<PAGE>
New Perspective Fund/(R)/
Prospectus
MARCH 15, 2000
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
OR DISAPPROVED OF THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
---------------------------------------------------------
NEW PERSPECTIVE FUND, INC.
333 South Hope Street
Los Angeles, California 90071
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-------------------------------------------------------
<S> <C>
Risk/Return Summary 2
-------------------------------------------------------
Fees and Expenses of the Fund 5
-------------------------------------------------------
Investment Objectives, Strategies and Risks 6
-------------------------------------------------------
Management and Organization 9
-------------------------------------------------------
Shareholder Information 11
-------------------------------------------------------
Choosing a Share Class 12
-------------------------------------------------------
Purchase and Exchange of Shares 13
-------------------------------------------------------
Sales Charges 14
-------------------------------------------------------
Sales Charge Reductions and Waivers 16
-------------------------------------------------------
Plans of Distribution 18
-------------------------------------------------------
How to Sell Shares 19
-------------------------------------------------------
Distributions and Taxes 20
-------------------------------------------------------
Financial Highlights 21
-------------------------------------------------------
</TABLE>
1
NEW PERSPECTIVE FUND / PROSPECTUS
NPF-010-0300/MC
<PAGE>
---------------------------------------------------------
RISK/RETURN SUMMARY
The fund seeks to make your investment grow over time by investing in stocks of
companies located around the world. Providing you with future income is a
secondary objective.
The fund is designed for investors seeking capital appreciation through stocks.
Investors in the fund should have a long-term perspective and be able to
tolerate potentially wide price fluctuations. An investment in the fund is
subject to risks, including the possibility that the fund may decline in value
in response to economic, political or social events in the U.S. or abroad. The
prices of equity securities owned by the fund may be affected by events
specifically involving the companies issuing those securities. Although all
securities in the fund's portfolio may be adversely affected by currency
fluctuations or world political, social and economic instability, investments
outside the U.S. may be affected to a greater extent.
Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS IS GREATER
IF YOU INVEST FOR A SHORTER PERIOD OF TIME.
2
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
INVESTMENT RESULTS
The following information provides some indication of the risks of investing in
the fund by showing changes in the fund's investment results from year to year
and by showing how the fund's average annual returns for various periods
compare with those of a broad measure of market performance. Past results are
not an indication of future results.
CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if one were included, results would
be lower.)
------------------------------------------------------------------------------
[bar chart]
1990 -2.08%
1991 22.64%
1992 3.98%
1993 26.98%
1994 2.97%
1995 20.43%
1996 17.28%
1997 14.98%
1998 28.53%
1999 40.07%
[end bar chart]
The fund's highest/lowest quarterly results during this time period were:
<TABLE>
<CAPTION>
<S> <C> <C>
HIGHEST 22.17% (quarter ended December 31, 1999)
LOWEST -14.04% (quarter ended September 30, 1990)
</TABLE>
3
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
For periods ended December 31, 1999:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN ONE YEAR FIVE YEARS TEN YEARS LIFETIME
<S> <C> <C> <C> <C>
Class A/1/
(with the maximum sales charge 32.02% 22.47% 16.23% 15.84%
deducted)
------------------------------------------------------------------------------
Class B/2/ N/A N/A N/A N/A
------------------------------------------------------------------------------
MSCI World Index /3/ 25.34% 20.25% 11.96% 12.76%
------------------------------------------------------------------------------
MSCI USA Index/4/ 22.38% 29.75% 19.01% 13.94%
------------------------------------------------------------------------------
</TABLE>
1 The fund began investment operations for Class A shares on March 13, 1973.
2 The fund is beginning investment operations for Class B shares on March 15,
2000.
3 The Morgan Stanley Capital International World Index measures 22 major stock
markets throughout the world, including the U.S. This index is unmanaged and
does not reflect sales charges, commissions or expenses. The lifetime figure
is from the date the fund's Class A shares began investment operations.
4 The Morgan Stanley Capital International USA Index measures the U.S. portion
of the world market. This index is unmanaged and does not reflect sales
charges, commissions or expenses. The lifetime figure is from the date the
fund's Class A shares began investment operations.
Unlike the bar chart on the previous page, this table reflects the fund's
investment results with the maximum initial or deferred sales charge deducted,
as required by Securities and Exchange Commission rules. Class A share results
are shown with the maximum initial sales charge of 5.75% deducted. Sales
charges are reduced for purchases of $25,000 or more. Results would be higher
if they were calculated at net asset value. All fund results reflect the
reinvestment of dividend and capital gain distributions.
Class B shares are subject to a maximum deferred sales charge of 5.00% if
shares are redeemed within the first year of purchasing them. The deferred
sales charge declines thereafter until it reaches 0% after six years. Class B
shares convert to Class A shares after eight years. Since the fund's Class B
shares begin investment operations on March 15, 2000, no results are available
as of the date of this prospectus.
4
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
FEES AND EXPENSES OF THE FUND
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B
--------------------------------------------------------------------------
<S> <C> <C>
Maximum sales charge imposed on purchases 5.75%/1/ 0.00%
(as a percentage of offering price)
--------------------------------------------------------------------------
Maximum sales charge imposed on reinvested dividends 0.00% 0.00%
--------------------------------------------------------------------------
Maximum deferred sales charge 0.00%/2/ 5.00%/3/
--------------------------------------------------------------------------
Redemption or exchange fees 0.00% 0.00%
</TABLE>
1 Sales charges are reduced or eliminated for purchases of $25,000 or more.
2 A contingent deferred sales charge of 1% applies on certain redemptions made
within 12 months following purchases of $1 million or more made without a
sales charge.
3 Deferred sales charges are reduced after 12 months and eliminated after six
years.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets) CLASS A CLASS B/1/
-----------------------------------------------
<S> <C> <C>
Management Fees 0.40% 0.40%
Distribution and/or Service (12b-1) Fees 0.25%/2/ 1.00%/3/
Other Expenses 0.12% 0.12%
Total Annual Fund Operating Expenses 0.77% 1.52%
</TABLE>
1 Based on estimated amounts for the current fiscal year.
2 Class A 12b-1 expenses may not exceed 0.25% of the fund's average net assets
annually.
3 Class B 12b-1 expenses may not exceed 1.00% of the fund's average net assets
annually.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated, that your investment
has a 5% return each year and that the fund's operating expenses remain the
same as shown above. The Class A example reflects the maximum initial sales
charge in Year One. The Class B-assuming redemption example reflects applicable
contingent deferred sales charges through Year Six (after which time they are
eliminated). Both Class B examples reflect Class A expenses for Years 9 and 10
since Class B shares automatically convert to Class A after eight years.
Although your actual costs may be higher or lower, based on these assumptions
your cumulative expenses would be:
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR
ONE THREE FIVE TEN
<S> <C> <C> <C> <C>
Class A $649 $807 $ 978 $1,474
------------------------------------------------------------------------------
Class B - assuming redemption $655 $880 $1,029 $1,610
Class B - assuming no redemption $155 $480 $ 829 $1,610
</TABLE>
5
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
The fund's primary investment objective is to provide you with long-term growth
of capital. Future income is a secondary objective. The fund invests
primarily in common stocks, including growth-oriented stocks, on a global basis
to take advantage of investment opportunities generated by changes in
international trade patterns and economic and political relationships.
The values of equity securities held by the fund may decline in response to
certain events, including those directly involving the companies whose
securities are owned in the fund, adverse conditions affecting the general
economy, overall market declines, world political, social and economic
instability, and currency fluctuations. The growth-oriented, equity-type
securities generally purchased by the fund may involve large price swings and
potential for loss. Investments outside the U.S. may be affected by these
events to a greater extent and may also be affected by differing securities
regulations, higher transaction costs, and administrative difficulties such as
delays in clearing and settling portfolio transactions.
The fund may also hold cash or money market instruments. The size of the fund's
cash position will vary and will depend on various factors, including market
conditions and purchases and redemptions of fund shares. A larger cash position
could detract from the achievement of the fund's objectives, but it also would
reduce the fund's exposure in the event of a market downturn and provide
liquidity to make additional investments or to meet redemptions.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic investment philosophy of the investment adviser is to
seek undervalued securities that represent good long-term investment
opportunities. Securities may be sold when the investment adviser believes they
no longer represent good long-term value.
6
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
ADDITIONAL INVESTMENT RESULTS
For periods ended December 31, 1999:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN/1/ ONE YEAR FIVE YEARS TEN YEARS LIFETIME
<S> <C> <C> <C> <C>
Class A/2/ 40.07% 23.93% 16.92% 16.10%
(with no sales charge deducted)
----------------------------------------------------------------------------
Class B/3/ N/A N/A N/A N/A
----------------------------------------------------------------------------
MSCI World Index/4/ 25.34% 20.25% 11.96% 12.76%
----------------------------------------------------------------------------
MSCI USA Index/5/ 22.38% 29.75% 19.01% 13.94%
----------------------------------------------------------------------------
</TABLE>
1 These fund results were calculated at net asset value according to a formula
that is required for all stock and bond funds and include the reinvestment of
dividend and capital gain distributions.
2 The fund began investment operations for Class A shares on March 13, 1973.
3 The fund is beginning investment operations for Class B shares on March 15,
2000.
4 The Morgan Stanley Capital International World Index measures 22 major stock
markets throughout the world, including the U.S. This index is unmanaged and
does not reflect sales charges, commissions or expenses. The lifetime figure
is from the date the fund's Class A shares began investment operations.
5 The Morgan Stanley Capital International USA Index measures the U.S. portion
of the world market. This index is unmanaged and does not reflect sales
charges, commissions or expenses. The lifetime figure is from the date the
fund's Class A shares began investment operations.
7
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
The following chart illustrates the industry mix of the fund's investment
portfolio as of the end of the fund's fiscal year, September 30, 1999.
LARGEST INDUSTRY HOLDINGS
[pie chart]
Diversified Telecommunications Services 8.55%
Health & Personal Care 8.34%
Electronic Components 8.20%
Electrical & Electronics 6.95%
Broadcasting & Publishing 5.88%
Other Industries 48.79%
Bonds & Notes 0.43%
Cash & Cash Equivalents 12.86%
[end pie chart]
<TABLE>
<CAPTION>
PERCENT INVESTED BY PERCENT OF TEN LARGEST PERCENT OF
COUNTRY NET ASSETS INDIVIDUAL HOLDINGS NET ASSETS
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASIA/PACIFIC RIM 16.5% Mannesmann 2.28%
---------------------------------
Japan 10.9 Micron Technology 2.09
---------------------------------
Australia 2.6 AstraZeneca 2.09
---------------------------------
Taiwan 1.6 Pfizer 2.04
---------------------------------
South Korea 1.1 Vodafone AirTouch 1.91
---------------------------------
New Zealand .3 Time Warner 1.85
------------------------------------- ---------------------------------
EUROPE 29.1% Viacom 1.77
---------------------------------
United Kingdom 8.7 Ericsson 1.56
---------------------------------
Germany 5.0 Philip Morris 1.37
---------------------------------
France 4.1 Sony 1.23
---------------------------------
Netherlands 3.2
Sweden 1.8
Italy 1.4
Finland 1.4
Switzerland 1.2
Spain .8
Norway .6
Denmark .5
Ireland .4
-------------------------------------
NORTH AMERICA 38.0%
United States 31.6
Canada 4.9
Mexico 1.5
-------------------------------------
OTHER 3.5%
-------------------------------------
CASH & CASH EQUIVALENTS 12.9%
</TABLE>
Because the fund is actively managed, its holdings will change from time to
time.
8
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
MANAGEMENT AND ORGANIZATION
INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and
other funds, including those in The American Funds Group. Capital Research and
Management Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
Research and Management Company manages the investment portfolio and business
affairs of the fund. The total management fee paid by the fund, as a percentage
of average net assets, for the previous fiscal year is discussed earlier under
"Fees and Expenses of the Fund."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company
Institute's Advisory Group on Personal Investing. This policy has also been
incorporated into the fund's code of ethics.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach the portfolio of
a fund is divided into segments which are managed by individual counselors.
Counselors decide how their respective segments will be invested, within the
limits provided by a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee. In addition, Capital Research
and Management Company's research professionals may make investment decisions
with respect to a portion of a fund's portfolio. The primary individual
portfolio counselors for New Perspective Fund are listed on the following page.
9
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE YEARS OF EXPERIENCE
AS AN INVESTMENT PROFESSIONAL
YEARS OF EXPERIENCE (INCLUDING THE LAST FIVE YEARS)
AS PORTFOLIO COUNSELOR -----------------------------------
PORTFOLIO (AND RESEARCH PROFESSIONAL, WITH CAPITAL
COUNSELORS FOR IF APPLICABLE) FOR RESEARCH AND
NEW PERSPECTIVE NEW PERSPECTIVE FUND MANAGEMENT
FUND PRIMARY TITLE(S) (APPROXIMATE) COMPANY
------------------------------------------------------------------------------ OR AFFILIATES TOTAL YEARS
-----------------------------------
<S> <C> <C> <C> <C>
GREGG E. Executive Vice President of 7 years (plus 7 years as a 27 years 27 years
IRELAND the fund. Senior Vice research professional prior
President, Capital Research to becoming a portfolio
and Management Company counselor for the fund)
-----------------------------------------------------------------------------------------------------------------
THIERRY Senior Vice President of the 21 years (plus 5 years as a 37 years 37 years
VANDEVENTER fund. Director, Capital research professional prior
Research and Management to becoming a portfolio
Company counselor for the fund)
-----------------------------------
------------------------------------------------------------------------------
MARK E. Director, Capital Research 7 years (plus 4 years as a 18 years 18 years
DENNING and Management Company research professional prior
to becoming a portfolio
counselor for the fund)
-----------------------------------
------------------------------------------------------------------------------
TIMOTHY P. Senior Vice President, 3 years 10 years 14 years
DUNN Capital Research Company*
----------------------------------------------------------------
-------------------------------------------------
WILLIAM C. Senior Partner, The Capital 27 years (since the fund 41 years 47 years
NEWTON Group Partners L.P.* began operations)
DONALD D. Vice President, Capital Less than 1 year 15 years 15 years
O'NEAL Research and Management
Company
DINA N. Senior Vice President, 7 years 8 years 22 years
PERRY Capital Research and
Management Company
The fund began operations on March 13, 1973.
* Company affiliated with Capital Research and Management Company
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
SHAREHOLDER INFORMATION
SHAREHOLDER SERVICES
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your
needs and circumstances change. These services may be terminated or modified at
any time upon 60 days' written notice. For your convenience, American Funds
Service Company has four service centers across the country.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
Call toll-Free from anywhere in the U.S.
(8 a.m. to 8 p.m. ET):
800/421-0180
[map of the United States]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Western Western Central Eastern Central Eastern
Service Center Service Center Service Center Service Center
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Indiana Norfolk, Virginia
92822-2205 78265-9522 46206-6007 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 Fax: 317/735-6620 Fax: 757/670-4773
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS INCLUDED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION. In addition, an easy-to-read guide to
owning a fund in The American Funds Group titled "Welcome to the Family" is
sent to new shareholders and is available by writing or calling American Funds
Service Company.
You may invest in the fund through various retirement plans. However, Class B
shares generally are not available to certain retirement plans (for example,
group retirement plans such as 401(k) plans, employer-sponsored 403(b) plans,
and money purchase pension and profit sharing plans). Some retirement plans or
accounts held by investment dealers may not offer certain services. If you
have any questions, please contact American Funds Service Company, your plan
administrator/trustee or dealer.
11
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
CHOOSING A SHARE CLASS
The fund offers both Class A and Class B shares. Each share class has its own
sales charge and expense structure, allowing you to choose the class that best
meets your situation.
Factors you should consider in choosing a class of shares include:
- How long you expect to own the shares
- How much you intend to invest
- The expenses associated with owning shares of each class
- Whether you qualify for any reduction or waiver of sales charges (for
example, Class A shares may be a less expensive option over time if you
qualify for a sales charge reduction or waiver)
EACH INVESTOR'S FINANCIAL CONSIDERATIONS ARE DIFFERENT. YOU SHOULD SPEAK WITH
YOUR FINANCIAL ADVISER TO HELP YOU DECIDE WHICH SHARE CLASS IS BEST FOR YOU.
Differences between Class A and Class B shares include:
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------------------------------------------
<S> <S>
Initial sales charge of up to No initial sales charge.
5.75%. Sales charges are reduced
for purchases of $25,000 or more
(see "Sales Charges - Class A").
------------------------------------------------------------------------------
Distribution and service (12b-1) Distribution and service (12b-1) fees
fees of up to 0.25% annually. of up to 1.00% annually.
------------------------------------------------------------------------------
Higher dividends than Class B Lower dividends than Class A shares due
shares due to lower annual to higher distribution fees and other
expenses. expenses.
------------------------------------------------------------------------------
No contingent deferred sales charge A contingent deferred sales charge if
(except on certain redemptions on you sell shares within six years of
purchases of $1 million or more buying them. The charge starts at 5%
bought without an initial sales and declines thereafter until it
charge). reaches 0% after six years. (see "Sales
Charges - Class B").
------------------------------------------------------------------------------
No purchase maximum. Maximum purchase of $100,000.
------------------------------------------------------------------------------
Automatic conversion to Class A shares
after eight years, reducing future
annual expenses.
------------------------------------------------------------------------------
</TABLE>
12
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer (who may
impose transaction charges in addition to those described in this prospectus)
authorized to sell the fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
EXCHANGE
You may exchange your shares into shares of the same class of other funds in
The American Funds Group generally without a sales charge. For purposes of
computing the contingent deferred sales charge on Class B shares, the length of
time you have owned your shares will be measured from the date of original
purchase and will not be affected by any exchange.
Exchanges of shares from the money market funds initially purchased without a
sales charge generally will be subject to the appropriate sales charge.
Exchanges have the same tax consequences as ordinary sales and purchases. See
"Transactions by Telephone..." for information regarding electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE
IS CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A
PERIOD OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO
REJECT ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY
INVESTOR WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES
ACTUAL OR POTENTIAL HARM TO THE FUND.
<TABLE>
<CAPTION>
PURCHASE MINIMUMS FOR CLASS A AND B SHARES
<S> <C>
To establish an account (including retirement plan accounts) $ 250
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account through payroll deduction $ 25
PURCHASE MAXIMUM FOR CLASS B SHARES $100,000
</TABLE>
13
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
SHARE PRICE
The fund calculates its share price, also called net asset value, as of
approximately 4:00 p.m. New York time, which is the normal close of trading on
the New York Stock Exchange, every day the Exchange is open. In calculating net
asset value, market prices are used when available. If a market price for a
particular security is not available, the fund will determine the appropriate
price for the security.
Your shares will be purchased at the net asset value plus any applicable sales
charge in the case of Class A shares, or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request. Sales of certain Class A and B shares may be subject to contingent
deferred sales charges.
---------------------------------------------------------
SALES CHARGES
CLASS A
The initial sales charge you pay when you buy Class A shares differs depending
upon the amount you invest and may be reduced for larger purchases as indicated
below.
<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE OF
----------------------------------
DEALER
NET COMMISSION
OFFERING AMOUNT AS % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 5.00%
------------------------------------------------------------------------------
$25,000 but less than 5.00% 5.26% 4.25%
$50,000
------------------------------------------------------------------------------
$50,000 but less than 4.50% 4.71% 3.75%
$100,000
------------------------------------------------------------------------------
$100,000 but less than 3.50% 3.63% 2.75%
$250,000
------------------------------------------------------------------------------
$250,000 but less than 2.50% 2.56% 2.00%
$500,000
------------------------------------------------------------------------------
$500,000 but less than 2.00% 2.04% 1.60%
$750,000
------------------------------------------------------------------------------
$750,000 but less than $1
million 1.50% 1.52% 1.20%
------------------------------------------------------------------------------
$1 million or more and certain other
investments described below see below see below see below
</TABLE>
CLASS A PURCHASES NOT SUBJECT TO SALES CHARGE
Investments of $1 million or more are sold with no initial sales charge.
HOWEVER, A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE IMPOSED IF REDEMPTIONS
ARE MADE WITHIN ONE YEAR OF PURCHASE. Employer-sponsored defined contribution--
14
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
type plans investing $1 million or more, or with 100 or more eligible
employees, and Individual Retirement Account rollovers involving retirement
plan assets invested in the American Funds, may invest with no sales charge and
are not subject to a contingent deferred sales charge. Investments made
through retirement plans, endowments or foundations with $50 million or more in
assets, or through certain qualified fee-based programs may also be made with
no sales charge and are not subject to a contingent deferred sales charge. The
fund may pay a dealer concession of up to 1% under its Plan of Distribution on
investments made with no initial sales charge.
