NEW PERSPECTIVE FUND, INC.
PART B
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 1, 1995
(AS AMENDED OCTOBER 11, 1996)
This document is not a prospectus but should be read in conjunction with the
current Prospectus of New Perspective Fund, Inc. (the fund or NPF) dated
December 1, 1995. The Prospectus may be obtained from your investment dealer
or financial planner or by writing to the fund at the following address:
NEW PERSPECTIVE FUND, INC.
Attention: Secretary
333 South Hope Street
Los Angeles, CA 90071
(213) 486-9200
The fund has two forms of prospectuses. Each reference to the prospectus in
this Statement of Additional Information includes both of the fund's
prospectuses. Shareholders who purchase shares at net asset value through
eligible retirement plans should note that not all of the services or features
described below may be available to them, and they should contact their
employer for details.
TABLE OF CONTENTS
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Item Page No.
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Investment Policies 1
Description of Certain Securities and Investment Techniques 2
Investment Restrictions 3
Fund Directors and Officers 6
Advisory Board 11
Management 12
Dividends, Distributions and Federal Taxes 14
Purchase of Shares 17
Shareholder Account Services and Privileges 19
Redemption of Shares 20
Execution of Portfolio Transactions 20
General Information 20
Investment Results 21
Appendix - Description of Bond Ratings 26
Financial Statements Attached
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INVESTMENT POLICIES
The fund's investment policies are intended to provide the flexibility to take
advantage of opportunities while accepting what seems to be a reasonable risk.
The fund is not intended to constitute a balanced investment program and is not
designed for investors who primarily seek income.
DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
Cash Equivalents - These securities include (1) commercial paper (short-term
notes up to 9 months in maturity issued by corporations or governmental
bodies), (2) commercial bank obligations (E.G., certificates of deposit,
bankers' acceptances (time drafts on a commercial bank where the bank accepts
an irrevocable obligation to pay at maturity) and documented discount notes
(corporate promissory discount notes accompanied by a commercial bank guarantee
to pay at maturity)), (3) savings association and saving bank obligations
(E.G., certificates of deposit issued by savings banks or savings
associations), (4) securities of the U.S. Government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (5)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.
CURRENCY TRANSACTIONS - The fund has the ability to hold a portion of its
assets in U.S. dollars and other currencies and to enter into certain currency
contracts (on either a spot or forward basis) in connection with investing in
non-U.S. dollar denominated securities including foreign currency exchange and
forward currency contracts. A foreign exchange contract is used to facilitate
settlement of trades. For example, the fund might purchase a currency or enter
into a foreign exchange contract to preserve the U.S. dollar price of
securities it has contracted to purchase. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, the fund
might enter into a forward currency contract to protect against an anticipated
decline in value of a foreign currency against the U.S. dollar when it holds
securities denominated in that foreign currency. To avoid having an amount
greater than its net assets subject to market risk in connection with currency
contract transactions, the fund will segregate cash, cash equivalents, or high
quality debt instruments to the extent required by the Securities and Exchange
Commission.
At the maturity of a forward contract, the fund may either accept or make
delivery of the currency specified in the contract or, prior to maturity, enter
into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually
effected with the currency trader who is a party to the original contract. The
fund will only enter into such a forward contract if it is expected that the
fund will be able readily to close out such contract. There can, however, be
no assurance that it will be able in any particular case to do so, in which
case the fund may suffer a loss.
Certain provisions of the Internal Revenue Code may limit the extent to which
the fund may enter into forward contracts. Such transactions may also affect,
for U.S. federal income tax purposes, the character and timing of income, gain
or loss recognized by the fund.
INVESTMENTS IN LOWER RATED BONDS - Although the fund has no current intention
of doing so (at least for the next 12 months), up to 5% of the fund's assets
may be invested in lower rated straight debt securities (securities rated Baa
or below by Moody's Investors Service, Inc. or BBB or below by Standard &
Poor's Corporation), including securities rated Ba and BB or below (commonly
referred to as "junk bonds" or "high-yield, high-risk bonds") or in unrated
securities that are determined to be of equivalent quality. High-yield,
high-risk bonds carry a higher degree of investment risk and are considered
speculative. This quality restriction does not apply to securities convertible
into common stocks.
High-yield, high-risk bonds are very sensitive to adverse economic changes and
corporate developments. During an economic downturn or substantial period of
rising interest rates, highly leveraged issuers may experience financial stress
that would adversely affect their ability to service their principal and
interest payment obligations, to meet projected business goals, and to obtain
additional financing. If the issuer of a bond defaulted on its obligations to
pay interest or principal or entered into bankruptcy proceedings, the fund may
incur losses or expenses in seeking recovery of amounts owed to it. In
addition, periods of economic uncertainty and changes can be expected to result
in increased volatility of market prices of high-yield, high-risk bonds.
High-yield, high-risk bonds, like other bonds, may contain redemption or call
provisions. If an issuer exercised these provisions in a declining interest
rate market, the fund would have to replace the security with a lower yielding
security, resulting in a decreased return for investors. Conversely, a
high-yield, high-risk bond's value is likely to decrease in a rising interest
rate market, as is generally true with all bonds.
There may be little trading in the secondary market for particular bonds,
which may affect adversely the fund's ability to value accurately or dispose of
such bonds. Adverse publicity and investor perceptions, whether or not based
on fundamental analysis, may decrease the values and liquidity of high-yield,
high-risk bonds, especially in a thin market.
INVESTMENT RESTRICTIONS
The fund has adopted the following fundamental policies and investment
restrictions which may not be changed without a majority vote of its
outstanding shares. Such majority is defined by the Investment Company Act of
1940 (the 1940 Act) as the vote of the lesser of (i) 67% or more of the
outstanding voting securities present at a meeting, if the holders of more than
50% of the outstanding voting securities are present in person or by proxy or
(ii) more than 50% of the outstanding voting securities. All percentage
limitations expressed in the following investment restrictions are measured
immediately after and giving effect to the relevant transactions. These
restrictions provide that the fund may not:
1. Invest in securities of another issuer (other than the U.S. or its agencies
or instrumentalities), if immediately after and as a result of such investment
more than 5% of the value of the total assets of the fund would be invested in
the securities of such other issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the fund;
2. Invest in companies for the purpose of exercising control or management;
3. Invest more than 25% of the value of its total assets in the securities of
companies primarily engaged in any one industry;
4. Purchase securities of other investment companies, except in connection with
a merger, consolidation, acquisition or reorganization, or by purchase in the
open market of securities of closed-end investment companies where no
underwriter or dealer's commission or profit, other than customary broker's
commissions, is involved, and only if immediately thereafter no more than 10%
of the value of the fund's total assets would be invested in such securities;
5. Buy or sell real estate in the ordinary course of its business; however, the
fund may invest in securities secured by real estate or interests therein or
issued by companies, including real estate investment trusts, which invest in
real estate or interests therein;
6. Buy or sell commodities or commodity contracts in the ordinary course of its
business provided, however, that this restriction shall not prohibit the fund
from purchasing, selling or holding foreign currencies or entering into forward
foreign currency contracts;
7. Make any investment under circumstances requiring direct payment by the fund
of the Federal Interest Equalization Tax if, immediately thereafter and as a
result of such investment, the total of the Federal Interest Equalization Tax
directly paid or owing by the fund during the fiscal year in which such
investment is made would amount to more than 1-1/2% of the fund's average
month-end net assets during such fiscal year to the date of such investment;
8. Acquire securities subject to restrictions on disposition imposed by the
Securities Act of 1933, if, immediately after and as a result of such
acquisition, the value of all such restricted securities held by the fund would
exceed 2% of the value of its total assets; in any event, the fund will not
invest more than 5% of the value of its total assets in securities which are
not readily marketable;
9. Engage in the business of underwriting of securities of other issuers,
except to the extent that the disposal of an investment position may
technically constitute the fund an underwriter as that term is defined under
the Securities Act of 1933;
10. Lend any of its assets; provided, however, that investment in government
obligations, short-term commercial paper, certificates of deposit and banker's
acceptances and publicly traded bonds, debentures, or other debt securities
shall not be deemed to be the making of a loan;
11. Sell securities short, except to the extent that the fund contemporaneously
owns or has the right to acquire at no additional cost securities identical to
those sold short;
12. Purchase securities on margin;
13. Borrow amounts in excess of 5% of the value of its total assets; in any
event, the fund may borrow only as a temporary measure for extraordinary or
emergency purposes and not for investment in securities; nor
14. Mortgage, pledge or hypothecate its assets to any extent.
For purposes of Investment Restriction #3, the fund will not invest 25% or
more of the value of its total assets in the securities of companies primarily
engaged in any one industry. Although the fund may sell securities short, to
the extent that the fund contemporaneously owns or has the right to acquire at
no additional cost securities identical to those sold short, the fund does not
anticipate doing so during the next twelve months.
Notwithstanding Investment Restriction #4, the fund may invest in securities
of other investment companies if deemed advisable by its officers in
connection with the administration of a deferred compensation plan adopted by
Directors pursuant to an exemptive order granted by the Securities and
Exchange Commission.
Additional investment restrictions adopted by the fund and which may be
changed by the Board of Directors, provide that the fund may not;
1. Purchase or retain the securities of any issuer, if those individual
officers and directors of the fund, its investment adviser or principal
underwriter, each owning beneficially more than 1/2 of 1% of the securities of
such issuer, together own more than 5% of the securities of such issuer;
2. Invest more than 5% of the value of its total assets in securities of
companies having, together with their predecessors, a record of less than three
years of continuous operation;
3. Invest in puts, calls, straddles or spreads, or combinations thereof; or
4. Purchase partnership interests in oil, gas, or mineral exploration, drilling
or mining ventures.
FUND DIRECTORS AND OFFICERS
DIRECTORS AND DIRECTOR COMPENSATION
(with their principal occupations during the past five years)
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NAME, ADDRESS POSITION WITH PRINCIPAL OCCUPATION(S) DURING PAST AGGREGATE COMPENSATION TOTAL COMPENSATION FROM TOTAL NUMBER
AND AGE REGISTRANT 5 YEARS (POSITIONS WITHIN THE (INCLUDING VOLUNTARILY ALL FUNDS MANAGED BY OF FUND BOARDS
ORGANIZATIONS LISTED MAY HAVE DEFERRED COMPENSATION/1/)CAPITAL RESEARCH AND ON WHICH
CHANGED DURING THIS PERIOD) FROM THE FUND MANAGEMENT COMPANY/2/ DIRECTOR SERVES
DURING FISCAL YEAR ENDED
9/30/95
<S> <C> <C> <C> <C> <C>
Elisabeth Allison Director Administrative Director, ANZI, Ltd. $ 21,900 $ 42,900 2
62 West 62nd Street (financial publishing and consulting)
New York, NY 10023 Former Senior Vice President,
Age: 49 Planning and Development,
McGraw Hill, Inc.
