44.500 31.015 .27
----------- -----------
TOTAL BONDS (cost: $113.102 million) 118.426 1.01
----------- -----------
TOTAL INVESTMENT SECURITIES (cost:
$7,526.463 million) 10,031.985 85.83
----------- -----------
Short-Term Securities
- ------------------------------------------
Corporate Short-Term Notes- 9.99%
Hewlett-Packard Co. 5.30%-5.40%
due 10/25-12/3/96 89.308 88.675 .77
Sandoz Corp. 5.33%-5.40% due 10/1-11/25/96 88.000 87.717 .75
International Business Machines Corp.
5.27%-5.30% due 10/2-10/23/96 85.100 84.890 .73
General Electric Capital Corp. 5.29%-5.40%
due 10/4-11/15/96 81.200 80.892 .69
Ford Credit Europe PLC 5.30%-5.47%
due 10/10-11/18/96 78.800 78.486 .67
Canada Bills 5.27%-5.40% due 10/17-12/11/96 75.300 74.633 .64
National Australia Funding (Delaware)
5.27%-5.28% due 10/15-11/21/96 64.900 64.597 .55
American Express Credit Corp. 5.30%-5.31%
due 10/11-10/21/96 63.900 63.754 .55
J.C. Penney Funding Corp. 5.31%-5.39%
due 11/18-12/12/96 63.700 63.154 .54
Deutsche Bank Financial Inc. 5.25%-5.28%
due 10/21-10/23/96 62.000 61.799 .53
International Lease Finance Corp. 5.27%-5.40%
due 10/15-11/21/96 49.100 48.894 .42
Canadian Wheat Board 5.27%-5.35%
due 11/7-11/25/96 47.500 47.174 .40
Abbey National North America 5.30%-5.33%
due 11/27-12/30/96 41.700 41.261 .35
Toyota Motor Credit Corp. 5.26%-5.38%
due 10/11-12/12/96 40.500 40.267 .34
Daimler-Benz North America Corp. 5.34%-5.39%
due 11/15-12/11/96 37.600 37.274 .32
PepsiCo, Inc. 5.30%-5.31% due 10/18-11/5/96 36.800 36.664 .31
Commonwealth Bank of Australia 5.29%-5.32%
due 10/16-10/24/96 36.600 36.500 .31
Ameritech Corp. 5.28%-5.42% due 10/21-10/29/96 35.700 35.558 .30
Svenska Hendelsbanken 5.30%-5.43%
due 10/16-12/19/96 32.800 32.595 .28
Wool International 5.27%
due 10/30-10/31/96 32.000 31.856 .27
Nestle Capital Corp. 5.37% due 11/7/96 20.000 19.887 .17
Commerzbank U.S. Finance Inc. 5.28%-5.50%
due 11/22-12/6/96 11.850 11.747 .10
Certificates of Deposit-2.80%
Canadian Imperial Bank of Commerce
5.38%-5.50% due 10/29-11/22/96 90.000 89.998 .78
Societe Generale 5.35%-5.48%
due 10/2-11/13/96 82.600 82.599 .71
Swiss Bank Corp. 5.51%-5.52%
due 12/19/96 50.000 50.008 .43
Bayerische Hypotheken- Und Wechsel-Bank AG
5.35%-5.39% due 10/9-12/2/96 45.000 44.999 .39
Morgan Guaranty Trust Co. Eurodollar
5.47% due 11/13/96 40.000 40.003 .34
Commerzbank AG 5.36% due 10/7/96 18.000 18.000 .15
Federal Agency Discount Notes- 0.88%
Federal Home Loan Mortgage Corp.
5.32%-5.38% due 10/17-12/20/96 71.200 70.670 .60
Federal National Mortgage Assn.
5.37% due 12/13/96 33.000 32.645 .28
----------- -----------
TOTAL SHORT-TERM SECURITIES
(cost: $1,597.203 million) 1,597.196 13.67
Excess of cash and receivables
over payables 58.479 .50
------------ ------------
TOTAL SHORT-TERM SECURITIES AND NET CASH 1,655.675 14.17
------------ ------------
NET ASSETS $11,687.660 100.00%
=========== ===========
/1/Non-income-producing securities
/2/Purchased in a private placement
transaction; resale to the public may
require registration or sale only
to qualified institutional buyers.