CLASS B
Class B shares are sold without any initial sales charge. However, a
contingent deferred sales charge may be applied to shares you redeem within six
years of purchase, as shown in the table below.
<TABLE>
<CAPTION>
Contingent deferred sales charge
on shares sold within year as a % of shares being sold
---------------------------------------------------------------
<S> <S>
1 5.00%
2 4.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
</TABLE>
Shares acquired through reinvestment of dividends or capital gain distributions
are not subject to a contingent deferred sales charge. In addition, the
contingent deferred sales charge may be waived in certain circumstances. See
"Contingent Deferred Sales Charge Waivers for Class B Shares" below. The
contingent deferred sales charge is based on the original purchase cost or the
current market value of the shares being sold, whichever is less. For purposes
of determining the contingent deferred sales charge, if you sell only some of
your shares, shares that are not subject to any contingent deferred sales
charge will be sold first and then shares that you have owned the longest.
CLASS B CONVERSION TO A SHARES
Class B shares automatically convert to Class A shares in the month of the
eight-year anniversary of the purchase date. The Internal Revenue Service
currently takes the position that this automatic conversion is not taxable.
Should their position change, shareholders would still have the option of
converting but may face certain tax consequences. Please see the statement of
additional information for more information.
15
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
SALES CHARGE REDUCTIONS AND WAIVERS
You must let your investment dealer or American Funds Service Company know if
you qualify for a reduction in your Class A sales charge or waiver of your
Class B contingent deferred sales charge using one or any combination of the
methods described below, in the statement of additional information and
"Welcome to the Family."
REDUCING YOUR CLASS A SALES CHARGES
You and your "immediate family" (your spouse and your children under the age of
21) may combine investments to reduce your Class A sales charge.
AGGREGATING ACCOUNTS
To receive a reduced Class A sales charge, investments made by you and your
immediate family (see above) may be aggregated if made for their own account(s)
and/or:
- trust accounts established by the above individuals. However, if the
person(s) who established the trust is deceased, the trust account may be
aggregated with accounts of the person who is the primary beneficiary of
the trust.
- solely controlled business accounts.
- single-participant retirement plans.
Other types of accounts may also be aggregated. You should check with your
financial adviser or consult the statement of additional information or
"Welcome to the Family" for more information.
CONCURRENT PURCHASES
You may combine simultaneous purchases of Class A and/or B shares of two or
more American Funds, as well as individual holdings in various American Legacy
variable annuities or variable life insurance policies, to qualify for a
reduced Class A sales charge. Direct purchases of money market funds are
excluded.
RIGHTS OF ACCUMULATION
You may take into account the current value of your existing Class A and B
holdings in the American Funds, as well as individual holdings in various
American Legacy variable annuities or variable life insurance policies, to
determine your Class A sales charge. Direct purchases of money market funds are
excluded.
16
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
STATEMENT OF INTENTION
You can reduce the sales charge you pay on your Class A share purchases by
establishing a Statement of Intention. A Statement of Intention allows you to
combine all Class A and B share non-money market fund purchases, as well as
individual American Legacy variable annuity and life insurance policies you
intend to make over a 13-month period, to determine the applicable sales
charge. At your request purchases made during the previous 90 days may be
included; however, capital appreciation and reinvested dividends and capital
gains do not apply toward these combined purchases. A portion of your account
may be held in escrow to cover additional Class A sales charges which may be
due if your total investments over the 13-month period do not qualify for the
applicable sales charge reduction.
CONTINGENT DEFERRED SALES CHARGE WAIVERS FOR CLASS B SHARES
The contingent deferred sales charge on Class B shares may be waived in the
following cases:
- to receive payments through systematic withdrawal plans (up to 12% of the
value of your account);
- to receive certain distributions, such as required minimum distributions,
from retirement accounts; or
- for redemptions due to death or post-purchase disability of the
shareholder.
For more information, please consult your financial adviser, the statement of
additional information or "Welcome to the Family."
17
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
PLANS OF DISTRIBUTION
The fund has Plans of Distribution or "12b-1 Plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of directors. The plans
provide for annual expenses of up to 0.25% for Class A shares and up to 1.00%
for Class B shares. Up to 0.25% of these payments are used to pay service fees
to qualified dealers for providing certain shareholder services. The remaining
0.75% expense for Class B shares is used for financing commissions paid to your
dealer. The 12b-1 fees paid by the fund, as a percentage of average net assets,
for the previous fiscal year is indicated above under "Fees and Expenses of the
Fund." Since these fees are paid out of the fund's assets or income on an
ongoing basis, over time they will increase the cost and reduce the return of
an investment. The higher fees for Class B shares may cost you more over time
than paying the initial sales charge for Class A shares.
OTHER COMPENSATION TO DEALERS
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.
18
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
HOW TO SELL SHARES
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)
- Shares held for you in your dealer's name must be sold through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- Requests must be signed by the registered shareholder(s).
- A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
- Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/:
- Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day.
- Checks must be made payable to the registered shareholder.
- Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE OR FUNDSLINE ONLINE
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all
of these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your
account(s), you agree to hold the fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, and each of their
respective directors, trustees, officers, employees and agents harmless from
any losses, expenses, costs or liabilities (including attorney fees) which may
be incurred in connection with the exercise of these privileges, provided
American Funds Service Company employs reasonable procedures to confirm that
the instructions received from any person with appropriate account information
are genuine. If reasonable procedures are not employed, the fund may be liable
for losses due to unauthorized or fraudulent instructions.
19
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The fund intends to distribute dividends to you, if any, usually in December.
Capital gains, if any, are usually distributed in December. When a dividend or
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.
You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash. Most shareholders do not elect
to take capital gain distributions in cash because these distributions reduce
principal value.
TAXES ON DISTRIBUTIONS
Distributions you receive from the fund may be subject to income tax and may
also be subject to state or local taxes - unless you are exempt from taxation.
For federal tax purposes, any taxable dividends and distributions of short-term
capital gains are treated as ordinary income. The fund's distributions of net
long-term capital gains are taxable to you as long-term capital gains. Any
taxable distributions you receive from the fund will normally be taxable to you
when made, regardless of whether you reinvest distributions or receive them in
cash.
TAXES ON TRANSACTIONS
Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment in the fund is
the difference between the cost of your shares, including any sales charges,
and the price you receive when you sell them.
Please see the statement of additional information, the "Welcome to the Family"
guide, and your tax adviser for further information.
20
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
results for the past five years and is currently only shown for Class A shares.
A similar table will be shown for Class B shares beginning with the fund's
2000 fiscal year end. Certain information reflects financial results for a
single fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statements, is included in the statement of additional information,
which is available upon request.
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30
------------------------------------
1999 1998 1997 1996 1995
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, $20.50 $21.86 $17.77 $16.98 $15.40
Beginning of Year
-----------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .26 .27 .29 .32 .31
Net gains or losses on
securities (both
realized and 7.26 (.11) 4.81 1.40 2.35
unrealized)
-----------------------------------------------------------------------------------
Total from investment 7.52 .16 5.10 1.72 2.66
operations
-----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends (from net
investment income) (.20) (.31) (.323) (.321) (.237)
Dividends (from net
realized non-U.S.
currency gains)/1/ - - (.007) (.009) (.003)
Distributions (from (1.57) (1.21) (.680) (.600) (.840)
capital gains)
-----------------------------------------------------------------------------------
Total distributions (1.77) (1.52) (1.01) (.93) (1.08)
-----------------------------------------------------------------------------------
Net Asset Value, $26.25 $20.50 $21.86 $17.77 $16.98
End of Year
-----------------------------------------------------------------------------------
Total return/2/ 38.43% 1.23% 29.97% 10.64% 18.63%
-----------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of $25,752 $17,707 $16,956 $11,688 $8,817
year (in millions)
-----------------------------------------------------------------------------------
Ratio of expenses to .77% .77% .79% .82% .83%
average net assets
-----------------------------------------------------------------------------------
Ratio of net income 1.06% 1.27% 1.56% 2.00% 2.12%
to average net assets
-----------------------------------------------------------------------------------
Portfolio turnover
rate 29.14% 29.71% 25.68% 18.12% 22.40%
1Realized non-U.S. currency gains are treated as ordinary income for federal
income tax purposes.
2 Excludes maximum sales charge.
</TABLE>
21
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
---------------------------------------------------------
NOTES
22
NEW PERSPECTIVE FUND / PROSPECTUS
NEW PERSPECTIVE FUND / PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180
FOR RETIREMENT PLAN SERVICES Call your employer or plan administrator
FOR DEALER SERVICES American Funds Distributors
800/421-9900 Ext. 11
FOR 24-HOUR INFORMATION American FundsLine(R)
800/325-3590
American FundsLine OnLine(R)
http://www.americanfunds.com
</TABLE>
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
* * * * *
MULTIPLE TRANSLATIONS This prospectus may be translated into other languages.
If there is any inconsistency or ambiguity as to the meaning of any word or
phrase in a translation, the English text will prevail.
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS Contains additional information
about the fund including financial statements, investment results, portfolio
holdings, a statement from portfolio management discussing market conditions
and the fund's investment strategies, and the independent accountants' report
(in the annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The SAI contains
more detailed information on all aspects of the fund, including the fund's
financial statements and is incorporated by reference into this prospectus.
The codes of ethics describe the personal investing policies adopted by the
fund and the fund's investment adviser and its affiliated companies.
The codes of ethics and current SAI have been filed with the Securities and
Exchange Commission ("SEC"). These and other related materials about the fund
are available for review or to be copied at the SEC's Public Reference Room in
Washington, D.C. (202/942-8090) or on the EDGAR database on the SEC's Internet
Web site at http://www.sec.gov, or, after payment of a duplicating fee, via
e-mail request to [email protected] or by writing the SEC's Public Reference
Section, Washington, D.C. 20549-0102.
HOUSEHOLD MAILINGS Each year you are automatically sent an updated
prospectus, annual and semi-annual report for the fund. In order to reduce the
volume of mail you receive, when possible, only one copy of these documents
will be sent to shareholders that are part of the same family and share the
same residential address.
If you would like to receive individual copies of these documents, or a free
copy of the SAI or Codes of Ethics, please call American Funds Service Company
at 800/421-0180 or write to the Secretary of the fund at 333 South Hope
Street, Los Angeles, California 90071.
Investment Company File No. 811-2333
Printed on recycled paper
<PAGE>
NEW PERSPECTIVE FUND, INC.
Part B
Statement of Additional Information
March 15, 2000
This document is not a prospectus but should be read in conjunction with the
current prospectus of New Perspective Fund (the "fund" or "NPF") dated March 15,
2000. The prospectus may be obtained from your investment dealer or financial
planner or by writing to the fund at the following address:
New Perspective Fund, Inc.
Attention: Secretary
333 South Hope Street
Los Angeles, California 90071
(213) 486-9200
Shareholders who purchase shares at net asset value through eligible retirement
plans should note that not all of the services or features described below may
be available to them, and they should contact their employer for details.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page No.
- ---- --------
<S> <C>
Certain Investment Limitations and Guidelines . . . . . . . . . . . 2
Description of Certain Securities and Investment Techniques . . . . 2
Fundamental Policies and Investment Restrictions. . . . . . . . . . 5
Fund Organization and Voting Rights . . . . . . . . . . . . . . . . 7
Fund Directors and Officers . . . . . . . . . . . . . . . . . . . . 8
Advisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . 20
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . . . . . 25
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Sales Charge Reductions and Waivers . . . . . . . . . . . . . . . . 29
Individual Retirement Account (IRA) Rollovers . . . . . . . . . . . 32
Price of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Selling Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Shareholder Account Services and Privileges . . . . . . . . . . . . 35
Execution of Portfolio Transactions . . . . . . . . . . . . . . . . 38
General Information . . . . . . . . . . . . . . . . . . . . . . . . 38
Class A Share Investment Results and Related Statistics . . . . . . 39
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Financial Statements
</TABLE>
New Perspective Fund - Page 1
<PAGE>
CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES
The following limitations and guidelines are considered at the time of purchase,
under normal market conditions, and are based on a percentage of the fund's net
assets unless otherwise noted. This summary is not intended to reflect all of
the fund's investment limitations.
. The fund invests primarily in common stocks
. The fund may invest up to 10% of its assets in straight debt securities
rated Baa or BBB or below by Moody Investors Services, Inc. (Moody's) or
Standard & Poor's Corporation (S&P) or unrated but determined to be of
equivalent quality.
. The fund may invest up to 5% of its assets in straight debt securities
rated Ba and BB or below by Moody's or S&P or unrated but determined to be
of equivalent quality.
The fund may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.
DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
The descriptions below are intended to supplement the material in the prospectus
under "Investment Objectives, Strategies and Risks."
EQUITY SECURITIES - Equity securities represent an ownership position in a
company. These securities may include common stocks and securities with equity
conversion or purchase rights. The prices of equity securities fluctuate based
on changes in the financial condition of their issuers and on market and
economic conditions. The fund's results will be related to the overall markets
for these securities.
DEBT SECURITIES - Bonds and other debt securities are used by issuers to borrow
money. Issuers pay investors interest and generally must repay the amount
borrowed at maturity. Some debt securities, such as zero coupon bonds, do not
pay current interest, but are purchased at a discount from their face values.
The prices of debt securities fluctuate depending on such factors as interest
rates, credit quality, and maturity. In general their prices decline when
interest rates rise and vice versa.
Lower quality, lower rated bonds rated Ba or below by Standard & Poor's
Corporation and BB or below by Moody's Investors Services, Inc. (or unrated but
considered to be of equivalent quality) are described by the rating agencies as
speculative and involve greater risk of default or price changes due to changes
in the issuer's creditworthiness than higher rated bonds, or they may already be
in default. The market prices of these securities may fluctuate more than higher
quality securities and may decline significantly in periods of general economic
difficulty. It may be more difficult to dispose of, or to determine the value
of, lower quality, lower rated bonds.
Certain risk factors relating to "lower quality, lower rated bonds" are
discussed below.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES - Lower quality, lower
rated bonds can be sensitive to adverse economic changes and political and
corporate developments and may be less sensitive to interest rate changes.
During an economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress that would
adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain
additional financing.
New Perspective Fund - Page 2
<PAGE>
In addition, periods of economic uncertainty and changes can be expected to
result in increased volatility of market prices and yields of lower
quality, lower rated bonds.
PAYMENT EXPECTATIONS - Lower quality, lower rated bonds, like other bonds,
may contain redemption or call provisions. If an issuer exercises these
provisions in a declining interest rate market, the fund would have to
replace the security with a lower yielding security, resulting in a
decreased return for investors. If the issuer of a bond defaults on its
obligations to pay interest or principal or enters into bankruptcy
proceedings, the fund may incur losses or expenses in seeking recovery of
amounts owed to it.
LIQUIDITY AND VALUATION - There may be little trading in the secondary
market for particular bonds, which may affect adversely the fund's ability
to value accurately or dispose of such bonds. Adverse publicity and
investor perceptions, whether or not based on fundamental analysis, may
decrease the values and liquidity of lower quality, lower rated bonds,
especially in a thin market.
The Investment Adviser attempts to reduce the risks described above through
diversification of the portfolio and by credit analysis of each issuer as well
as by monitoring broad economic trends and corporate and legislative
developments, but there can be no assurance that it will be successful in doing
so.
SECURITIES WITH EQUITY AND DEBT CHARACTERISTICS - The fund may invest in
securities that have a combination of equity and debt characteristics such as
non-convertible preferred stocks and convertible securities. These securities
may at times resemble equity more than debt and vice versa. The risks of
convertible preferred stock may be similar to those of equity securities. Some
types of convertible preferred stock automatically convert into common stock.
Non-convertible preferred stock with stated redemption rates are similar to debt
in that they have a stated dividend rate akin to the coupon of a bond or note
even though they are often classified as equity securities. The prices and
yields of non-convertible preferred stock generally move with changes in
interest rates and the issuer's credit quality, similar to the factors affecting
debt securities.
Bonds, convertible preferred stock, and other securities may sometimes be
converted into common stock or other securities at a stated conversion ratio.
These securities prior to conversion pay a fixed rate of interest or a dividend.
Because convertible securities have both debt and equity characteristics, their
value varies in response to many factors, including the value of the underlying
equity, general market and economic conditions, convertible market valuations,
as well as changes in interest rates, credit spreads, and the credit quality of
the issuer.
INVESTING IN VARIOUS COUNTRIES - Investing outside the U.S. involves special
risks, caused by, among other things: currency controls, fluctuating currency
values; different accounting, auditing, and financial reporting regulations and
practices in some countries; changing local and regional economic, political,
and social conditions; expropriation or confiscatory taxation; greater market
volatility; differing securities market structures; and various administrative
difficulties such as delays in clearing and settling portfolio transactions or
in receiving payment of dividends. However, in the opinion of Capital Research
and Management Company, investing outside the U.S. also can reduce certain
portfolio risks due to greater diversification opportunities.
New Perspective Fund - Page 3
<PAGE>
The risks described above are potentially heightened in connection with
investments in developing countries. Although there is no universally accepted
definition, a developing country is generally considered to be a country which
is in the initial stages of its industrialization cycle with a low per capita
gross national product. For example, political and/or economic structures in
these countries may be in their infancy and developing rapidly. Historically,
the markets of developing countries have been more volatile than the markets of
developed countries. The fund may only invest in securities of issuers in
developing countries to a limited extent.
Additional costs could be incurred in connection with the fund's investment
activities outside the U.S. Brokerage commissions may be higher outside the
U.S., and the fund will bear certain expenses in connection with its currency
transactions. Furthermore, increased custodian costs may be associated with the
maintenance of assets in certain jurisdictions.
CURRENCY TRANSACTIONS - The fund can purchase and sell currencies to facilitate
securities transactions and enter into forward currency contracts to protect
against changes in currency exchange rates. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. Forward currency contracts
entered into by the fund will involve the purchase or sale of one currency
against the U.S. dollar. While entering into forward currency transactions could
minimize the risk of loss due to a decline in the value of the hedged currency,
it could also limit any potential gain which might result from an increase in
the value of the currency. The fund will not generally attempt to protect
against all potential changes in exchange rates. The fund will segregate liquid
assets which will be marked to market daily to meet its forward contract
commitments to the extent required by the Securities and Exchange Commission.
Certain provisions of the Internal Revenue Code may affect the extent to which
the fund may enter into forward contracts. Such transactions may also affect,
for U.S. federal income tax purposes, the character and timing of income, gain
or loss recognized by the fund.
FORWARD COMMITMENTS - The fund may enter into commitments to purchase or sell
securities at a future date. When the fund agrees to purchase such securities it
assumes the risk of any decline in value of the security beginning on the date
of the agreement. When the fund agrees to sell such securities it does not
participate in further gains or losses with respect to the securities beginning
on the date of the agreement. If the other party to such a transaction fails to
deliver or pay for the securities, the fund could miss a favorable price or
yield opportunity, or could experience a loss.
As the fund's aggregate commitments under these transactions increase, the
opportunity for leverage similarly increases. The fund will not use these
transactions for the purpose of leveraging and will segregate liquid assets
which will be marked to market daily in an amount sufficient to meet its payment
obligations in these transactions. Although these transactions will not be
entered into for leveraging purposes, to the extent the fund's aggregate
commitments under these transactions exceed its segregated assets, the fund
temporarily could be in a leveraged position (because it may have an amount
greater than its net assets subject to market risk). Should market values of the
fund's portfolio securities decline while the fund is in a leveraged position,
greater depreciation of its net assets would likely occur than were it not in
such a position. The fund will not borrow money to settle these transactions and
therefore, will liquidate other portfolio securities in advance of settlement if
necessary to generate additional cash to meet its obligations thereunder.
New Perspective Fund - Page 4
<PAGE>
The fund may also enter into reverse repurchase agreements and "roll"
transactions. A reverse repurchase agreement is the sale of a security by a fund
and its agreement to repurchase the security at a specified time and price. A
"roll" transaction is the sale of mortgage-backed or other securities together
with a commitment to purchase similar, but not identical securities at a later
date. The fund assumes the rights and risks of ownership, including the risk of
price and yield fluctuations as of the time of the agreement. The fund intends
to treat roll transactions as two separate transactions: one involving the
purchase of a security and a separate transaction involving the sale of a
security. Since the fund does not intend to enter into roll transactions for
financing purposes, it may treat these transactions as not falling within the
definition of "borrowing" set forth in Section 2(a)(23) of the Investment
Company Act of 1940. The fund will segregate liquid assets which will be marked
to market daily in an amount sufficient to meet its payment obligations under
"roll" transactions and reverse repurchase agreements with broker-dealers (no
collateral is required for reverse repurchase agreements with banks).
