[The American Funds Group(r)]
New Perspective Fund
A Patient Outlook
[cover: the "map" of the human genome]
2000 Annual Report
for the year ended September 30
New Perspective Fund(r) seeks long-term growth of capital through investments
all over the world, including the United States.
New Perspective Fund is one of the 29 American Funds, the nation's
third-largest mutual fund family. For nearly seven decades, Capital Research
and Management Company, the American Funds adviser, has invested with a
long-term focus based on thorough research and attention to risk.
RESULTS AT A GLANCE
(for the periods ended September 30, 2000,
<TABLE>
<CAPTION>
with all distributions reinvested)
Average Annual Compound Returns
Lifetime
One Year Five Years Ten Years (since
Total Return March 13, 1973)
<S> <C> <C> <C> <C>
New Perspective Fund +18.9% +19.1% +17.6% +15.5%
Morgan Stanley Capital
International Indexes:/1/
World Index +8.5% +15.1% +14.2% +12.1%
USA Index +11.5% +22.0% +19.8% +13.4%
Rank versus Lipper global
funds/2/ 110 of 258 29 of 117 1 of 26 1 of 5
</TABLE>
/1/The indexes are unmanaged.
/2/Source: Lipper Inc. Rankings are based on total return and do not reflect
the effects of sales charges.
Fund results in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Please see page 5
for Class A and B share results with relevant sales charges deducted.
There are two ways to invest in New Perspective Fund. Class A shares are
subject to a 5.75% maximum up-front sales charge that declines for accounts of
$25,000 or more. Class B shares, which are not available for certain
employer-sponsored retirement plans, have no up-front sales charge. They are,
however, subject to additional expenses of approximately 0.75% a year over the
first eight years of ownership. If redeemed within six years, they may also be
subject to a contingent deferred sales charge (5% maximum) that declines over
time. Because expenses are first deducted from income, dividends for Class B
shares will be lower.
FIGURES SHOWN ARE PAST RESULTS AND ARE NOT PREDICTIVE OF FUTURE RESULTS. SHARE
PRICE AND RETURN WILL VARY, SO YOU MAY LOSE MONEY. INVESTING FOR SHORT PERIODS
MAKES LOSSES MORE LIKELY. INVESTMENTS ARE NOT FDIC-INSURED, NOR ARE THEY
DEPOSITS OF OR GUARANTEED BY A BANK OR ANY OTHER ENTITY. INVESTING OUTSIDE THE
UNITED STATES IS SUBJECT TO ADDITIONAL RISKS, SUCH AS CURRENCY FLUCTUATIONS,
POLITICAL INSTABILITY, DIFFERING SECURITIES REGULATIONS AND PERIODS OF
ILLIQUIDITY, WHICH ARE DETAILED IN THE FUND'S PROSPECTUS.
ABOUT OUR COVER: The "map" of the human genome, completed this past June, is
expected to revolutionize our approach to medicine. Although practical
applications are still years away, New Perspective Fund's research analysts are
closely following developments as they unfold.
FELLOW SHAREHOLDERS:
Global stock markets seesawed dramatically during fiscal 2000. Propelled by a
boom in technology stocks, equity prices soared through March, only to reverse
course as surging oil prices, rising interest rates and dampened earnings
expectations adversely affected markets. Technology stocks led the way down as
well, although most other sectors fell.
In this volatile environment, we are pleased to report that New Perspective
Fund garnered solid returns for the fiscal year ended September 30. Although
the fund was not immune to the declines in the second half of the fiscal year,
losses were more than offset by the 30% gain achieved from last October through
March. The result was a 12-month return of 18.9% for shareholders who
reinvested the income dividend of 11 cents a share and the capital gain
distribution of $2.34 a share paid in December 1999. The fund's capital gain
reflects the profitable sale of a number of long-held securities we believed
had become overvalued.
New Perspective's 12-month increase was well ahead of the 8.5% return of the
unmanaged Morgan Stanley Capital International (MSCI) World Index; the index
measures 22 major stock markets, including the United States. It was in line
with the average 18.8% return of the 258 global stock funds tracked by Lipper
Inc.
Over meaningful time frames, New Perspective continues to lead its peers. Once
again, it ranked first among the five global funds in existence over its
lifetime. Rankings and returns over other periods are shown in the table at
left.
GLOBAL BOOM AND BUST
New Perspective's fiscal year began in October 1999, coinciding with the start
of a powerful rally in so-called new economy stocks. The run-up was driven by a
frenzy for all things Internet-related, but beneficiaries included a wide range
of technology, media and telecommunications stocks. Investor ardor cooled
suddenly in early spring amid rising interest rates, soaring prices and
mounting concerns about profit growth. Technology stocks fell sharply,
eventually taking down many other sectors as well.
That divergence - between a soaring first half-year and a more sobering second
half - was reflected in the 12-month returns of many global equity markets.
In the U.S., where New Perspective has the greatest concentration of assets,
stock prices closed the fiscal year 11.5% higher.* Farther north, the Canadian
stock market was the standout for the year, rising 58.2% in U.S. dollars. In
Europe, meanwhile, equity markets enjoyed a very strong first half, only to be
hobbled later in the year by a steady erosion in the value of the euro against
the U.S. dollar. Thus, France returned an impressive 40.0% in local currency,
but 16.0% in dollars; Germany rose 28.1% for the year, but U.S. investors saw
only a 6.2% gain; similarly, the United Kingdom returned 7.2%, which became a
3.8% decline in dollars. To some extent, the currency weakness benefited
European exporters, which could sell goods more cheaply abroad; on the flip
side, it undermined profits for U.S.-based multinationals, which were not only
forced to sell products more expensively, but had to translate their European
earnings into fewer dollars.
*All country returns are based on MSCI indexes, expressed in dollar terms and
assume reinvestment of dividends, unless otherwise indicated.
[Begin Sidebar]
WHERE NEW PERSPECTIVE'S
<TABLE>
<CAPTION>
ASSETS WERE INVESTED
9/30/2000 9/30/1999
<S> <C> <C>
Asia/Pacific Rim 15.9% 16.5%
Japan 9.7 10.9
Australia 2.6 2.6
Taiwan 1.8 1.6
South Korea 1.7 1.1
New Zealand .1 .3
Europe 28.2% 29.1%
United Kingdom 9.8 8.7
France 3.5 4.1
Netherlands 3.2 3.2
Germany 2.6 5.0
Finland 2.1 1.4
Sweden 1.8 1.8
Italy 1.7 1.4
Ireland 1.3 .4
Switzerland 1.0 1.2
Norway .7 .6
Denmark .3 .5
Spain .2 .8
North America 41.2% 38.0%
United States 35.2 31.6
Canada 4.3 4.9
Mexico 1.7 1.5
Other 2.1% 3.5%
Cash &
Equivalents 12.6% 12.9%
100.0% 100.0%
</TABLE>
[End Sidebar]
[Begin Sidebar]
New Perspective Fund continued to lead its peers, once again ranking first
among the five global funds in existence over its lifetime.
<TABLE>
<CAPTION>
NEW PERSPECTIVE FUND VERSUS THE MAJOR WORLD INDEXES
12-Month Total Return Lifetime Total Return
World's Major Stock Markets/1/ (10/1/1999-9/30/2000) (3/13/1973-9/30/2000)
(listed by market capitalization Local Adjusted to Local Adjusted to
as of 9/30/2000) currency U.S.$/2/ currency U.S.$/2/
<S> <C> <C> <C> <C>
United States/3/
MSCI USA Index - 11.5% - 3,068.0%
Japan -0.6% -2.0 494.2% 1,324.5
United Kingdom 7.2 -3.8 5,182.6 3,072.6
France 40.0 16.0 4,727.5 2,807.7
Germany 28.1 6.2 1,859.7 2,474.7
Canada 62.0 58.2 2,270.9 1,474.2
Netherlands 26.5 4.8 5,714.6 6,478.5
Italy 27.5 5.7 3,919.8 935.0
Switzerland 10.1 -4.4 1,532.0 2,941.9
Australia 20.2 -0.3 2,781.8 1,011.2
Sweden 56.5 33.2 19,557.8 8,912.2
Spain 27.1 5.3 3,236.4 932.3
Hong Kong 11.8 11.3 2,005.7 1,276.2
Belgium 0.6 - 16.7 3,480.1 2,893.4
Singapore -6.2 -8.4 345.8 540.4
MSCI World Index/4/ - 8.5 - 2,219.8
New Perspective Fund - 18.9% - 5,218.9%
</TABLE>
/1/All figures include the reinvestment of dividends. Returns for international
indexes are with gross dividends reinvested (i.e., without local withholding
taxes removed).
/2/Figures adjusted to reflect foreign exchange fluctuations relative to the
U.S. dollar.
/3/United States market represented by the U.S. component of MSCI World Index;
all other markets were computed by Capital International Perspective S.A. and
are included in MSCI World Index. All indexes are unmanaged.
/4/Includes the major stock markets throughout the world, weighted by size and
adjusted to reflect foreign exchange fluctuation relative to the U.S. dollar.
U.S. companies currently represent approximately 50% of the total index.
[End Sidebar]
Stock prices in Japan -.0%) also lost steam during the year as confidence waned
in the government's ability to stanch the flow of corporate bankruptcies and
stimulate a recovery in the near future. Even technology stocks, which had
roared ahead earlier in the period, fell steeply during the summer amid signs
that worldwide demand for personal computers was softening. Elsewhere, a
surprisingly weak Australian dollar hurt stock prices there; they rose 20.2% in
local currency, but fell 0.3% when measured in U.S. dollars.
RESEARCH UNCOVERS THE BRIGHT SPOTS
As we have frequently mentioned in these reports, we set our sights squarely on
the long-term prospects of individual companies, not regions or industries. The
benefits of this emphasis became apparent during the year's roller coaster
ride. Good stock selection early on helped cushion the fund from the worst of
the declines. In many cases, individual holdings did significantly better than
the markets in which they are traded.
That was true for a number of our technology positions. We had been investing
in the sector selectively, concentrating on nimble, mid-sized firms - such as
Advanced Micro Devices (+175%), Murata (+37%) and Rohm (+31%) - and assiduously
avoiding riskier "dot-com" ventures that had grabbed investors' attention. When
Internet stocks tumbled from March to May, many by as much as 80% to 90% from
their highs, the fund's holdings were considerably more resilient.
New Perspective's larger holdings, many of which have been a part of the
portfolio for some time, generally fared quite well. Among New Perspective's 10
biggest positions, seven increased in price by double digits, as the table on
page 3 shows. They included pharmaceutical firms AstraZeneca and Pfizer, media
conglomerates Viacom, Time Warner and News Corp., and telecom giants Nokia and
Telefonos de Mexico. Together, these holdings account for more than 13% of the
fund's net assets. Only three of the 10 - Vodafone, Philip Morris and Bank of
America - declined over the year.
Global research, a hallmark of all of the American Funds, helped uncover other
bright spots. Based on the recommendations of the fund's health care analysts,
for example, shareholders were well-positioned to benefit from a rebound in
drug company stocks during the year. We had been increasing our exposure to
promising pharmaceutical companies a year or more ago, when stock prices were
relatively low. That strategy paid off handsomely during the period. In
addition to AstraZeneca and Pfizer, Genentech (+154%), Pharmacia (+69%) and
Elan (+63%) did extremely well. Shionogi (+127%) and Fujisawa (+89%), both
based in Japan, also appreciated strongly, as did Chugai and Yamanouchi, which
were added to the portfolio during the year. Teva Pharmaceuticals, an Israeli
producer of generic drugs, was New Perspective's top gainer for the year,
rising 191%. (You can read more about New Perspective's pharmaceutical
investments in the article beginning on page 6.)