/3/The fund owns 5.66% of the outstanding voting securities
of Georgia Gulf Corp. which represents investment in an
affiliate as defined in the Investment Company Act of 1940.
The descriptions of the companies in the
portfolio, which were obtained from
published reports and other sources
believed to be reliable, are supplemental
and are not covered by the report of independent
accountants.
See Notes to Financial Statements
</TABLE>
<TABLE>
<S> <C>
- ---------------------------- ------------------------------
Equity-type securities Equity-type securities
appearing in the portfolio eliminated from the portfolio
since March 31, 1996 since March 31, 1996
- ---------------------------- ------------------------------
AGA Avon Products
Alcatel Alsthom Bristol-Myers Squibb
AlliedSignal Cable and Wireless
Aluminum Co. of America Cheung Kong (Holdings)
Alza Chiron
Arrow Electronics Dow Jones
AUDIOFINA English China Clays
Australia and New Zealand Banking Group Guinness
Autodesk Hanson
Baker Hughes International Business Machines
Bank of Nova Scotia Koninklijke Nederlandsche Hoogovens en Stalfabrieken
DDI Makita
De Beers/Centenary Motorola
Electrocomponents Nippon Telegraph and Telephone
ENI NOVA
Gold Fields of South Africa Parker Hannifin
Kawasaki Heavy Industries Roberts Pharmaceutical
Kyocera SGS-THOMSON Microelectronics
LSI Logic Singapore Airlines
MFS Communications Sun Hung Kai Properties
Murata Manufacturing Swire Pacific
Oracle Telefonica de Argentina
Pechiney
Pioneer International
Rhone-Poulenc
Sakura
SANYO Electric
Schneider
"Shell" Transport and Trading
Societe Centrale des Assurances Generales de France
Swedish Match
U S WEST Media Group
United Utilities
Waste Management International
Williams Holdings
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
New Perspective Fund
Financial Statements
- ---------------------------------------------- --------------------------------
Statement of Assets and Liabilities (dollars in
at September 30, 1996 millions)
- ---------------------------------------------- --------------------------------
Assets:
Investment securities at market
(cost: $7,526.463) $10,031.985
Short-term securities
(cost: $1,597.203) 1,597.196
Cash .469
Receivables for-
Sales of investments $43.305
Sales of fund's shares 24.704
Dividends and accrued interest 33.399 101.408
--------------------------------
11,731.058
Liabilities:
Payables for-
Purchases of investments 26.788
Repurchases of fund's shares 10.045
Management services 4.062
Accrued expenses 2.503 43.398
--------------------------------
Net Assets at September 30, 1996-
Equivalent to $17.77 per share on
657,781,427 shares of $1 par value
capital stock outstanding (authorized
capital stock--1,000,000,000 shares) $11,687.660
================
Statement of Operations (dollars in
for the year ended September 30, 1996 millions)
- ---------------------------------------------- --------------------------------
Investment Income:
Income:
Dividends $ 203.990
Interest 84.929 $ 288.919
----------------
Expenses:
Management services fee 43.463
Distribution expenses 22.300
Transfer agent fee 10.919
Reports to shareholders .969
Registration statement and prospectus 1.146
Postage, stationery and supplies 1.642
Directors' and Advisory Board fees .202
Auditing and legal fees .084
Custodian fee 3.207
Taxes other than federal
income tax .138
Other expenses .101 84.171
--------------------------------
Net investment income 204.748
----------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 439.315
Net unrealized appreciation:
Beginning of year 2,116.350
End of year 2,505.461 389.111
--------------------------------
Net realized gain and unrealized appreciation
on investments 828.426
----------------
Net Increase in Net Assets Resulting
from Operations $1,033.174
================
- ---------------------------------------------- --------------------------------
Statement of Changes in Net Assets (dollars in
millions)
Year ended
September 30
1996 1995
- ---------------------------------------------- --------------------------------
Operations:
Net investment income $ 204.748 $ 155.900
Net realized gain on investments 439.315 308.729
Net unrealized appreciation
on investments 389.111 843.525
--------------------------------
Net increase in net assets
resulting from operations 1,033.174 1,308.154
--------------------------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (181.254) (105.752)
Distributions from net realized gain on
investments (326.785) (355.971)
--------------------------------
Total dividends and distributions (508.039) (461.723)
--------------------------------
Capital Share Transactions:
Proceeds from shares sold: 168,317,771
and 136,794,997 shares, respectively 2,872.559 2,129.286
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 29,221,609 and 30,235,980 shares,
respectively 477.859 432.534
Cost of shares repurchased: 58,868,182
and 55,659,438 shares, respectively (1,004.893) (869.751)
--------------------------------
Net increase in net assets resulting from
capital share transactions 2,345.525 1,692.069
--------------------------------
Total Increase in Net Assets 2,870.660 2,538.500
Net Assets:
Beginning of year 8,817.000 6,278.500
--------------------------------
End of year (including undistributed
net investment income: $119.565
and $96.071, respectively) $11,687.660 $8,817.000
================================
See Notes to Financial Statements
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. New Perspective Fund, Inc. (the "fund") is registered under the Investment
Company Act of 1940 as an open-end, diversified management investment company.