CASH AND CASH EQUIVALENTS - These securities include (i) commercial paper (e.g.,
short-term notes up to 9 months in maturity issued by corporations, governmental
bodies or bank/ corporation sponsored conduits (asset backed commercial paper)),
(ii) commercial bank obligations (e.g., certificates of deposit, bankers'
acceptances (time drafts on a commercial bank where the bank accepts an
irrevocable obligation to pay at maturity)), (iii) savings association and
savings bank obligations (e.g., bank notes and certificates of deposit issued by
savings banks or savings associations), (iv) securities of the U.S. Government,
its agencies or instrumentalities that mature, or may be redeemed, in one year
or less, and (v) corporate bonds and notes that mature, or that may be redeemed,
in one year or less.
RESTRICTED SECURITIES AND LIQUIDITY - The fund may purchase securities subject
to restrictions on resale. All such securities not actively traded will be
considered illiquid unless they have been specifically determined to be liquid
under procedures which may be adopted by the fund's board of directors, taking
into account factors such as the frequency and volume of trading, the commitment
of dealers to make markets and the availability of qualified investors, all of
which can change from time to time. The fund may incur certain additional costs
in disposing of illiquid securities.
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
FUNDAMENTAL POLICIES - The fund has adopted the following fundamental policies
and investment restrictions which may not be changed without approval by holders
of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940 ("1940 Act") as the vote of the lesser of (i) 67%
or more of the outstanding voting securities present at a meeting, if the
holders of more than 50% of the outstanding voting securities are present in
person or by proxy, or (ii) more than 50% of the outstanding voting securities.
All percentage limitations are considered at the time securities are purchased
and are based on the fund's net assets unless otherwise indicated. None of the
following investment restrictions involving a maximum percentage of assets will
be considered violated unless the excess occurs immediately after, and is caused
by, an acquisition by the fund.
1. Invest in securities of another issuer (other than the U.S. government or
its agencies or instrumentalities), if immediately after and as a result of such
investment more than 5% of the value of the total assets of the fund would be
invested in the securities of such other issuer, or more than 10% of the
outstanding voting securities of such issuer would be owned by the fund;
New Perspective Fund - Page 5
<PAGE>
2. Invest in companies for the purpose of exercising control or management;
3. Invest more than 25% of the value of its total assets in the securities of
companies primarily engaged in any one industry;
4. Buy or sell real estate in the ordinary course of its business; however,
the fund may invest in securities secured by real estate or interests therein or
issued by companies, including real estate investment trusts, which invest in
real estate or interests therein;
5. Buy or sell commodities or commodity contracts in the ordinary course of
its business; provided, however, that this restriction shall not prohibit the
fund from purchasing, selling or holding foreign currencies or entering into
forward foreign currency contracts;
6. Engage in the business of underwriting of securities of other issuers,
except to the extent that the disposal of an investment position may technically
constitute the fund an underwriter as that term is defined under the Securities
Act of 1933;
7. Lend any of its assets; provided, however, that investment in government
obligations, short-term commercial paper, certificates of deposit and banker's
acceptances and publicly traded bonds, debentures, or other debt securities
shall not be deemed to be the making of a loan;
8. Sell securities short, except to the extent that the fund contemporaneously
owns or has the right to acquire at no additional cost securities identical to
those sold short;
9. Purchase securities on margin;
10. Borrow amounts in excess of 5% of the value of its total assets; in any
event, the fund may borrow only as a temporary measure for extraordinary or
emergency purposes and not for investment in securities; nor
11. Mortgage, pledge or hypothecate its assets to any extent.
For purposes of Investment Restriction #3, the fund will not invest 25% or more
of the value of its total assets in the securities of companies primarily
engaged in any one industry.
For purposes of Investment Restriction #8, although the fund may sell securities
short, to the extent that the fund contemporaneously owns or has the right to
acquire at no additional cost securities identical to those sold short, the fund
does not anticipate doing so during the next twelve months.
NON-FUNDAMENTAL POLICIES - The following non-fundamental policy(ies) may be
changed without shareholder approval:
1. Purchase or retain the securities of any issuer, if those individual
officers and directors of the fund, its investment adviser or principal
underwriter, each owning beneficially more than 1/2 of 1% of the securities of
such issuer, together own more than 5% of the securities of such issuer;
2. Invest more than 5% of the value of its total assets in securities of
companies having, together with their predecessors, a record of less than three
years of continuous operation;
New Perspective Fund - Page 6
<PAGE>
3. Invest in puts, calls, straddles or spreads, or combinations thereof; or
4. Purchase partnership interests in oil, gas, or mineral exploration,
drilling or mining ventures.
5. Invest in securities of other investment companies, except as permitted by
the Investment Company Act of 1940, as amended. The fund may invest in
securities of other investment companies if deemed advisable by its officers in
connection with the administration of a deferred compensation plan adopted by
Directors pursuant to an exemptive order granted by the Securities and Exchange
Commission.
6. Invest knowingly more than 10% of its net assets in illiquid securities
FUND ORGANIZATION AND VOTING RIGHTS
The fund, an open-end, diversified management investment company, was organized
as a Maryland corporation on September 5, 1972.
All fund operations are supervised by the fund's Board of Directors which meets
periodically and performs duties required by applicable state and federal laws.
Members of the board who are not employed by Capital Research and Management
Company or its affiliates are paid certain fees for services rendered to the
fund as described in "Directors and Director Compensation" below. They may elect
to defer all or a portion of these fees through a deferred compensation plan in
effect for the fund.
The fund has two classes of shares - Class A and Class B. The shares of each
class represent an interest in the same investment portfolio. Each class has
equal rights as to voting, redemption, dividends and liquidation, except that
each class bears different distribution expenses and may bear different transfer
agent fees and other expenses properly attributable to the particular class as
approved by the Board of Directors. Class A and Class B shareholders have
exclusive voting rights with respect to the rule 12b-1 Plans adopted in
connection with the distribution of shares and on other matters in which the
interests of one class are different from interests in another class. Shares of
all classes of the fund vote together on matters that affect all classes in
substantially the same manner. Each class votes as a class on matters that
affect that class alone.
The fund does not hold annual meetings of shareholders. However, significant
matters which require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. At the request of the holders of at least 10% of the shares,
the fund will hold a meeting at which any member of the board could be removed
by a majority vote.
New Perspective Fund - Page 7
<PAGE>
FUND DIRECTORS AND OFFICERS
Directors and Director Compensation
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
(INCLUDING VOLUNTARILY
DEFERRED
COMPENSATION/1/)
FROM THE FUND
POSITION DURING FISCAL YEAR
WITH PRINCIPAL OCCUPATION(S) DURING ENDED
NAME, ADDRESS AND AGE REGISTRANT PAST 5 YEARS SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Elisabeth Allison Director Administrative Director, ANZI, Ltd. $ 23,500
ANZI, Ltd. (financial publishing and consulting);
1770 Massachusetts Ave. Publishing Consultant, Harvard Medical
Cambridge, MA 02410 School; former Senior Vice President,
Age: 53 Planning and Development, McGraw Hill,
Inc.
- --------------------------------------------------------------------------------------------------------------
Vanessa C.L. Chang Director Principal, ResolveItNow.com (insurance $ 0
11845 Olympic Blvd. related internet company); former
Los Angeles, CA 90064 Senior Vice President, Secured Capital
Age: 48 Corporation; former Partner, KPMG
Peat Marwick LLP
- --------------------------------------------------------------------------------------------------------------
+ Gina H. Despres Director Senior Vice President, Capital None/4/
3000 K Street, N.W. Research and Management Company
Washington, DC 20007
Age: 58
- --------------------------------------------------------------------------------------------------------------
Robert A. Fox Director President and Chief Executive Officer, $22,000/3/
P.O Box 457 Foster Farms, Inc.
Livingston, CA 95334
Age: 62
- --------------------------------------------------------------------------------------------------------------
Alan Greenway Director President, Greenway Associates, Inc. $ 25,000
7413 Fairway Road (management consulting services)
La Jolla, CA 92037
Age: 72
- --------------------------------------------------------------------------------------------------------------
+ Paul G. Haaga, Jr. Director Executive Vice President and Director, None/4/
333 South Hope Street Capital Research and Management
Los Angeles, CA 90071 Company
Age: 51
- --------------------------------------------------------------------------------------------------------------
Koichi Itoh Director Group Vice President - Asia/Pacific, $22,250/3/
7-14-11-104 Minami Autosplice Inc., former President and
Aoyama Chief Executive Officer, IMPAC
Minato-ku, Tokyo, Japan (management consulting services);
Age: 59 former Managing Partner, VENCA
Management (venture capital)
- --------------------------------------------------------------------------------------------------------------
William H. Kling Director President, Minnesota Public Radio; $23,500/3/
45 East Seventh Street President, Greenspring Co.; former
St. Paul, MN 55101 President, American Public Radio (now
Age: 57 Public Radio International)
- --------------------------------------------------------------------------------------------------------------
+ Jon B. Lovelace Vice Chairman Emeritus, Capital Research None/4/
333 South Hope Street Chairman and Management Company
Los Angeles, CA 90071 of
Age: 72 the Board
- --------------------------------------------------------------------------------------------------------------
John G. McDonald Director The IBJ Professor of Finance, Graduate $22,500/3/
Graduate School of School of Business, Stanford
Business University
Stanford University
Stanford, CA 94305
Age: 62
- --------------------------------------------------------------------------------------------------------------
++ William I. Miller Director Chairman of the Board, Irwin Financial $24,000/3/
500 Washington Street Corporation
Box 929
Columbus, IN 47202
Age: 43
- --------------------------------------------------------------------------------------------------------------
Kirk P. Pendleton Director Chairman/Chief Executive Officer, $25,000/3/
Cairnwood, Inc. Cairnwood, Inc. (venture capital
75 James Way investment)
Southhampton, PA 18966
Age: 60
- --------------------------------------------------------------------------------------------------------------
Donald E. Petersen Director Former Chairman of the Board and Chief $22,500/3/
255 East Brown, Suite 460 Executive Officer, Ford Motor Company
Birmingham, MI 48009
Age: 73
- --------------------------------------------------------------------------------------------------------------
Rozanne L. Ridgway Director Chair, Baltic American $ 10,000
Baltic-American Enterprise Enterprises Fund;
Fund former Co Chair,
1625 K Street, N.W. Atlantic Council of the
Washington, DC 20006 United States
Age: 64
- --------------------------------------------------------------------------------------------------------------
+ Walter P. Stern Chairman Vice Chairman, Capital Group None/4/
630 Fifth Avenue of International, Inc.; Chairman, Capital
New York, NY 10111 the Board International, Inc.; Director,
Age: 71 Temple-Inland Inc. (forest products)
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL COMPENSATION
(INCLUDING VOLUNTARILY
DEFERRED
COMPENSATION/1/) FROM TOTAL NUMBER
ALL FUNDS MANAGED BY OF FUND
CAPITAL RESEARCH AND BOARDS
MANAGEMENT COMPANY ON WHICH
OR ITS AFFILIATES/2/ FOR THE DIRECTOR
NAME, ADDRESS AND AGE YEAR ENDED SEPTEMBER 30, 1999 SERVES/2/
- ---------------------------------------------------------------------------
<S> <C> <C>
Elisabeth Allison $ 55,000 3
ANZI, Ltd.
1770 Massachusetts Ave.
Cambridge, MA 02410
Age: 53
- ---------------------------------------------------------------------------
Vanessa C.L. Chang $ 0 1
- ---------------------------------------------------------------------------
+ Gina H. Despres None/4/ 3
3000 K Street, N.W.
Washington, DC 20007
Age: 58
- ---------------------------------------------------------------------------
Robert A. Fox $133,500/3/ 7
P.O Box 457
Livingston, CA 95334
Age: 62
- ---------------------------------------------------------------------------
Alan Greenway $ 94,500 5
7413 Fairway Road
La Jolla, CA 92037
Age: 72
- ---------------------------------------------------------------------------
+ Paul G. Haaga, Jr. None/4/ 15
333 South Hope Street
Los Angeles, CA 90071
Age: 51
- ---------------------------------------------------------------------------
Koichi Itoh $58,000/3/ 3
7-14-11-104 Minami
Aoyama
Minato-ku, Tokyo, Japan
Age: 59
- ---------------------------------------------------------------------------
William H. Kling $95,250/3/ 6
45 East Seventh Street
St. Paul, MN 55101
Age: 57
- ---------------------------------------------------------------------------
+ Jon B. Lovelace None/4/ 3
333 South Hope Street
Los Angeles, CA 90071
Age: 72
- ---------------------------------------------------------------------------
John G. McDonald $240,750/3/ 8
Graduate School of
Business
Stanford University
Stanford, CA 94305
Age: 62
- ---------------------------------------------------------------------------
++ William I. Miller $55,500/3/ 3
500 Washington Street
Box 929
Columbus, IN 47202
Age: 43
- ---------------------------------------------------------------------------
Kirk P. Pendleton $131,000/3/ 6
Cairnwood, Inc.
75 James Way
Southhampton, PA 18966
Age: 60
- ---------------------------------------------------------------------------
Donald E. Petersen $94,000/3/ 5
255 East Brown, Suite 460
Birmingham, MI 48009
Age: 73
- ---------------------------------------------------------------------------
Rozanne L. Ridgway $ 10,000 1
Baltic-American Enterprise
Fund
1625 K Street, N.W.
Washington, DC 20006
Age: 64
- ---------------------------------------------------------------------------
+ Walter P. Stern None/4/ 4
630 Fifth Avenue
New York, NY 10111
Age: 71
- ---------------------------------------------------------------------------
</TABLE>
New Perspective Fund - Page 8
<PAGE>
New Perspective Fund - Page 9
<PAGE>
New Perspective Fund - Page 10
<PAGE>
+ "Interested persons" within the meaning of the 1940 Act on the basis of their
affiliation with the fund's Investment Adviser, Capital Research and
Management Company, or the parent company of the Investment Adviser, The
Capital Group Companies, Inc.
++ May be deemed an "interested person" of the fund due to membership on the
board of directors of the parent company of a registered broker-dealer.
1 Amounts may be deferred by eligible Directors under a non-qualified deferred
compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more funds in The
American Funds Group as designated by the Directors.
2 Capital Research and Management Company manages The American Funds Group
consisting of 29 funds: AMCAP Fund, Inc., American Balanced Fund, Inc.,
American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash
Management Trust of America, Capital Income Builder, Inc., Capital World
Growth and Income Fund, Inc., Capital World Bond Fund, Inc., EuroPacific
Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc.,
The Income Fund of America, Inc., Intermediate Bond Fund of America, The
Investment Company of America, Limited Term Tax-Exempt Bond Fund of America,
The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc.,
SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The
Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt
Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S. Treasury
Money Fund of America, U.S. Government Securities Fund and Washington Mutual
Investors Fund, Inc. Capital Research and Management Company also manages
American Variable Insurance Series and Anchor Pathway Fund, which serve as the
underlying investment vehicle for certain variable insurance contracts; and
Endowments, whose shareholders are limited to (i) any entity exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended ("501(c)(3) organization"); (ii) any trust, the present or future
beneficiary of which is a 501(c)(3) organization, and (iii) any other entity
formed for the primary purpose of benefiting a 501(c)(3) organization. An
affiliate of Capital Research and Management Company, Capital International,
Inc., manages Emerging Markets Growth Fund, Inc.
3 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) during the 1999
fiscal year for participating Directors is as follows: Robert A. Fox
($319,000), Koichi Itoh ($89,800), William H. Kling ($119,200), John G.
McDonald ($135,800), William I. Miller ($89,700), Kirk P. Pendleton ($81,900)
and Donald E. Petersen ($20,600). Amounts deferred and accumulated earnings
thereon are not funded and are general unsecured liabilities of the fund until
paid to the Directors.
4 Gina H. Despres, Paul G. Haaga, Jr., Jon B. Lovelace and Walter P. Stern are
affiliated with the Investment Adviser and, accordingly, receive no
compensation from the fund.
New Perspective Fund - Page 11
<PAGE>
OFFICERS
<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS AGE WITH REGISTRANT PAST 5 YEARS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Darcy B. Kopcho 45 Senior Vice Executive Vice President and
333 South Hope Street President Director,
Los Angeles, CA 90071 Capital Research Company*
- -------------------------------------------------------------------------------
Gregg E. Ireland 49 Executive Vice Senior Vice President, Capital
3000 K Street, N.W. President Research and Management Company
Washington, DC 20007
- -------------------------------------------------------------------------------
Thierry Vandeventer 64 Senior Vice Director, Capital Research and
3 Place des Bergues President Management Company
1201 Geneva,
Switzerland
- -------------------------------------------------------------------------------
Jonathan O. Knowles 38 Vice President Vice President,
25 Bedford Street Capital Research Company*
London, England WC2E
9HN
- -------------------------------------------------------------------------------
Cathy M. Ward 52 Vice President Senior Vice President and
333 South Hope Street Director,
Los Angeles, CA 90071 Capital Research and Management
Company
- -------------------------------------------------------------------------------
Vincent P. Corti 43 Secretary Vice President - Fund Business
333 South Hope Street Mangement Group, Capital Research
Los Angeles, CA 90071 and Management Company
- -------------------------------------------------------------------------------
R. Marcia Gould 45 Treasurer Vice President - Fund Business
135 South State Mangement Group, Capital Research
College Blvd. and Management Company
Brea, CA 92821
- -------------------------------------------------------------------------------
Dayna G. Yamabe 32 Assistant Assistant Vice President - Fund
135 South State Treasurer Business Management Group,
College Blvd. Capital Research and Management
Brea, CA 92821 Company
- -------------------------------------------------------------------------------
</TABLE>
* Company affiliated with Capital Research and Management Company.
All of the officers listed are officers, and/or directors/trustees of one or
more of the other funds for which Capital Research and Management Company serves
as Investment Adviser.
No compensation is paid by the fund to any officer or Director who is a
director, officer or employee of the Investment Adviser or affiliated companies.
The fund pays annual fees of $18,000 to Directors who are not affiliated with
the Investment Adviser, plus $1,000 for each Board of Directors meeting attended
($2,500 for each meeting attended in conjunction with meetings of the Advisory
Board), plus $500 for each meeting attended as a member of a committee of the
Board of Directors. No pension or retirement benefits are accrued as part of
fund expenses. The Directors may elect, on a voluntary basis, to defer all or a
portion of their fees through a deferred compensation plan in effect for the
fund. The Investment Adviser also reimburses certain expenses of the Directors
who are not affiliated with the Investment Adviser. As of February 15, 2000 the
officers and Directors of the fund and their families, as a group, owned
beneficially or of record less than 1% of the outstanding shares of the fund.
New Perspective Fund - Page 12
<PAGE>
ADVISORY BOARD MEMBERS
ADVISORY BOARD MEMBER COMPENSATION
The Board of Directors has established an Advisory Board whose members are, in
the judgment of the Directors, highly knowledgeable about world political and
economic matters. In addition to holding meetings with the Board of Directors,
members of the Advisory Board, while not participating in specific investment
decisions, consult from time to time with the Investment Adviser, primarily with
respect to world trade and business conditions. Members of the Advisory Board,
however, possess no authority or responsibility with respect to the fund^s
investments or management. The fund pays fees of $5,000 per annum to Advisory
Board members who are not affiliated with the Investment Adviser, plus $5,000
for each meeting attended in conjunction with meetings with the Board of
Directors. The members of the Advisory Board and their current or former
principal occupations are as follows:
<TABLE>
<CAPTION>
TOTAL COMPENSATION
(INCLUDING VOLUNTARILY
DEFERRED
AGGREGATE COMPENSATION/1/)
COMPENSATION FROM ALL FUNDS
(INCLUDING MANAGED BY CAPITAL
VOLUNTARILY RESEARCH AND
DEFERRED MANAGEMENT COMPANY
COMPENSATION/1/) OR ITS AFFILIATES/2/
POSITION PRINCIPAL FROM THE FUND FOR THE FISCAL
WITH OCCUPATION(S) DURING FISCAL YEAR YEAR ENDED
NAME, ADDRESS AND AGE REGISTRANT DURING PAST 5 YEARS ENDED SEPTEMBER 30, 1999 SEPTEMBER 30, 1999
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael R. Advisory Chairman of the $22,500/3/ $51,250/3/
Bonsignore Board Board and Chief
Honeywell Plaza Member Executive Officer,
P.O. Box 524 Honeywell Inc.