+ David I. Fisher Director Chairman of the Board, None None 2
333 South Hope Street The Capital Group Companies, Inc.
Los Angeles, CA 90072
Age: 56
Robert A. Fox Director President and Chief Executive Officer, $ 20,800 $ 80,400 5
P.O Box 457 Foster Farms, Inc.; Former President,
Livingston, CA 95334 Revlon International; former
Age: 58 Chairman and Chief Executive
Officer, Clarke Hooper America
(advertising)
Alan Greenway Director President, Greenway Associates, Inc. $ 21,650 $ 68,500 4
7413 Fairway Road (management consulting services)
La Jolla, CA 92037
Age: 68
Koichi Itoh Director Managing Partner, $ 22,300 $ 42,500 2
7-14-11-104 Minami VENCA Management
Aoyama (venture capital)
Minato-ku, Tokyo, Japan
Age: 54
William H. Kling Director President, Minnesota Public Radio; $ 20,850 $ 73,200 4
45 East Seventh Street President, Greenspring Co.; former
St. Paul, MN 55101 President, American Public Radio
Age: 53 (now Public Radio International)
+ Jon B. Lovelace Vice Vice Chairman of the Board and None None 4
333 South Hope Street Chairman of Chairman of the Executive
Los Angeles, CA 90071 the Board Committee, Capital Research and
Age: 68 Management Company
John G. McDonald Director The IBJ Professor of Finance, $ 21,167 $ 132,900 7
Graduate School of Business Graduate School of Business,
Stanford University Stanford University
Stanford, CA 94305
Age: 58
William I. Miller Director Chairman of the Board, $ 21,800 $ 41,500 2
500 Washington Street Irwin Financial Corporation
Box 929
Columbus, IN 47202
Age: 39
Kirk P. Pendleton Director President, Cairnwood, Inc. None* $ 24,600 5
Cairnwood, Inc.
75 James Way
Southhampton, PA 18966
Age: 56
Donald E. Petersen Director Former Chairman of the Board and $ 10,000 $ 47,250 4
255 East Brown, Suite 460 Chief Executive Officer, Ford Motor
Birmingham, MI 48009 Company
Age: 69
+ James W. Ratzlaff Director Vice Chairman of the Board, Capital None None 6
P.O. Box 7650 Research and Management Company;
San Francisco, CA 94120 Senior Partner, The Capital Group
Age: 59 Partners, L.P.
+ Walter P. Stern Chairman of Chairman, Capital Group None None 7
630 Fifth Avenue the Board International, Inc.; Vice Chairman,
New York, NY 10111 Capital Research International;
Age: 67 Director, The Capital Group
Companies, Inc.; Chairman,
Capital International, Inc.; Director,
Temple-Inland Inc. (forest products)
</TABLE>
* Mr. Pendleton was elected to the Board of Directors on September 24, 1996.
He received no compensation from the fund in fiscal year 1995.
+ Directors who are considered "interested persons as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), on the basis of
their affiliation with the fund's Investment Adviser, Capital Research and
Management Company.
/1/ Amounts may be deferred by eligible directors under a non-qualified
deferred compensation plan adopted by the fund in 1993. Deferred amounts
accumulate at an earnings rate determined by the total return of one or more of
the funds in The American Funds Group as designated by the director.
/2/ Capital Research and Management Company manages The American Funds Group
consisting of 28 funds: AMCAP Fund, American Balanced Fund, Inc., American
High-Income Municipal Bond Fund, Inc., American High-Income Trust, American
Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management Trust of
America, Capital Income Builder, Inc., Capital World Growth and Income Fund,
Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America.
Inc., Intermediate Bond Fund of America, The Investment Company of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of
America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of
Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of
America, The U.S. Treasury Money Fund of America, U.S. Government Securities
Fund and Washington Mutual Investors Fund, Inc. Capital Research and
Management Company also manages American Variable Insurance Series and Anchor
Pathway Fund which serve as the underlying investment vehicles for certain
variable insurance contracts, and Endowments, Inc. and Bond Portfolio for
Endowments, Inc.
OFFICERS
WALTER P. STERN, Chairman of the Board (see above).
JON B. LOVELACE, Vice Chairman of the Board (see above).
GINA H. DESPRES, President and Principal Executive Officer. 3000 K. Street,
N.W., Washington, DC 20007-5124. Vice President, Capital Research and
Management Company; formerly counsel to U.S. Senator Bill Bradley (NJ).
WILLIAM R. GRIMSLEY, Senior Vice President. P.O. Box 7650, San Francisco, CA
94120.
Senior Vice President and Director, Capital Research and Management Company.
THIERRY VANDEVENTER, Senior Vice President. 3 Place des Bergues, 1201 Geneva,
Switzerland.
Chairman of the Board and Chief Executive Officer, Capital Research Company.
GREGG E. IRELAND, Senior Vice President. 3000 K. Street, N.W., Washington, DC
20007-5124.
Vice President, Capital Research and Management Company.
* DARCY B. KOPCHO, Vice President. Vice President, Capital Research Company
* CATHERINE M. WARD, Vice President. Vice President and Director, Capital
Research and Management Company.
** STEVEN N. KEARSLEY, Treasurer. Vice President and Treasurer, Capital
Research and Management Company.
* VINCENT P. CORTI, Secretary. Vice President - Fund Business Management
Group, Capital Research and Management Company.
** MARY C. HALL, Assistant Treasurer. Senior Vice President - Fund Business
Management Group,
Capital Research and Management Company.
** R. MARCIA GOULD, Assistant Treasurer. Vice President - Fund Business
Management Group, Capital
Research and Management Company.
_________________________
# Positions within the organizations listed may have changed during this
period.
* Address is 333 South Hope Street, Los Angeles, CA 90071.
** Address is 135 South State College Boulevard, Brea, CA 92621.
ADVISORY BOARD
The Board of Directors has established an Advisory Board whose members are, in
the judgment of the Directors, highly knowledgeable about world political and
economic matters. In addition to holding meetings with the Board of Directors,
members of the Advisory Board, while not participating in specific investment
decisions, will consult from time to time with the Investment Adviser,
primarily with respect to world trade and business conditions abroad. The
members of the Advisory Board and their principal occupations during the past
five years are:
YOICHI FUNABASHI, PH.D., Washington, D.C. Washington, D.C. Bureau Chief and
Dipolmatic Correspondent of the ASAHI SHIMBUN
JEAN GANDOIS, Paris, France. Chairman of the Board, Cockerill-Sambre; former
Chairman and Chief Executive Officer, Pechiney; former Chairman, Pechiney
International.
CLAUDIO X. GONZALEZ LAPORTE, Mexico DF, Mexico. Chairman of the Board and
Managing Director,
Kimberly Clark de Mexico.
JUNICHI HATTORI, Tokyo, Japan. Senior Managing Director - Information Devices
and Systems Division, Seiko Instruments, Inc.
PETER C. HOBBINS, Zug, Switzerland. Counsellor and former Member Executive
Group, Corange Ltd.
SIR PETER F. 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 N.V.
JOHN L. NICHOL, Vancouver, British Columbia. President, Springfield Investment
Company Ltd.; former
President of Canada's National Liberal Party.
BRIAN NICHOLSON, London, England. Chairman of the Board, Advertising Standards
Board of Finance
Ltd.; former Head of Public Affairs, Lloyd's of London; former Executive
Chairman, Marlar International Ltd.; former Joint Managing Director, THE
OBSERVER.
DONALD E. PETERSEN, Birmingham, Michigan. Retired; former Chairman of the
Board and Chief Executive Officer, Ford Motor Company.
ALLEN E. PUCKETT, Los Angeles, California. Chairman Emeritus, Hughes Aircraft
Company.
ROZANNE L. RIDGWAY, Washington, DC. President, Atlantic Council of the United
States.
ORVILLE H. SCHELL, Berkeley, California. Dean, Graduate School of Journalism,
University of California, Berkeley
HAROLD M. WILLIAMS, Los Angeles, California. President and Chief Executive
Officer, The J. Paul Getty
Trust; former Chairman, U.S. Securities and Exchange Commission.
__________________________
All of the Directors and Officers are also directors and/or trustees and/or
officers of one or more of the other funds for which Capital Research and
Management Company serves as Investment Adviser. No compensation is paid by
the fund to any Director or Officer who is a director, officer or employee of
the Investment Adviser or affiliated companies. The fund pays fees of $10,000
per annum to directors who are not affiliated with the Investment Adviser, plus
$1,000 for each Board of Directors meeting attended ($2,500 for each meeting
attended in conjunction with meetings with the Advisory Board), plus $400 for
each meeting attended as a member of a committee of the Board of Directors.
The Directors may elect, on a voluntary basis, to defer all or a portion of
these fees through a deferred compensation plan in effect for the fund. Each
Advisory Board member is paid a fee of $3,000 per annum, plus $4,000 for each
meeting attended in conjunction with meetings with the Board of Directors. As
of November 1, 1995 the officers, Directors and members of the Advisory Board
and their families, as a group, owned beneficially or of record less than 1% of
the outstanding shares of the fund.
MANAGEMENT
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains
research facilities in the U.S. and abroad, with a staff of professionals, many
of whom have a number of years of investment experience. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world.
The Investment Adviser believes that it is able to attract and retain quality
personnel.
An affiliate of the Investment Adviser compiles indices for major stock
markets around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The Investment Adviser is responsible for more than $100 billion of stocks,
bonds and money market instruments and serves over five million investors of
all types. These investors include privately owned businesses and large
corporations as well as schools, colleges, foundations and other non-profit and
tax-exempt organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and
Service Agreement (the Agreement) between the fund and the Investment Adviser,
was approved by shareholders and is dated May 18, 1993. The Agreement will
continue in effect until March 31, 1996 unless sooner terminated and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (i) the Board of Directors of the
fund, or by the vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of the fund, and (ii) the vote of a majority of
Directors who are not parties to the Agreement or interested persons (as
defined in the 1940 Act) of any such party, cast in person, at a meeting called
for the purpose of voting on such approval. The Agreement provides that the
Investment Adviser has no liability to the fund for its acts or omissions in
the performance of its obligations to the fund not involving willful
misconduct, bad faith, gross negligence or reckless disregard of its
obligations under the Agreement. The Agreement also provides that either party
has the right to terminate it, without penalty, upon 60 days' written notice to
the other party, and that the Agreement automatically terminates in the event
of its assignment (as defined in the 1940 Act).
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of persons
to perform the executive, administrative, clerical and bookkeeping functions of
the fund, provides suitable office space and utilities, necessary office
equipment and general purpose forms and supplies used at the office of the
fund, and will pay the travel expenses of Directors and members of the Advisory
Board incurred in connection with attendance at meetings of those Boards. The
fund will pay all expenses not expressly assumed by the Investment Adviser,
including, but not limited to, fees and expenses of the transfer agent,
dividend disbursing agent, legal counsel and independent public accountants and
custodian, including charges of such custodian for the preparation and
maintenance of the books of account and records of the fund, cost of designing,
printing and mailing reports, prospectuses, proxy statements and notices to
shareholders; fees and expenses of registration, qualification and issuance of
fund shares; expenses pursuant to the fund's Plan of Distribution (described
below); association dues; interest; taxes; and compensation of Advisory Board
members and of Directors who are not affiliated persons of the Investment
Adviser.
The Investment Adviser has agreed that in the event the expenses of the fund
(with the exclusion of interest, taxes, brokerage costs, distribution expenses
pursuant to a plan under Rule 12b-1 and extraordinary expenses such as
litigation and acquisitions) for any fiscal year ending on a date on which the
Agreement is in effect, exceed the expense limitations, if any, applicable to
the fund pursuant to state securities laws or any regulations thereunder, it
will reduce its fee by the extent of such excess and, if required pursuant to
any such laws or regulations, will reimburse the fund in the amount of such
excess.