Telecommunications take a breather
At the other end of the spectrum, telecommunications stocks were taken sharply
lower with the springtime technology rout, following a long period of
exceptional gains. Sprint (-46%), WorldCom (-37%) and AT&T (-32%) were hard
hit; Vodafone, as we mentioned earlier, likewise took a breather. The bubble
preceding the decline provided an opportunity to trim our exposure to a number
of long-term holdings and look elsewhere for better valuations. Still, New
Perspective's telecommunications investments have been enormously profitable
for shareholders; longer term, forward-thinking companies should continue to
provide good returns. In the case of Sprint and WorldCom, we used the decline
to add to our positions.
[Begin Sidebar]
NEW PERSPECTIVE'S
10 LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
(as of 9/30/2000)
Percent Change from
Percent of 10/1/1999-9/30/2000
Company Net Assets Country (in U.S. dollars)
<S> <C> <C> <C>
AstraZeneca 3.14% United Kingdom +25.1%
Pfizer 2.19 United States +25.0
Vodafone Group 2.04 United Kingdom -22.2
Viacom 2.02 United States +38.2
Nokia 1.85 Finland +78.9
Time Warner 1.52 United States +28.8
News Corp. 1.39 Australia +90.1
Telefonos de Mexico 1.36 Mexico +49.3
Philip Morris 1.31 United States -13.9
Bank of America 1.21 United States - 5.9
</TABLE>
[End Sidebar]
A SYSTEM FOR ALL SEASONS
In September, U.S. stock prices dropped precipitously, falling some 5.5% over
the month; global markets followed a similar trajectory. The recent downturn
may have washed away some of the speculative froth we have been witnessing, but
it remains to be seen whether the worst is behind us. Indeed, with a new
American president about to take office, and investors taking their cues from
the Nasdaq Index and other technology benchmarks, the skittishness is likely to
continue for some time.
Difficult markets such as the one we are experiencing highlight a crucial
benefit of the multiple portfolio counselor system, the investment strategy
employed by all of the American Funds. New Perspective Fund has seven portfolio
counselors, each of whom contributes a particular style and strength to the
investment process. They also bring a depth of investment experience, ranging
from 12 to 37 years. They are further supported in their efforts by 44 research
analysts, most of whom manage assets as well. Over the years, that range of
perspectives has contributed to a consistency of results - through all market
cycles - that a single manager would find almost impossible to match.
Recently, many investors have been unnerved by the confluence of rising oil
prices, slowing economic growth and troubles in the Middle East - circumstances
that are eerily reminiscent of 1991 and the early 1970s, when New Perspective
Fund began. What we learned then, and continue to believe today, is that good
companies will ultimately reward the patient shareholder, and that for
long-term investors, difficult times can also be times of opportunity.
We look forward to reporting to you in six months.
Cordially,
/s/ Walter P. Stern
Walter P. Stern
Chairman of the Board
/s/ Gina H. Despres
Gina H. Despres
President
November 9, 2000
THE VALUE OF A LONG-TERM PERSPECTIVE
There have always been reasons not to invest. If you look beyond the negative
headlines, however, you will find that, despite occasional stumbles, financial
markets have tended to reward investors over the long term. Active management -
bolstered by experience and careful research - can add even more value: As the
chart below shows, over its lifetime, New Perspective Fund has done
demonstrably better than its relevant benchmarks.
Dividends, particularly when reinvested, have accounted for a large portion of
the fund's overall results. The table beneath the chart breaks down the fund's
year-by-year total returns into their income and capital components.
Low fund expenses, low turnover rate
(for the 12 months ended September 30, 2000)
New Perspective Fund's expense ratio was 0.79% in fiscal 2000. That's only $79
for every $10,000 invested and less than half of the 1.77% average expense
ratio for global equity funds, as measured by Lipper Inc.
The fund's turnover rate (the rate at which holdings are bought and sold) is
also low, keeping transaction costs and tax consequences contained. New
Perspective's 34% turnover rate means that stocks are held for an average of
2.9 years. The average global equity fund has a turnover rate of 93%, or an
average holding period of only 1.1 years, according to Lipper.
HOW A $10,000 INVESTMENT HAS GROWN
Average Annual Compound Returns
<TABLE>
<CAPTION>
(for periods ended September 30, 2000)
10 Years 5 Years 1 Year
<S> <C> <C> <C>
Class A Shares
reflecting 5.75%
maximum sales charge +16.93% +17.70% +12.10%
Class B Shares 3/15 - 9/30/2000
reflecting 5% maximum contingent
deferred sales charge (CDSC)
(payable only if shares are sold) -9.95%*
not reflecting the CDSC -5.21%*
</TABLE>
*Not offered before March 15, 2000. Results are not annualized.
[begin mountain chart]
$501,384/1,2/
New Perspective Fund
with dividends
reinvested
$316,742/3/
MSCI USA Index
with dividends
reinvested
$247,640/1/
New Perspective Fund
excluding dividends
$232,048/3/
MSCI World Index
with dividends
reinvested
$10,000/1/
original investment
<TABLE>
<CAPTION>
New
Perspective New
Year Fund Perspective MSCI USA MSCI World
ended TOTAL VALUE Fund Index with Index with
September Dividends excluding dividends dividends
30 Reinvested dividends reinvested reinvested
<S> <C> <C> <C> <C>
1973# $9,938 9,938 9,644 9,496
1974 7,402 7,163 5,796 5,886
1975 10,769 9,952 7,954 7,647
1976 12,720 11,422 10,379 9,328
1977 13,050 11,455 9,925 9,685
1978 17,342 14,861 10,953 11,895
1979 20,100 16,796 12,042 13,362
1980 24,866 20,250 14,200 15,945
1981 25,315 19,890 13,948 14,919
1982 27,151 19,984 15,458 15,314
1983 39,093 27,040 22,064 21,629
1984 39,494 26,488 23,019 22,861
1985 45,578 29,654 26,527 28,617
1986 63,273 40,227 34,776 45,581
1987 94,727 59,058 49,353 65,809
1988 81,233 49,459 42,818 61,905
1989 103,968 61,424 56,868 77,872
1990 98,896 57,024 52,008 61,430
1991 122,493 68,768 68,580 76,958
1992 132,337 72,828 76,198 76,629
1993 156,604 84,828 86,165 92,637
1994 176,345 94,260 89,637 100,116
1995 209,200 110,088 117,232 115,102
1996 231,461 119,477 142,355 131,445
1997 300,835 152,607 199,607 163,819
1998 304,530 152,236 221,657 164,657
1999 421,569 208,988 284,022 213,911
2000 501,384 247,640 316,742 232,048
</TABLE>
<TABLE>
<CAPTION>
Year ended September 30 1973/#/ 1974 1975 1976 1977 1978 1979
<S> <C> <C> <C> <C> <C> <C> <C>
New Perspective Fund
Total Value
Dividends reinvested - $325 401 337 280 318 444
Value at year-end/1/ $9,938 7,402 10,769 12,720 13,050 17,342 20,100
Total Return (0.6)% (25.5) 45.5 18.1 2.6 32.9 15.9
Year ended September 30 1980 1981 1982 1983 1984 1985 1986
New Perspective Fund
Total Value
Dividends reinvested 501 931 1,667 1,830 1,205 1,196 1,178
Value at year-end/1/ 24,866 25,315 27,151 39,093 39,494 45,578 63,273
Total Return 23.7 1.8 7.3 44.0 1.0 15.4 38.8
Year ended September 30 1987 1988 1989 1990 1991 1992 1993
New Perspective Fund
Total Value
Dividends reinvested 1,393 1,820 2,605 2,617 2,979 2,524 2,172
Value at year-end/1/ 94,727 81,233 103,968 98,896 122,493 132,337 156,604
Total Return 49.7 (14.2) 28.0 (4.9) 23.9 8.0 18.3
Year ended September 30 1994 1995 1996 1997 1998 1999 2000
New Perspective Fund
Total Value
Dividends reinvested 2,231 2,813 4,129 4,365 4,388 3,041 1,767
Value at year-end/1/ 176,345 209,200 231,461 300,835 304,530 421,569 501,384
Total Return 12.6 18.6 10.6 30.0 1.2 38.4 18.9
</TABLE>
Average annual compound return for 27-1/2 years 15.3%/1,2/
/#/For the period March 13, 1973 (commencement of operations), through
September 30, 1973.
/1/These figures, unlike those shown elsewhere in this report, reflect payment
of the maximum sales charge of 5.75% on the $10,000 investment. Thus, the net
amount invested was $9,425. As outlined in the prospectus, the sales charge is
reduced for larger investments. The maximum intitial sales charge was 8.5%
prior to July 1, 1988. There is no sales charge on dividends or capital gain
distributions that are reinvested in additional shares. No adjustment has been
made for income or capital gain taxes.
/2/Includes reinvested dividends of $49,457 and reinvested capital gain
distributions of $157,798.
/3/The indexes are unmanaged and do not reflect the effects of sales charges,
commissions or expenses. Past results are not predictive of future results.
[end chart]
A PATIENT OUTLOOK
A spotlight on New Perspective's pharmaceutical investments
[two circular illustrations of genetic diagrams]
[Begin Sidebar]
Ancient Greeks believed that human health was regulated by four "humors." Three
thousand years later, blood, phlegm, and black and yellow bile have given way
to four cryptic letters - "A," "C," "G" and "T" - which form the rungs of the
DNA double helix. As technology makes our genetic information increasingly
accessible, pharmaceutical companies are using these building blocks, alongside
more traditional scientific techniques, to develop remarkable weapons in the
battle against major diseases.
[End Sidebar]
For shareholders in New Perspective Fund, a sizable list of pharmaceutical
stocks has proven to be very rewarding over the long term. In the last year,
the sector has met with renewed enthusiasm from the marketplace, but as with
any security we consider for the fund, investing in drug companies is never a
snap decision.
Our pharmaceutical analysts take a long view, carefully tracking the progress
of breakthrough therapies and getting to know the firms and managements that
produce them very, very well. It's an effort that requires patience,
painstaking research and a global perspective - all qualities that dovetail
neatly into your fund's long-term investment strategy.
On the following pages, we'll spotlight New Perspective's pharmaceutical
holdings and show how going the extra mile helps us understand this complex
industry and identify long-term growth opportunities for the fund.
STALKING THE ELUSIVE BLOCKBUSTER
The pharmaceutical industry has made enormous strides in the past decade, both
in terms of revenues and the sheer sophistication of the treatments that have
been developed.
Progress should continue to be brisk. Longer life spans and a population of
aging baby boomers will continue to generate powerful demand for drugs that
treat ailments common among the aging, such as cancer, Alzheimer's,
cardiovascular disease and depression. Health care providers, under pressure to
trim budgets, have turned to drugs as a cost-effective way to prevent diseases
and hasten their cures. Breakthrough treatments, like combination therapy for
HIV/AIDS, have gained wider acceptance. Meanwhile, the FDA and regulatory
agencies in other countries have continued to shorten approval times, helping
to speed products to market. Ultimately, however, the greatest stimulus may be
the most obvious one. "Everyone wants to live," says Jonathan Knowles, a
portfolio counselor and pharmaceutical analyst based in London. "Drugs help you
stay alive."
For pharmaceutical firms, the economic incentives can be compelling. Global
drug sales topped $340 billion in 1999, an increase of 12% from the previous
year. "A truly novel compound, successfully developed and marketed, can
catapult a company's fortunes," notes Jonathan. To cite just one example,
AstraZeneca's blockbuster anti-ulcer medicine, Prilosec, which is co-marketed
by Merck in the U.S., brought in sales of nearly $6 billion last year.
On the flip side are formidable financial risks. Blockbusters are like needles
in a biochemical haystack. Bringing a new drug to market costs an average of
$500 million, and can take a decade or more of research and development. The
rate of failure is frustratingly high: For every 5,000 compounds in a company's
molecular "library," one will reach the pharmacist's shelf. Less than one-third
will make a profit. Once on the market, patent protection is relatively brief -
20 years from the date of application - giving pharmaceutical firms a finite
time to recoup the costs of their investment before generic copies can be sold.