The fund seeks long-term growth of capital through investments all over the
world, including the United States. 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. Long-term and short-term securities
with original or remaining maturities in excess of 60 days are 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. Securities denominated in non-U.S. currencies are generally valued on
the basis of bid quotations. Where pricing service or market quotations are
not readily available, securities will be 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.
Investment securities and other assets and liabilities denominated in non-U.S.
currencies are recorded in the financial statements after translation into U.S.
dollars utilizing rates of exchange on the last business day of the year.
Purchases and sales of investment securities, income, and expenses are
calculated using the prevailing exchange rate as accrued. The effects of
changes in foreign currency exchange rates on investment securities are
included with the net realized and unrealized gain or loss on investment
securities.
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 $3,207,000 includes $136,000 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 September 30, 1996, net unrealized appreciation on investments for
federal income tax purposes aggregated $2,506,503,000, of which $2,806,576,000
related to appreciated securities and $300,073,000 related to depreciated
securities. During the year ended September 30, 1996, the fund realized, on a
tax basis, a net capital gain of $431,900,000 on securities transactions. Net
gains related to non-U.S. currency transactions of $7,415,000 were treated as
ordinary income for federal income tax purposes. The capital gain distribution
paid in December 1995 includes $4,830,000 of realized non-U.S. currency gains.
The cost of portfolio securities for federal income tax purposes was
$9,122,678,000 at September 30, 1996.
3. The fee of $43,463,000 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 0.60% of the first $500 million of net assets; 0.50% of
such assets in excess of $500 million but not exceeding $1 billion; 0.46% of
such assets in excess of $1 billion but not exceeding $1.5 billion; 0.43% of
such assets in excess of $1.5 billion but not exceeding $2.5 billion; 0.41% of
such assets in excess of $2.5 billion but not exceeding $4 billion; 0.40% of
such assets in excess of $4 billion but not exceeding $6.5 billion; 0.395% of
such assets in excess of $6.5 billion but not exceeding $10.5 billion; and
0.391% of such assets in excess of $10.5 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 year ended September 30, 1996,
distribution expenses under the Plan were $22,300,000. As of September 30,
1996, accrued and unpaid distribution expenses were $1,661,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $10,919,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $12,923,000 (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 and Advisory Board members who are unaffiliated with CRMC may elect
to defer part or all of the fees earned for services as members of the Boards.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of September 30, 1996, aggregate amounts deferred and earnings thereon
were $257,000.