Minneapolis, MN
55440
Age: 58
- ---------------------------------------------------------------------------------------------------------------------
David I. Fisher Advisory Director, The None/4/ None/4/
333 South Hope Board Capital
Street Member Group Companies,
Los Angeles, CA Inc. (an
90071 affiliate of the
Age: 60 Investment
Adviser)
- ---------------------------------------------------------------------------------------------------------------------
Jean Gandois Advisory Chairman of the $ 10,000 $ 10,000
4 rue Quentin Board Member Board,
Bauchart Cockerill Sambre;
75008 Paris President, Conseil
France National du Patronat
Age: 69 Francais; former
Chairman and
Chief Executive
Officer,
Pechiney
- ---------------------------------------------------------------------------------------------------------------------
Claudio X. Gonzalez Advisory Chairman of the $ 10,000 $ 10,000
Laporte Board Board
Kimberly Clark Member and Chief Executive
de Mexico, SA Officer,
103-3 Colonia Kimberly Clark
Polanco Los Morales de Mexico, SA
Mexico, DF, Mexico
Age: 65
- ---------------------------------------------------------------------------------------------------------------------
Sir Peter Holmes Advisory Director and former $ 10,000 $ 10,000
Shell Centre Board Chairman
London, SE1 7NA Member of the Board
United Kingdom and Managing
Age: 67 Director,
The Royal
Dutch/Shell
Group of Companies
- ---------------------------------------------------------------------------------------------------------------------
Jae H. Hyun Advisory Chairman, Tong Yang $ 10,000 $ 10,000
Tong Yang Group Board Group
185, 2-Ka, Member
Eulchi-ro, Chung-ku
Seoul, Korea 100-192
Age: 50
- ---------------------------------------------------------------------------------------------------------------------
Baron Gualtherus Advisory Chairman of the $ 10,000 $ 10,000
Kraijenhoff Board Supervisory Council,
Stoeplaan 9, Flat 58 Member AKZO N.V.
The Netherlands
Age: 77
- ---------------------------------------------------------------------------------------------------------------------
Pierre Lescure Advisory Chairman and $ 10,000 $ 10,000
CANAL + Board Chief Executive
85-89 quai Andre Member Officer, CANAL +
Citroen
F-75015 Paris
France
Age: 54
- ---------------------------------------------------------------------------------------------------------------------
Shijuro Ogata Advisory Non-executive $ 10,000 $ 10,000
Ota-ku, Tokyo Board Director,
145-0071 Member Fuji Xerox Co. Ltd.
Age: 72 And Horiba Ltd.
- ---------------------------------------------------------------------------------------------------------------------
Alessandro Ovi Advisory Chief Executive $ 10,000 $ 10,000
Tecnitel Board Officer,
Via Abruzzi, 3 Member Tecnitel
Rome, Italy
Age: 55
- ---------------------------------------------------------------------------------------------------------------------
Henry B. Schact Advisory Board Director and Senior $ 0/5/ $ 0/5/
E.M. Warburg, Pincus Member Adviser, E.M.
& Co., LLC Warburg, Pincus &
466 Lexington Avenue Co., LLC; Director,
New York, NY Lucent Technologies
Age: 65
- ---------------------------------------------------------------------------------------------------------------------
Orville H. Schell Advisory Dean, Graduate $ 10,000 $ 10,000
Graduate School of Board School of
Journalism Member Journalism,
121 North Gate Hall University of
University of California, Berkeley
California
Berkeley, CA 94720
Age: 59
- ---------------------------------------------------------------------------------------------------------------------
Bruce B. Teele Advisory Chairman and $ 10,000 $ 10,000
Australian Board Chief Executive
Foundation Member Officer, J.B. Were &
Investment Co. Ltd. Son;
101 Collins Street Chairman,
Melbourne, Victoria Australian
3000 Foundation
Australia Investment Co. Ltd.
Age: 62
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL NUMBER
OF FUND BOARDS
ON WHICH
ADVISORY BOARD
NAME, ADDRESS AND AGE MEMBER SERVES/2/
- ------------------------------------------
<S> <C>
Michael R. 1
Bonsignore
Honeywell Plaza
P.O. Box 524
Minneapolis, MN
55440
Age: 58
- ------------------------------------------
David I. Fisher 2
333 South Hope
Street
Los Angeles, CA
90071
Age: 60
- ------------------------------------------
Jean Gandois 1
4 rue Quentin
Bauchart
75008 Paris
France
Age: 69
- ------------------------------------------
Claudio X. Gonzalez 1
Laporte
Kimberly Clark
de Mexico, SA
103-3 Colonia
Polanco Los Morales
Mexico, DF, Mexico
Age: 65
- ------------------------------------------
Sir Peter Holmes 1
Shell Centre
London, SE1 7NA
United Kingdom
Age: 67
- ------------------------------------------
Jae H. Hyun 1
Tong Yang Group
185, 2-Ka,
Eulchi-ro, Chung-ku
Seoul, Korea 100-192
Age: 50
- ------------------------------------------
Baron Gualtherus 1
Kraijenhoff
Stoeplaan 9, Flat 58
The Netherlands
Age: 77
- ------------------------------------------
Pierre Lescure 1
CANAL +
85-89 quai Andre
Citroen
F-75015 Paris
France
Age: 54
- ------------------------------------------
Shijuro Ogata 1
Ota-ku, Tokyo
145-0071
Age: 72
- ------------------------------------------
Alessandro Ovi 1
Tecnitel
Via Abruzzi, 3
Rome, Italy
Age: 55
- ------------------------------------------
Henry B. Schact 1
E.M. Warburg, Pincus
& Co., LLC
466 Lexington Avenue
New York, NY
Age: 65
- ------------------------------------------
Orville H. Schell 1
Graduate School of
Journalism
121 North Gate Hall
University of
California
Berkeley, CA 94720
Age: 59
- ------------------------------------------
Bruce B. Teele 1
Australian
Foundation
Investment Co. Ltd.
101 Collins Street
Melbourne, Victoria
3000
Australia
Age: 62
- ------------------------------------------
</TABLE>
New Perspective Fund - Page 13
<PAGE>
New Perspective Fund - Page 14
<PAGE>
New Perspective Fund - Page 15
<PAGE>
1 Amounts may be deferred by eligible advisory board members under a
non-qualified deferred compensation plan adopted by the fund in 1993. Deferred
amounts accumulate at an earnings rate determined by the total return of one
or more funds in The American Funds Group as designed by the Advisory Board
member.
2 Capital Research and Management Company manages The American Funds Group
consisting of 29 funds: AMCAP Fund, Inc., American Balanced Fund, Inc.,
American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash
Management Trust of America, Capital Income Builder, Inc., Capital World
Growth and Income Fund, Inc., Capital World Bond Fund, Inc., EuroPacific
Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc.,
The Income Fund of America, Inc., Intermediate Bond Fund of America, The
Investment Company of America, Limited Term Tax-Exempt Bond Fund of America,
The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc.,
SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The
Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt
Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S. Treasury
Money Fund of America, U.S. Government Securities Fund and Washington Mutual
Investors Fund, Inc. Capital Research and Management Company also manages
American Variable Insurance Series and Anchor Pathway Fund, which serve as the
underlying investment vehicle for certain variable insurance contracts; and
Endowments, whose shareholders are limited to (i) any entity exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended ("501(c)(3) organization"); (ii) any trust, the present or future
beneficiary of which is a 501(c)(3) organization, and (iii) any other entity
formed for the primary purpose of benefiting a 501(c)(3) organization. An
affiliate of Capital Research and Management Company, Capital International,
Inc., manages Emerging Markets Growth Fund, Inc.
New Perspective Fund - Page 16
<PAGE>
3 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) during the 1999
fiscal year for participating Directors is as follows: Michael R. Bonsignore
($62,800). Amounts deferred and accumulated earnings thereon are not funded
and are general unsecured liabilities of the fund until paid to the Directors.
4 David I. Fisher is affiliated with the Investment Adviser and, accordingly,
receives no compensation from the fund.
5 Henry B. Schact was appointed to the Advisory Board effective October 1, 1999
and, therefore, received no compensation from the fund in fiscal year 1999.
New Perspective Fund - Page 17
<PAGE>
MANAGEMENT
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains research
facilities in the U.S. and abroad (Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Hong Kong, Singapore and Tokyo), with a staff
of professionals, many of whom have a number of years of investment experience.
The Investment Adviser is located at 333 South Hope Street, Los Angeles, CA
90071, and at 135 South State College Boulevard, Brea, CA 92821. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world. The
Investment Adviser believes that it is able to attract and retain quality
personnel. The Investment Adviser is a wholly owned subsidiary of The Capital
Group Companies, Inc.
The Investment Adviser is responsible for managing more than $300 billion of
stocks, bonds and money market instruments and serves over 11 million
shareholder accounts of all types throughout the world. These investors include
privately owned businesses and large corporations as well as schools, colleges,
foundations and other non-profit and tax-exempt organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the Investment Adviser will
continue in effect until December 31, 2000, unless sooner terminated, and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (i) the Board of Directors, or by the
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the fund, and (ii) the vote of a majority of Directors who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement provides that the Investment Adviser has no
liability to the fund for its acts or omissions in the performance of its
obligations to the fund not involving willful misconduct, bad faith, gross
negligence or reckless disregard of its obligations under the Agreement. The
Agreement also provides that either party has the right to terminate it, without
penalty, upon 60 days' written notice to the other party, and that the Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of persons
to perform the executive, administrative, clerical and bookkeeping functions of
the fund, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies, and postage used at
the offices of the fund. The fund pays all expenses not assumed by the
Investment Adviser, including, but not limited to, custodian, stock transfer and
dividend disbursing fees and expenses; costs of the designing, printing and
mailing of reports, prospectuses, proxy statements, and notices to its
shareholders; taxes; expenses of the issuance and redemption of shares of the
fund (including stock certificates, registration and qualification fees and
expenses); expenses pursuant to the fund's Plans of Distribution (described
below); legal and auditing expenses; compensation, fees, and expenses paid to
directors unaffiliated with the Investment Adviser; association dues; costs of
stationery and forms prepared exclusively for the fund; and costs of assembling
and storing shareholder account data.
New Perspective Fund - Page 18
<PAGE>
As compensation for its services, the Investment Adviser receives a monthly fee
which is accrued daily, calculated at the annual rate of 0.60% on the first $500
million of the fund's net assets, 0.50% on net assets between $500 million and
$1 billion, 0.46% on net assets between $1 billion and $1.5 billion, 0.43% on
net assets between $1.5 billion and $2.5 billion, 0.41% on net assets between
$2.5 billion and $4 billion, 0.40% on net assets between $4 billion and $6.5
billion, 0.395% on net assets between $6.5 billion and $10.5 billion, 0.39% on
net assets between $10.5 billion and $17 billion, 0.385% on net assets between
$17 billion and $21 billion, 0.38% on net assets between $21 billion and $27
billion, 0.375% on net assets between $27 billion and $34 billion, 0.37%
on net assets between $34 billion and $44 billion, and 0.365% on net
assets over $44 billion.
The Investment Adviser has agreed that in the event the expenses of Class A
shares of the fund (with the exclusion of interest, taxes, brokerage costs,
extraordinary expenses such as litigation and acquisitions or other expenses
excludable under applicable state securities laws or regulations) for any fiscal
year ending on a date on which the Agreement is in effect, exceed the expense
limitations, if any, applicable to the fund pursuant to state securities laws or
any regulations thereunder, it will reduce its fee by the extent of such excess
and, if required pursuant to any such laws or any regulations thereunder, will
reimburse the fund in the amount of such excess. To the extent the fund's
management fee must be waived due to Class A share expense ratios exceeding the
above limit, management fees will be reduced similarly for all classes of shares
of the fund or other Class A fees will be waived in lieu of management fees.
For the fiscal years ended September 30, 1999, 1998, and 1997, the Investment
Adviser received advisory fees of $90,549,000, $72,691,000, and $59,337,000,
respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal
Underwriter") is the principal underwriter of the fund's shares. The Principal
Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92821, 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240,
and 5300 Robin Hood Road, Norfolk, VA 23513. The fund has adopted Plans of
Distribution (the Plans), pursuant to rule 12b-1 under the 1940 Act. The
Principal Underwriter receives amounts payable pursuant to the Plans (see below)
and commissions consisting of that portion of the sales charge remaining after
the discounts which it allows to investment dealers. Commissions retained by the
Principal Underwriter on sales of Class A shares during the 1999 fiscal year
amounted to $14,809,000 after allowance of $73,716,000 to dealers.
During the fiscal years ended 1998 and 1997 the Principal Underwriter retained
$11,088,000 and $12,090,000, respectively on sales of Class A shares after an
allowance of $55,870,000 and $62,293,000 to dealers, respectively.
As required by rule 12b-1 and the 1940 Act, the Plans (together with the
Principal Underwriting Agreement) have been approved by the full Board of
Directors and separately by a majority of the directors who are not "interested
persons" of the fund and who have no direct or indirect financial interest in
the operation of the Plans or the Principal Underwriting Agreement. The officers
and directors who are "interested persons" of the fund may be considered to have
a direct or indirect financial interest in the operation of the Plans due to
present or past affiliations with the Investment Adviser and related companies.
Potential benefits of the Plans to the fund include shareholder services,
savings to the fund in transfer agency costs, savings to the fund in advisory
fees and other expenses, benefits to the investment process from growth or
stability of assets and maintenance of a financially healthy management
organization. The selection and nomination of directors who are not "interested
persons" of the fund are committed to the discretion of the directors who are
not "interested persons" during the existence of the Plans.
New Perspective Fund - Page 19
<PAGE>
Plan expenses are reviewed quarterly and the Plans must be renewed annually by
the Board of Directors.
Under the Plans the fund may expend up to 0.25% of its net assets annually for
Class A shares and up to 1.00% of its net assets annually for Class B shares to
finance any activity which is primarily intended to result in the sale of fund
shares, provided the fund's Board of Directors has approved the category of
expenses for which payment is being made. For Class A shares these include up to
0.25% in service fees for qualified dealers and dealer commissions and
wholesaler compensation on sales of shares exceeding $1 million purchased
without a sales charge (including purchases by employer-sponsored defined
contribution-type retirement plans investing $1 million or more or with 100 or
more eligible employees, rollover IRA accounts as described in "Individual
Retirement Account (IRA) Rollovers" below, and retirement plans, endowments or
foundations with $50 million or more in assets). For Class B shares these
include 0.25% in service fees for qualified dealers and 0.75% in payments to the
Principal Underwriter for financing commissions paid to qualified dealers
selling Class B shares.
Commissions on sales of Class A shares exceeding $1 million (including purchases
by any employer-sponsored 403(b) plan or purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revenue Code, including any
"401(k)" plan with 100 or more eligible employees) in excess of the Class A Plan
limitation not reimbursed during the most recent fiscal quarter are recoverable
for five quarters, provided that such commissions do not exceed the annual
expense limit. After five quarters, these commissions are not recoverable.
During the 1999 fiscal year, the fund paid or accrued $56,076,000 for
compensation to dealers or the Principal Underwriter under the Plan for Class A
shares. As of September 30, 1999, accrued and unpaid distribution expenses were
$4,539,000.
OTHER COMPENSATION TO DEALERS - The Principal Underwriter, at its expense (from
a designated percentage of its income), currently provides additional
compensation to dealers. Currently these payments are limited to the top 100
dealers who have sold shares of the fund or other funds in The American Funds
Group. These payments will be based principally on a pro rata share of a
qualifying dealer's sales. The Principal Underwriter will, on an annual basis,
determine the advisability of continuing these payments.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS - The fund intends to follow the practice of distributing
substantially all of its investment company taxable income which includes any
excess of net realized short-term gains over net realized long-term capital
losses. Additional distributions may be made, if necessary. The fund also
intends to follow the practice of distributing the entire excess of net realized
long-term capital gains over net realized short-term capital losses. However,
the fund may retain all or part of such gain for reinvestment, after paying the
related federal taxes for which shareholders may then be able to claim a credit
against their federal tax liability. If the fund does not distribute the amount
of capital gain and/or net investment income required to be distributed by an
excise tax provision of the Code, the fund may be subject to that excise tax. In
certain circumstances, the fund may determine that it is in the interest of
shareholders to distribute less than the required amount. In this case, the fund
will pay any income or excise taxes due.
New Perspective Fund - Page 20
<PAGE>
Dividends will be reinvested in shares of the fund unless shareholders indicate
in writing that they wish to receive them in cash or in shares of other American
Funds, as provided in the prospectus.
TAXES - The fund has elected to be treated as a regulated investment company
under Subchapter M of the Code. A regulated investment company qualifying under
Subchapter M of the Code is required to distribute to its shareholders at least
90% of its investment company taxable income (including the excess of net
short-term capital gain over net long-term capital losses) and generally is not
subject to federal income tax to the extent that it distributes annually 100% of
its investment company taxable income and net realized capital gains in the
manner required under the Code. The fund intends to distribute annually all of
its investment company taxable income and net realized capital gains and
therefore does not expect to pay federal income tax, although in certain
circumstances the fund may determine that it is in the interest of shareholders
to distribute less than that amount.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gain (both long-term and short-term)
for the one-year period ending on October 31 (as though the one-year period
ending on October 31 were the regulated investment company's taxable year), and
(iii) the sum of any untaxed, undistributed net investment income and net
capital gains of the regulated investment company for prior periods. The term
"distributed amount" generally means the sum of (i) amounts actually distributed
by the fund from its current year's ordinary income and capital gain net income
and (ii) any amount on which the fund pays income tax during the periods
described above. The fund intends to distribute net investment income and net
capital gains so as to minimize or avoid the excise tax liability.
Investment company taxable income generally includes dividends, interest, net
short-term capital gains in excess of net long-term capital losses, and certain
foreign currency gains, if any, less expenses and certain foreign currency
losses, if any. Net capital gains for a fiscal year are computed by taking into
account any capital loss carry-forward of the fund.
If any net long-term capital gains in excess of net short-term capital losses
are retained by the fund for reinvestment, requiring federal income taxes to be
paid thereon by the fund, the fund intends to elect to treat such capital gains
as having been distributed to shareholders. As a result, each shareholder will
report such capital gains as long-term capital gains taxable to individual
shareholders at a maximum 20% capital gains rate, will be able to claim a pro
rata share of federal income taxes paid by the fund on such gains as a credit
against personal federal income tax liability, and will be entitled to increase
the adjusted tax basis on fund shares by the difference between a pro rata share
of the retained gains and their related tax credit.
Distributions of investment company taxable income are taxable to shareholders
as ordinary income.
Distributions of the excess of net long-term capital gains over net short-term
capital losses which the fund properly designates as "capital gain dividends"
generally will be taxable to individual shareholders at a maximum 20% capital
gains rate, regardless of the length of time the shares of the fund have been
held by such shareholders. Such distributions are not eligible for the
New Perspective Fund - Page 21
<PAGE>
dividends-received deduction. Any loss realized upon the redemption of shares
held at the time of redemption for six months or less from the date of their
purchase will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gain during such six-month
period.
Distributions of investment company taxable income and net realized capital
gains to individual shareholders will be taxable as described above, whether
received in shares or in cash. Shareholders electing to receive distributions in
the form of additional shares will have a cost basis for federal income tax
purposes in each share so received equal to the net asset value of a share on
the reinvestment date.
All distributions of investment company taxable income and net realized capital
gain, whether received in shares or in cash, must be reported by each
shareholder subject to tax on his or her federal income tax return. Dividends
and capital gains distributions declared in October, November or December and
payable to shareholders of record in such a month will be deemed to have been
received by shareholders on December 31 if paid during January of the following
year. Redemptions of shares, including exchanges for shares of another American
Fund, may result in tax consequences (gain or loss) to the shareholder and must
also be reported on the shareholder's federal income tax return.
Dividends from domestic corporations are expected to comprise some portion of
the fund's gross income. To the extent that such dividends constitute any of the
fund's gross income, a portion of the income distributions of the fund will be
eligible for the deduction for dividends received by corporations. Shareholders
will be informed of the portion of dividends which so qualify. The
dividends-received deduction is reduced to the extent that either the fund
shares, or the underlying shares of stock held by the fund, with respect to
which dividends are received, are treated as debt-financed under federal income
tax law and is eliminated if the shares are deemed to have been held by the
shareholder or the fund, as the case may be, for less than 46 days.
Distributions by the fund result in a reduction in the net asset value of the
fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of investment
capital. For this reason, investors should consider the tax implications of
buying shares just prior to a distribution. The price of shares purchased at
that time includes the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will then receive a partial return of investment
capital upon the distribution, which will nevertheless be taxable to them.
A portion of the difference between the issue price of zero coupon securities
and their face value ("original issue discount") is considered to be income to
the fund each year, even though the fund will not receive cash interest payments
from these securities. This original issue discount (imputed income) will
comprise a part of the investment company taxable income of the fund which must
be distributed to shareholders in order to maintain the qualification of the
fund as a regulated investment company and to avoid federal income tax at the
level of the fund. Shareholders will be subject to income tax on such original
issue discount, whether or not they elect to receive their distributions in
cash.