Finally, politics can have a big impact on the regulatory environment in which
drug companies operate.
In the highly competitive world of pharmaceuticals, companies that do not
continuously develop innovative products simply cannot thrive. To help offset
costs and minimize risks, many of the giant firms have chosen to join forces. A
number have merged, including in the last year alone: Pfizer and
Warner-Lambert; Glaxo Wellcome and SmithKline Beecham; and Pharmacia & Upjohn
and Monsanto. Some have also linked up through co-marketing agreements and
other joint ventures. Pharmacia, to name one, is co-marketing Celebrex, its new
anti-arthritis drug, with Pfizer, and has licensed Japanese rights to
Yamanouchi.
[begin line chart]
HOW PHAMACEUTICAL STOCKS HAVE GROWN
(indexed to 100)
9/30/90 100.00
3/31/91 129.76
9/30/91 141.34
3/31/92 147.46
9/30/92 150.08
3/31/93 135.63
9/30/93 141.34
3/31/94 140.04
9/30/94 154.92
3/31/95 180.01
9/30/95 211.47
3/31/96 245.14
9/30/96 269.26
3/31/97 302.56
9/30/97 367.00
3/31/98 450.26
9/30/98 455.48
3/31/99 539.87
9/30/99 477.40
3/31/00 485.53
9/30/00 550.92
Source: MSCI Health and Personal Care Index. Figures shown price change from
10/1/1990-9/30/2000.
[end chart]
THE BIOTECH CONNECTION
Biotechnology has provided a rich vein to mine. The marriage of technology and
genetics has yielded an array of new compounds. With new techniques - based on
recombinant DNA technology, monoclonal antibodies and genomics research - at
their disposal, scientists are analyzing and using information much more
efficiently than traditional methods would allow. "Biotechnology will play a
leading role in how we discover the next generation of breakthrough medicines,"
says Rick Beleson, a pharmaceutical analyst based in San Francisco.
[Begin Sidebar]
WORLD MARKET FOR PHARMACEUTICALS (BY SALES)
(for 1999)
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
U.S. 39%
Europe 27%
Japan 16%
Latin America 7%
China 2%
Canada 2%
Rest of world 7%
</TABLE>
[end chart]
The modern drug industry was born in 1897 with the invention of aspirin by a
German chemist named Felix Hoffman.
[photograph: Felix Hoffman]
Collaboration - on a global basis - helps New Perspective's analysts react
quickly when investment opportunities arise.
[photograph: close-up of laboratory work]
[Begin Sidebar]
Pfizer pioneered the mass production of penicillin in 1942.
[photographs of laboratory work]
Pharmaceutical companies create more than 90% of all medicines that come to
market; they spend $1 out of every $5 in revenue on research and development.
[photograph: close-up of medication]
NEW PERSPECTIVE'S PHARMACEUTICAL HOLDINGS* (AS OF SEPTEMBER 30, 2000)
AstraZeneca (U.K.)
Pfizer (U.S.)
Pharmacia (U.S.)
Elan (Ireland)
Teva (Israel)
Shionogi (Japan)
Bristol-Myers Squibb (U.S.)
Genentech (U.S.)
Glaxo Wellcome (U.K.)
Chugai (Japan)
Merck (U.S.)
Yamanouchi (Japan)
Fujisawa (Japan)
American Home Products (U.S.)
SmithKline Beecham (U.K.)
*Listed by percent of net assets and includes biotechnology holdings.
[End Sidebar]
New Perspective has not invested significantly in biotech stocks, which tend to
be quite volatile, but virtually all of the fund's pharmaceutical holdings have
exposure to biotechnology. Many large firms are helping to finance new
discoveries by contracting out a portion of their research to smaller firms,
striking joint venture deals or licensing marketing rights. Others are buying
the smaller companies outright. American Home Products, for example, recently
acquired Genetics Institute, which has developed a therapy that attaches a
poison to isolated cancer cells.
MONITORING THE PIPELINE
If research is the lifeblood of the drug industry, it is also a cornerstone of
New Perspective's investment strategy, as it is for all the American Funds. The
fund's investment professionals choose holdings on a company-by-company basis,
rather than by blanket judgments on a sector as a whole.
A core task of the fund's health care analysts is to closely follow drug
"pipelines" to monitor their progress. They talk to doctors, scientists and
company executives, read medical journals and attend medical conferences in an
effort to gauge a product's likelihood of success. "Because so many things can
change along the way, you have to make constant assessments of how a compound
is moving through the system," explains Jonathan, who holds a doctorate in
clinical immunovirology.
Rick Beleson was intrigued by a promising discovery made at Elan, an Irish
pharmaceutical company. Using mice specially developed to carry Alzheimer's,
Elan's scientists had isolated a protein that seemed to inhibit the growth of
brain plaques found to cause or exacerbate the disease. Clinical trials can
take years, but over time, Rick, who has a background in molecular biology,
grew increasingly impressed as test results continued to indicate that a
vaccine to protect humans was a possibility. "Projects can look really exciting
early on," he explains, "but may end up going nowhere. As investors, we reduce
risk not only by understanding the science behind the drugs, but by waiting for
later test phases, which are more conclusive."
[photograph: Jonathan Knowles and Dr. Tom McKillop]
[Begin Caption]
Jonathan Knowles (left), a health care analyst and New Perspective vice
president, meets with Dr. Tom McKillop, AstraZeneca's CEO, at the company's
London headquarters.
[End Caption]
GLOBAL SYNERGIES PAY OFF
Rick leverages his many hours of work by participating with more than a dozen
Capital analysts in a health care research "cluster." These men and women, who
are based in research offices in the U.S., Europe and Asia, meet twice a month
to brainstorm about products and treatments they've learned about. They
frequently travel together, visiting companies and attending conferences.
Constant collaboration allows them to broaden their base of knowledge, build
multiple perspectives - and react quickly when opportunities present
themselves.
"No analyst is an island," explains Mark Denning, a portfolio counselor based
in London. "You can't look at a company in just one country and hope to
understand it. That's become increasingly apparent as companies globalize.
Clusters are the culmination of our integrated approach to research."
[Begin Sidebar]
<TABLE>
<CAPTION>
BEST-SELLING PRESCRIPTION DRUGS (FOR 1999) Company Use
Drug
<S> <C> <C>
Prilosec AstraZeneca/Merck Anti-ulcer
Lipitor Pfizer Cholesterol reducer
Prozac Eli Lilly Antidepressant
Prevacid TAP Anti-ulcer
Zocor Merck Cholesterol reducer
Epogen Amgen Red blood cell stimulant
Zoloft Pfizer Antidepressant
Claritin Schering-Plough Antihistamine
Paxil SmithKline Beecham Antidepressant
Zyprexa Eli Lilly Antipsychotic
</TABLE>
Source: IMS Health. Ranked by U.S. retail sales for 1999.
[Begin Sidebar]
ON THE TRAIL OF DIABETES
[photograph of laboratory worker]
COLLABORATIVE RESEARCH UNCOVERS GEMS
Health experts believe that Type II (formerly known as "adult-onset") diabetes
will be a major global epidemic in the years ahead. Incidence of diabetes,
which today affects more than 16 million Americans, has increased sharply in
the last decade, particularly among young people. Diabetes is strongly linked
to obesity and lack of exercise; as western diets and habits have spread to
other regions, its prevalence has risen alarmingly. Complications - which can
include blindness, nerve damage and cardiovascular disease - are devastating.
The cost for treating the disease, in the U.S. alone, is estimated at $98
billion annually. "If I had to $invest' in just one illness for the next 20
years," says Jonathan Knowles, a portfolio counselor who also covers
pharmaceuticals as an analyst, "it would be Type II diabetes."
As drug companies develop breakthrough treatments for diabetes, New
Perspective's health care analysts work together to uncover promising therapies
well before other investors do. That type of cooperation helped them see early
on the value of a form of inhaled insulin created by Inhale Therapeutics, a
small drug delivery firm based in San Francisco. Rick Beleson, our
pharmaceutical analyst who follows Inhale, first flagged the discovery several
years ago. He was intrigued, but it was difficult to tell how valid the
company's claims were. He and Jonathan Knowles hit the streets; they discovered
that Pfizer, which had committed to testing and marketing the product, was very
excited about its progress, and that Aventis (then known as Hoechst Marion
Roussel), would manufacture the insulin. They dug deeper, visiting the Josslyn
Center, a leading diabetes clinic in Boston, and talking to doctors whose
patients were participating in Phase III trials. All the while, they consulted
with the fund's pharmaceutical cluster to gain additional insights and put
their findings in a broader context.
Although the FDA has yet to approve inhaled insulin, the prognosis is
excellent. "It took the better part of a year to piece this puzzle together,"
notes Jonathan, "but going that extra mile reinforced our conviction very early
on that this product should be a great success for the companies - and
investors - involved."
[photograph: laboratory worker]
[End Sidebar]
[photograph: Rick Beleson and Dr. Susan Hellman]
[Begin Caption]
New Perspective pharmaceutical analyst Rick Beleson talks with Dr. Susan
Hellman, who heads up Genentech's development and product operations.
[End Caption]
That kind of synergy can pay off handsomely for shareholders, as it did not
long ago with our investments in Japanese drug firms. Although Japan is the
world's second-largest consumer market for pharmaceuticals, investors had been
avoiding the sector, citing lackluster pipelines and anemic research and
development budgets. In reality, as our analyst in Japan had discovered, a
number of firms were developing some remarkable technology that he believed had
excellent market potential. Shionogi, for example, had invented a superstatin
to treat cardiovascular disease, which AstraZeneca snapped up. In another case,
Chugai developed a blood-screening test for HIV and hepatitis. And Yamanouchi
had upgraded its pipeline by licensing Japanese rights to two potential
blockbusters from U.S. companies - Lipitor from Pfizer and Celebrex from
Pharmacia. That analyst's input helped round out the cluster's information
about the industry and led to sizable positions in a number of firms -
Japanese, European and American - when their stock prices were quite low. As
other investors began to realize the value of these Japanese discoveries, we
were in a position to do quite well.
[photograph: close-up photograph of laboratory]
[Begin Caption]
Research, the lifeblood of the pharmaceutical industry, is also the cornerstone
of New Perspective's investment strategy.
[End Caption]
THE VALUE OF PATIENCE
Underpinning our intensive research effort is a long-term outlook. New
Perspective's stocks are held in the portfolio for about three years on
average; many companies have been a part of the fund for considerably longer.
That time horizon means that our expectations for companies are very different
from those of short-term investors.
Among the benefits of this approach is the ability to identify value. When it
comes to evaluating pharmaceutical companies, for example, our analysts look
beyond the headline-grabbing blockbuster drugs. They ask themselves, "Does this
company have the resources and the processes in place to continue developing
viable therapies? Does it have the distribution channels to tap into new
markets and attract the next generation of breakthrough products?
Alternatively, is the market discounting the stock of a fundamentally sound
company experiencing a quiet or difficult period, giving us a chance to buy?"
Going against the grain can be uncomfortable at times, but over the years, that
flexibility has had measurable long-term benefits for shareholders.
CRACKING THE CODE: MEDICINE IN THE NEXT GENERATION
This summer, scientists announced that they had completed the sequencing of the
human genome - a massive project involving some three billion bits of chemical
information. The accomplishment has rightly been hailed as a major scientific
landmark, but for geneticists and other scientists, work has only just begun.
It will likely be years before practical applications are realized, and much
like the early days of the Internet, it is difficult to predict what success
will look like.
In fact, a medical revolution is already underway. New methods have been
invented to help cut costs and speed the process of bringing products to
market. Computer technology has had a huge impact on the creation of "smart
drugs," tailored to isolate and combat specific conditions. Biotechnology
continues to broaden the range of treatable diseases and improve the precision
and effectiveness of drugs; eventually it will enhance our ability to
anticipate disease, rather than just react to it.