As compensation for its services, the Investment Adviser receives a monthly
fee which is accrued daily, calculated at the annual rate of 0.60% on the first
$500 million of the fund's net assets, 0.50% on net assets between $500 million
and $1 billion, 0.46% on net assets between $1 billion and $1.5 billion, 0.43%
on net assets between $1.5 billion and $2.5 billion, 0.41% on net assets
between $2.5 billion and $4 billion, 0.40% on net assets between $4 billion and
$6.5 billion, and 0.395% on net assets in excess of $6.5 billion. For the
fiscal years ended September 30, 1995, 1994 and 1993, the Investment Adviser
received advisory fees of $32,015,000, $24,390,000 and $17,045,000,
respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the Principal
Underwriter) is the principal underwriter of the fund's shares. The fund has
adopted a Plan of Distribution (the Plan), pursuant to rule 12b-1 under the
1940 Act (see "Principal Underwriter" in the Prospectus). The Principal
Underwriter receives amounts payable pursuant to the Plan (see below) and
commissions consisting of that portion of the sales charge remaining after the
discounts which it allows to investment dealers. Commissions retained by the
Principal Underwriter on sales of fund shares for the fiscal year ended
September 30, 1995 amounted to $8,330,000 after allowance of $44,248,000 to
dealers. During the fiscal years ended September 30, 1994 and 1993 the
Principal Underwriter received $6,903,000 and $4,995,000, after allowance of
$36,636,000 and $26,377,000, respectively.
As required by rule 12b-1, the Plan (together with the Principal Underwriting
Agreement) has been approved by the full Board of Directors, and separately by
a majority of the Directors who are not interested persons of the fund and who
have no direct or indirect financial interest in the operation of the Plan or
the Principal Underwriting Agreement, and the Plan has been approved by the
vote of a majority of the outstanding voting securities of the fund. The
Officers and Directors who are interested persons of the fund may be considered
to have a direct or indirect financial interest in the operation of the Plan
due to present or past affiliations with the Investment Adviser and related
companies. Potential benefits of the Plan to the fund include improved
shareholder services, savings to the fund in transfer agency costs, savings to
the fund in advisory fees and other expenses, benefits to the investment
process from growth or stability of assets and maintenance of a financially
healthy management organization. The selection and nomination of Directors who
are not interested persons of the fund are committed to the discretion of the
Directors who are not interested persons during the existence of the Plan. The
Plan is reviewed quarterly and must be renewed annually by the Board of
Directors.
Under the Plan, the fund may expend up to 0.25% of its net assets annually to
finance any activity which is primarily intended to result in the sale of fund
shares, provided the fund's Board of Directors has approved the category of
expenses for which payment is made. These include service fees for qualified
dealers and dealer commissions and wholesaler compensation on sales of shares
exceeding $1 million (including purchases by any employer-sponsored 403(b) plan
or any defined contribution plan qualified under Section 401(a) of the Internal
Revenue Code including a "401(k)" plan with 200 or more eligible employees).
Only expenses incurred during the preceding 12 months and accrued while the
Plan is in effect may be paid by the fund. During the fiscal year ended
September 30, 1995, the fund paid or accrued $15,602,000 in compensation to
dealers under the Plan.
The Glass-Steagall Act and other applicable laws, among other things,
generally prohibit commercial banks from engaging in the business of
underwriting, selling or distributing securities, but permit banks to make
shares of mutual funds available to their customers and to perform
administrative and shareholder servicing functions. However, judicial or
administrative decisions or interpretations of such laws, as well as changes in
either federal or state statutes or regulations relating to the permissible
activities of banks or their subsidiaries of affiliates, could prevent a bank
from continuing to perform all or a part of its servicing activities. If a
bank were prohibited from so acting, shareholder clients of such bank would be
permitted to remain shareholders of the fund and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the fund might occur and shareholders serviced by such bank
might no longer be able to avail themselves of any automatic investment or
other services then being provided by such bank. It is not expected that
shareholders would suffer adverse financial consequences as a result of any of
these occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and certain banks and financial
institutions may be required to be registered as dealers pursuant to state law.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
The fund intends to meet all the requirements, and has elected the tax status
of a "regulated investment company," under the provisions of Subchapter M of
the Internal Revenue Code of 1986 (the Code). Under Subchapter M, if the fund
distributes within specified times at least 90% of its investment company
taxable income, it will be taxed only on that portion of such investment
company taxable income that it retains.
To qualify, the fund must (a) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, and
gains from the sale or other disposition of stock, securities, currencies or
other income derived with respect to its business of investing in such stock,
securities or currencies; (b) derive less than 30% of its gross income from the
gains or sale or other disposition of stock or securities held less than three
months; and (c) diversify its holdings so that, at the end of each fiscal
quarter, (i) at least 50% of the market value of the fund's assets is
represented by cash, cash items, U.S. Government securities, securities of
other regulated investment companies, and other securities (but such other
securities must be limited, in respect of any one issuer, to an amount not
greater than 5% of the fund's assets and 10% of the outstanding voting
securities of such issuer), and (ii) not more than 25% of the value of its
assets is invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies), or in two or more issuers which the fund controls and which are
engaged in the same or similar trades or businesses or related trades or
businesses.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gains (both long-term and
short-term) for the one-year period ending on October 31 (as though the
one-year period ending on October 31 were the regulated investment company's
taxable year), and (iii) the sum of any untaxed, undistributed net investment
income and net capital gains of the regulated investment company for prior
periods. The term "distributed amount" generally means the sum of (i) amounts
actually distributed by the fund from its current year's ordinary income and
capital gain net income and (ii) any amount on which the fund pays income tax
for the year. The fund intends to distribute net investment income and net
capital gains so as to minimize or avoid the excise tax liability.
The amount of any realized gain or loss on closing out a futures contract such
as a forward commitment for the purchase or sale of foreign currency will
generally result in a realized capital gain or loss for tax purposes. Futures
contracts held by the fund at the end of each fiscal year will be required to
be "marked to market" for federal income tax purposes, that is, deemed to have
been sold at market value. Sixty percent (60%) of any net gain or loss
recognized on these deemed sales and sixty percent (60%) of any net realized
gain or loss from any actual sales will be treated as long-term capital gain or
loss, and the remainder will be treated as short-term capital gain or loss.
Currency transactions that are not subject to Section 1256 of the Code may be
subject to Section 988 of the Code, in which case the 60%/40%
long-term/short-term capital gain or loss rule of Section 1256 would not apply.
Rather, each Section 988 foreign currency gain or loss would generally be
computed separately and treated as ordinary income or loss. The fund will
attempt to monitor Section 988 transactions to avoid an adverse tax impact.
The fund also intends to continue distributing to shareholders all of the
excess of net long-term capital gain over net short-term capital loss on sales
of securities. If the net asset value of shares of the fund should, by reason
of a distribution of realized capital gains, be reduced below a shareholder's
cost, such distribution would to that extent be a return of capital to that
shareholder even though taxable to the shareholder, and a sale of shares by a
shareholder at net asset value at that time would establish a capital loss for
federal tax purposes.
Dividends generally are taxable to shareholders at the time they are paid.
However, dividends declared in October, November and December and made payable
to shareholders of record in such a month are treated as paid and are thereby
taxable as of December 31, provided that the fund pays the dividend no later
than the end of January of the following year.
If a shareholder exchanges or otherwise disposes of shares of the fund within
90 days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund, the sales charge previously
incurred in acquiring the fund's shares shall not be taken into account (to the
extent such previous sales charges do not exceed the reduction in sales
charges) for the purpose of determining the amount of gain or loss on the
exchange, but will be treated as having been incurred in the acquisition of
such other shares. Also, any loss realized on a redemption or exchange of
shares of a fund will be disallowed to the extent substantially identical
shares are reacquired within the 61-day period beginning 30 days before and
ending 30 days after the shares are disposed of.
The fund may be required to pay withholding and other taxes imposed by foreign
countries generally at rates from 10% to 40% which would reduce the fund's
investment income. Tax conventions between certain countries and the U.S. may
reduce or eliminate such taxes. If more than 50% in value of the fund's total
assets at the close of its taxable year consists of securities of foreign
issuers, the fund will be eligible to file elections with the Internal Revenue
Service pursuant to which shareholders of the fund will be required to include
their respective pro rata portions of such withholding taxes in their federal
income tax returns as gross income, treat such amounts as foreign taxes paid by
them, and deduct such amounts in computing their taxable incomes or,
alternatively, use them as foreign tax credits against their federal income
taxes. In any year the fund makes such an election, shareholders will be
notified as to the amount of foreign withholding and other taxes paid by the
fund.
Under the Code, distributions of net investment income by the fund to a
shareholder who, as to the U.S., is a nonresident alien individual, nonresident
alien fiduciary of a trust or estate, non-U.S. corporation, or non-U.S.
partnership (a non-U.S. shareholder) will be subject to U.S. withholding tax
(at a rate of 30% or lower treaty rate). Withholding will not apply if a
dividend paid by the fund to a non-U.S. shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens, U.S. residents, or domestic
corporations will apply. However, if the distribution is effectively connected
with the conduct of the non-U.S. shareholder's trade or business within the
U.S., the distribution would be included in the net income of the shareholder
and subject to U.S. income tax at the applicable marginal rate. Distributions
of net long-term capital gains are not subject to tax withholding, but in the
case of a non-U.S. shareholder who is a nonresident alien individual, such
distributions ordinarily will be subject to U.S. income tax at a rate of 30% if
the individual is physically present in the U.S. for more than 182 days during
the taxable year.
As of the date of this statement of additional information, the maximum
federal individual stated tax rate applicable to ordinary income is 39.6%
(effective tax rates may be higher for some individuals due to phase out of
exemptions and elimination of deductions); the maximum individual tax rate
applicable to net capital gains is 28%; and the maximum corporate tax
applicable to ordinary income and net capital gains is 35%. However, to
eliminate the benefit of lower marginal corporate income tax rates,
corporations which have taxable income in excess of $100,000 for a taxable
year will be required to pay an additional amount of tax liability of up to
$11,750 and corporations which have taxable income in excess of $15,000,000 for
a taxable year will be required to pay an additional amount of tax of up to
$100,000. Naturally, the amount of tax payable by a shareholder with respect
to either distributions from the fund or disposition of fund shares will be
affected by a combination of tax law rules covering, e.g., deductions, credits,
deferrals, exemptions, sources of income and other matters. Under the Code, an
individual is entitled to establish an IRA each year (prior to the tax return
filing deadline for that year) whereby earnings on investments are
tax-deferred. In addition, in some cases, the IRA contribution itself may be
deductible.
The foregoing is limited to a summary of federal taxation and should not be
viewed as a comprehensive discussion of all provisions of the Code relevant to
investors. Dividends and capital gain distributions may also be subject to
state or local taxes. Investors should consult their own tax advisers with
specific reference to their own tax situations.
PURCHASE OF SHARES
PRICE OF SHARES - Purchases of shares are made at the offering price next
determined after the purchase order is received by the fund or American Funds
Service Company; this offering price is effective for orders received prior to
the time of determination of the net asset value and, in the case of orders
placed with dealers, accepted by the Principal Underwriter prior to its close
of business. The dealer is responsible for promptly transmitting purchase
orders to the Principal Underwriter. Orders received by the investment dealer,
the Transfer Agent, or the fund after the time of the determination of the net
asset value will be entered at the next calculated offering price. Prices
which appear in the newspaper are not always indicative of prices at which you
will be purchasing and redeeming shares of the fund, since such prices
generally reflect the previous day's closing price whereas purchases and
redemptions are made at the next calculated price.