The fund will be required to report to the IRS all distributions of investment
company taxable income and capital gains as well as gross proceeds from the
redemption or exchange of fund
New Perspective Fund - Page 22
<PAGE>
shares, except in the case of certain exempt shareholders. Under the backup
withholding provisions of Section 3406 of the Code, distributions of investment
company taxable income and capital gains and proceeds from the redemption or
exchange of the shares of a regulated investment company may be subject to
withholding of federal income tax at the rate of 31% in the case of non-exempt
U.S. shareholders who fail to furnish the investment company with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. Withholding may also be required if the fund
is notified by the IRS or a broker that the taxpayer identification number
furnished by the shareholder is incorrect or that the shareholder has previously
failed to report interest or dividend income. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld.
Shareholders of the fund may be subject to state and local taxes on
distributions received from the fund and on redemptions of the fund's shares.
Each distribution is accompanied by a brief explanation of the form and
character of the distribution. In January of each year fund shareholders will
receive a statement of the federal income tax status of all distributions.
Dividend and interest income received by the fund from sources outside the U.S.
may be subject to withholding and other taxes imposed by such foreign
jurisdictions. Tax conventions between certain countries and the U.S. may reduce
or eliminate these foreign taxes, however. Most foreign countries do not impose
taxes on capital gains in respect of investments by foreign investors.
The fund may make the election permitted under Section 853 of the Code so that
shareholders may (subject to limitations) be able to claim a credit or deduction
on their federal income tax returns for, and will be required to treat as part
of the amounts distributed to them, their pro rata portion of qualified taxes
paid by the Fund to foreign countries (which taxes relate primarily to
investment income). The fund may make an election under Section 853 of the Code,
provided that more than 50% of the value of the total assets of the fund at the
close of the taxable year consists of securities in foreign corporations. The
foreign tax credit available to shareholders is subject to certain limitations
imposed by the Code.
Under the Code, gains or losses attributable to fluctuations in exchange rates
which occur between the time the fund accrues receivables or liabilities
denominated in a foreign currency and the time the fund actually collects such
receivables, or pays such liabilities, generally are treated as ordinary income
or ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency and on disposition of certain futures contracts, forward
contracts and options, gains or losses attributable to fluctuations in the value
of foreign currency between the date of acquisition of the security or contract
and the date of disposition are also treated as ordinary gain or loss. These
gains or losses, referred to under the Code as "Section 988" gains or losses,
may increase or decrease the amount of the fund's investment company taxable
income to be distributed to its shareholders as ordinary income.
If the fund invests in stock of certain passive foreign investment companies,
the fund may be subject to U.S. federal income taxation on a portion of any
"excess distribution" with respect to, or gain from the disposition of, such
stock. The tax would be determined by allocating such distribution or gain
ratably to each day of the fund's holding period for the stock. The distribution
or gain so allocated to any taxable year of the fund, other than the taxable
year of the excess
New Perspective Fund - Page 23
<PAGE>
distribution or disposition, would be taxed to the fund at the highest ordinary
income rate in effect for such year, and the tax would be further increased by
an interest charge to reflect the value of the tax deferral deemed to have
resulted from the ownership of the foreign company's stock. Any amount of
distribution or gain allocated to the taxable year of the distribution or
disposition would be included in the fund's investment company taxable income
and, accordingly, would not be taxable to the fund to the extent distributed by
the fund as a dividend to its shareholders.
To avoid such tax and interest, the fund intends to elect to treat these
securities as sold on the last day of its fiscal year and recognize any gains
for tax purposes at that time. Under this election, deductions for losses are
allowable only to the extent of any prior recognized gains, and both gains and
losses will be treated as ordinary income or loss. The fund will be required to
distribute any resulting income, even though it has not sold the security and
received cash to pay such distributions.
The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. persons, i.e., U.S. citizens and residents and
U.S. corporations, partnerships, trusts and estates. Each shareholder who is not
a U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30% (or at a lower rate under an
applicable income tax treaty) on dividend income received by him or her.
Shareholders should consult their tax advisers about the application of the
provisions of tax law described in this statement of additional information in
light of their particular tax situations.
New Perspective Fund - Page 24
<PAGE>
PURCHASE OF SHARES
<TABLE>
<CAPTION>
METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
- -------------------------------------------------------------------------------
<S> <C> <C>
See "Purchase $50 minimum (except where a
Minimums" for initial lower minimum is noted under
investment minimums. "Purchase Minimums").
- -------------------------------------------------------------------------------
By contacting Visit any investment Mail directly to your
your investment dealer dealer who is investment dealer's address
registered in the printed on your account
state where the statement.
purchase is made and
who has a sales
agreement with
American Funds
Distributors.
- -------------------------------------------------------------------------------
By mail Make your check Fill out the account additions
payable to the fund form at the bottom of a recent
and mail to the account statement, make your
address indicated on check payable to the fund,
the account write your account number on
application. Please your check, and mail the check
indicate an investment and form in the envelope
dealer on the account provided with your account
application. statement.
- -------------------------------------------------------------------------------
By telephone Please contact your Complete the "Investments by
investment dealer to Phone" section on the account
open account, then application or American
follow the procedures FundsLink Authorization Form.
for additional Once you establish the
investments. privilege, you, your financial
advisor or any person with your
account information can call
American FundsLine(R) and make
investments by telephone
(subject to conditions noted in
"Shareholder Account Services
and Privileges - Telephone and
Computer Purchases, Redemptions
and Exchanges" below).
- -------------------------------------------------------------------------------
By computer Please contact your Complete the American FundsLink
investment dealer to Authorization Form. Once you
open account, then established the privilege, you,
follow the procedures your financial advisor or any
for additional person with your account
investments. information may access American
FundsLine OnLine(R) on the
Internet and make investments
by computer (subject to
conditions noted in
"Shareholder Account Services
and Privileges - Telephone and
Computer Purchases, Redemptions
and Exchanges" below).
- -------------------------------------------------------------------------------
By wire Call 800/421-0180 to Your bank should wire your
obtain your account additional investments in the
number(s), if same manner as described under
necessary. Please "Initial Investment."
indicate an investment
dealer on the account.
Instruct your bank to
wire funds to:
Wells Fargo Bank
155 Fifth Street,
Sixth Floor
San Francisco, CA
94106
(ABA#121000248)
For credit to the
account of:
American Funds Service
Company a/c#
4600-076178
(fund name)
(your fund acct. no.)
- -------------------------------------------------------------------------------
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT ANY
PURCHASE ORDER.
- -------------------------------------------------------------------------------
</TABLE>
PURCHASE MINIMUMS - The minimum initial investment for all funds in The American
Funds Group, except the money market funds and the state tax-exempt funds, is
$250. The minimum initial investment for the money market funds (The Cash
Management Trust of America, The Tax--
New Perspective Fund - Page 25
<PAGE>
Exempt Money Fund of America, and The U.S. Treasury Money Fund of America) and
the state tax-exempt funds (The Tax-Exempt Fund of California, The Tax-Exempt
Fund of Maryland, and The Tax-Exempt Fund of Virginia) is $1,000. Purchase
minimums are reduced to $50 for purchases through "Automatic Investment Plans"
(except for the money market funds) or to $25 for purchases by retirement plans
through payroll deductions and may be reduced or waived for shareholders of
other funds in The American Funds Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS
RETIREMENT PLAN INVESTMENTS. The minimum is $50 for additional investments
(except as noted above).
PURCHASE MAXIMUM FOR CLASS B SHARES - The maximum purchase order for Class B
shares for all American Funds is $100,000. For investments above $100,000 Class
A shares are generally a less expensive option over time due to sales charge
reductions or waivers.
FUND NUMBERS - Here are the fund numbers for use with our automated phone line,
American FundsLine/(R)/ (see description below):
<TABLE>
<CAPTION>
FUND FUND
NUMBER NUMBER
FUND CLASS A CLASS B
---- ------- -------
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . . . . . . . 02 202
American Balanced Fund/(R)/ . . . . . . . . . . . . . . 11 211
American Mutual Fund/(R)/ . . . . . . . . . . . . . . . 03 203
Capital Income Builder/(R)/ . . . . . . . . . . . . . . 12 212
Capital World Growth and Income Fund/SM/ . . . . . . . 33 233
EuroPacific Growth Fund/(R)/ . . . . . . . . . . . . . 16 216
Fundamental Investors/SM/ . . . . . . . . . . . . . . . 10 210
The Growth Fund of America/(R)/ . . . . . . . . . . . . 05 205
The Income Fund of America/(R)/ . . . . . . . . . . . . 06 206
The Investment Company of America/(R)/ . . . . . . . . 04 204
The New Economy Fund/(R)/ . . . . . . . . . . . . . . . 14 214
New Perspective Fund/(R)/ . . . . . . . . . . . . . . . 07 207
New World Fund/SM/ . . . . . . . . . . . . . . . . . . 36 236
SMALLCAP World Fund/(R)/ . . . . . . . . . . . . . . . 35 235
Washington Mutual Investors Fund/SM/ . . . . . . . . . 01 201
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/ . . . . . 40 240
American High-Income Trust/SM/ . . . . . . . . . . . . 21 221
The Bond Fund of America/SM/ . . . . . . . . . . . . . 08 208
Capital World Bond Fund/(R)/ . . . . . . . . . . . . . 31 231
Intermediate Bond Fund of America/SM/ . . . . . . . . . 23 223
Limited Term Tax-Exempt Bond Fund of America/SM/ . . . 43 243
The Tax-Exempt Bond Fund of America/(R)/ . . . . . . . 19 219
The Tax-Exempt Fund of California/(R)/* . . . . . . . . 20 220
The Tax-Exempt Fund of Maryland/(R)/* . . . . . . . . . 24 224
The Tax-Exempt Fund of Virginia/(R)/* . . . . . . . . . 25 225
U.S. Government Securities Fund/SM/ . . . . . . . . . . 22 222
MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . . . . . . . 09 209
The Tax-Exempt Money Fund of America/SM/ . . . . . . . 39 N/A
The U.S. Treasury Money Fund of America/SM/ . . . . . . 49 N/A
___________
*Available only in certain states.
</TABLE>
New Perspective Fund - Page 26
<PAGE>
SALES CHARGES
CLASS A SALES CHARGES - The sales charges you pay when purchasing Class A shares
of stock, stock/bond, and bond funds of The American Funds Group are set forth
below. The money market funds of The American Funds Group are offered at net
asset value. (See "Fund Numbers" for a listing of the funds.)
<TABLE>
<CAPTION>
DEALER
SALES CHARGE AS CONCESSION
PERCENTAGE OF THE: AS PERCENTAGE
------------------ OF THE
AMOUNT OF PURCHASE
AT THE OFFERING PRICE NET AMOUNT OFFERING OFFERING
-INVESTED- PRICE PRICE
- ------------------------------------------ -------- ----- -----
<S> <C> <C> <C>
STOCK AND STOCK/BOND FUNDS
Less than $25,000 . . . . . . . . . 6.10% 5.75% 5.00%
$25,000 but less than $50,000 . . . 5.26 5.00 4.25
$50,000 but less than $100,000. . 4.71 4.50 3.75
BOND FUNDS
Less than $100,000 . . . . . . . . 3.90 3.75 3.00
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000 . 3.63 3.50 2.75
$250,000 but less than $500,000 . 2.56 2.50 2.00
$500,000 but less than $750,000 . 2.04 2.00 1.60
$750,000 but less than $1 million 1.52 1.50 1.20
$1 million or more . . . . . . . . . . none none (see below)
- -----------------------------------------------------------------------------
</TABLE>
CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES - Investments of $1 million or
more are sold with no initial sales charge. HOWEVER, A 1% CONTINGENT DEFERRED
SALES CHARGE (CDSC) MAY BE IMPOSED IF REDEMPTIONS ARE MADE WITHIN ONE YEAR OF
PURCHASE. Employer-sponsored defined contribution-type plans investing $1
million or more, or with 100 or more eligible employees, and Individual
Retirement Account rollovers from retirement plan assets invested in the
American Funds (see "Individual Retirement Account (IRA) Rollovers" below) may
invest with no sales charge and are not subject to a contingent deferred sales
charge. Investments made by
New Perspective Fund - Page 27
<PAGE>
investors in certain qualified fee-based programs, and retirement plans,
endowments or foundations with $50 million or more in assets may also be made
with no sales charge and are not subject to a CDSC. A dealer concession of up
to 1% may be paid by the fund under its Plan of Distribution on investments made
with no initial sales charge.
In addition, Class A shares of the stock, stock/bond and bond funds may be sold
at net asset value to:
(1) current or retired directors, trustees, officers and advisory board members
of, and certain lawyers who provide services to, the funds managed by Capital
Research and Management Company, current or retired employees of Washington
Management Corporation, current or retired employees and partners of The Capital
Group Companies, Inc. and its affiliated companies, certain family members and
employees of the above persons, and trusts or plans primarily for such persons;
(2) current registered representatives, retired registered representatives with
respect to accounts established while active, or full-time employees (and their
spouses, parents, and children) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such dealers) and plans
for such persons or the dealers;
(3) companies exchanging securities with the fund through a merger, acquisition
or exchange offer;
(4) trustees or other fiduciaries purchasing shares for certain retirement
plans of organizations with retirement plan assets of $50 million or more;
(5) insurance company separate accounts;
(6) accounts managed by subsidiaries of The Capital Group Companies, Inc.; and
(7) The Capital Group Companies, Inc., its affiliated companies and Washington
Management Corporation. Shares are offered at net asset value to these persons
and organizations due to anticipated economies in sales effort and expense.
CONTINGENT DEFERRED SALES CHARGE ON CLASS A SHARES - A contingent deferred
sales charge of 1% applies to redemptions made from funds, other than the money
market funds, within 12 months following Class A share purchases of $1 million
or more made without an initial sales charge. The charge is 1% of the lesser of
the value of the shares redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares. Shares held the longest
are assumed to be redeemed first for purposes of calculating this CDSC. The CDSC
may be waived in certain circumstances. See "CDSC Waivers for Class A Shares"
below.
DEALER COMMISSIONS ON CLASS A SHARES - The following commissions (up to 1%) will
be paid to dealers who initiate and are responsible for purchases of $1 million
or more, for purchases by any employer-sponsored defined contribution plan
investing $1 million or more, or with 100 or more eligible employees, IRA
rollover accounts (as described in "Individual Retirement Account (IRA)
Rollovers" below), and for purchases made at net asset value by certain
retirement plans, endowments and foundations with collective assets of $50
million or more: 1.00% on amounts of $1 million to $4 million, 0.50% on amounts
over $4 million to $10 million, and 0.25% on amounts over $10 million.
New Perspective Fund - Page 28
<PAGE>
CLASS B SALES CHARGES - Class B shares are sold without any initial sales
charge. However, a CDSC may be applied to shares you sell within six years of
purchase, as shown in the table below:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES CHARGE
ON SHARES SOLD WITHIN YEAR AS A % OF SHARES BEING SOLD
------------------------------------------------------------------------------
<S> <C>
1 5.00%
2 4.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
</TABLE>
There is no CDSC on appreciation in share value above the initial purchase price
or on shares acquired through reinvestment of dividends or capital gain
distributions. In addition, the CDSC may be waived in certain circumstances.
See "CDSC Waivers for Class B shares" below. The CDSC is based on the original
purchase cost or the current market value of the shares being sold, whichever is
less. In processing redemptions of Class B shares, shares that are not subject
to any CDSC will be redeemed first and then shares that you have owned the
longest during the six-year period. CLASS B SHARES ARE NOT AVAILABLE TO CERTAIN
RETIREMENT PLANS, INCLUDING GROUP RETIREMENT PLANS SUCH AS 401(K) PLANS,
EMPLOYER-SPONSORED 403(B) PLANS, AND MONEY PURCHASE PENSION AND PROFIT SHARING
PLANS.
Compensation equal to 4% of the amount invested is paid by the Principal
Underwriter to dealers who sell Class B shares.
CONVERSION OF CLASS B SHARES TO CLASS A SHARES - Class B shares automatically
convert to Class A shares in the month of the eight-year anniversary of the
purchase date. The conversion of Class B shares to Class A shares after eight
years is subject to the Internal Revenue Service's continued position that the
conversion of Class B shares is not subject to federal income tax. In the event
the Internal Revenue Service no longer takes this position, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. At your
option, Class B shares may still be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee; HOWEVER, SUCH AN EXCHANGE COULD CONSTITUTE A TAXABLE EVENT FOR
YOU, AND ABSENT SUCH AN EXCHANGE, CLASS B SHARES WOULD CONTINUE TO BE SUBJECT TO
HIGHER EXPENSES FOR LONGER THAN EIGHT YEARS.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCING YOUR CLASS A SALES CHARGE - You and your "immediate family" (your
spouse and your children under age 21) may combine investments to reduce your
costs. You must let your investment dealer or American Funds Service Company
(the "Transfer Agent") know if you qualify for a reduction in your sales charge
using one or any combination of the methods described below.
New Perspective Fund - Page 29
<PAGE>
STATEMENT OF INTENTION - You may enter into a non-binding commitment to
purchase shares of a fund(s) over a 13-month period and receive the same
sales charge as if all shares had been purchased at once. This includes
purchases made during the previous 90 days, but does not include
appreciation of your investment or reinvested distributions. The reduced
sales charges and offering prices set forth in the Prospectus apply to
purchases of $25,000 or more made within a 13-month period subject to the
following statement of intention (the "Statement"). The Statement is not a
binding obligation to purchase the indicated amount. When a shareholder
elects to use a Statement in order to qualify for a reduced sales charge,
shares equal to 5% of the dollar amount specified in the Statement will be
held in escrow in the shareholder's account out of the initial purchase (or
subsequent purchases, if necessary) by the Transfer Agent. All dividends
and any capital gain distributions on shares held in escrow will be
credited to the shareholder's account in shares (or paid in cash, if
requested). If the intended investment is not completed within the
specified 13-month period, the purchaser will remit to the Principal
Underwriter the difference between the sales charge actually paid and the
sales charge which would have been paid if the total of such purchases had
been made at a single time. If the difference is not paid by the close of
the period, the appropriate number of shares held in escrow will be
redeemed to pay such difference. If the proceeds from this redemption are
inadequate, the purchaser will be liable to the Principal Underwriter for
the balance still outstanding. The Statement may be revised upward at any
time during the 13-month period, and such a revision will be treated as a
new Statement, except that the 13-month period during which the purchase
must be made will remain unchanged. Existing holdings eligible for rights
of accumulation (see below), as well as purchases of Class B shares, and
any individual investments in American Legacy variable annuities and
variable life insurance policies (American Legacy, American Legacy II and
American Legacy III variable annuities, American Legacy Life, American
Legacy Variable Life, and American Legacy Estate Builder) may be credited
toward satisfying the Statement. During the Statement period reinvested
dividends and capital gain distributions, investments in money market
funds, and investments made under a right of reinstatement will not be
credited toward satisfying the Statement.
When the trustees of certain retirement plans purchase shares by payroll
deduction, the sales charge for the investments made during the 13-month
period will be handled as follows: The regular monthly payroll deduction
investment will be multiplied by 13 and then multiplied by 1.5. The current
value of existing American Funds investments (other than money market fund
investments) and any rollovers or transfers reasonably anticipated to be
invested in non-money market American Funds during the 13-month period, and
any individual investments in American Legacy variable annuities and
variable life insurance policies are added to the figure determined above.
The sum is the Statement amount and applicable breakpoint level. On the
first investment and all other investments made pursuant to the Statement,
a sales charge will be assessed according to the sales charge breakpoint
thus determined. There will be no retroactive adjustments in sales charges
on investments made during the 13-month period.
Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms with their first purchase.
AGGREGATION - Sales charge discounts are available for certain aggregated
investments. Qualifying investments include those by you, your spouse and
your children under the age of 21, if all parties are purchasing shares for
their own accounts and/or:
New Perspective Fund - Page 30
<PAGE>
. employee benefit plan(s), such as an IRA, individual-type 403(b) plan,
or single-participant Keogh-type plan;
. business accounts solely controlled by these individuals (for example,
the individuals own the entire business);
. trust accounts established by the above individuals. However, if the
person(s) who established the trust is deceased, the trust account may
be aggregated with accounts of the person who is the primary
beneficiary of the trust.
Individual purchases by a trustee(s) or other fiduciary(ies) may also be
aggregated if the investments are:
. for a single trust estate or fiduciary account, including an employee
benefit plan other than those described above;
.
made for two or more employee benefit plans of a single employer or of
affiliated employers as defined in the 1940 Act, again excluding
employee benefit plans described above; or
. for a diversified common trust fund or other diversified pooled
account not specifically formed for the purpose of accumulating fund
shares.
Purchases made for nominee or street name accounts (securities held in the
name of an investment dealer or another nominee such as a bank trust
department instead of the customer) may not be aggregated with those made
for other accounts and may not be aggregated with other nominee or street
name accounts unless otherwise qualified as described above.