These transformations have opened doors for the world's pharmaceutical giants,
but they have also created new challenges. As technology improves and
information becomes more readily available, large companies will find
themselves competing with smaller, nimbler firms. The pace of discovery is sure
to quicken, further compressing the already short shelf life of best-selling
drugs. Drug companies face pressures from other quarters as well, not least of
which are the costs of reaching the poorest segments of the world's population
and negotiating the demands of managed care.
As always, we are watching these developments as they unfold and acting on our
convictions about what is most appropriate for you over the long term. We
anticipate a future of remarkable change, and not only for pharmaceutical
companies. As solid, well-managed businesses explore the possibilities in the
years ahead, we will be right there, too, pursuing the most attractive growth
opportunities the world has to offer.
[photograph: abstract illustration]
[Begin Caption]
An American born today can expect to live more than 76 years. Today, some 1.4
million Americans are in their nineties and another 64,000 are over 100.
[End Caption]
[photographs: close-up of laboratory worker; vials]
[Begin Caption]
The map of the human genome sequences more than 3 billion letters of DNA. Our
smallest chromosome contains more than 67 million of them.
[End Caption]
WHAT MAKES THE AMERICAN FUNDS DIFFERENT?
[photograph: close-up of American flag]
As a shareholder in New Perspective Fund, you are also a member of The American
Funds Group, the nation's third-largest mutual fund family. You won't find us
advertised, yet thousands of financial advisers recommend the American Funds
for their clients' serious money - money set aside for education, a home,
retirement and other important dreams.
What the 29 funds in our group have in common is a commitment to your best
interests and the proven approach of our investment adviser, Capital Research
and Management Company. In business since 1931, Capital's calling cards
include:
A LONG-TERM, VALUE-ORIENTED APPROACH:
Rather than follow short-term fads, we rely on our own intensive research to
find well-managed companies with reasonably priced securities and solid,
long-term potential. Despite our size, we offer relatively few funds compared
with many large fund families, allowing us to maintain a careful focus on our
objectives and enabling you to benefit from economies of scale.
AN UNPARALLELED GLOBAL RESEARCH EFFORT:
We opened our first overseas office in 1962, well before most mutual funds
began investing internationally. Today, the American Funds draw on one of the
industry's most globally integrated research networks. Capital Research spends
substantial resources getting to know companies and industries around the
world.
A MULTIPLE PORTFOLIO COUNSELOR SYSTEM:
More than 40 years ago, we developed a unique strategy for managing investments
that blends teamwork with individual accountability. Every American Fund is
divided among a number of portfolio counselors, each of whom manages his or her
portion independently, within each fund's objectives; in most cases, research
analysts manage a portion as well. Over time, this method has contributed to
consistency of results and continuity of management.
EXPERIENCED INVESTMENT PROFESSIONALS:
More than 75% of the portfolio counselors who serve the American Funds were in
the investment business before the sharp stock market decline in October 1987.
Long tenure and experience through a variety of market conditions mean we
aren't "practicing" with your money.
A COMMITMENT TO LOW OPERATING EXPENSES:
You can't control market returns, but you can control what you invest in and
how much you pay to own it. American Funds provide exceptional value for
shareholders, with operating expenses that are among the lowest in the mutual
fund industry. Our portfolio turnover rates are low as well, keeping
transaction costs and tax consequences contained.
A PORTFOLIO FOR EVERY INVESTOR
Most financial advisers suggest that investors balance their portfolios by
investing across several types of investments. Which mix is right for you? That
depends on a number of things - including your risk tolerance, investment time
horizon and financial goals. The American Funds Group offers 29 funds with an
array of investment objectives to help you and your financial adviser build a
portfolio specifically tailored to your needs.
[illustration: globe]
GROWTH FUNDS
Emphasis on long-term growth through stocks
AMCAP Fund(r)
EuroPacific Growth Fund(r)
The Growth Fund of America(r)
The New Economy Fund(r)
New Perspective Fund(r)
New World Fund(sm)
SMALLCAP World Fund(r)
GROWTH-AND-INCOME FUNDS
Emphasis on long-term growth and dividends through stocks
American Mutual Fund(r)
Capital World Growth and Income Fund(sm)
Fundamental Investors(sm)
The Investment Company of America(r)
Washington Mutual Investors Fund(sm)
EQUITY-INCOME FUNDS
Emphasis on above-average income and growth through stocks and/or bonds
Capital Income Builder(r)
The Income Fund of America(r)
BALANCED FUND
Emphasis on long-term growth and current income through stocks and bonds
American Balanced Fund(r)
INCOME FUNDS
Emphasis on current income through bonds
American High-Income Trust(sm)
The Bond Fund of America(sm)
Capital World Bond Fund(r)
Intermediate Bond Fund of America(r)
U.S. Government Securities Fund(sm)
TAX-EXEMPT INCOME FUNDS
Emphasis on tax-free current income through municipal bonds
American High-Income Municipal Bond Fund(r)
Limited Term Tax-Exempt Bond Fund of America(sm)
The Tax-Exempt Bond Fund of America(r)
STATE-SPECIFIC TAX-EXEMPT FUNDS:
The Tax-Exempt Fund of California(r)
The Tax-Exempt Fund of Maryland(r)
The Tax-Exempt Fund of Virginia(r)
MONEY MARKET FUNDS
The Cash Management Trust of America(r)
The Tax-Exempt Money Fund of America(sm)
The U.S. Treasury Money Fund of America(sm)
We also offer a full line of retirement plans and variable annuities.
For more complete information about any of the funds, including charges and
expenses, please obtain a prospectus from your financial adviser, download one
from our Web site at www.americanfunds.com, or phone the funds' transfer agent,
American Funds Service Company at 800/421-0180. Please read the prospectus
carefully before you invest or send money. For more information, ask your
financial adviser for a copy of our brochure, A Portfolio for Every Investor.
<TABLE>
<S> <C> <C> <C>
New Perspective Fund, Inc.
Investment Portfolio, September 30, 2000 Percent
of Net
Assets
LARGEST INDUSTRY HOLDINGS LARGEST INDIVIDUAL --------
HOLDINGS
10.23% Pharmaceuticals AstraZeneca 3.14%
8.40% Media Pfizer 2.19
8.01% Diversified Telecommunication Vodafone Group 2.04
Services
5.59% Semiconductor Equipment & Products Viacom 2.02
4.76% Banks Nokia 1.85
49.88% Other Industries Time Warner 1.52
0.50% Bonds & Notes News Corp. 1.39
12.63% Cash & Equivalents Telefonos de Mexico 1.36
Philip Morris 1.31
Bank of America 1.21
Shares or Market Percent
Principal Value of Net
Equity Securitites Amount (Millions) Assets
----------------------------------- -------- -------- --------
PHARMACEUTICALS - 10.23%
AstraZeneca PLC (United Kingdom) 19,589,994 $1,027.225
AstraZeneca PLC (ADR) 555,000 29.172 3.14
Pfizer Inc (USA) 16,440,000 738.772 2.19
Pharmacia Corp. (formed by the merger 6,200,000 373.163 1.11
of Pharmacia & Upjohn, Inc. and
Monsanto Co.) (USA)
Elan Corp., PLC (ADR) (Ireland) (1) 5,242,200 287.010 .85
Teva Pharmaceutical Industries 3,200,000 234.200 .70
Ltd. (ADR) (Israel)
Shionogi & Co., Ltd. (Japan) 11,033,000 205.904 .61
Bristol-Myers Squibb Co. (USA) 3,120,000 178.230 .53
Glaxo Wellcome PLC (ADR) (United Kingdom) 1,044,000 63.097
Glaxo Wellcome PLC 563,264 17.043 .24
Chugai Pharmaceutical Co., Ltd. (Japan) 4,300,000 78.178 .23
Merck & Co., Inc. (USA) 1,000,000 74.438 .22
Yamanouchi Pharmaceutical Co., 1,000,000 48.162 .14
Ltd. (Japan)
Fujisawa Pharmaceutical Co. Ltd. (Japan) 1,052,000 38.779 .12
American Home Products Corp. (USA) 600,000 33.938 .10
SmithKline Beecham PLC (ADR) (United 250,000 17.156 .05
Kingdom)
MEDIA - 8.40%
Viacom Inc., Class B (USA) (1) 10,653,825 623.249
Viacom Inc., Class A (1) 1,000,000 58.500 2.02
Time Warner Inc. (USA) 6,547,000 512.303 1.52
News Corp. Ltd. (ADR) (Australia) 4,791,600 268.629
News Corp. Ltd., preferred (ADR) 2,548,800 119.475
News Corp. Ltd. 3,964,970 55.926
News Corp. Ltd., preferred 2,045,522 24.500 1.39
Seagram Co. Ltd. (Canada) 3,910,200 224.592 .67
CANAL+ (France) 1,275,000 191.053 .57
Walt Disney Co. (USA) 4,250,000 162.562 .48
Reuters Group PLC (United Kingdom) 6,770,400 128.233 .38
Clear Channel Communications, 1,632,800 92.253 .27
Inc. (USA) (1)
Grupo Televisa, SA, ordinary 1,316,400 75.940 .23
participation certificates (ADR)
(Mexico) (1)
Interpublic Group of Companies, 2,200,000 74.938 .22
Inc. (USA)
Independent Newspapers, PLC (Ireland) 19,915,044 72.978 .22
Pearson PLC (United Kingdom) 2,163,636 60.063 .18