The price you pay for shares, the offering price, is based on the net asset
value per share which is calculated once daily at the close of trading
(currently 4:00 p.m., New York time) each day the New York Stock Exchange is
open as set forth below. The New York Stock Exchange is currently closed on
weekends and on the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas
Day. The net asset value per share is determined as follows:
1. Stocks, and convertible bonds and debentures, traded on the New York Stock
Exchange are valued at the last sale price on such exchange on the day of
valuation, or if there is no sale on the day of valuation, at the last-reported
bid price. Non-convertible bonds and debentures, and other long-term debt
securities normally are valued at prices obtained for the day of valuation from
a bond pricing service, when such prices are available; however, in
circumstances where the Investment Adviser deems it appropriate to do so, an
over-the-counter or exchange quotation may be used. Securities traded
primarily on securities exchanges outside the U.S. are valued at the last sale
price on such exchanges on the day of valuation, or if there is no sale on the
day of valuation, at the last-reported bid price. U.S. Treasury bills,
certificates of deposit issued by banks, corporate short-term notes and other
short-term investments with original or remaining maturities in excess of 60
days are valued at the mean of representative quoted bid and asked prices for
such securities or, if such prices are not available, for securities of
comparable maturity, quality and type. Short-term securities with 60 days or
less to maturity are amortized to maturity based on their cost to the fund if
acquired within 60 days of maturity or, if already held on the 60th day, based
on the value determined on the 61st day. Other securities are valued on the
basis of last sale or bid prices in what is, in the opinion of the Investment
Adviser, the broadest and most representative market, which may be either a
securities exchange or the over-the-counter market. Where quotations are not
readily available, securities are valued at fair value as determined in good
faith by the Board of Directors. The fair value of all other assets is added
to the value of securities to arrive at the total assets;
2. There are deducted from the total assets, thus determined, the
liabilities, including proper accruals of taxes and other expense items; and
3. The value of the net assets so obtained are then divided by the total
number of shares outstanding, and the result, rounded to the nearer cent, is
the net asset value per share.
Any purchase order may be rejected by the Principal Underwriter or the fund.
The fund will not knowingly sell shares (other than for the reinvestment of
dividends or capital gain distributions) directly or indirectly, or through a
unit investment trust to any other investment company, person or entity, where,
after the sale, such investment company, person, or entity would own
beneficially directly, indirectly, or through an investment trust more than 3%
of the outstanding shares of the fund without the consent of a majority of the
fund's Directors.
STATEMENT OF INTENTION - The reduced sales charges and offering prices set
forth in the Prospectus apply to purchases of $50,000 or more made within a
13-month period subject to the following statement of intention (the Statement)
terms. The Statement is not a binding obligation to purchase the indicated
amount. When a shareholder elects to utilize the Statement in order to qualify
for a reduced sales charge, shares equal to 5% of the dollar amount specified
in the Statement will be held in escrow in the shareholder's account out of the
initial purchase (or subsequent purchases, if necessary) by the Transfer Agent.
All dividends and any capital gain distributions on shares held in escrow will
be credited to the shareholder's account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified
13-month period, the purchaser will remit to the Principal Underwriter the
difference between the sales charge actually paid and the sales charge which
would have been paid if the total purchases had been made at a single time. If
the difference is not paid within 45 days after written request by the
Principal Underwriter or the investment dealer, the appropriate number of
shares will be redeemed to pay such difference. If the proceeds from this
redemption are inadequate, the purchaser will be liable to the Principal
Underwriter for the balance still outstanding. The Statement may be revised
upward at any time during the 13-month period, and such a revision will be
treated as a new Statement, except that the 13-month period during which the
purchase must be made will remain unchanged and there will be no retroactive
reduction of the sales charges paid on prior purchases. Existing holdings
eligible for rights of accumulation (see the prospectus and account
application) may be credited toward satisfying the Statement. During the
Statement period reinvested dividends and capital gain distributions,
investments in the money market funds, and investments made under a right of
reinstatement will not be credited toward satisfying the Statement.
In the case of purchase orders by the trustees of certain retirement plans by
payroll deduction, the sales charge for the investments made during the
13-month period will be handled as follows: The regular monthly payroll
deduction investment will be multiplied by 13 and then multiplied by 1.5. The
current value of existing American Funds investments (other than money market
fund investments) and any rollovers or transfers reasonably anticipated to be
invested in non-money market American Funds during the 13-month period are
added to the figure determined above. The sum is the Statement amount and
applicable breakpoint level. On the first investment and all other investments
made pursuant to the statement of intention, a sales charge will be assessed
according to the sales charge breakpoint thus determined. There will be no
retroactive adjustments in sales charges on investments previously made during
the 13-month period.
Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms with their first purchase.
DEALER COMMISSIONS -- The following commissions will be paid to dealers who
initiate and are responsible for purchases of $1 million or more, for purchases
by any employer-sponsored 403(b) plan or purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees, and for purchases made at
net asset value by certain retirement plans of organizations with collective
retirement plan assets of $100 million or more: 1.00% on amounts to $2
million, 0.80% on amounts over $2 million to $3 million, 0.50% on amounts over
$3 million to $50 million, 0.25% on amounts over $50 million to $100 million,
and 0.15% on amounts over $100 million. The level of dealer commissions will
be determined based on sales made over a 12-month period commencing from the
date of the first sale at net asset value. See "The American Funds Shareholder
Guide" in the fund's prospectus for more information.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - The automatic investment plan enables shareholders
to make regular monthly or quarterly investments in shares through automatic
charges to their bank accounts. With shareholder authorization and bank
approval, the Transfer Agent will automatically charge the bank account for the
amount specified ($50 minimum), which will be automatically invested in shares
at the offering price on or about the 10th day of the month (or on or about the
15th day of the month in the case of accounts for retirement plans where
Capital Guardian Trust Company serves as custodian or trustee). Bank accounts
will be charged on the day or a few days before investments are credited,
depending on the bank's capabilities, and shareholders will receive a
confirmation statement at least quarterly. Participation in the plan will
begin within 30 days after receipt of the account application. If the
shareholder's bank account cannot be charged due to insufficient funds, a
stop-payment order or the closing of the account, the plan may be terminated
and the related investment reversed. The shareholder may change the amount of
the investment or discontinue the plan at any time by writing to the Transfer
Agent.
AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - A shareholder in one fund
may elect to cross-reinvest dividends or dividends and capital gain
distributions paid by that fund (the paying fund) into any other fund in The
American Funds Group (the receiving fund) subject to the following conditions:
(i) the aggregate value of the shareholder's account(s) in the paying fund(s)
must equal or exceed $5,000 (this condition is waived if the value of the
account in the receiving fund equals or exceeds that fund's minimum initial
investment requirement), (ii) as long as the value of the account in the
receiving fund is below that fund's minimum initial investment requirement,
dividends and capital gain distributions paid by the receiving fund must be
automatically reinvested in the receiving fund, and (iii) if this privilege is
discontinued with respect to a particular receiving fund, the value of the
account in that fund must equal or exceed the fund's minimum initial investment
requirement or the fund shall have the right, if the shareholder fails to
increase the value of the account to such minimum within 90 days after being
notified of the deficiency, automatically to redeem the account and send the
proceeds to the shareholder. These cross-reinvestments of dividends and
capital gain distributions will be at net asset value (without sales charge).
REDEMPTION OF SHARES
REDEMPTIONS - The fund's Articles of Incorporation permit the fund to direct
the Transfer Agent to redeem the shares of any shareholder if (a) the shares
owned by such shareholder have a value (determined, for the purpose of this
sentence only, as the greater of the shareholder's cost or the then net asset
value of the shares, including the reinvestment of income dividends and capital
gain distributions, if any) of less than $150, or (b) such shareholder owns
less than ten (10) shares of capital stock of the fund. Prior notice of at
least 60 days will be given to a shareholder before the involuntary redemption
provision is made effective with respect to the shareholder's account. The
shareholder will have not less than 30 days from the date of such notice within
which to bring the account up to the minimum determined as set forth above.
EXECUTION OF PORTFOLIO TRANSACTIONS
There are occasions on which portfolio transactions for the fund may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the fund, they are effected only when the
Investment Adviser believes that to do so is in the interest of the fund. When
such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, for the fiscal years ended September 30, 1995,
1994 and 1993 amounted to $7,790,000, $6,346,000, and $4,084,000, respectively.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by The Chase Manhattan Bank, N.A., One Chase Manhattan Plaza, New
York, NY 10081, as Custodian. Non-U.S. securities may be held by the
Custodian pursuant to subcustodial arrangements in non-U.S. banks or foreign
branches of U.S. banks.
INDEPENDENT ACCOUNTANTS - Price Waterhouse LLP, 400 South Hope Street, Los
Angeles, CA 90071, has served as the fund's independent accountants since the
fund's inception, providing audit services, preparation of tax returns and
review of certain documents to be filed with the Securities and Exchange
Commission. The financial statements included in this Statement of Additional
Information from the Annual Report have been so included in reliance on the
report of Price Waterhouse LLP given on the authority of said firm as experts
in accounting and auditing.
REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on September 30.
Shareholders are provided at least semi-annually with reports showing the
investment portfolio, financial statements and other information. The fund's
annual financial statements are audited by the fund's independent accountants,
Price Waterhouse LLP, whose selection is determined annually by the Board of
Directors.
PERSONAL INVESTING POLICY -- Capital Research and Management Company and its
affiliated companies have adopted a personal investing policy consistent with
Investment Company Institute guidelines. This policy includes: a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; pre-clearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the fund; blackout periods on personal investing for certain investment
personnel; ban on short-term trading profits for investment personnel;
limitations on service as a director of publicly traded companies; and
disclosure of personal securities transactions.
The financial statements including the investment portfolio and the report of
Independent Accountants contained in the Annual Report are included in this
Statement of Additional Information. The following information is not included
in the Annual Report:
DETERMINATION OF NET ASSET VALUE,
REDEMPTION PRICE ANDMAXIMUM OFFERING PRICE PER SHARE -- SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Net asset value and redemption price per share
<S> <C>
(Net assets divided by shares outstanding) $ 16.98
Maximum offering price per share (100/94.25 of
net asset value per share, which takes into
account the fund's current maximum sales charge) $ 18.02
</TABLE>
REMOVAL OF DIRECTORS BY SHAREHOLDERS - At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any director or directors from office and may elect a successor
or successors to fill any resulting vacancies for the unexpired terms of
removed directors. The fund has made an undertaking, at the request of the
staff of the Securities and Exchange Commission, to apply the provisions of
section 16(c) of the 1940 Act with respect to the removal of directors as
though the fund were a common-law trust. Accordingly, the Directors of the
fund shall promptly call a meeting of shareholders for the purpose of voting
upon the question of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the outstanding shares.