CONCURRENT PURCHASES - You may combine purchases of Class A and/or B shares
of two or more funds in The American Funds Group, as well as individual
holdings in American Legacy variable annuities and variable life insurance
policies. Direct purchases of the money market funds are excluded. Shares
of money market funds purchased through an exchange, reinvestment or
cross-reinvestment from a fund having a sales charge do qualify.
RIGHTS OF ACCUMULATION - You may take into account the current value of
your existing Class A and B holdings in The American Funds Group, as well
as your holdings in Endowments (shares of which may be owned only by
tax-exempt organizations), to determine your sales charge on investments in
accounts eligible to be aggregated, or when making a gift to an individual
or charity. When determining your sales charge, you may also take into
account the value of your individual holdings, as of the end of the week
prior to your investment, in various American Legacy variable annuities and
variable life insurance policies. Direct purchases of the money market
funds are excluded.
CDSC WAIVERS FOR CLASS A SHARES - Any CDSC on Class A shares may be waived in
the following cases:
(1) Exchanges (except if shares acquired by exchange are then redeemed within
12 months of the initial purchase).
New Perspective Fund - Page 31
<PAGE>
(2) Distributions from 403(b) plans or IRAs due to death, post-purchase
disability or attainment of age 59-1/2.
(3) Tax-free returns of excess contributions to IRAs.
(4) Redemptions through systematic withdrawal plans (see "Automatic
Withdrawals" below), not exceeding 12% of the net asset value of the account
each year.
CDSC WAIVERS FOR CLASS B SHARES - Any CDSC on Class B shares may be waived in
the following cases:
(1) Systematic withdrawal plans (SWPs) - investors who set up a SWP (see
"Automatic Withdrawals" below) may withdraw up to 12% of the net asset value of
their account each year without incurring any CDSC. Shares not subject to a
CDSC (such as shares representing reinvestment of distributions) will be
redeemed first and will count toward the 12% limitation. If there are
insufficient shares not subject to a CDSC, shares subject to the lowest CDSC
will be redeemed next until the 12% limit is reached.
The 12% fee from CDSC limit is calculated on a pro rata basis at the time the
first payment is made and is recalculated thereafter on a pro rata basis at the
time of each SWP payment. Shareholders who establish a SWP should be aware that
the amount of that payment not subject to a CDSC may vary over time depending on
fluctuations in net asset value of their account. This privilege may be revised
or terminated at any time.
(2) Required minimum distributions taken from retirement accounts upon the
attainment of age 70-1/2.
(3) Distributions due to death or post-purchase disability of a shareholder. In
the case of joint tenant accounts, if one joint tenant dies, the surviving joint
tenant(s), at the time they notify the Transfer Agent of the decedent's death
and remove his/her name from the account, may redeem shares from the account
without incurring a CDSC. Redemptions subsequent to the notification to the
Transfer Agent of the death of one of the joint owners will be subject to a
CDSC.
INDIVIDUAL RETIREMENT ACCOUNT (IRA) ROLLOVERS
Assets from an employer-sponsored retirement plan (plan assets) may be invested
in any class of shares of the American Funds (except as described below) through
an IRA rollover plan. All such rollover investments will be subject to the terms
and conditions for Class A and B shares contained in the fund's current
prospectus and statement of additional information. In the case of an IRA
rollover involving plan assets from a plan that offered the American Funds, the
assets may only be invested in Class A shares of the American Funds. Such
investments will be at net asset value and will not be subject to a contingent
deferred sales charge. Dealers who initiate and are responsible for such
investments will be compensated pursuant to the schedule applicable to
investments of $1 million or more (see "Dealer Commissions on Class A Shares"
above).
New Perspective Fund - Page 32
<PAGE>
PRICE OF SHARES
Shares are purchased at the offering price next determined after the purchase
order is received and accepted by the fund or the Transfer Agent; this offering
price is effective for orders received prior to the time of determination of the
net asset value and, in the case of orders placed with dealers, accepted by the
Principal Underwriter prior to its close of business. In the case of orders sent
directly to the fund or the Transfer Agent, an investment dealer MUST be
indicated. The dealer is responsible for promptly transmitting purchase orders
to the Principal Underwriter. Orders received by the investment dealer, the
Transfer Agent, or the fund after the time of the determination of the net asset
value will be entered at the next calculated offering price. Prices which appear
in the newspaper do not always indicate prices at which you will be purchasing
and redeeming shares of the fund, since such prices generally reflect the
previous day's closing price whereas purchases and redemptions are made at the
next calculated price.
The price you pay for shares, the offering price, is based on the net asset
value per share which is calculated once daily as of approximately 4:00 p.m. New
York time, which is the normal close of trading on the New York Stock Exchange
each day the Exchange is open. If, for example, the Exchange closes at 1:00
p.m., the fund's share price would still be determined as of 4:00 p.m. New York
time. The New York Stock Exchange is currently closed on weekends and on the
following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas Day.
All portfolio securities of funds managed by Capital Research and Management
Company (other than money market funds) are valued, and the net asset value per
share is determined as follows:
1. 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.
Assets or liabilities initially expressed in terms of non-U.S. currencies are
translated prior to the next determination of the net asset value of the fund's
shares into U.S. dollars at the prevailing market rates.
Securities and assets for which representative market quotations are not readily
available are valued at fair value as determined in good faith under policies
approved by the fund's Board. The fair value of all other assets is added to the
value of securities to arrive at the total assets;
2. Liabilities, including accruals of taxes and other expense items, are
deducted from total assets; and
New Perspective Fund - Page 33
<PAGE>
3. Net assets so obtained are then divided by the total number of shares
outstanding, and the result, rounded to the nearer cent, is the net asset value
per share
Any purchase order may be rejected by the Principal Underwriter or by the fund.
The Principal Underwriter will not knowingly sell shares of the fund directly or
indirectly to any person or entity, where, after the sale, such person or entity
would own beneficially directly or indirectly more than 3.0% of the outstanding
shares of the fund without the consent of a majority of the fund's Board of
Directors.
SELLING SHARES
Shares are sold at the net asset value next determined after your request is
received in good order by the Transfer Agent. Sales of certain Class A and B
shares may be subject to deferred sales charges. You may sell (redeem) shares
in your account in any of the following ways:
THROUGH YOUR DEALER (certain charges may apply)
- Shares held for you in your dealer's street name must be sold
through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- Requests must be signed by the registered shareholder(s)
- A signature guarantee is required if the redemption is:
- Over $50,000;
- Made payable to someone other than the registered
shareholder(s); or
- Sent to an address other than the address of record, or
an address of record which has been changed within the
last 10 days.
Your signature may be guaranteed by a domestic stock exchange or the National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution.
- Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
- You must include any shares you wish to sell that are in
certificate form.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/
- Redemptions by telephone or fax (including American FundsLine/(R)/ and
American FundsLine OnLine/(R)/) are limited to $50,000 per shareholder each
day.
- Checks must be made payable to the registered shareholder(s).
New Perspective Fund - Page 34
<PAGE>
- Checks must be mailed to an address of record that has been
used with the account for at least 10 days.
MONEY MARKET FUNDS
- You may have redemptions of $1,000 or more wired to your bank by writing
American Funds Service Company.
- You may establish check writing privileges (use the money market funds
application).
- If you request check writing privileges, you will be provided with
checks that you may use to draw against your account. These checks may
be made payable to anyone you designate and must be signed by the
authorized number or registered shareholders exactly as indicated on
your checking account signature card.
- Check writing is not available for Class B shares of The Cash
Management Trust.
If you sell Class B shares and request a specific dollar amount to be sold, we
will sell sufficient shares so that the sale proceeds, after deducting any
contingent deferred sales charge, equals the dollar amount requested.
Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the 1940 Act), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution of Class A or Class B shares without a sales charge in the Class A
shares of any fund in The American Funds Group within 90 days after the date of
the redemption or distribution (any contingent deferred sales charge on Class A
shares will be credited to your account). Redemption proceeds of shares
representing direct purchases in the money market funds are excluded. Proceeds
will be reinvested at the next calculated net asset value after your request is
received and accepted by the Transfer Agent.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - An automatic investment plan enables you to make
monthly or quarterly investments into The American Funds through automatic
debits from your bank account. To set up a plan you must fill out an account
application and specify the amount you would like to invest ($50 minimum) and
the date on which you would like your investments to occur. The plan will begin
within 30 days after your account application is received. Your bank account
will be debited on the day or a few days before your investment is made,
depending on the bank's capabilities. The Transfer Agent will then invest your
money into the fund you specified on or around the date you specified. For
example, if the date you specified falls on a
New Perspective Fund - Page 35
<PAGE>
weekend or holiday, your money will be invested on the next business day. If
your bank account cannot be debited due to insufficient funds, a stop-payment or
the closing of the account, the plan may be terminated and the related
investment reversed. You may change the amount of the investment or discontinue
the plan at any time by writing to the Transfer Agent.
AUTOMATIC REINVESTMENT - Dividends and capital gain distributions are reinvested
in additional shares of the same class at no sales charge unless you indicate
otherwise on the account application. You also may elect to have dividends
and/or capital gain distributions paid in cash by informing the fund, the
Transfer Agent or your investment dealer.
If you have elected to receive dividends and/or capital gain distributions in
cash, and the postal or other delivery service is unable to deliver checks to
your address of record, or you do not respond to mailings from American Funds
Service Company with regard to uncashed distribution checks, your distribution
option will automatically be converted to having all dividends and other
distributions reinvested in additional shares.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - You may cross-reinvest
dividends and capital gains ("distributions") of the same share class into any
other fund in The American Funds Group at net asset value, subject to the
following conditions:
(a) The aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the fund
receiving the distributions equals or exceeds that fund's minimum initial
investment requirement),
(b) If the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested,
(c) If you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distributions must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.
EXCHANGE PRIVILEGE - You may only exchange shares into other funds in The
American Funds Group within the same class. However, exchanges from Class A
shares of The Cash Management Trust of America may be made to Class B shares of
any other American Fund for dollar cost averaging purposes. Exchange purchases
are subject to the minimum investment requirements of the fund purchased and no
sales charge generally applies. However, exchanges of shares from the money
market funds are subject to applicable sales charges on the fund being
purchased, unless the money market fund shares were acquired by an exchange from
a fund having a sales charge, or by reinvestment or cross-reinvestment of
dividends or capital gain distributions.
You may exchange shares by writing to the Transfer Agent (see "Redeeming
Shares"), by contacting your investment dealer, by using American FundsLine and
American FundsLine OnLine (see "American FundsLine and American FundsLine
OnLine" below), or by telephoning 800/421-0180 toll-free, faxing (see "Principal
Underwriter and Transfer Agent" in the prospectus for the appropriate fax
numbers) or telegraphing the Transfer Agent. (See "Telephone and Computer
Purchases, Redemptions and Exchanges" below.) Shares held in corporate-type
retirement plans for which Capital Guardian Trust Company serves as trustee may
not be exchanged by telephone, computer, fax or telegraph. Exchange redemptions
and purchases are
New Perspective Fund - Page 36
<PAGE>
processed simultaneously at the share prices next determined after the exchange
order is received. (See "Purchase of Shares--Price of Shares.") THESE
TRANSACTIONS HAVE THE SAME TAX CONSEQUENCES AS ORDINARY SALES AND PURCHASES.
AUTOMATIC EXCHANGES - You may automatically exchange shares of the same class in
amounts of $50 or more among any of the funds in The American Funds Group on any
day (or preceding business day if the day falls on a non-business day of each
month you designate.
AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
ACCOUNT STATEMENTS - Your account is opened in accordance with your registration
instructions. Transactions in the account, such as additional investments will
be reflected on regular confirmation statements from the Transfer Agent.
Dividend and capital gain reinvestments and purchases through automatic
investment plans and certain retirement plans will be confirmed at least
quarterly.
AMERICAN FUNDSLINE AND AMERICAN FUNDSLINE ONLINE - You may check your share
balance, the price of your shares, or your most recent account transaction,
redeem shares (up to $50,000 per shareholder each day), or exchange shares
around the clock with American FundsLine and American FundsLine OnLine. To use
these services, call 800/325-3590 from a TouchTone(TM) telephone or access the
American Funds Web site on the Internet at www.americanfunds.com. Redemptions
and exchanges through American FundsLine and American FundsLine OnLine are
subject to the conditions noted above and in "Shareholder Account Services and
Privileges - Telephone and Computer Purchases, Redemptions and Exchanges" below.
You will need your fund number (see the list of funds in The American Funds
Group under "Purchase of Shares - Purchase Minimums" and "Purchase of Shares -
Fund Numbers"), personal identification number (generally the last four digits
of your Social Security number or other tax identification number associated
with your account) and account number.
TELEPHONE AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES - By using the
telephone (including American FundsLine) or computer (including American
FundsLine OnLine), fax or telegraph purchase, redemption and/or exchange
options, you agree to hold the fund, the Transfer Agent, any of its affiliates
or mutual funds managed by such affiliates, and each of their respective
directors, trustees, officers, employees and agents harmless from any losses,
expenses, costs or liability (including attorney fees) which may be incurred in
connection with the exercise of these privileges. Generally, all shareholders
are automatically eligible to use these options. However, you may elect to opt
out of these options by writing the Transfer Agent (you may also reinstate them
at any time by writing the Transfer Agent). If the Transfer Agent does not
employ reasonable procedures to confirm that the instructions received from any
person with appropriate account information are genuine, the fund may be liable
for losses due to unauthorized or fraudulent instructions. In the event that
shareholders are unable to reach the fund by telephone because of technical
difficulties, market conditions, or a natural disaster, redemption and exchange
requests may be made in writing only.
New Perspective Fund - Page 37
<PAGE>
REDEMPTION OF SHARES - The fund's Articles of Incorporation permits the fund to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per share if at such time the shareholder owns of record
shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in the fund's
current registration statement under the 1940 Act, and subject to such further
terms and conditions as the Board of Directors of the fund may from time to time
adopt.
SHARE CERTIFICATES - Shares are credited to your account and certificates are
not issued unless you request them by writing to the Transfer Agent.
EXECUTION OF PORTFOLIO TRANSACTIONS
The Investment Adviser places orders for the fund's portfolio securities
transactions. The Investment Adviser strives to obtain the best available prices
in its portfolio transactions taking into account the costs and quality of
executions. When, in the opinion of the Investment Adviser, two or more brokers
(either directly or through their correspondent clearing agents) are in a
position to obtain the best price and execution, preference may be given to
brokers who have sold shares of the fund or who have provided investment
research, statistical, or other related services to the Investment Adviser. The
fund does not consider that it has an obligation to obtain the lowest available
commission rate to the exclusion of price, service and qualitative
considerations.
There are occasions on which portfolio transactions for the fund may be executed
as part of concurrent authorizations to purchase or sell the same security for
other funds served by the Investment Adviser, or for trusts or other accounts
served by affiliated companies of the Investment Adviser. Although such
concurrent authorizations potentially could be either advantageous or
disadvantageous to the fund, they are effected only when the Investment Adviser
believes that to do so is in the interest of the fund. When such concurrent
authorizations occur, the objective is to allocate the executions in an
equitable manner. The fund will not pay a mark-up for research in principal
transactions.
Brokerage commissions paid on portfolio transactions for the fiscal years ended
September 30, 1999, 1998 and 1997, amounted to $17,027,000, $14,763,000 and
$11,461,000, respectively.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by The Chase Manhattan Bank, One Chase Manhattan Plaza, New York, NY
10081, as Custodian. If the fund holds non-U.S. securities, the Custodian may
hold these securities pursuant to sub-custodial arrangements in non-U.S. banks
or non-U.S. branches of U.S. banks.
TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the records of each shareholder's account,
processes purchases and redemptions of the fund's shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee of
$18,723,000 for the 1999 fiscal year.
INDEPENDENT ACCOUNTANTS - PricewaterhouseCoopers LLP, 400 South Hope Street, Los
Angeles, CA 90071, serves as the fund's independent accountants providing audit
services,
New Perspective Fund - Page 38
<PAGE>
preparation of tax returns and review of certain documents to be filed with the
Securities and Exchange Commission. The financial statements included in this
Statement of Additional Information from the Annual Report have been so included
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in accounting and
auditing. The selection of the fund's independent accountants is reviewed and
determined annually by the Board of Directors.
PROSPECTUSES AND REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on
September 30. Shareholders are provided updated prospectuses annually. In
addition, shareholders are provided at least semiannually with reports showing
the investment portfolio, financial statements and other information. The fund's
annual financial statements are audited by the fund's independent accountants,
PricewaterhouseCoopers LLP. In an effort to reduce the volume of mail
shareholders receive from the fund when a household owns more than one account,
the Transfer Agent has taken steps to eliminate duplicate mailings of
prospectuses and shareholder reports. To receive additional copies of a
prospectus or report, shareholders should contact the Transfer Agent.
PERSONAL INVESTING POLICY - The fund, Capital Research and Management Company
and its affiliated companies, including the fund's principal underwriter, have
adopted codes of ethics which allow for personal investments. The personal
investing policy is consistent with Investment Company Institute guidelines.
This policy includes: a ban on acquisitions of securities pursuant to an initial
public offering; restrictions on acquisitions of private placement securities;
pre-clearance and reporting requirements; review of duplicate confirmation
statements; annual recertification of compliance with codes of ethics; blackout
periods on personal investing for certain investment personnel; ban on
short-term trading profits for investment personnel; limitations on service as a
director of publicly traded companies; and disclosure of personal securities
transactions.
OTHER INFORMATION - The financial statements including the investment portfolio
and the report of Independent Accountants contained in the Annual Report are
included in this Statement of Additional Information. The following information
is not included in the Annual Report:
DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND
MAXIMUM OFFERING PRICE PER SHARE FOR CLASS A SHARES -- SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Net asset value and redemption price per share
(Net assets divided by shares outstanding) . . . . . . . . . $26.25
Maximum offering price per share
(100/94.25 of net asset value per share,
which takes into account the fund's current maximum
sales charge). . . . . . . . . . . . . . . . . . . . . . . . $27.85
</TABLE>
CLASS A SHARE INVESTMENT RESULTS AND RELATED STATISTICS
The fund's yield was 0.92% based on a 30-day (or one month) period ended
September 30, 1999, computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last day
of the period, according to the following formula:
New Perspective Fund - Page 39
<PAGE>
YIELD = 2[( a-b/cd + 1)/6/ -1]
Where: a = dividends and interest earned during the period.
b =
expenses accrued for the period (net of reimbursements).
c =
the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d =
the maximum offering price per share on the last day of the
period.
The fund's one year total return and average annual total return for the five-
and ten-year periods ended September 30, 1999 were 30.48%, 17.64% and 14.35%,
respectively. The fund's average annual total return at net asset value for the
one-, five- and ten-year periods ended on September 30, 1999 were 38.43%, 19.04%
and 15.03%, respectively.
The average total return ("T") is computed by equating the value at the end of
the period ("ERV") with a hypothetical initial investment of $1,000 ("P") over a
period of years ("n") according to the following formula as required by the
Securities and Exchange Commission: P(1+T)/n/ = ERV.
In calculating average annual total return, the fund assumes: (1) deduction of
the maximum sales load of 5.75% from the $1,000 initial investment; (2)
reinvestment of dividends and distributions at net asset value on the
reinvestment date determined by the Board; and (3) a complete redemption at the
end of any period illustrated. In addition, the fund will provide lifetime
average total return figures. From time to time, the fund may calculate
investment results for Class B shares.
The fund may also, at times, calculate total return based on net asset value per
share (rather than the offering price), in which case the figure would not
reflect the effect of any sales charges which would have been paid if shares
were purchased during the period reflected in the computation. Consequently,
total return calculated in this manner will be higher. These total returns may
be calculated over periods in addition to those described above. Total return
for the unmanaged indices will be calculated assuming reinvestment of dividends
and interest, but will not reflect any deductions for advisory fees, brokerage
costs or administrative expenses.
The fund may include information on its investment results and/or comparisons of
its investment results to various unmanaged indices (such as the Dow Jones
Average of 30 Industrial Stocks and the Standard and Poor's 500 Composite Stock
Index) or results of other mutual funds or investment or savings vehicles in
advertisements or in reports furnished to present or prospective shareholders.
The fund may also, from time to time, combine its results with those of other
funds in The American Funds Group for purposes of illustrating investment
strategies involving multiple funds.
The fund may refer to results and surveys compiled by organizations such as CDA/
Wiesenberger, Ibbotson Associates, Lipper Analytical Services, Morningstar,
Inc., and by the U.S. Department of Commerce. Additionally, the fund may refer
to results published in various newspapers and periodicals, including Barron's,
Forbes, Fortune, Institutional Investor, Kiplinger's Personal Finance Magazine,
Money, U.S. News and World Report and The Wall Street Journal.