Lagardere Groupe SCA (France) 700,000 42.433 .13
Dow Jones & Co., Inc. (USA) 491,600 29.742 .09
EMI Group PLC (United Kingdom) 1,375,569 10.974 .03
DIVERSIFIED TELECOMMUNICATION
SERVICES - 8.01%
Telefonos de Mexico, SA de CV, 8,599,060 457.363 1.36
Class L (ADR) (Mexico)
AT&T Corp. (USA) 13,700,000 402.438 1.20
Telecom Italia SpA, nonconvertible 27,127,995 148.108
savings shares (Italy)
Telecom Italia SpA, ordinary shares 12,827,500 136.532 .85
DDI Corp. (Japan) 34,500 226.869 .67
WorldCom, Inc. (formerly MCI 6,618,591 201.040 .60
WorldCom, Inc.) (USA) (1)
Sprint FON Group (USA) 5,500,000 161.219 .48
Deutsche Telekom AG (Germany) 3,523,600 121.031 .36
Global Crossing Ltd. (USA - 3,880,000 120.280 .36
Incorporated in Bermuda) (1)
SBC Communications Inc. (USA) 2,351,600 117.580 .35
France Telecom, SA (France) 1,000,000 107.196 .32
Tele Danmark AS (Denmark) 1,182,300 65.072
Tele Danmark AS, Class B (ADR) 1,398,600 39.336 .31
Nippon Telegraph and Telephone 7,652 75.124 .22
Corp. (Japan)
Koninklijke KPN NV (formerly 3,399,332 74.080 .22
Koninklijke PTT Nederland
NV)(Netherlands)
Telefonica, SA (Spain) (1) 2,837,170 56.242 .17
British Telecommunications 5,157,000 54.171 .16
PLC (United Kingdom)
Embratel Participacoes SA, 2,500,000 46.250 .14
preferred nominative (ADR) (Brazil)
VersaTel Telecom International 1,500,000 34.569 .10
NV (Netherlands) (1)
Korea Telecom Corp. (South Korea) 383,250 22.961 .07
Telecom Corp. of New Zealand 5,475,250 13.648
Ltd. (New Zealand)
Telecom Corp. of New Zealand Ltd. (2) 1,468,000 3.659 .05
Global TeleSystems, Inc. (USA) (1) 1,830,000 8.349 .02
SEMICONDUCTOR EQUIPMENT &
PRODUCTS - 5.59%
Micron Technology, Inc. (USA) (1) 8,500,000 391.000 1.16
Taiwan Semiconductor Manufacturing 93,830,600 311.590 .93
Co. Ltd. (Taiwan) (1)
Samsung Electronics Co., 1,636,936 296.557 .88
Ltd. (South Korea)
Advanced Micro Devices, Inc. (USA) (1) 9,000,000 212.625 .63
Hyundai Electronics Industries 13,196,400 188.774 .56
Co., Ltd. (South Korea) (1)
Texas Instruments Inc. (USA) 3,000,000 141.563 .42
Rohm Co., Ltd. (Japan) 400,000 109.697 .32
Murata Manufacturing Co., Ltd. (Japan) 564,000 77.833 .23
AIXTRON AG (Germany) 493,000 61.815 .18
Altera Corp. (USA) (1) 800,000 38.200 .11
Intel Corp. (USA) 900,000 37.406 .11
ASM Lithography Holding 456,000 15.140
NV (Netherlands) (1)
ASM Lithography Holding NV (New 250,000 8.078 .06
York registered) (1)
BANKS - 4.76%
Bank of America Corp. (USA) 7,800,000 408.525 1.21
Royal Bank of Canada (Canada) 7,954,000 236.273 .70
Bank of Nova Scotia (Canada) 7,719,000 224.419 .67
Sakura Bank, Ltd. (Japan) 28,200,000 210.514 .62
ABN AMRO Holding NV (Netherlands) 5,916,691 137.925 .41
Mizuho Holdings, Inc. (Japan) (1) 14,460 119.194 .35
Westpac Banking Corp. (Australia) 16,049,832 111.015 .33
Australia and New Zealand Banking 12,143,541 87.487 .26
Group Ltd. (Australia)
Toronto-Dominion Bank (Canada) 1,223,700 35.943 .11
San Paolo-IMI SpA (Italy) 2,000,000 32.314 .10
COMMUNICATIONS EQUIPMENT - 3.88%
Nokia Corp., Class A (Finland) 8,300,000 336.543
Nokia Corp., Class A (ADR) 7,200,000 286.650 1.85
Telefonaktiebolaget LM Ericsson, 26,000,000 395.535 1.17
Class B (Sweden)
Motorola, Inc. (USA) 6,030,000 170.348 .50
Cisco Systems, Inc. (USA) (1) 1,400,000 77.350 .23
Matsushita Communication Industrial 330,000 44.654 .13
Co., Ltd. (Japan)
METALS & MINING - 3.29%
Alcoa Inc. (USA) 9,230,000 233.634 .69
Barrick Gold Corp. (Canada) 10,000,000 152.500 .45
De Beers Consolidated Mines 2,837,500 78.864
Ltd. (South Africa)
De Beers Consolidated Mines Ltd. (ADR) 1,992,400 55.165 .40
Newmont Mining Corp. (USA) 7,150,000 121.550 .36
Anglo American PLC (United Kingdom) 1,650,000 87.329 .26
Placer Dome Inc. (Canada) 9,000,000 84.938 .25
Pechiney, Class A (France) 1,856,909 74.276 .22
Broken Hill Proprietary Co. 5,391,198 56.008 .17
Ltd. (Australia)
Usinor (formerly Unisor Sacilor)(France) 4,700,000 42.705 .13
Billiton PLC (United Kingdom) 10,372,416 37.046 .11
Homestake Mining Co. (USA) 7,000,000 36.313 .11
WMC Ltd. (Australia) 7,000,000 28.945 .09
Gold Fields Ltd.(South Africa) 5,191,105 16.471 .05
Cia. Vale do Rio Doce, preferred 38,400 .000 .00
nominative, Class B (Brazil) (1) (3)
OIL & GAS - 3.04%
TOTAL FINA SA, Class B (formerly 3,871,884 284.341
Total Fina SA) (ADR) (France)
TOTAL FINA SA, Class B 715,688 104.778 1.15
Royal Dutch Petroleum Co. (New 1,952,000 116.998
York registered) (Netherlands)
"Shell" Transport and Trading 9,000,000 73.264 .57
Co., PLC (United Kingdom)
ENI SpA (Italy) 31,100,000 164.768 .49
Canadian Occidental Petroleum 2,204,097 55.073 .16
Ltd. (Canada)
Phillips Petroleum Co. (USA) 844,700 53.005 .16
Unocal Corp. (USA) 1,400,000 49.613 .15
Talisman Energy Inc. (Canada) (1) 1,034,300 36.257 .11
LUKOIL (ADR) (Russia) 520,000 29.952 .09
Texaco Inc. (USA) 500,000 26.250 .08
Chevron Corp. (USA) 300,000 25.575 .08
FOOD PRODUCTS - 2.71%
Nestle SA (Switzerland) 147,400 307.689 .91
Groupe Danone (France) 1,446,898 198.796 .59
Unilever PLC (United Kingdom) 13,715,526 88.753
Unilever NV (New York registered 400,000 19.300
shares) (Netherlands)
Unilever NV 300,000 14.570 .36
Uni-President Enterprises Co. (Taiwan) 113,400,000 80.022 .24
Sara Lee Corp. (USA) 3,750,000 76.172 .23
Archer Daniels Midland Co. (USA) 8,174,890 70.508 .21
Nabisco Group Holdings Corp. (USA) 2,000,000 57.000 .17
WIRELESS TELECOMMUNICATION
SERVICES - 2.58%
Vodafone Group PLC (formerly Vodafone 180,146,362 672.024
AirTouch) (United Kingdom)
Vodafone Group PLC (ADR) 385,000 14.245 2.04
Crown Castle International 4,912,360 152.590
Corp. (USA) (1)
Crown Castle 6.50% convertible $555,900 28.281 .54
preferred 2012 (1)
BEVERAGES - 2.26%
Coca-Cola Co. (USA) 6,300,000 347.288 1.03
Coca-Cola Enterprises Inc. (USA) 8,950,000 142.641 .42
PepsiCo, Inc. (USA) 2,250,000 103.500 .31
Cia. de Bebidas das Americas - 3,278,600 72.539 .22
AmBev (ADR) (formerly Cia. Cervejaria
Brahma) (Brazil) (1)
Heineken NV (Netherlands) 1,100,000 61.192 .18
Lion Nathan Ltd. (New Zealand) 9,800,000 19.159 .06
Foster's Brewing Group Ltd. (Australia) 6,000,000 13.997 .04
DIVERSIFIED FINANCIALS - 2.22%
ING Groep NV (Netherlands) 4,233,085 282.130
ING Groep NV, warrants, expire 2008 (1) 590,000 16.801 .89
Investor AB, Class B (Sweden) 12,200,000 172.928 .51
Citigroup Inc. (USA) 2,750,000 148.672 .44
Associates First Capital Corp., 2,375,000 90.250 .27
Class A (USA)
OM Gruppen AB (Sweden) 900,000 38.692 .11
INSURANCE - 2.15%
American International Group, Inc. (USA) 2,734,569 261.664 .78
Allianz AG (Germany) 234,000 76.760 .23
QBE Insurance Group Ltd. (Australia) 15,869,886 75.332 .22
AEGON NV (Netherlands) 1,788,888 67.527 .20
Fairfax Financial Holdings 352,800 44.135
Ltd. (Canada) (1)
Fairfax Financial Holdings Ltd. (1) (2) 93,000 11.634 .17
Berkshire Hathaway Inc., 860 55.384 .16
Class A (USA) (1)
Yasuda Fire and Marine Insurance 10,000,000 53.163 .16
Co., Ltd. (Japan)
Royal & Sun Alliance Insurance Group 6,700,000 44.742 .13
PLC (United Kingdom)
Assicurazioni Generali SpA (Italy) 1,100,000 35.258 .10
COMPUTERS & PERIPHERALS - 2.11%
Fujitsu Ltd. (Japan) 10,386,000 241.445 .72
Toshiba Corp. (Japan) 15,600,000 125.846 .37
International Business Machines 1,100,000 123.750 .37
Corp. (USA)
Compaq Computer Corp. (USA) 2,300,000 63.434 .19
Hewlett-Packard Co. (USA) 616,700 59.820 .18
Gateway, Inc. (USA) (1) 811,100 37.919 .11
Dell Computer Corp. (USA) (1) 1,000,000 30.813 .09
NEC Corp. (Japan) 1,151,000 26.171 .08
PAPER & FOREST PRODUCTS - 1.83%
International Paper Co. (USA) 8,900,000 255.319 .76
Georgia-Pacific Corp.(USA) 5,100,000 119.850 .35
Abitibi-Consolidated Inc. (Canada) 8,072,755 75.374 .22
UPM-Kymmene Corp. (Finland) 1,953,000 49.959 .15
Stora Enso Oyj (Finland) 5,800,000 48.602 .14
Weyerhaeuser Co. (USA) 700,000 28.263 .08
Louisiana-Pacific Corp. (USA) 2,550,000 23.428 .07
Rayonier Inc. (USA) 600,000 21.563 .06
INDUSTRIAL CONGLOMERATES - 1.71%
Siemens AG (Germany) 2,330,000 299.865 .89
Norsk Hydro AS (Norway) 3,600,000 150.767 .45
General Electric Co. (USA) 900,000 51.919 .15
Southcorp Ltd. (Australia) 14,314,649 39.815 .12
Smiths Industries PLC (United Kingdom) 1,800,000 18.655 .05
Preussag AG (Germany) 537,619 16.473 .05
HOUSEHOLD DURABLES - 1.51%
Sony Corp. (Japan) 3,064,800 311.107 .92
Koninklijke Philips Electronics 4,105,040 176.779 .52
NV (Netherlands)
Newell Rubbermaid Inc. (USA) 1,000,000 22.813 .07
ELECTRONIC EQUIPMENT &
INSTRUMENTS - 1.44%
Hon Hai Precision Industry Co 30,108,000 198.041 .59
. Ltd. (Taiwan)
Hitachi, Ltd. (Japan) 11,500,000 133.565 .40
Samsung Electro-Mechanics 2,288,990 77.395 .23
Co. (South Korea) (1)
Hirose Electric Co., Ltd. (Japan) 300,000 39.178 .12
TDK Corp. (Japan) 255,000 32.356 .10
TOBACCO - 1.43%
Philip Morris Companies Inc. (USA) 15,020,000 442.151 1.31
Gallaher Group PLC (United Kingdom) 5,455,100 32.640
Gallaher Group PLC (ADR) 300,000 6.975 .12
HOTELS RESTAURANTS & LEISURE - 1.41%
Carnival Corp. (USA) 7,890,000 194.291 .58
MGM Mirage, Inc. (formerly Mirage 3,153,000 120.405
Resorts, Inc.)(USA) (2)
MGM Mirage, Inc. (formerly Mirage 647,000 24.707 .43
Resorts, Inc.)