INVESTMENT RESULTS
The fund's yield is 1.73% based on a 30-day (or one month) period ended
September 30, 1995, computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last
day of the period, according to the following formula:
YIELD = 2[(a-b/cd+1)/6/-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
The fund's one-year total return and average annual total returns for the
five- and ten-year periods ended on September 30, 1995 was 11.81%, 14.80% and
15.77%, respectively. The average annual total return (T) is computed by using
the value at the end of the period (ERV) of a hypothetical initial investment
of $1,000 (P) over a period of years (n) according to the following formula as
required by the Securities and Exchange Commission: P(1+T)/n/ = ERV.
To calculate total return, an initial investment is divided by the offering
price (which includes the sales charge) as of the first day of the period in
order to determine the initial number of shares purchased. Subsequent dividends
and capital gain distributions are then reinvested at net asset value on the
reinvestment date determined by the Board of Directors. The sum of the initial
shares purchased and shares acquired through reinvestment is multiplied by the
net asset value per share as of the end of the period in order to determine
ending value. The difference between the ending value and the initial
investment divided by the initial investment converted to a percentage equals
total return. The resulting percentage indicates the positive or negative
investment results that an investor would have experienced from reinvested
dividends and capital gain distributions and changes in share price during the
period. Total return may be calculated for one year, five years, ten years and
for other periods of years. The average annual total return over periods
greater than one year may also be computed by utilizing ending values as
determined above.
The following assumptions will be reflected in computations made in accordance
with the formula stated above: (1) deduction of the maximum sales load of
5.75% from the $1,000 initial investment; (2) reinvestment of dividends and
distributions at net asset value on the reinvestment date determined by the
Board; and (3) a complete redemption at the end of any period illustrated.
The fund may also calculate a distribution rate on a taxable and tax
equivalent basis. The distribution rate is computed by dividing the dividends
paid by the fund over the last 12 months by the sum of the month-end net asset
value or maximum offering price and the capital gains paid over the last 12
months. The distribution rate may differ from the yield.
The fund may include information on its investment results and/or comparisons
of its investment results to various unmanaged indices (such as The Dow Jones
Average of 30 Industrial Stocks and The Standard and Poor's 500 Composite Stock
Index) or results of other mutual funds or investment or savings vehicles in
advertisements or in reports furnished to present or prospective shareholders.
The fund may refer to results compiled by organizations such as CDA Investment
Technologies, Ibbottson Associates, Lipper Analytical Services, Morningstar,
Inc. and Wiesenberger Investment Companies Services and by the U.S. Department
of Commerce. Additionally, the fund may, from time to time, refer to results
published in various newspapers or periodicals, including BARRONS, FORBES,
FORTUNE, INSTITUTIONAL INVESTOR, KIPLINGER'S PERSONAL FINANCE MAGAZINE, MONEY,
U.S. NEWS AND WORLD REPORT and THE WALL STREET JOURNAL.
The fund may, from time to time, illustrate the benefits of tax-deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans.
The fund may from time to time compare its investment results with the
Consumer Price Index, which is a measure of the average change in prices over
time in a fixed market basket of goods and services (e.g. food, clothing,
fuels, transportation, and other goods and services that people buy for
day-to-day living).
EXPERIENCE OF THE INVESTMENT ADVISER - Capital Research and Management Company
manages nine common stock funds that are at least 10 years old. In the
rolling 10-year periods since 1964 (115 in all) those funds have had better
total returns than the Standard and Poor's 500 Composite Stock Index in 94 of
the 115 periods.
Note that past results are not an indication of future investment results and
that the fund has different investment policies from other funds managed by
Capital Research and Management Company. Reference to the other common stock
funds is made solely for the purpose of informing investors about the
experience and history of Capital Research and Management Company.
The investment results set forth below were calculated as described in the
fund's Prospectus.
NPF VS. VARIOUS UNMANAGED INDEXES
Total Return
<TABLE>
<CAPTION>
Periods MSCI Indices Capital
Appreciation
10/1 - 9/30 NPF DJIA/1/ S&P 500/2/ World/3/ U.S./4/ NPF NYSE/6/
<S> <C> <C> <C> <C> <C> <C> <C>
1973# - 1995 +1,992% +1,223% +1,165% +1,051% +1,072% +1,001% +411%
1985 - 1995 +332 +404 +341 +302 +342 +250 +198
1984 - 1994 +321 +355 +289 +338 +289 +236 +167
1983 - 1993 +278 +321 +293 +328 +291 +196 +165
1982 - 1992 +360 +443 +402 +400 +393 +244 +232
1981 - 1991 +356 +446 +397 +416 +392 +246 +218
1980 - 1990 +275 +314 +269 +285 +266 +166 +132
1979 - 1989 +387 +395 +392 +483 +372 +245 +212
1978 - 1988 +342 +302 +317 +420 +291 +214 +166
1977 - 1987 +584 +415 +432 +580 +397 +386 +241
1976 - 1986 +369 +205 +256 +389 +235 +232 +137
1975 - 1985 +299 +187 +253 +274 +233 +181 +136
1974 - 1984 +403 +241 +326 +288 +297 +248 +186
1973# - 1983 +271 +124 +149 +128 +129 +156 + 64
</TABLE>
/1/ The Dow Jones Average of 30 Industrial stocks is comprised of 30 industrial
companies such as General Motors and General Electric.
/2/ The Standard and Poor's 500 Composite Stock Index is comprised of
industrial, transportation, public utilities and financial stocks and
represents a large portion of the value of issues traded on the New York Stock
Exchange. Selected issues traded on the American Stock Exchange are also
included.
/3/ The Morgan Stanley Capital International World Index is an arithmetical
average, weighted by market value, of the performance of more than 1,400
securities listed on the stock exchanges of Europe, Australia, the Far East,
Canada, New Zealand and the U.S.
/4/ The Morgan Stanley Capital International U.S. Index is an arithmetical
average, weighted by market value, of the performance of more than 300
securities listed on stock exchanges in the U.S.
/5/ The New York Stock Exchange Composite Index is a capitalization weighted
index of all common stocks listed on the exchange.
# From March 13, 1973, the date the fund commenced operations.
IF YOU ARE CONSIDERING NPF FOR RETIREMENT . . .
Here's how much you would have if you had invested $2,000 on
October 1 of each year in NPF over the past 5 and 10 years:
<TABLE>
<CAPTION>
<S> <C>
5 Years 10 Years
(10/1/90 - 9/30/95) (10/1/85 - 9/30/95)
$14,939 $42,626
</TABLE>
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM . . .
<TABLE>
<CAPTION>
If you had invested Periods ...and taken all
$10,000 in NPF 10/1 - 9/30 distributions in shares,
this many years ago... your investment would
Number of Years have been worth this
much at September 30, 1995
Value
<S> <C> <C>
1 1994 - 1995 $11,181
2 1993 - 1995 12,588
3 1992 - 1995 14,896
4 1991 - 1995 16,094
5 1990 - 1995 19,937
6 1989 - 1995 18,964
7 1988 - 1995 24,262
8 1987 - 1995 20,811
9 1986 - 1995 31,150
10 1985 - 1995 43,247
11 1984 - 1995 49,943
12 1983 - 1995 50,441
13 1982 - 1995 72,660
14 1981 - 1995 77,868
15 1980 - 1995 79,327
16 1979 - 1995 98,085
17 1978 - 1995 113,725
18 1977 - 1995 151,076
19 1976 - 1995 155,047
20 1975 - 1995 183,143
21 1974 - 1995 266,290
22 1973 - 1995 198,433
Lifetime 1973# - 1995 209,200
</TABLE>
APPENDIX
DESCRIPTION OF BOND RATINGS
Corporate Debt Securities
MOODY'S INVESTORS SERVICE, INC. rates the long-term debt securities issued by
various entities in categories ranging from "Aaa" to "C" according to quality.
"AAA -- Best quality. These securities carry the smallest degree of investment
risk and are generally referred to as 'gilt edge.' Interest payments are
protected by a large or by an exceptionally stable margin, and principal is
secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues."
"AA -- High quality by all standards. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude, or there may be
other elements present which make the long-term risks appear somewhat greater."
"A -- Upper medium grade obligations. These bonds possess many favorable
investment attributes. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future."
"BAA -- Medium grade obligations. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and , in fact, have
speculative characteristics as well."
"BA -- Have speculative elements; future cannot be considered as well assured.
The protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Bonds in this class are characterized by uncertainty of position."
"B -- Generally lack characteristics of the desirable investment; assurance of
interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small."
"CAA -- Of poor standing. Issues may be in default or there may be present
elements of danger with respect to principal or interest."
"CA -- Speculative in a high degree; often in default or have other marked
shortcomings."
"C -- Lowest rated class of bonds; can be regarded as having extremely poor
prospects of ever attaining any real investment standing."
STANDARD & POOR'S CORPORATION rates the long-term securities debt of various
entities in categories ranging from "AAA" to "D" according to quality.
"AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong."
"AA -- High grade. Very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree."
"A - Have a strong capacity to pay interest and repay principal, although they
are somewhat more susceptible to the adverse effects of change in circumstances
and economic conditions, than debt in higher rated categories."
"BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal than for debt in
higher rated categories."
"BB, B, CCC, CC, C -- Regarded, on balance, as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with the
terms of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions."
"C-1 -- Reserved for income bonds on which no interest is being paid."
"D -- In default and payment of interest and/or repayment of principal is in
arrears."
<PAGE>
NEW PERSPECTIVE FUND
Investment Portfolio, September 30, 1995
LARGEST INDUSTRY HOLDINGS
Telecommunications 7.63%
Health & Personal Care 6.51%
Broadcasting & Publishing 6.50%
Electrical & Electronics 5.13%
Energy Sources 4.92%
Other Industries 52.61%
Bonds & Cash Equivalents 16.70%
<TABLE>
<CAPTION>
Shares or Market Percent
Principal Value of Net
Equity-Type Securities Amount (Millions) Assets
- ----------------------------------------- ---------- ---------- ------
<S> <C> <C> <C>
TELECOMMUNICATIONS-7.63%
Telecom Corp. of New Zealand Ltd.
(New Zealand) 17,400,000 $67.863 1.05%
Telecom Corp. of New Zealand Ltd. /1/ 6,220,000 24.259
AirTouch Communications (USA) /2/ 2,732,000 83.667 .95
Vodafone Group PLC (American Depositary
Receipts)(United Kingdom) 1,980,000 81.180 .92
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts) (Mexico) 2,434,530 77.296 .88
Tele Danmark AS, Class B (Denmark) 375,000 19.388
Tele Danmark AS, Class B (American .58
Depositary Receipts) 1,233,700 31.922
AT&T Corp.(USA) 735,000 48.326 .55
Cable and Wireless PLC (United Kingdom) 6,302,730 41.529
Cable and Wireless PLC (American .51
Depositary Receipts) 200,000 3.925
STET-Societa Finanziaria Telefonica p.a.,
ordinary shares (Italy) 5,890,000 17.955 .38
STET-Societa Finanziaria Telefonica p.a.,
nonconvertible savings shares 7,000,000 16.283
MCI Communications Corp. (USA) 1,225,000 31.927 .36
Telefonica de Argentina SA, Class B
(American Depositary Receipts) (Argentina) 1,332,000 31.802 .36
Koninklijke PTT Nederlanden NV
(Netherlands) 869,500 30.729 .35
Telecomunicacoes Brasileiras SA, preferred
nominative (Brazil) 556,439,000 26.540 .30
Telefonica de Espana, SA (Spain) 1,500,000 20.661
Telefonica de Espana, SA (American .27
Depositary Receipts) 76,000 3.145
Hong Kong Telecommunications Ltd. (Hong
Kong) 4,000,000 7.270
Hong Kong Telecommunications Ltd. .17
(American Depositary Receipts) 420,000 7.665
HEALTH & PERSONAL CARE- 6.51%
AB Astra, Class A (Sweden) 2,000,000 71.688
AB Astra, Class A (American Depositary
Receipts) 155,000 5.556 1.99
AB Astra, Class B 2,800,000 98.546
Teva Pharmaceutical Industries Ltd.