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 September 30, 1996, accumulated undistributed net realized gain on
investments was $382,716,000 and paid-in capital was $8,016,133,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $3,441,935,000 and $1,601,182,000, respectively,
during the year ended September 30, 1996.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
year ended September 30, 1996, such non-U.S. taxes were $23,742,000. Net
realized currency gains on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $3,597,000 for the year ended
September 30, 1996.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Per-Share Data and Ratios
Year ended September 30
1996 1995 1994 1993 1992
------- ------- ------- --------------
Net Asset Value, Beginning of Year $16.98 $15.40 $14.21 $12.25 $11.77
------- ------- ------- --------------
Income from Investment Operations:
Net investment income .32 .31 .22 .17 .21
Net realized and unrealized gain
on investments 1.40 2.35 1.54 2.04 .71
------- ------- ------- --------------
Total income from
investment operations 1.72 2.66 1.76 2.21 .92
------- ------- ------- --------------
Less Distributions:
Dividends from net
investment income (.321) (.237) (.173) (.178) (.24)
Dividends from net realized
non-U.S. currency gains (1) (.009) (.003) (.027) (.022) -
Distributions from net
realized gains (.600) (.840) (.370) (.050) (.20)
------- ------- ------- --------------
Total distributions (.93) (1.08) (.57) (.25) (.44)
------- ------- ------- --------------
Net Asset Value, End of Year $17.77 $16.98 $15.40 $14.21 $12.25
===== ===== ===== ===== =====
Total Return(2) 10.64% 18.63% 12.61% 18.34% 8.04%
Ratios/Supplemental Data:
Net assets, end of
year (in millions) $11,688 $8,817 $6,279 $4,417 $3,082
Ratio of expenses to average
net assets .82% .83% .84% .87% .85%
Ratio of net income to
average net assets 2.00% 2.12% 1.48% 1.40% 1.82%
Average commissions paid (3) 4.30 cents .72 cents 1.05 cents 1.74 cents 3.02 cents
Portfolio turnover rate 18.12% 22.40% 25.33% 15.02% 6.43%
(1) Realized non-U.S. currency gains
are treated as ordinary income for
federal income tax purposes.
(2)Calculated without deducting a sales
charge. The maximum sales charge is
5.75% of the fund's offering price.
(3)Brokerage commissions paid on
portfolio transactions increase
the cost of securities
purchased or reduce the proceeds
of securities sold, and are not
reflected in the fund's
statement of operations. Shares
traded on a principal basis are
excluded. Generally, non-U.S.
commissions are lower than U.S.
commissions when expressed as cents
per share but higher when expressed
as a percentage of transactions
because of the lower per-share prices
of many non-U.S. securities.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of New Perspective Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of New Perspective Fund, Inc. (the
"Fund") at September 30, 1996, the results of its operations, the changes in
its net assets and the per-share data and ratios for the years indicated, in
conformity with generally accepted accounting principles. These financial
statements and per-share data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards, which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 1996 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Los Angeles, California
October 31, 1996
1996 Tax Information (Unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
fund were earned from the following sources:
<TABLE>
<CAPTION>
Dividends and Distributions per Share
<S> <C> <C> <C> <C>
To Shareholders Payment Dividends From Net From Net
of Record Date from Net Realized Realized
Investment Short-Term Long-Term
Income Gains Gains
December 15, December $0.23 - $0.60
1995 18, 1995
May 31, 1996 June 3, $0.10 - -
1996
</TABLE>
The fund makes an election under the Internal Revenue Code Section 853 to pass
through non-U.S. taxes paid by the fund to its shareholders. The amount of
non-U.S. taxes for the fiscal year ended September 30, 1996 is $0.02454 on a
per share basis. Shareholders are entitled to a foreign tax credit or an
itemized deduction, at their option. Generally, it is more advantageous to
claim a credit rather than to take a deduction.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 19% of the
dividends paid by the fund from net investment income represents qualifying
dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many plan retirement trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV AND OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 1997 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR RESPECTIVE 1996 TAX RETURNS. SHAREHOLDERS
SHOULD CONSULT THEIR TAX ADVISERS.
<PAGE>
New Perspective Fund
Board of Directors
Elisabeth Allison, Cambridge, Massachusetts
Administrative Director, ANZI, Ltd.;
Publishing Consultant, Harvard Medical School
David I. Fisher, Los Angeles, California
Chairman of the Board,
The Capital Group Companies, Inc.
Robert A. Fox, Livingston, California
President and Chief Executive Officer,
Foster Farms Inc.
Alan Greenway, La Jolla, California
Private investor; President,
Greenway Associates, Inc.
(management consulting services)
Koichi Itoh, Tokyo, Japan
Managing Partner, VENCA Management
(venture capital)
William H. Kling, St. Paul, Minnesota
President, Minnesota Public Radio;
President, Greenspring Co.;
former President, American Public Radio
(now Public Radio International)
Jon B. Lovelace, Los Angeles, California
Vice Chairman of the Board of the fund
Vice Chairman of the Board and
Chairman of the Executive Committee,
Capital Research and Management Company
John G. McDonald, Stanford, California
The IBJ Professor of Finance,
Graduate School of Business, Stanford University
William I. Miller, Columbus, Indiana
Chairman of the Board,
Irwin Financial Corporation
Kirk P. Pendleton,
Southampton, Pennsylvania
Chairman of the Board and
Chief Executive Officer, Cairnwood, Inc.