New Perspective Fund - Page 40
<PAGE>
The fund may illustrate the benefits of tax-deferral by comparing taxable
investments to investments made through tax-deferred retirement plans.
The fund may compare its investment results with the Consumer Price Index, which
is a measure of the average change in prices over time in a fixed market basket
of goods and services (e.g. food, clothing, and fuels, transportation, and other
goods and services that people buy for day-to-day living).
New Perspective Fund - Page 41
<PAGE>
APPENDIX
Description of Bond Ratings
BOND RATINGS - The ratings of Moody's Investors Service, Inc. (Moody's) and
Standard & Poor's Corporation (S&P) represent their opinions as to the quality
of the municipal bonds which they undertake to rate. It should be emphasized,
however, that ratings are general and are not absolute standards of quality.
Consequently, municipal bonds with the same maturity, coupon and rating may
have different yields, while municipal bonds of the same maturity and coupon
with different ratings may have the same yield.
Moody's rates the long-term debt securities issued by various entities from
- -------
"Aaa" to "C." Moody's applies the numerical modifiers 1, 2, and 3 in each
generic rating classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category. Ratings are described as follows:
"Bonds which are rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as 'gilt edge.'
Interest payments are protected by a large or by an exceptionally stable
margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues."
"Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities."
"Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future."
"Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well."
"Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class."
"Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small."
New Perspective Fund - Page 42
<PAGE>
"Bonds which are rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest."
"Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings."
"Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing."
S & P rates the long-term securities debt of various entities in categories
- -----
ranging from "AAA" to "D" according to quality. The ratings from "AA" to "CCC"
may be modified by the addition of a plus (+) or minus (-) sign to show relative
standing within the major rating categories. Ratings are described as follows:
"Debt rated 'AAA' has the highest rating assigned by S & P. Capacity to pay
interest and repay principal is extremely strong."
"Debt rated 'AA' has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree."
"Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."
"Debt rated 'BBB' is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories."
"Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or impled 'BBB-' rating.
"Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating."
"The rating 'CC' is typically applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC' rating."
"The rating 'C' is typically applied to debt subordinated to senior debt which
is assigned an actual or implied 'CCC-' debt rating. The 'C' rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued."
"The rating 'C1' is reserved for income bonds on which no interest is being
paid."
New Perspective Fund - Page 43
<PAGE>
"Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The 'D' rating also will be used upon
the filing of a bankruptcy petition if debt service payments are jeopardized."
New Perspective Fund - Page 44
<TABLE>
New Perspective Fund, Inc.
Investment Portfolio, September 30, 1999
<S> <C> <C> <C>
[pie chart for largest industry holdings]
LARGEST INDUSTRY HOLDINGS Largest Individual
Holdings
8.55% Diversified Telecommunication Services Mannesmann 2.28
8.34% Health & Personal Care Micron Technology 2.09
8.20% Electronic Components AstraZeneca 2.09
6.95% Electrical & Electronics Pfizer Inc. 2.04
5.88% Broadcasting & Publishing Vodafone AirTouch 1.91
48.79% Other Industries Time Warner 1.85
0.43% Bonds & Notes Viacom 1.77
12.86% Cash and Equivalents Ericsson 1.56
Philip Morris 1.37
Sony 1.23
Shares/Principal Market Percent
Amount Value Of Net
EQUITY SECURITIES (000) Assets
- -------------------------------------------- -------- ----------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 8.55%
Telefonos de Mexico, SA de CV, Class L (ADR) (Mexico) 3,934,530 280.335 1.09
Telecom Italia SpA, ordinary shares (Italy) 15,427,500 133.140 1.05
Telecom Italia SpA, nonconvertible savings shares 27,127,995 136.768
Deutsche Telekom AG (Germany) 5,308,400 217.882 .85
MCI WorldCom, Inc. (USA)(1) 2,892,067 207.867 .81
AT&T Corp. (USA) 4,338,200 188.712 .73
Global Crossing Ltd. (USA - Incorporated in Bermuda)(1) 5,200,000 137.800 .54
Telefonica, SA (Spain) 8,595,540 137.730 .53
Tele Danmark AS (Denmark) 1,342,300 80.133
Tele Danmark AS, Class B (ADR) 1,398,600 41.433 .47
Swisscom AG (Switzerland) 313,086 97.787 .38
Sprint FON Group (USA) 1,766,800 95.849 .37
France Telecom, SA (France) 1,000,000 87.847 .34
Koninklijke PTT Nederland NV (Netherlands) 1,687,862 74.047 .28
Telecom Corp. of New Zealand Ltd. (New Zealand) 10,671,100 42.086
Telecom Corp. of New Zealand Ltd. (2) 4,917,700 19.395 .24
Teleglobe Inc. (Canada) 3,300,000 51.028 .20
British Telecommunications PLC (United Kingdom) 3,000,000 45.542 .18
Global TeleSystems Group, Inc. (USA)(1) 1,830,000 36.085 .14
Korea Telecom Corp. (ADR) (Korea)(1) 766,500 28.361 .11
Nippon Telegraph and Telephone Corp. (Japan) 2,000 24.629 .10
Embratel Participacoes SA, preferred nominative 2,000,000 22.875 .09
(ADR) (Brazil)
Telstra Corp. Ltd. (Australia) 2,800,000 14.508 .05
HEALTH & PERSONAL CARE - 8.34%
AstraZeneca PLC (United Kingdom) 12,275,560 514.305
AstraZeneca PLC (ADR) 555,000 23.449 2.09
Pfizer Inc (USA) 14,610,000 525.047 2.04
Novartis AG (Switzerland) 95,450 141.799 .55
Teva Pharmaceutical Industries Ltd. (ADR) (Israel) 2,635,000 132.573 .52
SmithKline Beecham PLC (ADR) (United Kingdom) 2,200,000 126.775 .49
Elan Corp., PLC (ADR) (Ireland) (1) 3,400,000 114.112 .44
Merck & Co., Inc. (USA) 1,621,000 105.061 .41
Glaxo Wellcome PLC (United Kingdom) 563,264 14.602
Glaxo Wellcome PLC (ADR) 1,044,000 54.288 .27
Bristol-Myers Squibb Co. (USA) 800,000 54.000 .21
ALZA Corp. (USA)(1) 1,000,000 42.812 .17
Genentech, Inc. (USA) (1) 267,500 39.139 .15
Guidant Corp. (USA) (1) 660,000 35.392 .14
Fujisawa Pharmaceutical Co. Ltd. (Japan) 1,782,000 34.675 .13
Luxottica Group SpA (ADR) (Italy) 1,812,700 34.555 .13
Pharmacia & Upjohn, Inc. (USA) 600,000 29.775 .12
Medtronic, Inc. (USA) 800,000 28.400 .11
Nycomed Amersham PLC (United Kingdom) 4,700,000 28.064 .11
Shionogi & Co., Ltd. (Japan) 3,200,000 26.291 .10
Shiseido Co., Ltd. (Japan) 1,250,000 18.683 .07
Kimberly-Clark Corp. (USA) 250,000 13.125 .05
Avon Products, Inc. (USA) 400,000 9.925 .04
ELECTRONIC COMPONENTS - 8.20%
Micron Technology, Inc. (USA) (1) 8,100,000 539.156 2.09
Taiwan Semiconductor Manufacturing Co. Ltd. 70,193,000 296.075 1.15
(Taiwan)(1)
Samsung Electronics Co., Ltd. (South Korea) 1,601,176 259.401 1.01
Intel Corp. (USA) 2,200,000 163.487 .63
Advanced Micro Devices, Inc. (USA)(1) 7,250,000 124.609 .48
Murata Manufacturing Co., Ltd. (Japan) 1,146,000 115.268 .45
Hon Hai Precision Industry Co. Ltd. (Taiwan)(1) 14,560,000 95.687 .37
Analog Devices, Inc. (USA)(1) 1,710,000 87.638 .34
Rohm Co., Ltd. (Japan) 400,000 83.662 .32
Altera Corp. (USA)(1) 1,764,800 76.548 .30
Texas Instruments Inc. (USA) 900,000 74.025 .30
Hirose Electric Co., Ltd. (Japan) 400,000 62.982 .24
Seagate Technology (USA)(1) 1,200,000 36.975 .14
Motorola, Inc. (USA) 400,000 35.200 .14
Fanuc Ltd. (Japan) 515,000 35.050 .14
Newbridge Networks Corp. (Canada) (1) 1,000,000 26.062 .10
ELECTRICAL & ELECTRONICS - 6.95%
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 11,910,000 371.662
Telefonaktiebolaget LM Ericsson, Class B (ADR) 1,000,000 31.250 1.56
Nokia Corp., Class A (Finland) 1,440,000 129.109 1.16
Nokia Corp., Class A (ADR) 1,900,000 170.644
Toshiba Corp. (Japan) 34,500,000 257.177 1.01
Siemens AG (Germany) 2,950,000 243.894 .95
NEC Corp. (Japan) 10,250,000 206.677 .80
Matsushita Communication Industrial Co., Ltd. (Japan) 990,000 110.279 .43
Schneider SA (France) 1,300,000 95.213 .37
Lucent Technologies Inc. (USA) 1,072,500 69.578 .27
Nortel Networks Corp. (formerly Northern 1,029,200 52.489 .20
Telecom Ltd.) (Canada)
General Electric Co. (USA) 440,000 52.168 .20
BROADCASTING & PUBLISHING - 5.88%
Time Warner Inc. (USA) 7,844,000 476.523 1.85
Viacom Inc., Class A (USA) (1) 1,000,000 43.250
Viacom Inc., Class B (1) 9,780,000 413.205 1.77
News Corp. Ltd. (Australia) 3,962,351 27.794
News Corp. Ltd. (ADR) 3,991,600 113.511
News Corp. Ltd., preferred 2,041,755 13.454
News Corp. Ltd., preferred (ADR) 2,548,800 68.021 .86
CANAL + (France) 1,421,172 84.998 .33
Grupo Televisa, SA, ordinary participation 1,875,400 74.899 .29
certificates (ADR) (Mexico)(1)
CBS Corp. (USA)(1) 1,045,000 48.331 .19
AT&T Corp. Liberty Media Group, Class A (USA)(1) 1,300,000 48.262 .19
Pearson PLC (United Kingdom) 1,700,000 35.798 .14
Dow Jones & Co., Inc. (USA) 500,000 26.688 .10
Wolters Kluwer NV (Netherlands) 650,064 22.316 .09
Elsevier NV (Netherlands) 1,700,000 17.489 .07
WIRELESS TELECOMMUNICATION SERVICES - 5.39%
Mannesmann AG (Germany) 1,637,500 261.861 2.28
Mannesmann AG (ADR) 2,037,500 326.000
Vodafone AirTouch PLC (ADR) (United Kingdom) 2,072,850 492.820 1.91
(formerly Vodafone Group PLC)
DDI Corp. (Japan) 39,500 297.048 1.16
Orange PLC (United Kingdom)(1) 485,425 9.565 .04
BANKING - 5.07%
Bank of America Corp. (formerly BankAmerica 3,767,400 209.797 .81
Corp.) (USA)
Bank of Nova Scotia (Canada) 7,719,000 165.678 .64
Westpac Banking Corp. (Australia) 18,023,011 111.150
Westpac Banking Corp., warrants, expire 2000 (1) 3,000,000 17.321 .50
ABN AMRO Holding NV (Netherlands) 5,669,731 127.539 .50
Royal Bank of Canada (Canada) 2,717,000 112.746 .44
Sakura Bank, Ltd. (Japan) 14,700,000 110.547 .43
Citigroup Inc. (USA) 2,062,500 90.750 .35
Fuji Bank, Ltd. (Japan) 6,855,000 83.384 .32
Australia and New Zealand Banking Group Ltd. 12,143,541 81.205 .32
(Australia)
Banco Santander Central Hispano, SA (formerly 4,932,000 51.055
Banco de Santander, SA) (Spain)
Banco Santander Central Hispano, SA (ADR) 2,203,200 22.721 .29
Banque Nationale de Paris (France) 570,000 45.545
Banque Nationale de Paris, guaranteed value 130,000 1.081 .18
certificates, expire 2002 (1)
San Paolo-IMI SpA (Italy) 2,000,000 25.906 .10
First Union Corp. (USA) 700,000 24.894 .10
Toronto-Dominion Bank (Canada) 1,223,700 23.722 .09
DATA PROCESSING & REPRODUCTION - 4.43%
Fujitsu Ltd. (Japan) 9,623,000 300.323 1.17
Microsoft Corp. (USA) (1) 2,500,000 226.406 .89
Computer Associates International, Inc. (USA) 3,550,000 217.438 .84
Oracle Corp. (USA)(1) 2,150,000 97.825 .38
Compaq Computer Corp. (USA) 3,400,000 77.987 .30
International Business Machines Corp. (USA) 600,000 72.825 .28
Cisco Systems, Inc. (USA) (1) 900,000 61.706 .24
Gateway, Inc. (formerly Gateway 2000, Inc.) (USA)(1) 1,000,000 44.438 .17
PeopleSoft, Inc. (USA)(1) 2,465,100 41.753 .16
ENERGY SOURCES - 2.93%
TOTAL FINA SA, Class B (France) 131,077 16.490
TOTAL FINA SA, Class B (ADR) 2,788,924 176.922 .75
Elf Aquitaine (France) 400,000 69.936
Elf Aquitaine (ADR) 1,100,000 100.788 .66
Royal Dutch Petroleum Co. (New York Registered 1,952,000 115.290
Shares) (Netherlands)
"Shell" Transport and Trading Co., PLC (United Kingdom) 3,000,000 22.224 .54
Norsk Hydro AS (Norway) 2,000,000 84.952 .33
Talisman Energy Inc. (Canada)(1) 1,535,500 45.774 .18
Phillips Petroleum Co. (USA) 850,000 41.438 .16
Unocal Corp. (USA) 982,500 36.414 .14
Broken Hill Proprietary Co. Ltd. (Australia) 3,213,797 37.006 .14
RAO Gazprom (ADR) (Russia)(1,2) 1,141,000 7.901 .03
INSURANCE - 2.47%
ING Groep NV (Netherlands) 2,603,331 141.546
ING Groep NV, warrants, expire 2008 (1) 590,000 11.322 .59
American International Group, Inc. (USA) 1,498,046 130.236 .51
Allianz AG (Germany) 268,000 77.314 .30
Fairfax Financial Holdings Ltd. (Canada)(1) 352,800 52.886
Fairfax Financial Holdings Ltd. (1,2) 93,000 13.941 .26
QBE Insurance Group Ltd. (Australia) 14,414,732 55.344 .21
Yasuda Fire and Marine Insurance Co., Ltd (Japan) 7,158,000 45.688 .18
AEGON NV (Netherlands) 510,843 44.005 .17
Assicurazioni Generali SpA (Italy) 1,100,000 36.624 .14
Royal & Sun Alliance Insurance Group PLC 3,500,000 27.185 .11
(United Kingdom)
BUSINESS & PUBLIC SERVICES - 2.40%
Cendant Corp. (USA)(1) 15,408,000 273.492 1.06
Reuters Group PLC (United Kingdom) 9,670,400 106.983 .42
TNT Post Groep (Netherlands) 2,914,488 74.261 .29
Rentokil Initial PLC (United Kingdom) 16,200,000 57.254 .22
Interpublic Group of Companies, Inc. (USA) 1,000,000 41.125 .16
Electronic Data Systems Corp. (USA) 550,000 29.116 .11
Pitney Bowes Inc. (USA) 400,000 24.375 .09
United Utilities PLC (United Kingdom) 1,000,000 10.775 .05
MULTI-INDUSTRY - 2.26%
Invensys PLC (formerly BTR Siebe PLC) (United Kingdom) 29,120,000 139.176 .54
Investor AB, Class B (Sweden) 5,000,000 59.586 .23
Williams PLC (United Kingdom) 11,076,923 58.268 .23
Anglo American PLC (Great Britain) (1) 1,000,000 56.103 .22
Preussag AG (Germany) 1,084,743 54.700 .21
Lend Lease Corp. Ltd. (Australia) 4,318,283 52.686 .20
TI Group PLC (United Kingdom) 5,781,991 41.630 .16
Lagardere Groupe SCA (France) 850,000 35.332 .14
AlliedSignal Inc. (USA) 500,000 29.969 .12
Canadian Pacific Ltd. (Canada) (1) 1,200,000 27.375 .11
FMC Corp. (USA)(1) 559,800 27.010 .10
LEISURE & TOURISM - 2.22%
Carnival Corp. (USA) 6,140,000 267.090 1.04
Seagram Co. Ltd. (Canada) 5,650,000 257.075 1.00
Starbucks Corp. (USA)(1) 1,970,000 48.819 .18
BEVERAGES & TOBACCO - 2.11%
Philip Morris Companies Inc. (USA) 10,290,000 351.789 1.37
Cia. Cervejaria Brahma, preferred nominative 3,278,600 39.343 .15
(ADR) (Brazil)
Southcorp Ltd. (Australia) 10,357,562 37.773 .14
PepsiCo, Inc. (USA) 1,000,000 30.250 .12
Gallaher Group PLC (United Kingdom) 2,905,100 20.180
Gallaher Group PLC (ADR) 300,000 8.156 .11
Coca-Cola Co. (USA) 375,000 18.023 .07
Foster's Brewing Group Ltd. (Australia) 6,000,000 16.910 .07
Asahi Breweries, Ltd. (Japan) 1,056,000 16.171 .06
South African Breweries PLC (United Kingdom)(1) 558,003 4.740 .02
GOLD MINES - 1.99%
Newmont Mining Corp. (USA) 6,100,000 157.838 .61
Barrick Gold Corp. (Canada) 7,000,000 152.250 .59
Placer Dome Inc. (Canada) 9,000,000 133.875 .51
Homestake Mining Co. (USA) 5,500,000 50.531 .20
Gold Fields Ltd. (South Africa) 4,191,105 19.408 .08
CHEMICALS - 1.78%
Monsanto Co. (USA) 2,421,900 86.432 .34
Praxair, Inc. (USA) 1,815,000 83.490 .32
BOC Group PLC (United Kingdom) 3,500,000 72.943 .28
Valspar Corp. (USA) 1,555,000 50.829 .20
Sherwin-Williams Co. (USA) 1,962,000 41.079 .16
Bayer AG (Germany) 950,000 37.929 .15
E.I. du Pont de Nemours and Co. (USA) 400,000 24.350 .09
Methanex Corp. (Canada)(1) 7,250,000 20.748 .08
Georgia Gulf Corp. (USA) 1,175,000 20.709 .08
L'Air Liquide (France) 125,235 19.894 .08
APPLIANCES & HOUSEHOLD DURABLES - 1.76%
Sony Corp. (Japan) 2,110,400 315.628 1.23
Koninklijke Philips Electronics NV (Netherlands) 1,358,000 136.813 .53
AUTOMOBILES - 1.69%
Suzuki Motor Corp. (Japan) 8,158,000 132.592 .52
Renault SA (France) 2,000,000 110.661 .43
Bayerische Motoren Werke AG (Germany) 2,089,100 59.021
Bayerische Motoren Werke AG, preferred 686,712 9.700 .27
Honda Motor Co., Ltd. (Japan) 1,296,000 54.335 .21
Ford Motor Co. (USA) 1,000,000 50.188 .19
General Motors Corp. (USA) 300,000 18.881 .07
FOREST PRODUCTS & PAPER - 1.57%
Champion International Corp. (USA) 4,200,000 215.775 .84
UPM-Kymmene Corp. (Finland) 1,953,000 66.627 .26
Louisiana-Pacific Corp. (USA) 2,550,000 39.844 .15
International Paper Co. (USA) 600,000 28.837 .11
Smurfit-Stone Container Corp. (USA)(1) 1,255,700 27.155 .11
Rayonier Inc. (USA) 600,000 25.200 .10
FOOD & HOUSEHOLD PRODUCTS - 1.54%
Groupe Danone (France) 350,000 85.261 .33
Reckitt & Colman PLC (United Kingdom) 6,503,125 81.629 .32
Nestle SA (Switzerland) 39,000 73.398 .29
Archer Daniels Midland Co. (USA) 4,780,000 58.256 .23
Unilever NV (Netherlands) 300,000 20.437
Unilever NV (New York Registered shares) 200,000 13.625 .13
Sara Lee Corp. (USA) 1,250,000 29.297 .11
Kellogg Co. (USA) 571,900 21.411 .08
Colgate-Palmolive Co. (USA) 300,000 13.725 .05
UTILITIES: ELECTRIC & GAS - 1.01%
Williams Companies, Inc. (USA) 5,000,000 187.187 .73
National Power PLC (United Kingdom) 9,300,000 72.617 .28
MERCHANDISING - 0.99%
Wal-Mart Stores, Inc. (USA) 2,600,000 123.663 .48
Kingfisher PLC (United Kingdom) 4,371,632 47.070 .18
Home Depot, Inc. (USA) 575,000 39.459 .15
Cifra, SA de CV, Class C (Mexico) (1) 3,624,400 5.589
Cifra, SA de CV, Class V (1) 10,995,004 17.285 .10
Koninklijke Ahold NV (Netherlands) 637,693 21.007 .08
METALS: NONFERROUS - 0.97%
Alcoa Inc. (USA) 2,400,000 148.950 .58
Billiton PLC (United Kingdom) 10,372,416 43.439 .17
WMC Ltd. (Australia) 7,000,000 35.621 .13
Pechiney, Class A (France) 406,909 22.558 .09
RECREATION & OTHER CONSUMER PRODUCTS - 0.86%
Nintendo Co., Ltd. (Japan) 650,000 103.751 .40
Hasbro, Inc. (USA) 2,700,000 57.881 .22
EMI Group PLC (United Kingdom) 4,242,369 30.475 .12
Eastman Kodak Co. (USA) 400,000 30.175 .12
AEROSPACE & MILITARY TECHNOLOGY - 0.66%
Bombardier Inc., Class B (Canada) 7,495,000 124.355 .48
Boeing Co. (USA) 600,000 25.575 .10
Northrop Grumman Corp. (USA) 300,000 19.069 .08
ENERGY EQUIPMENT - 0.61%
Baker Hughes Inc. (USA) 4,138,100 120.005 .47
Schlumberger Ltd. (Netherlands Antilles) 598,300 37.282 .14
OTHER INDUSTRIES - 2.44%
De Beers Consolidated Mines Ltd. (South Africa)(1) 2,000,000 55.069
De Beers Consolidated Mines Ltd. (ADR) 1,000,000 27.000 .32
Usinor Sacilor (France) 5,500,000 77.692 .31
AMR Corp. (USA)(1) 1,100,000 59.950 .24
ADVANTEST CORP. (Japan) 400,000 57.906 .22
Japan Airlines Co., Ltd. (Japan) 15,000,000 57.812 .22
Bergesen d.y. AS, Class A (Norway) 2,650,000 43.240
Bergesen d.y. AS, Class B 795,000 12.354 .21
NIKE, Inc., Class B (USA) 900,000 51.187 .20
Caterpillar Inc. (USA) 700,000 38.369 .15
Delphi Automotive Systems Corp. (USA) 1,871,679 30.064 .12
Deere & Co. (USA) 750,000 29.015 .11
Allegheny Teledyne Inc. (USA) 1,697,600 28.647 .11
Cie. de Saint-Gobain (France) 100,000 18.657 .07
Kvaerner ASA, Class A (Norway) 922,936 18.526 .07