(American Depositary Receipts)(Israel) 1,940,000 70.083 .79
Merck & Co., Inc. (USA) 1,030,000 57.680 .65
Pfizer Inc (USA) 1,000,000 53.375 .61
Sandoz Ltd. (Switzerland) 49,515 37.742 .43
Glaxo Holdings PLC (United Kingdom) 563,264 6.892
Glaxo Holdings PLC (American Depositary .42
Receipts) 1,254,000 30.253
Johnson & Johnson (USA) 400,000 29.650 .34
AVON PRODUCTS, INC. (USA) 408,000 29.274 .33
Genentech, Inc. (USA) /2/ 600,000 29.175 .33
Abbott Laboratories (USA) 400,000 17.050 .19
Roberts Pharmaceutical Corp. (USA) /2/ 450,000 10.575 .12
Bristol-Myers Squibb Co. (USA) 140,000 10.202 .12
Bausch & Lomb Inc. (USA) 225,000 9.309 .11
BioChem Pharma Inc. (Canada) /2/ 123,000 3.905 .04
Chiron Corp. (USA) /2/ 37,049 3.353 .04
BROADCASTING & PUBLISHING- 6.50%
News Corp. Ltd. (Australia) 3,910,001 21.771
News Corp. Ltd. (American Depositary
Receipts) 3,991,600 87.815 1.81
News Corp. Ltd., preferred shares 1,963,771 9.733
News Corp. Ltd., preferred shares
(American Depositary Receipts) 1,995,800 39.666
Turner Broadcasting System, Inc., Class
B (USA) 3,512,300 96.588 1.10
Time Warner Inc. (USA) 1,772,000 70.437 .80
Viacom Inc., Class B (USA) /2/ 1,340,000 66.665 .76
Elsevier NV (Netherlands) 3,050,000 39.110 .44
Carlton Communications PLC (United
Kingdom) 1,956,000 32.045 .36
CANAL+ (France) 185,560 31.621 .36
Dow Jones & Co., Inc. (USA) 780,000 28.762 .33
Grupo Televisa, SA, Class L (American
Depositary Receipts) (Mexico) 825,000 16.500 .19
Pearson PLC (United Kingdom) 1,700,000 15.927 .18
Wolters Kluwer NV (Netherlands) 162,516 14.933 .17
ELECTRICAL & ELECTRONICS- 5.13%
ASEA AB, Class A (Sweden) 115,000 11.529
ASEA AB, Class B 760,000 75.421
ASEA AB, Class B (American Depositary
Receipts) 450,000 44.944 2.13
BBC Brown Boveri Ltd, Class A
(Switzerland) 47,957 55.621
Nokia Corp., Class A (Finland) 480,000 33.713
Nokia Corp., Class A (American Depositary
Receipts) 968,000 67.518 1.52
Nokia Corp., Class K 460,000 32.309
Telefonaktiebolaget LM Ericsson, Class B
(Sweden) 2,519,600 62.147
Telefonaktiebolaget LM Ericsson, Class B,
rights, expire 10/27/95 /2/ 2,519,600 2.944
Telefonaktiebolaget LM Ericsson, Class B 1.08
(American Depositary Receipts) 1,200,000 29.400
Telefonaktiebolaget LM Ericsson, Class B
(American Depositary Receipts), rights,
expire 10/26/95 /2/ 1,200,000 1.382
Makita Corp. (Japan) 814,000 12.870 .15
General Electric Co. (USA) 200,000 12.750 .14
Hitachi, Ltd. (Japan) 900,000 9.788 .11
ENERGY SOURCES- 4.92%
Royal Dutch Petroleum Co. (New York
Registered Shares) (Netherlands) 613,000 75.246 .85
Anadarko Petroleum Corp. (USA) 1,555,000 73.668 .84
TOTAL, Class B (France) 128,196 7.759
TOTAL, Class B (American Depositary .75
Receipts) 1,925,798 58.015
Unocal Corp. (USA) 1,550,000 44.175 .50
Repsol SA (Spain) 1,400,000 44.069 .50
Phillips Petroleum Co. (USA) 1,225,000 39.813 .45
NOVA Corp. of Alberta (Canada) 4,500,000 35.633 .40
YPF SA, Class D (American Depositary
Receipts) (Argentina) 1,200,000 21.600 .24
Broken Hill Proprietary Co. Ltd.
(Australia) 1,219,014 16.780 .19
British Petroleum Co. PLC (American
Depositary Receipts) (United Kingdom) 155,940 14.015 .16
Petrofina SA (Belgium) 12,600 3.907 .04
BEVERAGES & TOBACCO- 4.92%
Philip Morris Companies Inc. (USA) 1,835,000 153.222 1.74
Seagram Co. Ltd. (Canada) 2,500,000 89.688 1.02
Heineken NV (Netherlands) 364,257 58.784 .67
LVMH MOET HENNESSY LOUIS VUITTON (FRANCE) 220,000 41.511 .47
Guinness PLC (United Kingdom) 3,700,000 30.191 .34
PepsiCo, Inc. (USA) 500,000 25.500 .29
Lion Nathan Ltd. (New Zealand) 10,450,000 21.856 .25
American Brands, Inc. (USA) 300,000 12.675 .14
BANKING- 4.17%
Westpac Banking Corp. (Australia) 16,326,389 66.113 .75
Citicorp (USA) 850,000 60.137 .68
BankAmerica Corp. (USA) 675,000 40.416 .46
Banco de Santander, SA (Spain) 450,000 18.887
Banco de Santander, SA (American .45
Depositary Receipts) 500,000 20.812
Deutsche Bank AG (Germany) 751,410 35.785 .41
Svenska Handelsbanken Group (Sweden) 1,400,000 24.233 .27
Republic New York Corp. (USA) 370,000 21.645 .25
Sumitomo Bank, Ltd. (Japan) 895,000 17.305
Sumitomo Bank, Ltd., 3.125% convertible .24
debentures 2004 $4,700,000 3.924
ABN AMRO Holding NV (Netherlands) 418,240 17.319 .20
J.P. Morgan & Co. Inc. (USA) 142,100 10.995 .12
Istituto Mobiliare Italiano SpA
(American Depositary Receipts) (Italy) 520,000 9.490 .11
Chase Manhattan Bank, NA (USA) 150,000 9.169 .10
Asahi Bank Ltd. (Japan) 670,000 7.287 .08
Bank of Montreal (Canada) 210,000 4.617 .05
CHEMICALS- 3.55%
Praxair, Inc. (USA) 2,579,300 68.996 .78
Georgia Gulf Corp. (USA) 1,975,000 68.138 .77
Ciba-Geigy Ltd. (Switzerland) 69,000 55.344 .63
Sherwin-Williams Co. (USA) 775,000 27.125 .31
Valspar Corp. (USA) 554,100 21.194 .24
E.I. du Pont de Nemours and Co. (USA) 240,000 16.500 .19
L'Air Liquide (France) 89,489 14.250 .16
Engelhard Corp. (USA) 413,100 10.482 .12
Solvay SA (Belgium) 16,600 8.839 .10
Sumitomo Chemical Co., Ltd. (Japan) 1,730,000 7.544 .09
Bayer AG (Germany) 25,000 6.370 .07
BASF AG (Germany) 20,000 4.375 .05
Rhone-Poulenc SA (American Depositary
Receipts) (France) 153,400 3.106 .04
MACHINERY & ENGINEERING- 3.40%
Mannesmann AG (Germany) 487,375 160.013 1.81
Caterpillar Inc. (USA) 1,960,000 111.475 1.26
Deere & Co. (USA) 260,000 21.158 .24
Parker Hannifin Corp. (USA) 200,000 7.600 .09
MULTI-INDUSTRY- 3.37%
Hutchison Whampoa Ltd. (Hong Kong) 11,281,000 61.144 .69
Lend Lease Corp. Ltd. (Australia) 3,889,796 54.837 .62
LTV Corp. (USA) /2/ 3,000,000 42.000 .48
Hanson PLC (United Kingdom) 4,000,000 12.732
Hanson PLC (American Depositary .46
Receipts) 1,730,000 28.113
Groupe Bruxelles Lambert SA (Belgium) 182,000 24.188 .27
B.A.T Industries PLC (United Kingdom) 2,711,122 22.556 .26
Swire Pacific Ltd., Class A (Hong Kong) 1,930,000 15.292 .17
Incentive AB, Class A (Sweden) 80,000 3.820
Incentive AB, Class B 165,000 7.925 .13
CITIC Pacific Ltd. (Hong Kong) 3,600,000 10.874 .12
Canadian Pacific Ltd. (Canada) 625,000 10.000 .11
Pacific Dunlop Ltd. (Australia) 2,000,000 4.986 .06
ELECTRONIC COMPONENTS- 3.34%
Advanced Micro Devices, Inc. (USA) /2/ 2,325,000 67.716 .77
Micron Technology, Inc. (USA) 605,000 48.098 .55
Intel Corp. (USA) 785,000 47.198 .54
Motorola, Inc. (USA) 600,000 45.825 .52
Analog Devices, Inc. (USA) /2/ 855,000 29.604 .34
SGS-THOMSON MICROELECTRONICS NV (NEW
YORK REGISTERED SHARES) NETHERLANDS /2/ 565,000 27.473 .31
Seagate Technology (USA) /2/ 650,000 27.381 .31
AUTOMOBILES- 2.98%
Ford Motor Co., Class A (USA) 2,700,000 84.038 .95
Toyota Motor Corp. (Japan) 2,705,000 51.485 .58
Renault V.I. SA (France) 1,597,700 47.053 .53
Bayerische Motoren Werke AG (Germany) 70,909 38.867
Bayerische Motoren Werke AG, preferred .53
shares 20,318 7.865
Daimler-Benz AG (Germany) 19,800 9.758
Daimler-Benz AG (American Depositary .17
Receipts) 110,000 5.459
General Motors Corp. (USA) 230,000 10.781 .12
Suzuki Motor Corp. (Japan) 800,000 8.620 .10
RECREATION & OTHER CONSUMER PRODUCTS-
2.79%
THORN EMI PLC (United Kingdom) 3,311,553 77.140 .87
PolyGram NV (New York Registered Shares)
(Netherlands) 1,109,800 72.414 .82
Duracell International Inc. (USA) 925,000 41.509 .47
Mattel, Inc. (USA) 1,200,000 35.250 .40
Eastman Kodak Co. (USA) 175,000 10.369 .12
Hasbro, Inc. (USA) 301,800 9.394 .11
FOOD & HOUSEHOLD PRODUCTS- 2.64%
Reckitt & Colman PLC (United Kingdom) 6,975,000 72.542 .82
Nestle SA (Switzerland) 68,782 70.480 .80
GROUPE DANONE (FRANCE) 250,000 40.418 .46
Colgate-Palmolive Co. (USA) 400,000 26.650 .30
Unilever NV (Netherlands) 175,000 22.768 .26
INSURANCE- 1.74%
Internationale Nederlanden Groep NV
(Netherlands) 1,268,486 73.711 .84
American International Group, Inc. (USA) 516,562 43.908 .50
Munchener Ruckversicherungs-Gesellschaft
(Germany) 6,213 12.657
Munchener Ruckversicherungs-Gesellschaft, .20
registered shares 3,000 5.422
CKAG Colonia Konzern (Germany) 19,400 15.889
CKAG Colonia Konzern, preferred shares 1,385 .824 .19
Yasuda Fire and Marine Insurance Co.,
Ltd. (Japan) 200,000 1.289 .01
MERCHANDISING- 1.64%
Wal-Mart Stores, Inc. (USA) 2,300,000 57.212 .65
Ito-Yokado Co., Ltd. (Japan) 610,000 33.664 .38
Toys 'R' Us, Inc. (USA) /2/ 1,100,000 29.700 .34
WHSmith Group PLC, Class A (United
Kingdom) 1,827,500 10.641 .12
Coles Myer Ltd. (Australia) 3,098,250 9.948 .11
Cifra, SA de CV, Class C (Mexico) 2,854,800 3.314 .04
.