Starbucks Corp. (USA) (1) 2,950,000 118.184 .35
Hilton Group PLC (United Kingdom) 5,480,000 15.707 .05
CHEMICALS - 1.33%
Dow Chemical Co. (USA) 6,810,000 169.824 .50
BOC Group PLC (United Kingdom) 3,500,000 46.280 .14
Bayer AG (Germany) 1,200,000 44.397 .13
FMC Corp. (USA) (1) 559,800 37.542 .11
Methanex Corp. (Canada) (1) 7,250,000 35.653 .10
Valspar Corp. (USA) 1,512,200 34.765 .10
Praxair, Inc. (USA) 800,000 29.900 .09
L'Air Liquide (France) 249,010 29.222 .09
Imperial Chemical Industries 1,046,000 24.254 .07
PLC (ADR) (United Kingdom)
SOFTWARE - 1.28%
Microsoft Corp. (USA) (1) 2,100,000 126.656 .38
Autonomy Corp. PLC (United Kingdom) (1) 2,190,000 122.640 .36
Baltimore Technologies PLC (United 6,700,000 68.300 .20
Kingdom) (1)
Cadence Design Systems, Inc. (USA) (1) 2,440,500 62.690 .19
PeopleSoft, Inc. (USA) (1) 1,750,000 48.891 .15
MACHINERY - 1.21%
Mitsubishi Heavy Industries, Ltd.(Japan) 38,000,000 150.634 .45
Invensys PLC (United Kingdom) 41,170,000 89.868 .27
Fanuc Ltd. (Japan) 515,000 57.000 .17
Deere & Co. (USA) 1,200,000 39.900 .12
TI Group PLC (United Kingdom) 5,781,991 29.642 .09
Caterpillar Inc. (USA) 700,000 23.625 .07
Kvaerner ASA, Class A (Norway) (1) 1,396,552 13.237 .04
COMMERCIAL SERVICES & SUPPLIES - 1.16%
Cendant Corp. (USA) (1) 15,152,900 164.788 .49
Granada Compass PLC (United Kingdom) (1) 12,150,000 113.626 .34
Williams PLC (United Kingdom) 9,076,923 44.254 .13
Adecco SA (Switzerland) 45,000 29.224 .09
Rentokil Initial PLC (United Kingdom) 10,000,000 22.420 .07
Pitney Bowes Inc. (USA) 373,000 14.710 .04
AEROSPACE & DEFENSE - 1.02%
Bombardier Inc., Class B (Canada) 10,500,000 181.419 .54
Lockheed Martin Corp. (USA) 1,846,400 60.857 .18
Northrop Grumman Corp. (USA) 500,000 45.437 .13
BAE SYSTEMS (United Kingdom) 6,164,661 33.243 .10
Honeywell International Inc. (USA) 700,000 24.937 .07
AUTOMOBILES - 0.87%
Honda Motor Co., Ltd. (Japan) 2,796,000 103.066 .31
Suzuki Motor Corp. (Japan) 8,658,000 90.052 .27
Renault SA (France) 1,500,000 64.371 .19
General Motors Corp. (USA) 500,000 32.500 .10
HEALTH CARE EQUIPMENT & SUPPLIES - 0.76%
Guidant Corp. (USA) (1) 2,000,000 141.375 .42
Luxottica Group SpA (ADR) (Italy) 4,225,400 68.134 .20
Medtronic, Inc. (USA) 900,000 46.631 .14
MULTI-UTILITIES - 0.63%
Williams Companies, Inc. (USA) 5,013,700 211.829 .63
BUILDING PRODUCTS - 0.62%
Nippon Sheet Glass Co., Ltd. (Japan) 10,994,000 176.666 .52
Asahi Glass Co., Ltd. (Japan) 3,349,000 34.275 .10
IT CONSULTING & SERVICES - 0.61%
CMG PLC (United Kingdom) 3,632,000 70.240
CMG PLC (Netherlands) 1,488,000 28.906 .29
Amdocs Ltd. (USA) (1) 1,400,000 87.325 .26
Electronic Data Systems Corp. (USA) 450,000 18.675 .06
MULTILINE RETAIL - 0.60%
Ito-Yokado Co., Ltd. (Japan) 1,330,000 69.352 .21
Wal-Mart Stores, Inc. (USA) 1,350,000 64.969 .19
Kingfisher PLC (United Kingdom) 5,607,529 36.618 .11
Wal-Mart de Mexico, SA de CV, 10,995,004 22.889
Class V (Mexico) (1)
Wal-Mart de Mexico, SA de CV, 3,624,400 7.169 .09
Class C (1)
LEISURE EQUIPMENT & PRODUCTS - 0.54%
Nintendo Co., Ltd. (Japan) 830,000 151.671 .45
Hasbro, Inc. (USA) 2,700,000 30.881 .09
OTHER INDUSTRIES - 5.02%
Avon Products, Inc. (USA) 3,983,300 162.817 .48
EPCOS AG (Germany) (1) 1,717,000 139.482 .41
Japan Airlines Co., Ltd. (Japan) 32,590,000 123.454 .37
Baker Hughes Inc. (USA) 2,600,000 96.525 .29
Genentech, Inc. (USA) (1) 466,800 86.679 .26
Smurfit Group (Ireland) 47,610,745 83.660 .25
Smurfit-Stone Container Corp. (USA) (1) 6,455,700 77.468 .23
Yahoo Inc. (USA) (1) 805,000 73.255 .22
Gap, Inc. (USA) 3,320,000 66.815 .20
Bergesen d.y. AS, Class A (Norway) 2,455,350 51.685
Bergesen d.y. AS, Class B 795,000 15.026 .20
Intershop Communications AG (Germany)(1) 965,000 62.885 .19
Kimberly-Clark Corp. (USA) 1,066,700 59.535 .18
Quintiles Transnational Corp. (USA) (1) 3,701,000 58.985 .17
United Parcel Service, Inc. (USA) 1,017,300 57.350 .17
Canadian Pacific Ltd. (Canada) 2,000,000 52.000 .15
Schlumberger Ltd. (Netherlands Antilles) 598,300 49.247 .15
Marubeni Corp. (Japan) (1) 16,629,600 41.739 .12
Scottish Power PLC (United Kingdom) 5,157,902 40.006 .12
Canon Inc. (Japan) 900,000 39.928 .12
TNT Post Groep NV(Netherlands) 1,652,573 38.450 .11
RWE AG (Germany) 1,034,900 36.370 .11
NIKE, Inc., Class B (USA) 900,000 36.056 .11
AMR Corp. (USA) (1) 1,100,000 35.956 .11
Reckitt Benckiser PLC (United Kingdom) 2,653,125 32.396 .10
Christian Dior SA (France) 600,000 32.344 .10
Ushio Inc. (Japan) 1,092,000 23.565 .07
Southern Energy, Inc. (USA) (1) 356,000 11.169 .03
MISCELLANEOUS - .66%
Other equity securities in initial 221.257 .66
period of acquisition
Total Equity Securities (cost: 29,250.727 86.87
$20,830.563 million)
Principal Market Percent
Amount Value of Net
Bonds & Notes (Millions) (Millions) Assets
--------------------------------- -------- -------- --------
NON U.S. GOVERNMENT OBLIGATIONS - 0.50%
Brazil (Federal Republic of), $211.495 162.322
Bearer 8.00% 2014 (4)
Brazil (Federal Republic of), 9.851 7.561 .50
Front-Loaded Interest Reduction Bond,
Series L, 8.00% 2014 (4)
Total Bonds & Notes (cost: 169.883 .50
$130.596 million)
Principal Market Percent
Amount Value of Net
Short-Term Securities (Millions) (Millions) Assets
------------------------------ -------- -------- --------
CORPORATE SHORT-TERM NOTES - 10.81%
Toyota Motor Corp. 6.47%-6.49% $107.000 $106.651 .32%
due 10/3-10/27/2000
Eastman Kodak Co. 6.47%-6.50% 105.000 104.156 .31
due 10/3-12/1/2000
AT&T Corp. 6.47%-6.52% 103.400 102.183 .30
due 10/20/2000-1/12/2001
Bank of Nova Scotia 6.64%-6.68% 100.000 99.996 .30
due 11/1/2000-1/8/2001
Monte Rosa Capital Corp. 6.50%-6.53% 100.000 99.714 .30
due 10/3-10/24/2000
Halifax Group PLC 6.49%-6.55% 100.000 99.703 .30
due 10/5-10/30/2000
CDC Commercial Paper Corp. 6.48%-6.53% 100.000 99.648 .30
due 10/6-10/25/2000
CBA (Delaware) Finance Inc. 6.47%-6.52% 100.000 99.549 .30
due 10/10-11/27/2000
Motorola Inc. 6.47%-6.50% 100.000 99.472 .30
due 10/10-11/28/2000
Den Danske Corp. Inc. 6.47%-6.54% 100.000 99.441 .30
due 10/18-11/13/2000
BMW US Capital Corp. 6.47%-6.48% 100.000 99.437 .30
due 10/16-11/14/2000
Svenska Handelsbanken 6.48%-6.52% 100.000 99.249 .29
due 10/13-12/11/2000
Abbey National North America 6.48%-6.55% 100.000 99.229 .29
due 10/5/2000-1/19/2001
DaimlerChrysler NA Holdings 6.48%-6.50% 100.000 99.202 .29
due 10/2/2000-1/19/2001
Motiva Enterprises LLC 6.47% 100.000 99.111 .29
due 11/10-12/5/2000
British Telecommunications PLC 6.48% 100.000 99.005 .29
due 11/21-11/27/2000
Spintab AB 6.52%-6.55% 100.000 98.849 .29
due 10/5/2000-1/25/2001
FCE Bank PLC 6.53%-6.55% 97.000 96.860 .29
due 10/6-10/10/2000
SBC Communications Inc. 6.47%-6.51% 93.250 92.806 .28
due 10/2-11/16/2000
Glaxo Wellcome PLC 6.47%-6.54% 90.300 89.827 .27
due 10/10-11/14/2000
American Honda Finance Corp. 6.48%-6.49% 90.000 89.410 .27
due 10/20-11/20/2000
Barclays U.S. Funding Corp. 6.48%-6.49% 89.000 88.629 .26
due 10/6-10/31/2000
Rio Tinto 6.48%-6.50% 85.700 85.045 .25
due 10/25-11/20/2000
Sony Capital Corp. 6.48%-6.50% 81.500 80.939 .24
due 10/2-11/29/2000
Bayer Corp. 6.47%-6.50% 81.500 80.937 .24
due 10/17-12/14/2000
General Motors Acceptance Corp. 80.800 80.444 .24
6.49%-6.55% due 10/19-10/30/2000
Lloyds TSB Bank PLC 6.51%-6.55% 75.000 74.952 .22
due 10/11-11/22/2000
Societe Generale North America Inc. 75.000 74.814 .22
6.53% due 10/12-10/17/2000
Marsh USA Inc. 6.52% due 10/4-11/2/2000 75.000 74.741 .22
Alcatel S.A. 6.52%-6.55% 75.000 74.610 .22
due 10/17-11/21/2000
Bank of America Corp. 6.49%-6.55% 75.000 73.906 .22
due 10/10/2000-1/22/2001
Westpac Trust Securities NZ LTD. 75.000 73.849 .22
6.52%-6.53% due 11/16/2000-1/11/2001
International Lease Finance Corp. 74.000 73.589 .21
6.47%-6.50% due 10/18-11/6/2000
Asset Securitization Corp. 6.50%-6.57% 70.000 69.818 .21
due 10/5-10/20/2000
Alcoa Inc. 6.47%-6.52% 67.850 67.654 .20
due 10/5-10/27/2000
KfW International Finance Inc. 66.383 65.344 .19
6.49%-6.50% due 10/12/2000-1/18/2001
H.J. Heinz Co. 6.46%-6.47% 60.200 59.770 .18
due 10/27-11/21/2000
American Express Credit Corp. 6.48% 54.000 53.766 .16
due 10/24/2000
France Telecom, SA 6.48% due 10/23/2000 51.000 50.787 .15
Associates First Capital Corp. 50.000 49.882 .15
6.50%-6.53% due 10/13/2000
Dresdner U.S. Finance Inc. 6.50% 50.000 49.882 .15
due 10/13/2000
ANZ (Delaware) Inc. 6.48% due 10/26/2000 50.000 49.766 .15
Panasonic Finance (Europe) PLC 50.000 49.710 .15
6.52%-6.53% due 11/1/2000
Archer Daniels Midland Co. 6.50% 38.000 37.746 .11
due 10/18-12/4/2000
Caisse d'amortisement de la dette 25.000 24.909 .07
sociale 6.50% due 10/20/2000
Federal Agency Discount Notes - 1.32%
Freddie Mac 6.39%-6.45% 245.772 243.477 .72
due 10/5-12/28/2000
Fannie Mae 6.40%-6.44% 121.500 120.423 .36
due 10/19-12/14/2000
Federal Home Loan Banks 6.38%-6.44% 80.000 79.475 .24
due 10/4-12/8/2000
Certificates of Deposit - 0.30%
Deutsche Bank, AG 6.64% due 10/16/2000 50.000 50.001 .15
Morgan Guaranty Trust Co. of New York 50.000 49.999 .15
6.57% due 12/27/2000
Non-U.S. Currency - 0.02%
New Taiwanese Dollar NT$339.172 10.830 .03
Total Short-Term Securities (cost: 4,193.192 12.46
$4,193.915 million)
Total Investment Securities (cost: 33,613.802 99.83
$25,155.074 million)
Excess of cash and receivables 57.818 .17
over payables
NET ASSETS $33,671.620 100.00
(1) Non-income-producing securities.