Cia. Vale do Rio Doce, preferred nominative, 38,400 0.000
Class B (Brazil)(1,3)
Cia. Vale do Rio Doce, preferred nominative (ADR) 771,000 16.191 .06
Bridgestone Corp. (Japan) 286,000 8.012 .03
MISCELLANEOUS - 1.64%
Other equity securities in initial period of acquisition 422.415 1.64
------------------
TOTAL EQUITY SECURITIES(cost: $14,160.957 million) 22,330.7 86.71
------------------
BONDS & NOTES Principal Amount
(Millions)
GOVERNMENTS AND GOVERNMENTAL
AUTHORITIES (EXCLUDING U.S.) - 0.43%
Brazil (Federal Republic of), Bearer 8.00% 2014 (4) $165.905 103.898
Brazil (Federal Republic of), Front-Loaded Interest 9.562 5.988 .43
Reduction Bond, Series L, 8.00% 2014 (4)
------------------
TOTAL BONDS AND NOTES (cost: $99.764 million) 109.886 .43
------------------
SHORT-TERM SECURITIES
- --------------------------------------------
CORPORATE SHORT-TERM NOTES - 10.25%
Procter & Gamble Co. 5.11%-5.65% due 122.000 120.784 .47
10/20/1999-1/27/2000
National Australia Funding (Delaware) Inc. 105.500 104.358 .41
5.20%-5.77% due 10/12/1999-2/7/2000
DaimlerChrysler NA Holdings 5.15%-5.73% 102.500 100.606 .39
due 12/1/1999-2/11/2000
ANZ (Delaware) Inc. 5.13%-5.76% due 101.000 100.070 .39
10/6/1999-1/18/2000
BMW U.S. Capital Corp. 5.12%-5.28% due 100.000 99.655 .38
10/19-10/28/1999
Duke Energy Corp. 5.35%-5.68% due 1/25-2/4/2000 100.000 98.027 .38
BellSouth Telecommunications, Inc. 5.65%-5.67% 100.000 97.787 .38
due 2/8-2/24/2000
Abbey National North America 5.14%-5.36% due 96.000 95.611 .37
10/7-12/3/1999
UBS Finance (Delaware) Inc. 5.12%-5.40% due 96.700 95.594 .37
10/14/1999-2/9/2000
Associates First Capital Corp. 5.13%-5.72% due 96.600 95.343 .37
10/8/1999-2/22/2000
BP America Inc. 4.75%-5.33% due 10/4/1999-2/10/2000 91.000 89.984 .35
France Telecom, SA 5.20%-5.33% due 11/2-11/9/1999 90.000 89.515 .35
CBA (Delaware) Finance Inc. 5.14%-5.35% due 87.000 86.491 .34
10/12-12/2/1999
Westpac Capital Corp. 5.34% due 1/27-1/28/2000 85.000 83.351 .32
Toronto-Dominion Holdings USA Inc. 5.28%-5.38% 83.000 81.911 .32
due 11/22/1999-2/8/2000
Archer Daniels Midland Co. 5.40%-5.70% due 80.000 78.221 .30
2/1-3/13/2000
General Electric Capital Corp. 5.40%-5.78% due 80.000 78.185 .30
1/25-3/2/2000
Merck & Co., Inc. 5.30%-5.34% due 2/4-2/7/2000 78.000 76.406 .29
Internationale Nederlanden (U.S.) Funding Corp. 75.000 74.459 .29
5.30%-5.31% due 11/18/1999
Heinz H.J. Co. 5.28%-5.33% due 10/18/1999-1/28/2000 75.000 74.301 .29
Cregen North America Inc. 5.30%-5.33% due 75.000 74.281 .29
11/19-12/16/1999
E.I. du Pont de Nemours and Co. 5.55% due 75.300 73.708 .29
2/10-2/11/2000
KfW International Finance Inc. 5.11%-5.20% due 73.500 73.118 .28
10/15-11/29/1999
British Columbia (Province of) 4.79%-4.86% due 69.820 69.550 .27
10/5-11/9/1999
FCE Bank PLC 5.11%-5.15% due 10/7-10/25/1999 57.000 56.857 .22
Halifax PLC 4.83%-5.35% due 10/1/1999-1/18/2000 56.000 55.552 .22
Monsanto Co. 4.81%-5.72% due 11/4/1999-2/25/2000 53.500 52.822 .21
IBM Credit Corp. 5.32%-5.55% due 10/20/1999-1/28/2000 50.000 49.450 .19
Emerson Electric Co. 5.30% due 1/20-1/24/2000 50.000 49.092 .19
General Motors Acceptance Corp. 5.12%-5.29% 48.300 48.108 .19
due 10/27/1999
British Telecommunications PLC 5.40%-5.75% 40.000 39.201 .15
due 2/2/2000
Canadian Wheat Board 5.08%-5.10% due 10/22-11/19/1999 35.000 34.805 .14
Ford Motor Credit Co. 5.64% due 2/10/2000 25.700 25.153 .10
Lloyds Bank PLC 5.10% due 10/6/1999 25.000 24.978 .10
Reseau Ferre de France 5.13% due 10/22/1999 25.000 24.920 .10
Svenska Handelsbanken Group 5.33% due 11/12/1999 25.000 24.841 .10
Telstra Corp. Ltd. 5.12%-5.30% due 10/5-11/19/1999 24.000 23.916 .09
Vattenfall Treasury AB 5.13% due 10/4/1999 16.000 15.991 .06
FEDERAL AGENCY DISCOUNT NOTES - 1.31%
Fannie Mae 4.72%-5.40% due 10/1/1999-2/9/2000 174.677 173.467 .67
Freddie Mac 4.72%-5.52% due 10/18/1999-2/24/2000 166.938 164.674 .64
CERTIFICATES OF DEPOSIT - 0.78%
Canadian Imperial Bank of Commerce 5.40% due 50.000 49.999 .20
11/16-11/17/1999
Lloyds Bank PLC 5.43% due 12/8/1999 50.000 49.999 .20
National Westminster Bank PLC 5.25%-5.62% due 50.000 49.962 .20
11/8/1999-2/1/2000
Svenska Handelsbanken Group 5.56% due 1/24/2000 25.000 24.960 .09
Rabobank Nederland NV 5.50% due 1/27/2000 25.000 24.959 .09
OTHER - 0.28%
Canada Bills 5.18%-5.51% due 11/30/1999-2/23/2000 75.000 73.660 .28
NON-U.S. CURRENCY - 0.02%
New Taiwanese Dollar NT$241.104 7.618 .02
------------------
TOTAL SHORT-TERM SECURITIES (cost: $3,258.414 million) 3,256.30 12.64
------------------
TOTAL INVESTMENT SECURITIES (cost: $17,519.135 million) 25,696.8 99.78
Excess of cash and receivables over payables 55.389 .22
------------------
NET ASSETS 25,752.2 100.000
(1) Non-income-producing securities
(2) Purchased in a private placement transaction;
resale tot he 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
GDR = Global Depositary Receipts
The descriptions of the companies shown in the
portfolio, which were obtained from published reports
and other sources believed to be reliable, are
supplemental and are not covered by the Report of
Independent Accountants.
See Notes to Financial Statements
</TABLE>
<TABLE>
New Perspective Fund
<S> <C>
Equity Securities Appearing in the Equity Securities Eliminated from the
Portfolio Since March 31, 1999 Portfolio Since March 31, 1999
AEGON AGA
AT&T, Liberty Media Group Alcatel
Caterpillar Asahi Breweries
Coca-Cola Brambles Industries
Delphi Automotive Systems ENI
E.I. du Pont de Nemours General Intrument
Elan Halliburton
Embratel Participacoes LTV
Fanuc Mattel
Ford Motor Mobil
Foster's Brewing Nissan Motor
Global Telesystems Silicon Graphics
Hon Hai Precision Standard Chartered Bank
Japan Airlines Suez Lyonnaise des Eaux
Kellogg Union Pacific
Kimberly-Clark Vivendi
Korea Telecom Volvo
Lucent Technologies York
NEC YPF
Newbridge Networks
Norsk Hydro
Nycomed Amersham
Orange
Pitney Bowes
Royal & Sun Alliance
Sara Lee
Shionogi
Telstra
Toronto-Dominion Bank
</TABLE>
<TABLE>
New Perspective Fund
Financial Statements
<S> <C> <C>
- ---------------------------------------------- ---------------- ----------------
Statement of Assets and Liabilities (dollars in
at September 30, 1999 millions)
- ---------------------------------------------- ---------------- ----------------
Assets:
Investment securities at market
(cost: $14,260.721) $22,440.593
Short-term securities
(cost: $3,258.414) 3,256.300
Cash 4.808
Receivables for-
Sales of investments $81.025
Sales of fund's shares 42.769
Dividends and accrued interest 48.164 171.958
---------------- ----------------
25,873.659
Liabilities:
Payables for-
Purchases of investments 82.909
Repurchases of fund's shares 24.051
Management services 8.561
Accrued expenses 5.856 121.377
---------------- ----------------
Net Assets at September 30, 1999-
Equivalent to $26.25 per share on
980,900,343 shares of $1 par value
capital stock outstanding (authorized
capital stock--1,000,000,000 shares) $25,752.282
================
Statement of Operations
for the year ended September 30, 1999 Unaudited
(dollars in
millions)
- ---------------------------------------------- ---------------- ----------------
Investment Income:
Income:
Dividends $ 257.542
Interest 160.235 $ 417.777
----------------
Expenses:
Management services fee 90.549
Distribution expenses 56.076
Transfer agent fee 18.723
Reports to shareholders 0.650
Registration statement and prospectus 1.202
Postage, stationery and supplies 3.217
Directors'/Trustees' fees 0.363
Auditing and legal fees 0.090
Custodian fee 4.026
Taxes other than federal income tax 0.349
Other expenses 0.292 175.537
---------------- ----------------
Net investment income 242.240
----------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 2,029.050
Net increase in unrealized appreciation on
investments 4,591.605
----------------
Net realized gain and unrealized appreciation
on investments 6,620.655
----------------
Net Increase in Net Assets Resulting
from Operations $ 6,862.895
================
- ---------------------------------------------- ---------------- ----------------
Statement of Changes in Net Assets (dollars in millions)
Year ended September 30
1999 1998
- ---------------------------------------------- ---------------- ----------------
Operations:
Net investment income $ 242.240 $ 225.434
Net realized gain on investments 2,029.050 1,406.817
Net change in unrealized appreciation
on investments 4,591.605 (1,486.638)
---------------- ----------------
Net increase in net assets
resulting from operations 6,862.895 145.613
---------------- ----------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (178.626) (250.381)
Distributions from net realized gain on
investments (1,352.865) (944.065)
---------------- ----------------
Total dividends and distributions (1,531.491) (1,194.446)
---------------- ----------------
Capital Share Transactions:
Proceeds from shares sold: 174,677,528
and 141,823,983 shares, respectively 4,287.650 3,063.856
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 66,803,759 and 58,921,097
shares respectively 1,462.075 1,133.982
Cost of shares repurchased: 124,489,632
and 112,476,829 shares, respectively (3,035.817) (2,398.119)
---------------- ----------------
Increase in net assets resulting from
capital share transactions 2,713.908 1,799.719
---------------- ----------------
Total Increase in Net Assets 8,045.312 750.886
Net Assets:
Beginning of year 17,706.970 16,956.084
---------------- ----------------
End of year (including undistributed
net investment income: $108.492
and $85.257, respectively) $25,752.282 $17,706.970
================ ================
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.
SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been
prepared in conformity with generally accepted accounting principles 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. The ability of the issuers of the debt securities held by the fund to
meet their obligations may be affected by economic developments in a specific
industry, state or region. Short-term securities maturing within 60 days are
valued at amortized cost, which approximates market value. Forward currency
contracts are valued at the mean of their representative quoted bid and asked
prices. 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.
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 and premiums and original issue discounts
on securities purchased 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.
FORWARD CURRENCY CONTRACTS - The fund may enter into forward currency
contracts, which represent agreements to exchange currencies of different
countries at specified future dates at specified rates. The fund enters into
these contracts to reduce its exposure to fluctuations in foreign exchange
rates arising from investments denominated in non-U.S. currencies. The fund's
use of forward currency contracts involves market risk in excess of the amount
recognized in the statement of assets and liabilities. The contracts are
recorded in the statement of assets and liabilities at their net unrealized
value. The fund records realized gains or losses at the time the forward
contract is closed or offset by a matching contract. The face or contract
amount in U.S. dollars reflects the total exposure the fund has in that
particular contract. Risks may arise upon entering these contracts from the
potential inability of counterparties to meet the terms of their contracts and
from possible movements in non-U.S. exchange rates and securities values
underlying these instruments.
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, 1999, such non-U.S. taxes were
$24,092,000.
CURRENCY GAINS AND LOSSES - Net realized currency losses on dividends,
interest, sales of non-U.S. bonds and notes, and other receivables and
payables, on a book basis, were $1,540,000 for the year ended September 30,
1999.
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, 1999, net unrealized appreciation on investments for
federal income tax purposes aggregated $8,178,746,000, of which $8,849,242,000
related to appreciated securities and $670,496,000 related to depreciated
securities. During the year ended September 30, 1999, the fund realized, on a
tax basis, a net capital gain of $2,035,050,000 on securities transactions. Net
losses related to non-U.S. currency transactions of $6,000,000 were treated as
an adjustment to ordinary income for federal income tax purposes. The cost of
portfolio securities for federal income tax purposes was $17,518,147,000 at
September 30, 1999.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $90,549,000 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 an annual rate of 0.60% of the first $500 million
of average net assets; 0.50% of such assets in excess of $500 million but not
exceeding $1 billion; 0.46% of such assets in excess of $1 billion but not
exceeding $1.5 billion; 0.43% of such assets in excess of $1.5 billion but not
exceeding $2.5 billion; 0.41% of such assets in excess of $2.5 billion but not
exceeding $4 billion; 0.40% of such assets in excess of $4 billion but not
exceeding $6.5 billion; 0.395% of such assets in excess of $6.5 billion but not
exceeding $10.5 billion; 0.39% of such assets in excess of $10.5 billion but
not exceeding $17 billion; and 0.385% of such assets in excess of $17 billion.
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution, the fund may
expend up to 0.25% of its average net assets annually for any activities
primarily intended to result in sales of fund shares, provided the categories
of expenses for which reimbursement is made are approved by the fund's Board of
Directors. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. During the year ended
September 30, 1999, distribution expenses under the Plan were $56,076,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $14,809,000 (after allowances to dealers) as its
portion of the sales charges paid by purchasers of the fund's shares. Such
sales charges are not an expense of the fund and, hence, are not reflected in
the accompanying statement of operations.
TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer
agent for the fund, was paid a fee of $18,723,000.
DEFERRED DIRECTORS' 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, 1999, aggregate
deferred amounts and earnings thereon since the deferred compensation plan's
adoption (1993), net of any payments to Directors, were $919,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $6,543,756,000 and $5,768,560,000, respectively,
during the year ended September 30, 1999.
As of September 30, 1999, accumulated undistributed net realized gain on
investments was $1,875,244,000 and additional paid-in capital was
$14,609,485,000. The fund reclassified $40,379,000 and $117,444,000 from
undistributed net investment income and undistributed net realized gains,
respectively, to additional paid-in capital for the year ended September 30,
1999, as a result of permanent differences between book and tax.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $4,026,000 includes $104,000 that was paid by these
credits rather than in cash.
<TABLE>
<S> <C> <C> <C> <C> <C>
Per-Share Data and Ratios
Year EndedSeptember 30
1999 1998 1997 1996 1995
Net Asset Value, Beginning of Year $20.50 $21.86 $17.77 $16.98 $15.40
------------------------------------------------
Income From Investment Operations:
Net investment income .26 .27 .29 .32 .31
Net gains or losses on securities (both
realized and unrealized) 7.26 (.11) 4.81 1.40 2.35
------------------------------------------------
Total from investment operations 7.52 .16 5.10 1.72 2.66
----------------------------- ------------------
Less Distributions:
Dividends (from net investment income) (.20) (.31) (.323) (.321) (.237)
Dividends (from net realized non-U.S. currency gains) - - (.007) (.009) (.003)
Distributions (from capital gains) (1.57) (1.21) (.680) (.600) (.840)
----------------------------- ------------------
Total distributions (1.77) (1.52) (1.01) (.93) (1.08)
----------------------------- ------------------
Net Asset Value, End of Year $26.25 $20.50 $21.86 $17.77 $16.98
==================== ======== ======== =======
Total Return (2) 38.43% 1.23% 29.97% 10.64% 18.63%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $25,752 $17,707 $16,956 $11,688 $8,817
Ratio of expenses to average net assets 0.77% .77% .79% .82% .83%
Ratio of net income to average net assets 1.06% 1.27% 1.56% 2.00% 2.12%
Portfolio turnover rate 29.14% 29.71% 25.68% 18.12% 22.40%
(1) Realized non-U.S. currency gains are treated as ordinary
income for federal income tax purposes.
(2) Excludes maximum sales charge of 5.75%.
</TABLE>
Report of Independent Accountants
To the Board of Trustees 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, 1999, 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, 1999 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
/s/PricewaterhouseCoopers LLP
Los Angeles, California
October 29, 1999
Tax Information (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
fund were earned from the following sources:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Dividends and
Distributions per Share
To Shareholders of Record Payment Date From Net From Net Realized
Short-term Gains From Net Realized
Long-term Gains
Investment Income
December 15, 1998 December 16, 1998 $.14 - $1.57
June 4, 1999 June 7, 1999 .06 - -
</TABLE>
The fund also designates 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, 1999 is $0.023 on a
per-share basis. Foreign source income earned by the fund was $0.223 on a
per-share basis. Shareholders are entitled to a foreign tax credit or an
itemized deduction, at their option. Generally, it is more advantageous to
claim a credit rather than to take a deduction.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 30% of the dividends
paid by the fund from net investment income represents qualifying dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans and 403(b) plans need not be reported as taxable income.
However, many 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 AND OTHER TAX
INFORMATION WHICH WERE MAILED IN JANUARY 2000 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 1999 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.