DATA PROCESSING & REPRODUCTION- 1.50%
Sybase, Inc. (USA) /2/ 1,613,800 51.843 .59
International Business Machines Corp.
(USA) 277,000 26.142 .30
Oracle Corp. (USA)/2/
(formerly Oracle Systems Corp.) 540,000 20.723 .24
Adobe Systems Inc. (USA) 175,000 9.056 .10
Apple Computer, Inc. (USA) 226,850 8.450 .10
Cisco Systems, Inc. (USA) /2/ 100,000 6.900 .08
Tandem Computers Inc. (USA) /2/ 340,000 4.165 .05
Novell, Inc. (USA) /2/ 200,000 3.650 .04
LEISURE & TOURISM- 1.41%
Carnival Cruise Lines, Inc. (USA) 2,000,000 48.000 .54
Walt Disney Co. (USA) 670,000 38.441 .44
Forte PLC (United Kingdom) 3,465,700 13.517 .15
Euro Disney SCA (France) 3,870,000 12.459
Euro Disney SCA, warrants, expire 2004 /2/ 1,028,142 0.457 .15
McDonald's Corp. (USA) 300,000 11.475 .13
INDUSTRIAL COMPONENTS- 1.33%
Compagnie Generale des Etablissements
Michelin, Class B (France) 1,100,000 48.236 .55
Goodyear Tire & Rubber Co. (USA) 1,120,000 44.100 .50
AB SKF, Class B (Sweden) 550,000 12.138 .14
Rockwell International Corp. (USA) 170,000 8.033 .09
Orbital Engine Corp. Ltd. (American
Depositary Receipts) (Australia) /2/ 466,133 4.020 .05
FOREST PRODUCTS & PAPER- 1.30%
Kymmene Corp. (Finland) 995,000 30.749 .35
LOUISIANA-PACIFIC CORP. (USA) 900,000 21.713 .25
Jefferson Smurfit Corp. (USA) /2/ 1,255,700 19.149 .22
Weyerhaeuser Co. (USA) 300,000 13.688 .16
ITT Rayonier Inc. (USA) 325,000 12.716 .14
International Paper Co. (USA) 200,000 8.400 .10
Carter Holt Harvey Ltd. (New Zealand) 3,100,000 7.218 .08
AEROSPACE & MILITARY TECHNOLOGY- 1.09%
Bombardier Inc., Class B (Canada) 5,400,000 63.385 .72
Boeing Co. (USA) 250,000 17.063 .19
United Technologies Corp. (USA) 160,000 14.140 .16
Litton Industries, Inc. (USA) /2/ 40,000 1.740 .02
METALS: NONFERROUS- 0.98%
Western Mining Corp. Holdings Ltd.
(Australia) 6,037,151 39.499 .45
Alcan Aluminium Ltd. (Canada) 700,000 22.663 .26
Alumax Inc. (USA) /2/ 426,000 14.378 .16
Teck Corp., Class B (Canada) 479,000 9.549 .11
METALS: STEEL- 0.87%
Companhia Vale do Rio Doce, ordinary
nominative (Brazil) 4,800,000 1.169
Companhia Vale do Rio Doce, preferred .24
nominative 123,780,000 20.719
Armco Inc. (USA) /2/ 3,000,000 19.500
Armco Inc., convertible preferred 20,000 1.035 .23
USINOR SACILOR (FRANCE) /2/ 1,000,000 17.782 .20
Ugine SA (France) 130,502 8.402 .10
Thyssen AG (Germany) /2/ 25,000 4.839 .05
Koninklijke Nederlandsche Hoogovens en
Staalfabrieken NV (Netherlands) 100,000 3.991 .05
ENERGY EQUIPMENT- 0.85%
Schlumberger Ltd. (Netherlands Antilles) 1,000,000 65.250 .74
Western Atlas Inc. (USA) /2/ 200,000 9.475 .11
TRANSPORTATION: SHIPPING- 0.84%
NIPPON YUSEN KK (JAPAN) 6,600,000 39.015 .44
Bergesen d.y.AS, Class A (Norway) 500,000 11.069
Bergesen d.y.AS, Class B 795,000 17.726 .33
Overseas Shipholding Group, Inc. (USA) 300,000 5.962 .07
TRANSPORTATION: AIRLINES- 0.77%
Singapore Airlines Ltd. (Singapore) 3,841,000 35.630 .40
British Airways PLC (United Kingdom) 1,545,000 11.062
British Airways PLC (American Depositary .37
Receipts) 305,500 21.805
GOLD MINES- 0.77%
Placer Dome Inc. (Canada) 1,600,000 42.000 .48
BARRICK GOLD CORP. (CANADA) 1,000,000 25.875 .29
MISCELLANEOUS MATERIALS & COMMODITIES-
0.76%
English China Clays PLC (United Kingdom) 3,200,000 18.379 .21
Compagnie de Saint-Gobain (France) 119,511 14.564 .16
Potash Corp. of Saskatchewan Inc.
(Canada) 200,000 12.450 .14
TRINOVA Corp. (USA) 250,000 8.438 .10
Cleveland-Cliffs Inc. (USA) 180,000 7.403 .08
Pilkington PLC (United Kingdom) 2,000,000 6.275 .07
BUSINESS & PUBLIC SERVICES- 0.71%
WMX Technologies, Inc. (USA) 600,000 17.100 .19
Havas SA (France) 194,048 14.519 .16
Eurotunnel SA, units, comprised of one
share of Eurotunnel SA ordinary and one
share of Eurotunnel PLC ordinary
(France) /2/ 9,222,700 13.300 .15
Reuters Holdings PLC (American Depositary
Receipts) (United Kingdom) 200,000 10.575 .12
Federal Express Corp. (USA) /2/ 100,000 8.300 .09
APPLIANCES & HOUSEHOLD DURABLES- 0.69%
Sony Corp. (Japan) 480,000 24.846 .28
AB Electrolux, Class B (Sweden) 441,600 21.116 .24
Philips Electronics NV (Netherlands) 300,000 14.637 .17
TRANSPORTATION: RAIL & ROAD-0.48%
CSX Corp. (USA) 500,000 42.062 .48
UTILITIES: ELECTRIC & GAS- 0.39%
Hongkong Electric Holdings Ltd.
(Hong Kong) 5,213,500 17.433 .20
VEBA AG (Germany) 340,450 13.516 .15
Hong Kong and China Gas Co. Ltd. (Hong
Kong) 2,401,800 3.868 .04
REAL ESTATE- 0.35%
Cheung Kong (Holdings) Ltd. (Hong Kong) 3,500,000 19.061 .22
Sun Hung Kai Properties Ltd. (Hong Kong) 840,000 6.818 .08
Hysan Development Co. Ltd. (Hong Kong) 1,960,000 4.703 .05
ELECTRONIC INSTRUMENTS- 0.18%
Scitex Corp. Ltd. (Israel) 835,000 15.761 .18
BUILDING MATERIALS & COMPONENTS- 0.02%
CEMEX, SA, Class A (Mexico) 400,125 1.535 .02
MISCELLANEOUS- 0.00%
Other equity-type securities in initial
period of acquisition 244.893 2.78
---------- ------
TOTAL EQUITY-TYPE SECURITIES
(cost:$5,236.241 million) 7,344.813 83.30
---------- ------
Principal
Amount
Bonds (Millions)
- --------------------------------------- ----------
FRENCH GOVERNMENT- 0.04%
France O.A.T. 9.50% June 1998 FF17.000 3.712 .04
---------- ------
TOTAL BONDS (cost: $2.657 million) 3.712 .04
---------- ------
TOTAL INVESTMENT SECURITIES (cost:
$5,238.898 million) 7,348.525 83.34
---------- ------
Short-Term Securities
- ------------------------------------------
CORPORATE SHORT-TERM NOTES- 13.32%
General Electric Capital Corp.
5.64%-5.71% due 11/2-12/4/95 $87.060 86.498 .98
Glaxo Wellcome plc 5.71%-5.74%
due 10/17-11/13/95 79.000 78.701 .89
J.C. Penney Funding Corp. 5.69%-5.72%
due 10/6-11/9/95 77.500 77.226 .88
Commerzbank U.S. Finance Inc. 5.69%-5.72%
due 10/16-11/15/95 70.300 70.035 .79
AT&T Corp. 5.64%-5.69% due 10/2-10/27/95 69.150 68.965 .78
Ford Credit Europe PLC 5.69%-5.72%
due 10/12-11/16/95 68.700 68.439 .78
Eli Lilly and Co. 5.70%-6.50%
due 10/2-12/7/95 64.650 64.351 .73
National Australia Funding (Delaware)
Inc. 5.64%-5.73% due 10/18-11/29/95 63.300 62.860 .71
American Express Credit Corp. 5.70%-5.73%
due 10/19-11/9/95 60.500 60.169 .68
PepsiCo, Inc. 5.70% due 10/13-10/30/95 49.500 49.343 .56
E.I. du Pont de Nemours and Co. 5.69%-5.70%
due 10/17-10/24/95 48.000 47.846 .54
Central and South West Corp. 5.72%-5.73%
due 10/10-11/8/95 47.900 47.678 .54
Commonwealth Bank of Australia 5.63%-5.65%
due 11/21-11/30/95 45.000 44.585 .51
Daimler-Benz North America Corp.
5.71%-5.73% due 10/4-10/19/95 41.800 41.733 .47
Chevron Oil Finance Co. 5.70%-5.74%
due 10/12-11/7/95 39.200 39.050 .44
Mobil Australia Finance Co., Inc.
5.68%-5.69% due 10/3-10/26/95 34.710 34.639 .39
Siemens Corp. 5.65%-5.72%
due 10/18-11/21/95 30.600 30.409 .35
Toyota Motor Credit Corp. 5.64%-5.67%
due 10/5-11/17/95 28.500 28.378 .32
ABN AMRO North America Finance Inc.