(2) Purchased in a private placement
transaction; resale to the public
may require registration or sale only
to qualified institutional buyers.
(3) Valued under procedures established.
by the Board of Directors
(4) Payment in kind; the issuer has the
option of paying additional
securities in lieu of cash.
ADR = American Depositary Receipts
See Notes to Financial Statements
</TABLE>
<TABLE>
<S> <C>
Equity Securities Appearing in the Equity Securities Eliminated from the
Portfolio Since March 31, 2000 Portfolio Since March 31, 2000
Abitibi-Consolidated ADVANTEST
AIXTRON Banco Santander Central Hispano
Amdocs Banque Nationale de Paris
AMR Bayerische Motoren Werke
Asahi Glass Bridgestone
ASM Lithography CBS
Autonomy Champion International
Baltimore Technologies Colgate-Palmolive
Berkshire Hathaway Compal Electronics
BAE SYSTEMS Computer Associates International
Canon Delphi Automotive Systems
Chevron Eastman Kodak
Crown Castle International First Union
Disney Ford Motor
Dow Chemical Fuji Bank
ENI Home Depot
EPOCS Kellogg
Gap Lend Lease
Granada Compass Lucent Technologies
Hyundai Electronics Industries National Power
International Paper Nichicon
Intershop Communications Novartis
Lockheed Martin Nycomed Amersham
LUKOIL Oracle
Marubeni Rohm
Mizuho Holdings Sabre Holdings
Nippon Sheet Glass Cie. De Saint-Gobain
OM Gruppen Schneider
Quintiles Transnational Shiseido
RWE United Utilities
Southern Energy Wolters Kluwer
Stora Enso
TDK
Texaco
Ushio
Walt Disney
</TABLE>
<TABLE>
<S> <C> <C>
NEW PERSPECTIVE FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000 (dollars in millions)
Assets:
Investment securities at market
(cost: $25,155.074) $33,613.802
Cash 3.238
Receivables for--
Sales of investments $113.983
Sales of fund's shares 47.470
Dividends and interest 61.597
Other .081 223.131
33,840.171
Liabilities:
Payables for--
Purchases of investments 113.926
Repurchases of fund's shares 32.465
Management services 11.182
Other expenses 10.978 168.551
Net Assets at September 30, 2000--
Total authorized capital stock - 2,000,000,000 shares $33,671.620
Class A shares, $.001 par value
Net assets $33,411.564
Shares outstanding 1,165,670,540
Net asset value per share $28.66
Class B shares, $.001 par value
Net assets $260.056
Shares outstanding 9,110,440
Net asset value per share $28.54
STATEMENT OF OPERATIONS
for the year ended September 30, 2000 (dollars in millions)
Investment Income:
Income:
Dividends $321.769
Interest 265.124 $586.893
Expenses:
Management services fee 130.767
Distribution expenses - Class A 81.223
Distribution expenses - Class B .720
Transfer agent fee - Class A 28.997
Transfer agent fee - Class B .072
Reports to shareholders .771
Registration statement and prospectus 1.889
Postage, stationery and supplies 5.849
Directors' and Advisory Board fees .473
Auditing and legal fees .094
Custodian fee 7.658
Taxes other than federal income tax .382
Other expenses .270 259.165
Net investment income 327.728
Realized Gain and Increase in Unrealized
Appreciation on Investments:
Net realized gain 4,202.874
Net increase in unrealized
appreciation on investments 279.532
Net realized gain and increase in
unrealized appreciation
on investments 4,482.406
Net Increase in Net Assets Resulting
from Operations $4,810.134
STATEMENT OF CHANGES IN NET ASSETS (dollars in millions)
Year ended
September 30,
2000 1999
Operations:
Net investment income $327.728 $242.240
Net realized gain on investments 4,202.874 2,029.050
Net increase in unrealized appreciation
on investments 279.532 4,591.605
Net increase in net assets
resulting from operations 4,810.134 6,862.895
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income:
Class A (109.901) (178.626)
Distributions from net realized gains on investments
Class A (2,337.892) (1,352.865)
Total dividends and distributions (2,447.793) (1,531.491)
Capital Share Transactions:
Proceeds from shares sold 6,834.769 4,287.650
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on investments 2,334.800 1,462.075
Cost of shares repurchased (3,612.572) (3,035.817)
Net increase in net assets resulting from
capital share transactions 5,556.997 2,713.908
Total Increase in Net Assets 7,919.338 8,045.312
Net Assets:
Beginning of year 25,752.282 17,706.970
End of year (including
undistributed net investment
income of: $315.556 and $108.492
respectively) $33,671.620 $25,752.282
See Notes to Financial Statements
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - New Perspective Fund, Inc.(the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks long-term growth of capital through
investments all over the world, including the United States.
The fund offers Class A and Class B shares. Class A shares are sold with an
initial sales charge of up to 5.75%. Class B shares are sold without an
initial sales charge but subject to a contingent deferred sales charge paid
upon redemption. This charge declines from 5% to zero over a period of six
years. Class B shares have higher distribution expenses and transfer agent fees
than Class A shares. Class B shares are automatically converted to Class A
shares eight years after the date of purchase. Holders of both classes of
shares have equal pro rata rights to assets and identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution and transfer agent expenses, and each class shall have exclusive
rights to vote on matters affecting only their class.
SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with accounting principles generally accepted in the United
States which require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at the last reported sale price on the exchange or market on which such
securities are traded, as of the close of business on the day the securities
are being valued or, lacking any sales, at the last available bid price. In
cases where equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market. Fixed-income securities
are valued at prices obtained from a pricing service, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued at the mean quoted bid and
asked prices or at prices for securities of comparable maturity, quality and
type. Short-term securities maturing within 60 days are valued at amortized
cost, which approximates market value. Securities and assets for which
representative market quotations are not readily available are valued at fair
value as determined in good faith by a committee appointed by the Board of
Directors. The ability of the issuers of the fixed-income securities held by
the fund to meet their obligations may be affected by economic developments in
a specific industry, state or region.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities initially expressed in
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing
market rates at the end of the reporting period. Purchases and sales of
securities and income and expenses are translated into U.S. dollars at the
prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities and other
assets and liabilities are included with the net realized and unrealized gain
or loss on investment securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for as of the trade date. Realized gains and losses from
securities transactions are determined based on specific identified cost. In
the event securities are purchased on a delayed delivery or "when-issued"
basis, the fund will instruct the custodian to segregate liquid assets
sufficient to meet its payment obligations in these transactions. Dividend
income is recognized on the ex-dividend date, and interest income is recognized
on an accrual basis. Market discounts, premiums, and original issue discounts
on fixed-income securities are amortized daily over the expected life of the
security.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions paid
to shareholders are recorded on the ex-dividend date.
Allocations - Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses are allocated daily between Class A
and Class B based on their relative net asset values. Distribution expenses,
transfer agent fees and any other class-specific expenses are accrued daily and
charged to the applicable share class.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - Investments in securities of non-U.S. issuers in certain
countries involve special investment risks. These risks may include, but are
not limited to, investment and repatriation restrictions, revaluation of
currencies, adverse political, social, and economic developments, government
involvement in the private sector, limited and less reliable investor
information, lack of liquidity, certain local tax law considerations, and
limited regulation of the securities markets.
TAXATION - Dividend and interest income is recorded net of non-U.S. taxes
paid. For the year ended September 30, 2000 such non-U.S. taxes were
$30,703,000. Net realized gain of the fund derived in certain countries is
subject to certain non-U.S. taxes. The fund provides for such non-U.S. taxes
on investment income, net realized gain and net unrealized gain.
CURRENCY GAINS AND LOSSES - Net realized currency losses on dividends,
interest, sales of non-U.S. bonds and notes, forward contracts, and other
receivables and payables, on a book basis, were $1,716,000 for the year ended
September 30, 2000.
3. FEDERAL INCOME TAXATION
The fund complies with the requirements of the Internal Revenue Code
applicable to regulated investment companies and intends to distribute all of
its net taxable income and net capital gains for the fiscal year. As a
regulated investment company, the fund is not subject to income taxes if such
distributions are made. Required distributions are determined on a tax basis
and may differ from net investment income and net realized gains for financial
reporting purposes. In addition, the fiscal year in which amounts are
distributed may differ from the year in which the net investment income and net
realized gains are recorded by the fund.
As of September 30, 2000, net unrealized appreciation on investments for
federal income tax purposes aggregated $8,446,108,000; $10,233,199,000 related
to appreciated securities and $1,787,091,000 related to depreciated securities.
During the year ended September 30, 2000, the fund realized, on a tax basis, a
net capital gain of $4,204,522,000 on securities transactions. Net losses
related to non-U.S. currency and other transactions of $1,648,000 are treated
as ordinary income for federal income tax purposes. The cost of portfolio
securities for federal income tax purposes was $25,167,694,000 at September 30,
2000.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $130,767,000 for management services was
incurred 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 the following rates and net asset levels:
<TABLE>
<CAPTION>
NET ASSET LEVEL
RATE IN EXCESS OF UP TO
<S> <C> <C>
0.60% $0 $500 MILLION
0.50 500 million 1 billion
0.46 1 billion 1.5 billion
0.43 1.5 billion 2.5 billion
0.41 2.5 billion 4 billion
0.40 4 billion 6.5 billion
0.395 6.5 billion 10.5 billion
0.39 10.5 billion 17 billion
0.385 17 billion 21 billion
0.38 21 billion 27 billion
0.375 27 billion 34 billion
0.37 34 billion 44 billion
0.365 44 billion
</TABLE>
DISTRIBUTION EXPENSES - American Funds Distributors, Inc. ("AFD"), the
principal underwriter of the fund's shares, received $17,367,000 (after
allowances to dealers) as its portion of the sales charges paid by purchasers
of the fund's Class A shares during the year ended September 30, 2000. Such
sales charges are not an expense of the fund and, hence, are not reflected in
the accompanying Statement of Operations.
The fund has adopted plans of distribution under which it may finance
activities primarily intended to sell fund shares, provided the categories of
expense are approved in advance by the fund's Board of Directors. The plans
provide for aggregate annual expenses limits of 0.25% of net assets for Class A
shares, and 1.00% of net assets for Class B shares.
For Class A shares, approved categories of expense include dealer service fees
of up to 0.25% of net assets. Also included are monthly reimbursements to AFD
for commissions paid during the prior 15-month period to dealers and
wholesalers in respect of certain shares sold without a sales charge. These
reimbursements are permitted only to the extent that the fund's overall 0.25%
annual expense limit is not exceeded. For the year ended September 30, 2000,
aggregate distribution expenses were $81,223,000, or 0.25% of net assets
attributable to Class A shares.
For Class B shares, approved categories of expense include fees of 0.75% per
annum payable to AFD. AFD sells the rights to receive such payments (as well as
any contingent deferred sales charges payable in respect of shares sold during
the period) in order to finance the payment of dealer commissions. Also
included are service fees of 0.25% per annum. These fees are paid to AFD to
compensate AFD for paying service fees to qualified dealers. For the year ended
September 30, 2000, aggregate distribution expenses were $720,000, or 1.00% of
net assets attributable to Class B shares.
As of September 30, 2000, accrued and unpaid distribution expenses payable to
AFD for Class A and Class B shares were $5,780,000 and $201,000, respectively.