(venture capital investment)
Donald E. Petersen, Birmingham, Michigan
Retired; former Chairman of the Board and
Chief Executive Officer, Ford Motor Company
James W. Ratzlaff, San Francisco, California
Senior Partner,
The Capital Group Partners L.P.
Walter P. Stern, New York, New York
Chairman of the Board of the fund
Chairman of the Board,
Capital Group International, Inc.
Other Officers
Gina H. Despres, Washington, D.C.
President of the fund
Vice President, Capital Research and Management Company
William R. Grimsley, San Francisco, California
Senior Vice President of the fund
Senior Vice President and Director,
Capital Research and Management Company
Gregg E. Ireland, Washington, D.C.
Senior Vice President of the fund
Vice President, Capital Research and Management Company
Thierry Vandeventer, Geneva, Switzerland
Senior Vice President of the fund
Chairman of the Board,
Capital Research Company
Darcy B. Kopcho, Geneva, Switzerland
Vice President of the fund
Vice President, Capital Research Company
Catherine M. Ward, Los Angeles, California
Vice President of the fund
Senior Vice President and Director,
Capital Research and Management Company
Vincent P. Corti, Los Angeles, California
Secretary of the fund
Vice President - Fund Business
Management Group, Capital Research and Management Company
Steven N. Kearsley, Brea, California
Treasurer of the fund
Vice President and Treasurer,
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
Mary C. Hall, Brea, California
Assistant Treasurer of the fund
Senior Vice President - Fund Business
Management Group, Capital Research and Management Company
Members of the Advisory Board
Yoichi Funabashi, PH.D., Washington, D.C.
Washington, D.C. Bureau Chief and Diplomatic
Correspondent of the Asahi Shimbun
Jean Gandois, Paris, France
President, Conseil National du Patronat Fran_ais;
former Chairman of the Board of
Cockerill-Sambre; former Chairman and
Chief Executive Officer, Pechiney, and former
Chairman, Pechiney International
Claudio X. Gonzalez LaPorte,
Mexico, DF, Mexico
Chairman of the Board and Chief Executive
Officer, Kimberly-Clark de Mexico, SA de CV
Junichi Hattori, Tokyo, Japan
Senior Managing Director - Information Devices
& Systems Division, Seiko Instruments, Inc.
Peter C. Hobbins, Zug, Switzerland
Counselor and former Member Executive Group, Corange Ltd.
Sir Peter Holmes, London, England
Director and former Chairman of the Board
and Managing Director, The Royal Dutch/Shell Group of Companies
Baron Gualtherus Kraijenhoff,
Nijmegen, Netherlands
Chairman of the Supervisory Council, Akzo NV
The Honourable John L. Nichol,
Vancouver, Canada
President, Springfield Investment Co., Ltd.;
former President of Canada's Liberal Party
Brian Nicholson, London, England
Chairman of the Board, Advertising Standards
Board of Finance Ltd.; former Executive
Chairman, Marlar International Ltd.; former
Joint Managing Director, The Observer
Allen E. Puckett, Los Angeles, California
Chairman Emeritus, Hughes Aircraft Company
Rozanne L. Ridgway, Washington, D.C.
Co-Chair, Atlantic Council of the United States;
Chair, Baltic American Enterprises Fund
Orville H. Schell, Berkeley, California
Dean, Graduate School of Journalism,
University of California at Berkeley
Harold M. Williams, Los Angeles, California
President and Chief Executive Officer, J. Paul Getty Trust;
former Chairman, U.S. Securities and Exchange Commission
Kirk P. Pendleton was elected a Director and Orville H. Schell, who has written
widely on contemporary Chinese affairs, was appointed to the Advisory Board on
September 24, 1996.
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
American Funds Service Company
(Please write to the address nearest you.)
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
Independent accountants
Price Waterhouse LLP
400 South Hope Street
Los Angeles, California 90071-2889
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, OR CALL AMERICAN FUNDS SERVICE COMPANY,
TOLL-FREE, AT 800/421-0180.
This report is for the information of shareholders of New Perspective 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
December 31, 1996, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Litho in USA AGD/GRS/3115
Lit. No. NPF-011-1196
[back cover: photo: two compasses on map]
[The American Funds Group (R)]