5.65%-5.72% due 10/2-11/14/95 26.000 25.891 .29
Exxon Imperial U.S. Inc. 5.70% due 10/23/95 24.600 24.510 .28
Canada Bills 5.55%-5.62% due 11/1-12/6/95 23.900 23.671 .27
Coca-Cola Co. 5.62%-5.70%
due 10/12-11/17/95 23.500 23.372 .27
Halifax Building Society 5.68% due 10/31/95 22.700 22.588 .26
Ford Motor Credit Co. 5.70% due 10/19/95 20.000 19.939 .23
Abbey National North America 5.67%
due 11/9/95 18.500 18.382 .21
Barclays Bank of Canada 5.70%
due 10/10/95 15.000 14.976 .17
CERTIFICATES OF DEPOSIT-2.04%
Canadian Imperial Bank of Commerce
5.73%-5.78% due 10/24-11/27/95 65,000 64.998 .74
ABN AMRO Bank NV 5.75%-5.78%
due 10/23-11/1/95 45,000 45.000 .51
Societe Generale 5.74% due 11/15-12/5/95 45,000 44.996 .51
Abbey National Treasury Services PLC
Eurocertificate 5.75% due 10/25/95 15,000 14.999 .17
ABN-AMRO Bank NV Eurocertificate 5.76%
due 10/25/95 10,000 10.000 .11
FEDERAL AGENCY DISCOUNT NOTES- 1.17%
Federal Home Loan Mortgage Corp.
5.61%-5.62% due 11/6-11/10/95 88.479 87.930 1.00
Federal National Mortgage Assn.
5.61% due 11/3/95 15.000 14.922 .17
---------- ------
NON-U.S. GOVERNMENT SHORT-TERM NOTES- 0.17%
Netherlands 6.50% 4/15/96 NLG23.000 14.560 .17
---------- ------
TOTAL SHORT-TERM SECURITIES
(cost: $1,467.468 million) 1,471.639 16.70
Excess of payables over cash and
receivables 3.164 .04
---------- ------
TOTAL SHORT-TERM SECURITIES AND NET CASH 1,468.475 16.66
---------- ------
NET ASSETS $8,817.000 100.00%
========== ======
</TABLE>
/1/ Purchased in a private placement transaction; resale to the public may
require registration or may extend only to qualified institutional buyers.
/2/ Non-income-producing securities
See Notes to Financial Statements
<PAGE>
EQUITY-TYPE SECURITIES
APPEARING IN THE PORTFOLIO
SINCE MARCH 31, 1995
Alumax
Avon Products
Barrick Gold
Bergesen d.y.
Carnival Cruise Lines
Carter Holt Harvey
Chase Manhattan Bank
Cisco Systems
Colgate-Palmolive
Dow Jones & Co.
Duracell International
Georgia Gulf
Groupe Danone
Hitachi
Johnson & Johnson
Kymmene
Louisiana-Pacific
LTV
LVMH Moet Hennessy Louis Vuitton
Mattel
Nippon Yusen
Petrofina
SGS-THOMSON Microelectronics
Sybase
Telecommunicacoes Brasileiras
Telefonica de Argentina
Toys "R" Us
TRINOVA
Unocal
Usinor Sacilor
Viacom
Wal-Mart Stores
Weyerhaeuser
YPF
EQUITY-TYPE SECURITIES
ELIMINATED FROM THE PORTFOLIO
SINCE MARCH 31, 1995
Amoco
AMR
Banco Bilbao Vizcaya
BCE
China Light & Power
Fletcher Challenge
Imperial Oil
Lotus Development
Microsoft
Swiss Bank Corp.
Timken
Tokio Marine and Fire Insurance
TransCanada PipeLines
Volkswagen
Whirlpool
New Perspective Fund
Financial Statements
<TABLE>
<CAPTION>
Statement of Assets and Liabilities (dollars in
at September 30, 1995 millions)
- ------------------------------------- ---------- -----------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $5,238.898) $7,348.525
Short-term securities
(cost: $1,467.468) 1,471.639
Cash 1.408
Receivables for-
Sales of investments $5.872
Sales of fund's shares 22.013
Forward currency contracts 2.551
Dividends and accrued interest 17.507 47.943
---------- -----------
8,869.515
Liabilities:
Payables for-
Purchases of investments 43.383
Repurchases of fund's shares 3.984
Management services 3.117
Accrued expenses 2.031 52.515
---------- -----------
Net Assets at September 30, 1995-
Equivalent to $16.98 per share on
519,110,229 shares of $1 par value
capital stock outstanding (authorized
capital stock--600,000,000 shares) $8,817.000
===========
Statement of Operations (dollars in
for the year ended September 30, 1995 millions)
- ------------------------------------- ---------- -----------
Investment Income:
Income:
Dividends $ 128.996
Interest 87.691 $ 216.687
----------
Expenses:
Management services fee 32.015
Distribution expenses 15.602
Transfer agent fee 7.497
Reports to shareholders .801
Registration statement and prospectus .778
Postage, stationery and supplies 1.211
Directors' and Advisory Board fees .281
Auditing and legal fees .073
Custodian fee 2.384
Taxes other than federal
income tax .103
Other expenses .042 60.787
---------- -----------
Net investment income 155.900
-----------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 308.729
Net increase in unrealized
appreciation on investments 840.974
Net unrealized appreciation on
open forward currency contracts 2.551 843.525
---------- -----------
Net realized gain and unrealized appreciation
on investments 1,152.254
-----------
Net Increase in Net Assets Resulting
from Operations $1,308.154
===========
- ------------------------------------- ---------- -----------
Statement of Changes in Net Assets (dollars in
millions)
Year ended
September 30
1995 1994
- ------------------------------------- ---------- -----------
Operations:
Net investment income $155.900 $80.563
Net realized gain on investments 308.729 329.640
Net unrealized appreciation
on investments 843.525 178.640
---------- -----------
Net increase in net assets
resulting from operations 1,308.154 588.843
---------- -----------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (105.752) (59.900)
Distributions from net realized gain on
investments (355.971) (128.427)
---------- -----------
Total dividends and distributions (461.723) (188.327)
---------- -----------
Capital Share Transactions:
Proceeds from shares sold: 136,794,997
and 119,000,193 shares, respectively 2,129.286 1,798.198
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 30,235,980 and 11,574,470 shares,
respectively 432.534 169.717
Cost of shares repurchased: 55,659,438
and 33,593,016 shares, respectively (869.751) (506.668)
---------- -----------
Net increase in net assets resulting from
capital share transactions 1,692.069 1,461.247
---------- -----------
Total Increase in Net Assets 2,538.500 1,861.763
Net Assets:
Beginning of year 6,278.500 4,416.737
---------- -----------
End of year (including undistributed
net investment income: $96.071
and $45.923, respectively) $8,817.000 $6,278.500
========== ===========
</TABLE>
See Notes to Financial Statements
<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 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, including forward currency contracts, are valued at the mean
of their quoted bid and asked prices. Short-term securities with 60 days or
less to maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities and other assets and liabilities, including forward
currency contracts, 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 fund does not identify the portion of each
amount shown in the fund's statement of operations under the caption "Realized
Gain and Unrealized Appreciation on Investments" that arises from changes in
non-U.S. currency exchange rates.
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 $2,384,000 includes $205,000 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, 1995, net unrealized appreciation on investments,
excluding forward currency contracts, for federal income tax purposes
aggregated $2,114,787,000, of which $2,280,553,000 related to appreciated
securities and $165,766,000 related to depreciated securities. During the
year ended September 30, 1995, the fund realized, on a tax basis, a net capital
gain of $306,883,000 on securities transactions. Net gains related to non-U.S.
currency transactions of $4,685,000 were treated as ordinary income for federal
income tax purposes. The capital gain distribution paid in December 1994
includes $1,267,000 of realized non-U.S. currency gains. The cost of portfolio
securities, excluding forward currency contracts, for federal income tax
purposes was $6,705,378,000 at September 30, 1995.
3. The fee of $32,015,000 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; and 0.395%
of such assets in excess of $6.5 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, 1995,
distribution expenses under the Plan were $15,602,000. As of September 30,
1995, accrued and unpaid distribution expenses were $1,442,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $7,497,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $8,330,000 (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 of the fund who are unaffiliated with
CRMC may elect to defer part or all of the fees earned for services as members
of the Board. Amounts deferred are not funded and are general unsecured
liabilities of the fund. As of September 30, 1995, aggregate amounts deferred
were $150,000.
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, 1995, accumulated undistributed net realized gain on
investments was $272,771,000 and paid-in capital was $5,809,281,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $2,511,035,000 and $1,322,647,000, respectively,
during the year ended September 30, 1995.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
year ended September 30, 1995, such non-U.S. taxes were $13,148,000. Net
realized currency gains on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $2,154,000 for the year ended
September 30, 1995.
The fund purchases forward currency contracts in anticipation of, or to
protect itself against, fluctuations in exchange rates. The fund's use of
forward currency contracts involves, to varying degrees, elements of market
risk in excess of the amount recognized in the statement of assets and
liabilities. The contracts are recorded at market value and reflect the extent
of the fund's involvement in these financial instruments. Risks may arise upon
entering these contracts from the potential inability of counterparties to meet
the terms of their contracts and from the possible movements in non-U.S.
exchange rates and securities values underlying these instruments. At
September 30, 1995, the fund had outstanding forward currency contracts to sell
non-U.S. currencies as follows:
Non-U.S. Currency Sale Contracts
<TABLE>
<CAPTION>
Contract Amount U.S. Valuation at 9/30/95
Unrealized
Non-U.S. U.S. Amount Appreciation
Japanese Yen
<S> <C> <C> <C> <C>
expiring 1/22/96 Yen 1,900,000,000 $22,023,879 $19,472,612 $2,551,267
</TABLE>
- --------
<PAGE>
Per-Share Data and Ratios
<TABLE>
<CAPTION>
Year ended
September
30
1995 1994 1993 1992 1991
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $15.40 $14.21 $12.25 $11.77 $10.16
------ ------ ------ ------- -------
Income from Investment Operations:
Net investment income .31 .22 .17 .21 .29
Net realized and unrealized gain
on investments 2.35 1.54 2.04 .71 2.05
------ ------ ------ ------- -------
Total income from
investment operations 2.66 1.76 2.21 .92 2.34
------ ------ ------ ------- -------
Less Distributions:
Dividends from net
investment income (.237) (.173) (.178) (.24) (.30)
Dividends from net realized
non-U.S. currency gains (1) (.003) (.027) (.022) - -
Distributions from net
realized gains (.840) (.370) (.050) (.20) (.43)
------ ------ ------ ------- -------
Total distributions (1.08) (.57) (.25) (.44) (.73)
------ ------ ------ ------- -------
Net Asset Value, End of Year $16.98 $15.40 $14.21 $12.25 $11.77
====== ====== ======= =======
Total Return(2) 18.63% 12.61% 18.34% 8.04% 23.86%
Ratios/Supplemental Data:
Net assets, end of
year (in millions) $8,817 $6,279 $4,417 $3,082 $2,213
Ratio of expenses to average
net assets .83% .84% .87% .85% .86%
Ratio of net income to
average net assets 2.12% 1.48% 1.40% 1.82% 2.80%
Portfolio turnover rate 22.40% 25.33% 15.02% 6.43% 8.16%
</TABLE>
(1) Realized non-U.S. currency gains are treated as ordinary income for federal
income tax purposes.
(2) This was calculated without deducting a sales charge. The maximum sales
charge is 5.75% of the fund's offering price.