TRANSFER AGENT FEE - A fee of $29,069,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund.
DEFERRED DIRECTORS' AND ADVISORY BOARD FEES - Directors and Advisory Board
members who are unaffiliated with CRMC may elect to defer part or all of the
fees earned for services as members of the Board. Amounts deferred are not
funded and are general unsecured liabilities of the fund. As of September 30,
2000, aggregate deferred amounts and earnings thereon since the deferred
compensation plan's adoption (1993), net of any payments to Directors, were
$1,273,000.
AFFILIATED DIRECTORS' AND OFFICERS - CRMC is owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC.
Officers of the fund and certain Directors are or may be considered to be
affiliated with CRMC, AFS and AFD. No such persons received any remuneration
directly from the fund.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $12,263,867,000 and $9,815,916,000, respectively,
during the year ended September 30, 2000.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $7,658,000
includes $164,000 that was paid by these credits rather than in cash.
The fund reclassified $1,738,000 from undistributed net investment income to
undistributed net realized gains; and reclassified $9,025,000 and $131,888,000
from undistributed net investment income and undistributed net realized gains,
respectively, to additional paid-in capital for the year ended September 30,
2000, as a result of permanent differences between book and tax.
Net assets consisted of the following:
<TABLE>
<S> <C>
Capital paid in on shares of capital stock $21,288,298,000
Undistributed net investment income 315,556,000
Accumulated net realized gain 3,610,073,000
Net unrealized appreciation 8,457,693,000
Net Assets $33,671,620,000
</TABLE>
Capital share transactions in the fund were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Year ended Septe mber 30,2000 (1) Year ended Sep tember 30,1999
Amount (000) Shares Amount (000) Shares
Class A Shares:
Sold $ 6,555.931 220,816,130 $ 4,287.650 174,677,528
Reinvestment of dividends 2,334.800 85,115,039 1,462.075 66,803,759
and distributions
Repurchased (3,610.152) (121,160,972) (3,035.817) (124,489,632)
Net increase in Class A 5,280.579 184,770,197 2,713.908 116,991,655
Class B Shares:
Sold 278.838 9,191,145 - -
Reinvestment of dividends - - - -
and distributions
Repurchased (2.420) (80,705) - -
Net increase in Class B 276.418 9,110,440 - -
Total net increase in fund $ 5,556.997 193,880,637 $ 2,713.908 116,991,655
(1) Class B shares not
offered before
March 15, 2000.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
PER-SHARE DATA AND RATIOS (1)
Net
Net asset gains/(losses)
Year value, Net on securities
Ended beginning investment (both realized
September 30 of year income and unrealized)
Class A:
2000 $26.25 $ .30 (2) $4.56 (2)
1999 20.50 .26 7.26
1998 21.86 .27 (.11)
1997 17.77 .29 4.81
1996 16.98 .32 1.40
Class B:
2000 30.11 0.08 (2) (1.65)(2)
Dividends
Year Total from (from net Distributions
Ended investment investment (from capital
September 30 operations income) gains)
Class A:
2000 $4.86 $(.11) $(2.34)
1999 7.52 (.20) (1.57)
1998 .16 (.31) (1.21)
1997 5.10 (.33) (.68)
1996 1.72 (.33) (.60)
Class B:
2000 (1.57) - -
Year Net asset
Ended Total value, end Total
September 30 distributions of year return
Class A:
2000 $(2.45) $28.66 18.93%
1999 (1.77) 26.25 38.43
1998 (1.52) 20.50 1.23
1997 (1.01) 21.86 29.97
1996 (.93) 17.77 10.64
Class B:
2000 - 28.54 (5.21)
Ratio of Ratio of
Year Net assets, expenses net income
Ended end of year to average to average
September 30 (in millions) net assets net assets
Class A:
2000 $33,412 .79% 1.00%
1999 25,752 .77 1.06
1998 17,707 .77 1.27
1997 16,956 .79 1.56
1996 11,688 .82 2.00
Class B:
2000 260 1.53 (3) .56(3)
Year Portfolio
Ended turnover
September 30 rate
Class A:
2000 34.25%
1999 29.14
1998 29.71
1997 25.68
1996 18.12
Class B:
2000 34.25 (4)
</TABLE>
(1) The periods 1996 through 2000 represent, for Class A shares, fiscal years
ended September 30. The period ended 2000 represents, for Class B shares, the
199-day period ended September 30, 2000. Class B shares were not offered before
March 15, 2000. Total return for Class B is based on activity during the period
and thus is not representative of a full year. Total returns exclude all sales
charges, including contingent deferred sales charges.
(2) Based on average shares outstanding.
(3) Annualized.
(4) Represents portfolio turnover rate (equivalent for all share classes) for
the year ended September 30, 2000.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of New Perspective Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of New Perspective Fund (the "Fund")
at September 30, 2000, the results of its operations, the changes in its net
assets and the per-share data and ratios for the years indicated in conformity
with generally accepted accounting principles. These financial statements and
per-share data and ratios (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at September 30, 2000 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PRICEWATERHOUSECOOPER LLP
Los Angeles, California
October 31, 2000
Tax Information (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year.
During the fiscal year ended September 30, 2000, the fund paid a long-term
capital gains distribution of $2,337,892,000 to Class A shareholders.
The fund also designates as a net investment income distribution and as a
capital gain distribution a portion of earnings and profits paid to
shareholders in redemption of their shares.
The fund makes an election under the Internal Revenue Code Section 853 to pass
through non-U.S. taxes paid by the fund to its shareholders. The amount of
non-U.S. taxes for the fiscal year ended September 30, 2000 was $30,703,000.
Foreign source income earned by the fund was $275,008,000. Shareholders are
entitled to a foreign tax credit or an itemized deduction, at their discretion.
Generally, it is more advantageous to claim a credit rather than to take a
deduction.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 35% of the dividends
paid by the fund from net investment income represent qualifying dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans and 403(b) plans need not be reported as taxable income.
However, many retirement plan trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 2001 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR TAX RETURNS. SHAREHOLDERS SHOULD CONSULT THEIR
TAX ADVISERS.
Board of Directors
Elisabeth Allison, Cambridge, Massachusetts
Administrative Director, ANZI, Ltd.
(financial publishing and consulting); publishing consultant,
Harvard Medical School
Vanessa C. L. Chang, Los Angeles, California
President, ResolveItNow.com
(insurance-related Internet company);
former Senior Vice President,
Secured Capital Corporation; former Partner, KPMG
Peat Marwick LLP
Gina H. Despres, Washington, D.C.
President of the fund
Senior Vice President,
Capital Research and Management Company
Robert A. Fox, Livingston, California
President and Chief Executive Officer, Foster Farms Inc.
Alan Greenway, La Jolla, California
Private investor; President, Greenway Associates, Inc.
(management consulting services)
Paul G. Haaga, Jr., Los Angeles, California
Executive Vice President and Director,
Capital Research and Management Company
Koichi Itoh, Tokyo, Japan
Group Vice President-Asia/Pacific, Autosplice, Inc.;
former President and Chief Executive Officer, IMPAC
(management consulting services); former managing
partner, VENCA Management (venture capital)
William H. Kling, St. Paul, Minnesota
President, Minnesota Public Radio;
President, Greenspring Company;
former President, American Public Radio
(now Public Radio International)
Jon B. Lovelace, Los Angeles, California
Vice Chairman of the Board of the fund
Chairman Emeritus, Capital Research and
Management Company
John G. McDonald, Stanford, California
The IBJ Professor of Finance,
Graduate School of Business, Stanford University
William I. Miller, Columbus, Indiana
Chairman of the Board, Irwin Financial Corporation
Kirk P. Pendleton, Huntingdon Valley, Pennsylvania
Chairman of the Board and Chief Executive Officer,
Cairnwood, Inc. (venture capital investment)
Donald E. Petersen, Birmingham, Michigan
Retired; former Chairman of the Board and
Chief Executive Officer, Ford Motor Company
Rozanne L. Ridgway, Washington, D.C.
Chair, Baltic-American Enterprises Fund;
former co-chair, Atlantic Council of the United States
Walter P. Stern, New York, New York
Chairman of the Board of the fund
Chairman of the Board, Capital International, Inc.
Other Officers
Gregg E. Ireland, Washington, D.C.
Executive Vice President of the fund
Senior Vice President,
Capital Research and Management Company
Darcy B. Kopcho, Los Angeles, California
Senior Vice President of the fund
Executive Vice President and Director,
Capital Research Company
Thierry Vandeventer, Geneva, Switzerland
Senior Vice President of the fund
Director, Capital Research and Management Company
Timothy P. Dunn, Washington, D.C.
Vice President of the fund
Senior Vice President, Capital Research Company
Jonathan Knowles, Ph.D., London, England
Vice President and Director of the fund
Vice President, Capital Research Company
Catherine M. Ward, Los Angeles, California
Vice President of the fund
Senior Vice President and Director,
Capital Research and Management Company
Vincent P. Corti, Los Angeles, California
Secretary of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
R. Marcia Gould, Brea, California
Treasurer of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
Dayna Yamabe, Brea, California
Assistant Treasurer of the fund
Assistant Vice President -
Fund Business Management Group,
Capital Research and Management Company
Members of the Advisory Board
Michael R. Bonsignore, Minneapolis, Minnesota
Chairman of the Board and Chief Executive Officer,
Honeywell Inc.
David I. Fisher, Los Angeles, California
Chairman of the Board,
Capital Group International, Inc.;
Chairman of the Board,
Capital Guardian Trust Company
Jean Gandois, Paris, France
Chairman of the Board of Cockerill-Sambre; former
President, Conseil National du Patronat Francais;
former Chairman of the Board and Chief Executive
Officer, Pechiney; former Chairman of the Board,
Pechiney International
Claudio X. Gonzalez Laporte, Mexico, DF, Mexico
Chairman of the Board and Chief Executive Officer,
Kimberly-Clark de Mexico, SA de CV
Sir Peter Holmes, London, England
Director and former Chairman of the Board and
Managing Director, The Royal Dutch/Shell Group of
Companies
Jae H. Hyun, New York, New York
Chairman of the Board, Tong Yang Group
Baron Gualtherus Kraijenhoff,
Nijmegen, The Netherlands
Chairman of the Supervisory Council, Akzo NV
Pierre Lescure, Paris, France
Chairman of the Board and Chief Executive Officer,
CANAL+
Shijuro Ogata, Tokyo, Japan
Non-executive Director, Fuji Xerox Co. Ltd.
and Horiba Ltd.
Alessandro Ovi, Rome, Italy
Chief Executive Officer, Tecnitel
Henry B. Schacht, New York, New York
Director and Senior Advisor,
E.M. Warburg, Pincus & Co., LLC;
Director, Lucent Technologies
Orville H. Schell, Berkeley, California
Dean, Graduate School of Journalism,
University of California at Berkeley
Bruce B. Teele, Melbourne, Australia
Chairman of the Board,
Australian Foundation Investment Co., Ltd.;
former Chairman of the Board and
Chief Executive Officer, J.B. Were & Son
[The American Funds Group(r)]
Offices of the fund and of the investment adviser,
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5823
Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
Custodian of assets
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
Counsel
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
Independent accountants
PricewaterhouseCoopers LLP
350 South Grand Avenue
Los Angeles, California 90071-3405
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
For information about your account or any of the fund's services, or for a
prospectus for any of the American Funds, please contact your financial
adviser. You may also call American Funds Service Company, toll-free, at
800/421-0180 or visit www.americanfunds.com on the World Wide Web. Please read
the prospectus carefully before you invest or send money.
This report is for the information of shareholders of New Perspective Fund, but
it may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details about charges, expenses, investment
objectives and operating policies of the fund. If used as sales material after
December 31, 2000, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Printed on recycled paper
Litho in USA BG/GRS/4835
Lit. No. NPF-011-1100
